[Federal Register Volume 68, Number 60 (Friday, March 28, 2003)]
[Notices]
[Pages 15174-15188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7459]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-03-50-B (Auction No. 50); DA 03-372]


Narrowband PCS Spectrum Auction Revised Inventory and Start Date 
for Auction No. 50; Notice and Filing Requirements, Minimum Opening 
Bids, Upfront Payments and Other Auction Procedures

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the procedures, minimum opening bids, 
and revised inventory and start date for the upcoming auction of 
narrowband PCS licenses. This document is intended to familiarize 
prospective bidders with the procedures and minimum opening bids for 
this auction.

DATES: Auction No. 50 is scheduled to begin on September 24, 2003.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: Christopher M. Shields, Legal Branch, or Jeff Crooks, 
Auctions Operations Branch, at (202) 418-0660; Lisa Stover, Auctions 
Operations Branch, at (717) 338-2888, Media Contact: Lauren Kravetz at 
(202) 418-7944, Commercial Wireless Division: Policy and Rules Branch, 
Amal Abdallah at (202) 418-7307 or Evan Baranoff at (202) 418-7142; 
Licensing and Technical Analysis Branch, JoAnn Epps or Dwain 
Livingston, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 50 
Procedures Public Notice released on February 7, 2003. The complete 
text of the Auction No. 50 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. 50 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]. 
This document is also available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/50/.

I. General Information

A. Introduction

    1. By the Auction No. 50 Procedures Public Notice, the Wireless 
Telecommunications Bureau (``Bureau'') announces the procedures and 
minimum opening bids for the upcoming Narrowband PCS Spectrum Auction 
(Auction No. 50). The Bureau also announces a new date for the start of 
Auction 50 and a revised license inventory.
    2. On November 26, 2002, in accordance with the Balanced Budget Act 
of 1997, the Bureau released a public notice seeking comment on reserve 
prices or minimum opening bids and auction procedures to be used in the 
Narrowband PCS Spectrum Auction (Auction No. 50). The Auction No. 50 
Comment Public Notice, 67 FR 72417 (December 5, 2002), announced that 
Auction No. 50 would include regional and MTA licenses. The Bureau 
received one comment in response to the Auction No. 50 Comment Public 
Notice. No reply comments were submitted.
    3. Space Data proposed that the Commission adopt a combinatorial 
bidding scheme for Auction No. 50. Space Data contends that the 
regional licenses are uniquely complementary, because in combination, 
they effectively constitute a nationwide license and will be more 
highly valued as a combined package by prospective auction participants 
intending to deploy nationwide service.
    4. After consideration of Space Data's comments, the Bureau has 
concluded that it may be appropriate to use package bidding for the 
auction of the regional licenses. Accordingly, by this public notice 
the Commission:
    i. Revises the license inventory for Auction No. 50 by removing the 
regional narrowband PCS licenses from Auction No. 50. Auction No. 50 
will include only the MTA licenses.
    ii. Revises the starting date for Auction No. 50, which will 
commence on September 24, 2003.
    5. The Bureau notes that the regional narrowband PCS licenses will 
be included in Auction No. 51. It will announce the dates for Auction 
No. 51 and seek comment on a package bidding auction design and other 
auction procedures in a public notice.

[[Page 15175]]

i. Background of Proceeding
    6. In the PCS First Report and Order, 58 FR 42681 (August 11, 
1993), the Commission provided for the operation of narrowband PCS in 
three one-megahertz blocks in the 900 MHz band. The Commission broadly 
defined PCS as mobile and fixed communications offerings that serve 
individuals and businesses and that can be integrated with a variety of 
competing networks. The Commission also adopted a spectrum allocation 
and channelization plan, licensing rules, and technical standards for 
narrowband PCS. In the Competitive Bidding Second Report and Order, 59 
FR 22980 (May 4, 1994), the Commission determined that, pursuant to 
section 309(j) of the Communications Act of 1934, as amended, PCS is 
subject to competitive bidding in the case of mutually exclusive 
applications. In the Competitive Bidding Third Report and Order, 59 FR 
26741 (May 24, 1994) the Commission established competitive bidding 
rules specifically for narrowband PCS.
    7. Subsequently, in the Narrowband Second Report and Order and 
Second Further Notice of Proposed Rule Making, 65 FR 35843 (June 6, 
2000), the Commission adopted modifications to its service rules for 
narrowband PCS. Specifically, the Commission: (i) Adopted Major Trading 
Areas (``MTAs'') for future licensing of narrowband PCS; (ii) 
eliminated the restriction, which only applied to 100 kilohertz of the 
3 megahertz blocks allocated for narrowband PCS, that limited 
eligibility for acquiring narrowband PCS response channels to existing 
paging licensees; (iii) modified the construction and minimum coverage 
requirement for narrowband PCS spectrum by allowing licensees to meet a 
``substantial service'' alternative; (iv) adopted Subpart Q of Part 1 
of the Commission rules to apply to narrowband PCS; and (v) eliminated 
the narrowband PCS spectrum aggregation limit, finding that it is not 
necessary to prevent an undue concentration of licenses. In the Third 
Narrowband Report and Order and Order on Reconsideration, 66 FR 29911 
(June 4, 2001), the Commission modified its channel band plan to allow 
for the licensing of narrowband PCS spectrum for eight additional 
nationwide licenses and seven licenses in each of the 51 MTAs. Further, 
the Commission channelized and licensed the one megahertz of narrowband 
spectrum that had been held in reserve and re-channelized 712 kilohertz 
of previously channelized spectrum for which licenses had not been 
auctioned. With that action, the Commission resolved the remaining 
issues concerning narrowband PCS in preparation for auctioning licenses 
for the remaining narrowband PCS spectrum. In 2001, the Commission 
conducted an auction of nationwide and MTA narrowband PCS licenses in 
Auction No. 41.
ii. Licenses to Be Auctioned
    8. The licenses available in Auction No. 50 will include 48 Major 
Trading Area (MTA) Personal Communications Service (PCS) licenses. The 
spectrum to be auctioned remains unsold from Auction No. 41, which 
closed on October 16, 2001. A complete list of licenses available for 
Auction No. 50 is included as Attachment A of the Auction No. 50 
Procedures Public Notice.
    9. The following table describes the licenses that will be 
auctioned:

----------------------------------------------------------------------------------------------------------------
                                                                                                      Bandwidth
            Channel number                  Channel description              Frequency bands            (kHz)
----------------------------------------------------------------------------------------------------------------
                                                  MTA Licenses
----------------------------------------------------------------------------------------------------------------
26...................................  One 50 kHz unpaired channel..  901.35-901.40 MHz...........          50
27...................................  One 50 kHz unpaired channel..  901.40-901.45 MHz...........          50
29...................................  One 50 kHz/50 kHz paired       901.95-902.00, 930.80-930.85         100
                                        channel.                       MHz.
30...................................  One 50 kHz/100 kHz paired      901.65-901.70, 930.30-930.40         150
                                        channel.                       MHz.
31...................................  One 50 kHz/150 kHz paired      901.70-901.75, 930.85-931.00         200
                                        channel.                       MHz.
32...................................  One 12.5 kHz/100 kHz paired    901.8375-901.8500, 940.9-            112.5
                                        channel.                       941.0 MHz.
                                                                                                   -------------
      MTA Subtotal...................  .............................  ............................         662.5 kHz
----------------------------------------------------------------------------------------------------------------

    (Note: For Auction No. 50, licenses are not available for every 
channel number listed in the table in every market. See Attachment A of 
the Auction No. 50 Procedures Public Notice to determine which licenses 
will be offered.)

