[Federal Register Volume 69, Number 91 (Tuesday, May 11, 2004)]
[Notices]
[Pages 26103-26108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10662]


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FEDERAL COMMUNICATIONS COMMISSION

[Report Nos. AUC-04-37-I (Auction No. 37); DA 04-1020 and AUC-04-37-J 
(Auction No. 37); DA 04-1275]


Revised Inventory and Auction Start Date for FM Broadcast 
Construction Permits, Auction