B. Rules and Disclaimers

i. Relevant Authority
    10. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the narrowband services, contained 
in title 47, part 24 and part 90 of the Code of Federal Regulations, 
and those relating to application and auction procedures, contained in 
title 47, part 1 of the Code of Federal Regulations.
    11. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``terms'') contained in 
the Auction No. 50 Procedures Public Notice; the Auction No. 50 Comment 
Public Notice; the Part 1 Fifth Report and Order, 65 FR 52401 (August 
29, 2000), (as well as prior and subsequent Commission proceedings 
regarding competitive bidding procedures); the Narrowband PCS R&O/
Further Notice; 62 FR 27507 (May 20, 1997), the Narrowband Second 
Report and Order and Second Further Notice of Proposed Rulemaking; and 
the Third Narrowband Report and Order and Order on Reconsideration.
    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

[[Page 15176]]

via e-mail [email protected]. When ordering documents from Qualex, 
please provide the appropriate FCC number (for example, FCC 01-135 for 
the Third Narrowband Report and Order and Order on Reconsideration).
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. The Commission's anti-
collusion rules allow applicants to form certain agreements during the 
auction, provided the applicants have not applied for licenses covering 
the same geographic areas. However, all 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), 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 substantial change that may be of decisional 
significance to that application. Thus, Sec. Sec.  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 G of the Auction No. 50 Procedures Public Notice.
iii. Due Diligence
    17. Potential bidders seeking licenses for MTAs that border Canada 
or Mexico will be subject to on-going coordination arrangements with 
those respective countries. Potential bidders are also subject to the 
Interim Sharing Arrangement with Canada for the Bands 901-902 MHz, 930-
931 MHz, and 940-941 MHz and to any restrictions that arise from future 
agreements with Canada or Mexico.
    18. 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 
judicial proceedings that may relate to particular applicants or 
incumbent licensees or the licenses available in Auction No. 50 may be 
commenced, may be pending, or may be subject to further review. The 
Bureau notes that resolution of these matters could have an impact on 
the availability of spectrum in Auction No. 50. Some of these matters 
(whether before the Commission or the courts) may not be resolved by 
the time of the auction.
    19. 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. 50.
    20. Potential bidders may obtain information about licenses 
available in Auction No. 50 through the Bureau's licensing databases on 
the World Wide Web at http://wireless.fcc.gov/uls. Potential bidders 
should direct questions regarding the search capabilities to the FCC 
Technical Support hotline at (202) 414-1250 (voice) or (202) 414-1255 
(TTY), or via e-mail at [email protected]. The hotline is available to 
assist with questions Monday through Friday, from 8 AM to 6 PM ET. In 
order to provide better service to the public, all calls to the hotline 
are recorded. The Commission makes no representations or guarantees 
regarding the accuracy or completeness of information in its databases 
or any third party databases, including, for example, court docketing 
systems. 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 MTA for which they plan to 
bid.
iv. Bidder Alerts
    21. 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.
    22. 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.
    23. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may

[[Page 15177]]

attempt to use Auction No. 50 to deceive and defraud unsuspecting 
investors. Common warning signals of fraud include the following:
    [sbull] 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.
    [sbull] 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.
    [sbull] The amount of investment is less than $25,000.
    [sbull] 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.
    24. 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. 50 may also call the FCC 
Consumer Center at (888) CALL-FCC ((888) 225-5322).
v. National Environmental Policy Act (``NEPA'') Requirements
    25. Licensees must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of a 
wireless antenna facility is a federal action and the licensee must 
comply with the Commission's NEPA rules for each such facility. The 
Commission's NEPA rules require, among other things, that the licensee 
consult with expert agencies having NEPA responsibilities, including 
the U.S. Fish and Wildlife Service, the State Historic Preservation 
Office, the Army Corp of Engineers and the Federal Emergency Management 
Agency (through the local authority with jurisdiction over 
floodplains). The licensee must prepare environmental assessments for 
facilities that may have a significant impact in or on wilderness 
areas, wildlife preserves, threatened or endangered species or 
designated critical habitats, historical or archaeological sites, 
Indian religious sites, floodplains, and surface features. The licensee 
must also prepare environmental assessments for facilities that include 
high intensity white lights in residential neighborhoods or excessive 
radio frequency emission.

C. Auction Specifics

i. Auction Date
    26. The auction will begin on Wednesday, September 24, 2003. The 
initial schedule for bidding will be announced by public notice at 
least one week before the start of the auction. Unless otherwise 
announced, bidding on all licenses will be conducted on each business 
day until bidding has stopped on all licenses.
ii. Auction Title
    27. Auction No. 50--Narrowband PCS.
iii. Bidding Methodology
    28. The bidding methodology for Auction No. 50 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet. Telephonic bidding will also be available. As a 
contingency, the FCC Wide Area Network will be available as well. 
Qualified bidders are permitted to bid telephonically or 
electronically.
iv. Pre-Auction Dates and Deadlines
    29. The following is a list of important dates related to Auction 
No. 50:


Auction Seminar........................  July 30, 2003
Short-Form Application (FCC FORM 175)..  August 8, 2003; 6 p.m. e.t.
Upfront Payments (via wire transfer)...  August 26, 2003; 6 p.m. e.t.
Mock Auction...........................  September 19, 2003
Auction Begins.........................  September 24, 2003
 

v. Requirements for Participation
    30. Those wishing to participate in the auction must:
    [sbull] Submit a short-form application (FCC Form 175) 
electronically by 6 p.m. e.t., August 8, 2003.
    [sbull] Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. e.t., August 26, 2003.
    [sbull] Comply with all provisions outlined in the Auction No. 50 
Procedures Public Notice.
vi. General Contact Information
    31. The following is a list of general contact information relating 
to Auction No. 50.

General Auction Information:...........  FCC Auctions Hotline, (888) 225-
General Auction Questions..............   5322, Press Option 2,
Seminar Registration...................   or direct (717) 338-2888,
                                          Hours of service: 8 a.m.-5:30
                                          p.m. ET.
Auction Legal Information:.............  Auctions and Industry Analysis
Auction Rules, Policies, Regulations...   Division, Legal Branch (202)
                                          418-0660.
Licensing Information:.................  Commercial Wireless Division,
Rules, Policies, Regulations...........   (202) 418-0620.
Licensing Issues.......................
Due Diligence..........................
Incumbency Issues......................
Technical Support:.....................  FCC Auctions Technical Support
Electronic Filing......................   Hotline, (202) 414-1250
Automated Auction System...............   (Voice), (202) 414-1255 (TTY),
                                          Hours of service: Monday
                                          through Friday 8 a.m. to 6
                                          p.m. E.T.
Payment Information:...................  FCC Auctions Accounting Branch,
Wire Transfers.........................   (202) 418-0578 or (202) 418-
Refunds................................   0496, (202) 418-2843 (Fax).
Telephonic Bidding.....................  Will be furnished only to
                                          qualified bidders.

[[Page 15178]]

 
FCC Copy Contractor: Additional Copies   Qualex International, Portals
 of Commission Documents.                 II, 445 12th Street, SW., Room
                                          CY-B402, Washington, DC 20554,
                                          (202) 863-2893, (202) 863-2898
                                          (Fax), [email protected] (E-
                                          mail).
Press Information......................  Lauren Kravetz (202) 418-7944.
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

    32. Guidelines for completion of the short-form (FCC Form 175) are 
set forth in Attachment D of the Auction No. 50 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.E (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. License Selection

    33. In Auction No. 50, Form 175 will include a mechanism that 
allows an applicant to create customized lists of licenses. The 
applicant will make selections for one or more of the filter criteria 
and the system will produce a list of licenses satisfying the specified 
criteria. The applicant may apply for all the licenses in the 
customized list by using the ``Save all filtered licenses'' option; 
select and save individual licenses separately from the list; or create 
a second customized list without selecting any of the licenses from the 
first list. Applicants also will be able to select licenses from one 
customized list and then create a second customized list to select 
additional licenses.

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

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

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

    35. 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 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.
    36. A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest in, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for licenses in the same geographic license area provided 
that (i) the attributable interest holder certifies that it has not and 
will not communicate with any party concerning the bids or bidding 
strategies of more than one of the applicants in which it holds an 
attributable interest, or with which it has formed a consortium or 
entered into a joint bidding arrangement; and (ii) the arrangements do 
not result in a change in control of any of the applicants. While the 
anti-collusion rules do not prohibit non-auction related business 
negotiations among auction applicants, bidders are reminded that 
certain discussions or exchanges could touch upon impermissible subject 
matters because they may convey pricing information and bidding 
strategies.

D. Eligibility

i. Bidding Credit Eligibility (FCC Form 175 Exhibit C)
    37. In the Narrowband Second Report and Order and Second Further 
Notice of Proposed Rule Making, the Commission adopted bidding credits 
to promote and facilitate the participation of small businesses in the 
competitive bidding for licenses in the narrowband PCS service.
    38. Bidding credits are available to small and very small 
businesses, or consortia thereof, (as defined in 47 CFR 1.2110(c)). A 
bidding credit represents the amount by which a bidder's winning bids 
are discounted. The size of the bidding credit depends on the average 
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:
    [sbull] 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 narrowband PCS licenses;
    [sbull] 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 narrowband PCS licenses.
    39. Bidding credits are not cumulative. A qualifying applicant 
receives either the 15 percent or 25 percent bidding credit on its 
winning bid, but not both.
ii. Tribal Land Bidding Credit
    40. 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. 50 Procedures 
Public Notice.

[[Page 15179]]

iii. Applicability of Part 1 Attribution Rules
    41. 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. 50. Accordingly, the ``controlling interest'' 
standard as set forth in the part 1 rules will be in effect for Auction 
No. 50.
    42. 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:
    [sbull] the entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
    [sbull] the entity has authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
licensee; or
    [sbull] the entity plays an integral role in management decisions.
    43. 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.
    44. 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 Sec.  
1.2110(f). 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. The Bureau notes 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
    45. 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.
    46. 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.
    47. 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.

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

    48. Each applicant must certify on its FCC Form 175 application 
that it is not in default on any Commission licenses and that it is not 
delinquent on any non-tax debt owed to any Federal agency. In addition, 
each applicant must attach to its FCC Form 175 application a statement 
made under penalty of perjury indicating whether or not the applicant, 
its affiliates, its controlling interests, or the affiliates of its 
controlling interests 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.
    49. ``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. 50, provided that they are otherwise qualified. 
However, as discussed infra in section III.D.3, former defaulters are 
required to pay upfront payments that are fifty percent more than the 
normal upfront payment amounts.

F. Installment Payments

    50. Installment payment plans will not be available in Auction No. 
50.

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

    51. 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

[[Page 15180]]

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.

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

    52. After the short-form filing deadline (August 8, 2003), 
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, 
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 must make these modifications to their FCC Form 
175 electronically and should 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 should 
include a subject or caption referring to Auction No. 50. The Bureau 
requests that parties format any attachments to electronic mail as 
Adobe[reg] Acrobat[reg] (pdf) or Microsoft[reg] Word documents.
    53. 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 Christopher Shields of the Auctions and Industry 
Analysis Division at (202) 418-0660.

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

    54. 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

    55. On Wednesday, July 30, 2003, the FCC will sponsor a free 
seminar for Auction No. 50 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, FCC Automated Auction System, and the 
narrowband PCS and auction rules. The seminar will also provide an 
opportunity for prospective bidders to ask questions of FCC staff.
    56. To register complete the registration form found in Attachment 
B of the Auction No. 50 Procedures Public Notice and submit it by 
Monday, July 28, 2003. Registrations are accepted on a first-come, 
first-served basis.

B. Short-Form Application (FCC Form 175)--Due August 8, 2003

    57. 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. e.t. on August 8, 2003. Late applications will not be accepted.
    58. 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 section III.D.
i. Electronic Filing
    59. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time 
beginning at noon e.t. on July 30, 2003, until 6 p.m. e.t. on August 8, 
2003. 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 August 8, 2003.
    60. Applicants must press the ``SUBMIT Application'' button on the 
``Submission'' page of the electronic form to successfully submit their 
FCC Form 175s. Any form that is not submitted will not be reviewed by 
the FCC. Information about accessing the FCC Form 175 is included in 
Attachment C of the Auction No. 50 Procedures Public Notice. Technical 
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text 
telephone (TTY)); hours of service Monday through Friday, from 8 a.m. 
to 6 p.m e.t. In order to provide better service to the public, all 
calls to the hotline are recorded.
    61. Applicants can also contact Technical Support via e-mail. To 
obtain the address, click the Support tab on the Form 175 Homepage.
ii. Completion of the FCC Form 175
    62. Applicants should carefully review 47 CFR 1.2105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment D of the Auction No. 50 Procedures 
Public Notice. Applicants are encouraged to begin preparing the 
required attachments for FCC Form 175 prior to submitting the form. 
Attachments C and D of the Auction No. 50 Procedures Public Notice 
provide information on the required attachments and appropriate 
formats.
iii. Electronic Review of FCC Form 175
    63. 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.

    Note: Applicants should not include sensitive information (i.e., 
TIN/EIN) on any exhibits to their FCC Form 175 applications. There 
is no fee for accessing this system. See Attachment C of the Auction 
No. 50 Procedures Public Notice for details on accessing the review 
system.

C. Application Processing and Minor Corrections

    64. 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.
    65. As described more fully in the Commission's rules, after the 
August 8, 2003, 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 August 26, 2003

    66. 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

[[Page 15181]]

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. e.t. on 
August 26, 2003.
    67. Please note that:
    [sbull] All payments must be made in U.S. dollars.
    [sbull] All payments must be made by wire transfer.
    [sbull] Upfront payments for Auction No. 50 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.
    [sbull] Failure to deliver the upfront payment by the August 26, 
2003, deadline will result in dismissal of the application and 
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
    68. Wire transfer payments must be received by 6 p.m. e.t. on 
August 26, 2003. 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 (BNF): FCC/Account  910-1174, 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: A50U), FCC CODE 1 (same as FCC 
Form 159, block 28A: ``50''), PAYER NAME (same as FCC Form 159, block 
2), LOCKBOX NO.  358405.


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


    69. 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. 50.'' Bidders should confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
ii. FCC Form 159
    70. 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 E of the 
Auction No. 50 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
    71. In the Part 1 Order, 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 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).
    72. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed that the amount of the upfront payments would determine the 
number of bidding units on which a bidder may place bids. In order to 
bid on a license, otherwise qualified bidders that 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, but rather to cover the maximum number of bidding 
units that are associated with licenses on which the bidder wishes to 
place bids and hold high bids at any given time.
    73. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed upfront payments on a license-by-license basis using the 
following formula:
    $.00001 * kHz * License Area Population with a minimum of $500 per 
license.
    74. The Bureau received no comments on this issue. Therefore, the 
Bureau adopts its proposed upfront payments. The specific upfront 
payments and bidding units for each license are set forth in Attachment 
A of the Auction No. 50 Procedures Public Notice.
    75. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bidding units associated with licenses on which the bidder 
has the standing high bid from the previous round and licenses on which 
the bidder places a bid in the current round) in any single round, and 
submit an upfront payment covering that number of bidding units. In 
order to make this calculation, an applicant should add together the 
upfront payments for all licenses on which it seeks to bid in any given 
round. Bidders should check their calculations carefully, as there is 
no provision for increasing a bidder's maximum eligibility after the 
upfront payment deadline.

                                Example: Upfront Payments and Bidding Flexibility
----------------------------------------------------------------------------------------------------------------
                                           Ch.                                               Bidding    Upfront
               Market No.                  No.          Market name           Population      units     payment
----------------------------------------------------------------------------------------------------------------
MTA003.................................      31  Chicago..................      13,220,193     26,000    $26,000
MTA005.................................      31  Detroit..................      10,658,459     21,000   $21,000
----------------------------------------------------------------------------------------------------------------
If a bidder wishes to bid on both licenses in a round, it must have selected both on its FCC Form 175 and
  purchased at least 47,000 bidding units (26,000 + 21,000). If a bidder only wishes to bid on one, but not
  both, purchasing 26,000 bidding units would meet the requirement for either license. The bidder would be able
  to bid on either license, but not both at the same time. If the bidder purchased only 21,000 bidding units, it
  would have enough eligibility for the Detroit license but not for the Chicago.


[[Page 15182]]

    76. 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.
    77. An applicant may, on its FCC Form 175, apply for every 
applicable license being offered, but its actual bidding in any round 
will be limited by the bidding units reflected in its upfront payment.
iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    78. The Commission will use wire transfers for all Auction No. 50 
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 August 26, 2003. 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 Gail Glasser at (202) 418-0578 or Tim Dates at 
(202) 418-0496.

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, September 17, 2003, 
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 replacement codes. Qualified 
bidders requiring replacements must call technical support prior to 
arriving at the FCC.

F. Remote 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 will be available as well. Qualified bidders are 
permitted to bid electronically or telephonically, i.e., over the 
Internet or the FCC's Wide Area Network. In either case, each 
authorized bidder must have its own Remote Security Access SecurID 
card, which the FCC will provide at no charge. Each applicant with 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. 50. The telephonic bidding phone number will be 
supplied in the first overnight mailing, which 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 the 
Bureau encourage bidders to return the cards to the FCC. The Bureau 
will provide pre-addressed envelopes that bidders may use to 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 Friday, September 19, 2003. 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. 50 will begin on 
Wednesday, September 24, 2003. 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
    87. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed to award all licenses in Auction No. 50 in a simultaneous 
multiple round auction. Space Data proposes that the Commission use 
combinatorial bidding for Auction No. 50 or, alternatively, for the 
regional licenses only. Space Data believes that participants that 
have, or intend to deploy, nationwide systems, likely would value 
certain combinations of MTA licenses that would be ideal for filling in 
coverage areas initially established by licenses won in Auction No. 41. 
They also believe the regional licenses are uniquely complementary, 
because, in combination, they effectively constitute a nationwide 
license and will be more highly valued as a combined package by 
prospective auction participants intending to deploy nationwide 
service.
    88. As stated previously in the Auction No. 50 Procedures Public 
Notice, the Bureau will conduct Auction No. 50 as a simultaneous 
multiple round auction without package bidding. Unless otherwise 
announced, bids will

[[Page 15183]]

be accepted on all licenses in each round of the auction.
    89. Also as previously stated, the Bureau has tentatively concluded 
that it may be appropriate to use package bidding for auctioning the 
regional licenses. Accordingly, the Bureau has removed the regional 
licenses from this auction and will include them in Auction No. 51. It 
will announce the dates for Auction No. 51 and seek comment on a 
package bidding auction design and other auction procedures in a public 
notice.
ii. Maximum Eligibility and Activity Rules
    90. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed that the amount of the upfront payment submitted by a bidder 
would determine the initial maximum eligibility (as measured in bidding 
units) for each bidder. The Bureau received no comments on this issue.
    91. For Auction No. 50 the Bureau adopts this proposal. The amount 
of the upfront payment submitted by a bidder determines the maximum 
initial eligibility (in bidding units) for each bidder. Note again that 
each license is assigned a specific number of bidding units equal to 
the upfront payments listed in Attachment A of the Auction No. 50 
Procedures Public Notice on a bidding unit per dollar basis. The total 
upfront payment defines the maximum number of bidding units on which 
the applicant will be permitted to bid and hold high bids. As there is 
no provision for increasing a bidder's eligibility during the course of 
an auction (as described under ``Auction Stages'' in section IV.A.3), 
prospective bidders are cautioned to calculate their upfront payments 
carefully. The total upfront payment does not affect the total dollars 
a bidder may bid on any given license.
    92. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until the end before 
participating. Bidders are required to be active on a specific 
percentage of their current eligibility during each round of the 
auction.
    93. A bidder's activity level in a round is the sum of the bidding 
units associated with licenses on which the bidder is active. A bidder 
is considered active on a license in the current round if it is either 
the high bidder at the end of the previous bidding round and does not 
withdraw the high bid in the current round, or if it submits a bid in 
the current round (see ``Bid Increments and Minimum Acceptable Bids'' 
in section IV.B.(iii)). The minimum required activity is expressed as a 
percentage of the bidder's current bidding eligibility, and increases 
by stage as the auction progresses. Because these procedures have 
proven successful in maintaining the pace of previous auctions (as set 
forth under ``Auction Stages'' in section IV.A.iii and ``Stage 
Transitions'' in section IV.A.iv), the Bureau adopts them for Auction 
No. 50.
iii. Auction Stages
    94. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed to conduct the auction in three stages and employ an activity 
rule. It further proposed that, in each round of Stage One, a bidder 
desiring to maintain its current eligibility would be required to be 
active on licenses encompassing at least 80 percent of its current 
bidding eligibility. In each round of Stage Two, a bidder desiring to 
maintain its current eligibility would be required to be active on at 
least 90 percent of its current bidding eligibility. Finally, the 
Bureau proposed that a bidder in Stage Three, in order to maintain its 
current eligibility, would be required to be active on 98 percent of 
its current bidding eligibility. The Bureau received no comments on 
this proposal.
    95. The Bureau adopts its proposals for the activity rules. Listed 
are the activity levels for each stage of the auction. The FCC reserves 
the discretion to further alter the activity percentages before and/or 
during the auction.
    Stage One: During the first stage of the auction, a bidder desiring 
to maintain its current eligibility will be required to be active on 
licenses that represent at least 80 percent of its current bidding 
eligibility in each bidding round. Failure to maintain the required 
activity level will result in a reduction in the bidder's bidding 
eligibility in the next round of bidding (unless an activity rule 
waiver is used). During Stage One, reduced eligibility for the next 
round will be calculated by multiplying the bidder's current activity 
(the sum of bidding units of the bidder's standing high bids and bids 
during the current round) by five-fourths (5/4).
    Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 90 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). During Stage Two, reduced eligibility for the 
next round will be calculated by multiplying the bidder's current 
activity (the sum of bidding units of the bidder's standing high bids 
and bids during the current round) by ten-ninths (10/9).
    Stage Three: During the third stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 98 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). In this stage, reduced eligibility for the next 
round will be calculated by multiplying the bidder's current activity 
(the sum of bidding units of the bidder's standing high bids and bids 
during the current round) by fifty-fortyninths (50/49).

    Caution: Since activity requirements increase in each auction 
stage, bidders must carefully check their current activity during 
the bidding period of the first round following a stage transition. 
This is especially critical for bidders that have standing high bids 
and do not plan to submit new bids. In past auctions, some bidders 
have inadvertently lost bidding eligibility or used an activity rule 
waiver because they did not re-verify their activity level at stage 
transitions. Bidders may check their activity against the required 
activity level by using the bidding system's bidding module.

    96. Because the foregoing procedures have proven successful in 
maintaining proper pace in previous auctions, the Bureau adopts them 
for Auction No. 50.
iv. Stage Transitions
    97. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed that the auction would generally advance to the next stage 
(i.e., from Stage One to Stage Two, and from Stage Two to Stage Three) 
when the auction activity level, as measured by the percentage of 
bidding units receiving new high bids, is below 20 percent for three 
consecutive rounds of bidding in each Stage. The Bureau further 
proposed that it retain the discretion to change stages unilaterally by 
announcement during the auction. This determination, the Bureau 
proposed, would be based on a variety of measures of bidder activity, 
including, but not limited to, the auction activity level, the 
percentages of licenses (as measured in bidding units) on which there 
are new bids, the number of new bids, and the percentage increase in 
revenue. The Bureau received no comments on this subject.
    98. The Bureau adopts its proposal. Thus, the auction will start in 
Stage One and will advance to the next stage (i.e., from Stage One to 
Stage Two, and from Stage Two to Stage Three) when, in each of three 
consecutive rounds of bidding, the high bid has increased on 20 percent 
or less of the licenses being auctioned

[[Page 15184]]

(as measured in bidding units). In addition, the Bureau will retain the 
discretion to regulate the pace of the auction by announcement. This 
determination will be based on a variety of measures of bidder 
activity, including, but not limited to, the auction activity level, 
the percentages of licenses (as measured in bidding units) on which 
there are new bids, the number of new bids, and the percentage increase 
in revenue. The Bureau believes that these stage transition rules, 
having proven successful in prior auctions, are appropriate for use in 
Auction No. 50.
v. Activity Rule Waivers and Reducing Eligibility
    99. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed that each bidder in the auction would be provided five 
activity rule waivers. Bidders may use an activity rule waiver in any 
round during the course of the auction. The Bureau received no comment 
on this issue.
    100. Based upon the its experience in previous auctions, the Bureau 
adopts its proposal that each bidder be provided five activity rule 
waivers that may be used in any round during the course of the auction. 
Use of an activity rule waiver preserves the bidder's current bidding 
eligibility despite the bidder's activity in the current round being 
below the required level. An activity rule waiver applies to an entire 
round of bidding and not to a particular license. The Bureau is 
satisfied that its 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.
    101. The FCC Automated Auction System assumes that bidders with 
insufficient activity would prefer to use an activity rule waiver (if 
available) rather than lose bidding eligibility. Therefore, the system 
will automatically apply a waiver (known as an ``automatic waiver'') at 
the end of any round where a bidder's activity level is below the 
minimum required unless: (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 required activity 
level. If a bidder has no waivers remaining and does not satisfy the 
required activity level, the current eligibility will be permanently 
reduced, possibly eliminating the bidder from the auction.
    102. A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the round 
by using the ``reduce eligibility'' function in the bidding system. In 
this case, the bidder's eligibility is permanently reduced to bring the 
bidder into compliance with the activity rules as described in 
``Auction Stages'' (see section IV.A.iii discussion). Once eligibility 
has been reduced, a bidder will not be permitted to regain its lost 
bidding eligibility.
    103. Finally, a bidder may proactively use an activity rule waiver 
as a means to keep the auction open without placing a bid. If a bidder 
submits a proactive waiver (using the proactive waiver function in the 
FCC Automated Auction System) during a round in which no bids are 
submitted, the auction will remain open and the bidder's eligibility 
will be preserved. However, an automatic waiver triggered during a 
round in which there are no new bids or withdrawals will not keep the 
auction open.

    Note: Once a proactive waiver is submitted during a round, that 
waiver cannot be unsubmitted.

vi. Auction Stopping Rules
    104. For Auction No. 50, the Bureau proposed to employ a 
simultaneous stopping rule approach. The Bureau also sought comment on 
a modified version of the stopping rule. The modified version of the 
stopping rule would close the auction for all licenses after the first 
round in which no bidder submits a proactive waiver, a withdrawal, or a 
new bid on any license on which it is not the standing high bidder. 
Thus, absent any other bidding activity, a bidder placing a new bid on 
the license for which it is the standing high bidder would not keep the 
auction open under this modified stopping rule.
    105. The Bureau further proposed retaining the discretion to keep 
the auction open even if no new acceptable bids or proactive waivers 
are submitted and no previous high bids are withdrawn in a round. In 
this event, the effect will be the same as if a bidder had submitted a 
proactive waiver. Thus, the activity rule will apply as usual, and a 
bidder with insufficient activity will either use an activity rule 
waiver (if it has any left) or lose bidding eligibility.
    106. In addition, the Bureau proposed that it reserve the right to 
declare that the auction will end after a designated number of 
additional rounds (``special stopping rule''). If the Bureau invokes 
this special stopping rule, it will accept bids in the final round(s) 
only for licenses on which the high bid increased in at least one of 
the preceding specified number of rounds. The Bureau proposed to 
exercise this option only in circumstances such as where the auction is 
proceeding very slowly, where there is minimal overall bidding activity 
or where it appears likely that the auction will not close within a 
reasonable period of time. Before exercising this option, the Bureau is 
likely to attempt to increase the pace of the auction by, for example, 
moving the auction into the next stage (where bidders will be required 
to maintain a higher level of bidding activity), increasing the number 
of rounds per day, and/or adjusting the minimum acceptable bids and bid 
increments for the licenses.
    107. The Bureau received no comments concerning the auction 
stopping rules; therefore, it adopts the proposals. Auction No. 50 will 
begin under the simultaneous stopping rule, and the Bureau will retain 
the discretion to invoke the other versions of the stopping rule. The 
Bureau believes that these stopping rules are most appropriate for 
Auction No. 50, because its experience in prior auctions demonstrates 
that the auction stopping rules balance the interests of administrative 
efficiency and maximum bidder participation.
vii. Auction Delay, Suspension, or Cancellation
    108. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed that, by public notice or by announcement during the auction, 
it 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 conduct of competitive bidding.
    109. Because this approach has proven effective in resolving 
exigent circumstances in previous auctions, the Bureau adopts its 
proposed auction cancellation rules. By public notice or by 
announcement during the auction, the Bureau may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and competitive conduct of competitive bidding. 
In such cases, the Bureau, in its sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureau to delay or 
suspend the auction. The Bureau emphasizes that exercise of

[[Page 15185]]

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
    110. 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. Each bidding round is followed 
by the release of the round results. Multiple bidding rounds may be 
conducted in a given day. Details regarding round results formats and 
locations will also be included in the qualified bidders public notice.
    111. The FCC has discretion to change the bidding schedule in order 
to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. The 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 or Minimum Opening Bid
    112. Background. The Balanced Budget Act calls upon the Commission 
to prescribe methods by which a reasonable reserve price will be 
required or a minimum opening bid established when FCC licenses are 
subject to auction (i.e., because they are mutually exclusive), unless 
the Commission determines that a reserve price or minimum opening bid 
is not in the public interest. Consistent with this mandate, the 
Commission directed the Bureau to seek comment on the use of a minimum 
opening bid and/or reserve price prior to the start of each auction. 
Among other factors, the Bureau must consider the amount of spectrum 
being auctioned, levels of incumbency, the availability of technology 
to provide service, the size of the geographic service areas, the 
extent of interference with other spectrum bands, and any other 
relevant factors that could have an impact on 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. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed to establish minimum opening bids for Auction No. 50 and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 50, the Bureau proposed the following license-by-license 
formula for calculating minimum opening bids:
    $.00001 * kHz * License Area Population with a minimum of $500 per 
license.
    114. In the alternative, the Bureau sought comment on whether, 
consistent with the Balanced Budget Act, the public interest would be 
served by having no minimum opening bid or reserve price.
    115. No comments were received. Therefore the Bureau adopts minimum 
opening bids for Auction No. 50, which 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.
    116. The specific minimum opening bids for each license available 
in Auction No. 50 are set forth in Attachment A of the Auction No. 50 
Procedures Public Notice.
iii. Minimum Acceptable Bids and Bid Increments
    117. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed to use a smoothing methodology to calculate minimum acceptable 
bids. The smoothing methodology is designed to vary the increment for a 
given license between a maximum and minimum value based on the bidding 
activity on that license. This methodology allows the increments to be 
tailored to the activity level of a license, decreasing the time it 
takes for active licenses to reach their final value. The formula used 
to calculate this increment is included as Attachment F of the Auction 
No. 50 Procedures Public Notice. The Bureau further proposed to retain 
the discretion to change the minimum acceptable bids and bid increments 
if circumstances so dictate. The Bureau received no comment on this 
issue.
    118. In each round, each eligible bidder will be able to place a 
bid on the particular license for which it applied in any of nine 
different amounts. The FCC Automated Auction System will list the nine 
acceptable bid amounts for each license.
    119. At the start of the auction and until a bid has been placed on 
a license, the minimum acceptable bid for that license will be equal to 
its minimum opening bid. Corresponding additional bid amounts will be 
calculated using bid increments defined as the difference between the 
minimum opening bid times one plus the percentage increment, rounded as 
described in Attachment F of the Auction No. 50 Procedures Public 
Notice, and the minimum opening bid--i.e., bid increment = (minimum 
opening bid)(1 + percentage increment) {rounded{time}  - (minimum 
opening bid). At the start of the auction and until a bid has been 
placed on a license, the nine acceptable bid amounts for each license 
consist of the minimum opening bid and additional amounts calculated 
using multiple bid increments (i.e., the second bid amount equals the 
minimum opening bid plus the bid increment, the third bid amount equals 
the minimum opening bid plus two times the bid increment, etc).
    120. Once there is a standing high bid on a license, the FCC 
Automated Auction System will calculate a minimum acceptable bid for 
that license for the following round, as described in Attachment F of 
the Auction No. 50 Procedures Public Notice. The difference between the 
minimum acceptable bid and the standing high bid for each license will 
define the bid increment--i.e., bid increment = (minimum acceptable 
bid) -(standing high bid). The nine acceptable bid amounts for each 
license consist of the minimum acceptable bid (the standing high bid 
plus one bid increment) and additional amounts calculated using 
multiple bid increments (i.e., the second bid amount equals the 
standing high bid plus two times the bid increment, the third bid 
amount equals the standing high bid plus three times the bid increment, 
etc.).
    121. The Bureau retains the discretion to change the minimum 
acceptable bids and bid increments and the methodology for determining 
the minimum acceptable bids and bid increments if it determines 
circumstances so dictate. The Bureau will do so by announcement in the 
FCC Automated Auction System. The Bureau may also use its discretion to 
adjust the minimum bid increment without prior notice if circumstances 
warrant.
iv. High Bids
    122. At the end of each bidding round, the high bids will be 
determined based on the highest gross bid amount of the bids received 
for each license.
    123. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed to use a random number generator to select a high bid in the 
event of identical high bids on a license in a given round (i.e., tied 
bids). A random number will be assigned to each bid. The tied bid 
having the highest random number will become the standing high bid. The 
remaining bidders, as well as the high

[[Page 15186]]

bidder, will be able to submit a higher bid in a subsequent round. If 
no bidder submits a higher bid in a subsequent round, the high bid from 
the previous round will win the license. If any bids are received on 
the license in a subsequent round, the high bid will once again be 
determined on the highest gross bid amount received for the license.
v. Bidding
    124. During a round, a bidder may submit bids for as many licenses 
as it wishes (subject to its eligibility), withdraw high bids from 
previous bidding rounds, remove bids placed in the same bidding round, 
or permanently reduce eligibility. Bidders also have the option of 
making multiple submissions and withdrawals in each round. If a bidder 
submits multiple bids for a single license in the same round, the 
system takes the last bid entered as that bidder's bid for the round. 
Bidders should note that the bidding units associated with licenses for 
which the bidder has removed or withdrawn its bid do not count towards 
the bidder's activity at the close of the round.
    125. 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. Normally, four to five minutes are necessary to 
complete a bid submission.) There will be no on-site bidding during 
Auction No. 50.
    126. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by two factors: (i) the licenses 
applied for on FCC Form 175 and (ii) the upfront payment amount 
deposited. The bid submission screens will allow bidders to submit bids 
on only those licenses for which the bidder applied on its FCC Form 
175.
    127. In order to access the bidding functions of the FCC Automated 
Auction System, bidders must 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 for each round after they have 
completed all of the activity for that round.
    128. In each round, eligible bidders will be able to place bids on 
a given license in any of nine different amounts. For each license, the 
FCC Automated Auction System interface will list the nine acceptable 
bid amounts in a drop-down box. Bidders may use the drop-down box to 
select from among the nine acceptable bid amounts. The FCC Automated 
Auction System also includes an import function that allows bidders to 
upload text files containing their bid information.
    129. Until a bid has been placed on a license, the minimum 
acceptable bid for that license will be equal to its minimum opening 
bid. Once there is a standing high bid on a license, the FCC Automated 
Auction System will calculate a minimum acceptable bid for that license 
for the following round, as described in section IV.B.iii.
    130. Finally, bidders are cautioned in selecting their bid amounts 
because, as explained in the following section, bidders who withdraw a 
standing high bid from a previous round, even if mistakenly or 
erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    131. In the Auction No. 50 Comment Public Notice, the Bureau 
proposed bid removal and bid withdrawal procedures. With respect to bid 
withdrawals, the Bureau proposed limiting each bidder to withdrawals in 
no more than two rounds during the course of the auction. The two 
rounds in which withdrawals are utilized would be at the bidder's 
discretion. The Bureau received no comments on this issue.
    132. Procedures. Before the close of a bidding round, a bidder has 
the option of removing any bids placed in that round. By using the 
``remove bid'' function in the bidding system, a bidder may effectively 
``unsubmit'' any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to withdrawal payments. 
Removing a bid will affect a bidder's activity for the round in which 
it is removed, i.e., a bid that is subsequently removed does not count 
toward the bidder's activity requirement. This procedure, about which 
the Bureau received no comments, will enhance bidder flexibility during 
the auction. Therefore, the Bureau adopts these procedures for Auction 
No. 50.
    133. Once a round closes, a bidder may no longer remove a bid. 
However, in later rounds, a bidder may withdraw standing high bids from 
previous rounds using the withdraw bid function in the FCC Automated 
Auction System (assuming that the bidder has not exhausted its 
withdrawal allowance). A high bidder that withdraws its standing high 
bid from a previous round during the auction is subject to the bid 
withdrawal payments specified in 47 CFR 1.2104(g).


    Note: Once a withdrawal is submitted during a round, that 
withdrawal cannot be unsubmitted.


    134. In previous auctions, the Bureau has detected bidder conduct 
that, arguably, may have constituted strategic bidding through the use 
of bid withdrawals. While it continues to recognize the important role 
that bid withdrawals play in an auction, i.e., reducing risk associated 
with efforts to secure various licenses in combination, the Bureau 
concludes that, for Auction No. 50, adoption of a limit on their use to 
two rounds per bidder is the most appropriate outcome. By doing so the 
Bureau believes it strikes a reasonable compromise that will allow 
bidders to use withdrawals. The Bureau's decision on this issue is 
based upon its experience in prior auctions, particularly the PCS D, E 
and F block auctions, and 800 MHz SMR auction, and is in no way a 
reflection of our view regarding the likelihood of any speculation or 
``gaming'' in this auction.
    135. The Bureau will therefore limit the number of rounds in which 
each bidder may place withdrawals to two rounds. These rounds will be 
at the bidder's discretion and there will be no limit on the number of 
bids that may be withdrawn in either of these rounds. Withdrawals 
during the auction will still be subject to the bid withdrawal payments 
specified in 47 CFR 1.2104(g). Bidders should note that abuse of the 
Commission's bid withdrawal procedures could result in the denial of 
the ability to bid on a market.
    136. If a high bid is withdrawn, the minimum accepted bid will 
equal the second highest bid received for the license, which may be 
less than, or equal to, in the case of tied bids, the amount of the 
withdrawn bid. To set the additional bid amounts, the second highest 
bid also will be used in place of the standing high bid in the formula 
used to calculate bid increments. The Commission will serve as a 
``place holder'' high bidder on the license until a new bid is 
submitted on that license.
    137. Calculation. Generally, the Commission imposes payments on 
bidders that withdraw high bids during the course of an auction. If a 
bidder withdraws its bid and there is no higher bid in the same or 
subsequent auction(s), the bidder that withdrew its bid is responsible 
for the difference between its withdrawn bid and the net high bid in 
the same or subsequent auction(s). See 47 CFR 1.2104(g)(1). In the case 
of multiple bid withdrawals on a single license, within the same or

[[Page 15187]]

subsequent auctions(s), the payment for each bid withdrawal will be 
calculated based on the sequence of bid withdrawals and the amounts 
withdrawn. No withdrawal payment will be assessed for a withdrawn bid 
if either the subsequent winning bid or any of the intervening 
subsequent withdrawn bids, in either the same or subsequent 
auctions(s), equals or exceeds that withdrawn bid. Thus, a bidder that 
withdraws a bid will not be responsible for any withdrawal payments if 
there is a subsequent higher bid in the same or subsequent auction(s). 
This policy allows bidders to allocate their resources most efficiently 
as well as to evaluate their bidding strategies and business plans 
during an auction while, at the same time, maintaining the integrity of 
the auction process. The Bureau retains the discretion to scrutinize 
multiple bid withdrawals on a single license for evidence of anti-
competitive strategic behavior and take appropriate action when deemed 
necessary.
    138. In the Part 1 Fifth Report and Order, the Commission modified 
Sec.  1.2104(g)(1) of the rules regarding assessments of interim bid 
withdrawal payments. As amended, Sec.  1.2104(g)(1) provides that in 
instances in which bids have been withdrawn on a license that is not 
won in the same auction, the Commission will assess an interim 
withdrawal payment equal to 3 percent of the amount of the withdrawn 
bids. The 3 percent interim payment will be applied toward any final 
bid withdrawal payment that will be assessed after subsequent auction 
of the license. Assessing an interim bid withdrawal payment ensures 
that the Commission receives a minimal withdrawal payment pending 
assessment of any final withdrawal payment. The Part 1 Fifth Report and 
Order provides specific examples showing application of the bid 
withdrawal payment rule.
vii. Round Results
    139. 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 placed, bids withdrawn, current high 
bids, new minimum acceptable 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. 50 will be available before and 
during the auction. Thus, bidders will know in advance of this auction 
the identities of the bidders against which they are bidding.
viii. Auction Announcements
    140. The FCC will use auction announcements to announce items such 
as schedule changes and stage transitions. All FCC auction 
announcements will be available by clicking a link on the FCC Automated 
Auction System.
ix. Maintaining the Accuracy of FCC Form 175 Information
    141. As noted in section II.H., after the short-form filing 
deadline, applicants may make only minor changes to their FCC Form 175 
applications. For example, permissible minor changes include deletion 
and addition of authorized bidders (to a maximum of three) and certain 
revision of exhibits. Applicants must 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 
should include a subject or caption referring to Auction No. 50. The 
Bureau requests that parties format any attachments to electronic mail 
as Adobe'' Acrobat'' (pdf) or Microsoft'' Word documents.
    142. 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 Christopher Shields of the Auctions and Industry 
Analysis Division at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    143. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed, identifying winning bidders, down 
payments and any withdrawn bid payments due.
    144. 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). In addition, by the same deadline all bidders must 
pay any bid withdrawal payments due under 47 CFR 1.2104(g), as 
discussed in ``Bid Removal and Bid Withdrawal,'' section IV.B.vi. 
(Upfront payments are applied first to satisfy any withdrawn bid 
liability, before being applied toward down payments.)

B. Long-Form Application (FCC Form 601)

    145. 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. 50. 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.

C. Ownership Disclosure Information Report (FCC Form 602)

    146. At the time it submits its long-form application (FCC Form 
601), each winning bidder also must comply with the ownership reporting 
requirements as set forth in 47 CFR 1.913, 1.919, and 1.2112(a). The 
Bureau reminds applicants that effective December 10, 2002, electronic 
filing of the Ownership Disclosure Information Report (FCC Form 602) 
became mandatory. Accordingly, forms filed manually will not be 
accepted. Winning bidders without a current Form 602 already on file 
with the Commission must submit a properly completed Form 602 at the 
time they submit their long-form applications. Further filing 
instructions will be provided to auction winners at the close of the 
auction.

D. Tribal Land Bidding Credit

    147. 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.
    148. 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

[[Page 15188]]

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).
    149. For additional information on the tribal land bidding credit, 
including how the amount of the credit is calculated, applicants should 
review the Commission's rule making proceeding regarding tribal land 
bidding credits and related public notices. Relevant documents can be 
viewed on the Commission's Web site by going to http://wireless.fcc.gov/auctions and clicking on the Tribal Land Credits link.

E. Default and Disqualification

    150. Any high bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) will be subject to the payments described in 47 CFR 
1.2104(g)(2). In such event the Commission may re-auction the license 
or offer it to the next highest bidder (in descending order) at its 
final bid. 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.

F. Refund of Remaining Upfront Payment Balance

    151. All applicants that submitted upfront payments but were not 
winning bidders for a license in Auction No. 50 may be entitled to a 
refund of their remaining upfront payment balance after the conclusion 
of the auction. No refund will be made unless there are excess funds on 
deposit from that applicant after any applicable bid withdrawal 
payments have been paid. 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.
    152. Bidders that drop out of the auction completely may be 
eligible for a refund of their upfront payments before the close of the 
auction. Qualified bidders that have exhausted all of their activity 
rule waivers, have no remaining bidding eligibility, and have not 
withdrawn a high bid during the auction must submit a written refund 
request. If you have completed the refund instructions electronically, 
then only a written request for the refund is necessary. If not, the 
request must also include wire transfer instructions and a Taxpayer 
Identification Number (TIN). Send refund request to: Federal 
Communications Commission, Financial Operations Center, Auctions 
Accounting Group, Gail Glasser or Tim Dates, 445 12th Street, SW., Room 
1-C863, Washington, DC 20554.
    153. 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 at (202) 418-0496 or Gail Glasser at (202) 418-0578.


Federal Communications Commission.
Louis J. Sigalos,
Deputy Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 03-7459 Filed 3-27-03; 8:45 am]
BILLING CODE 6712-01-P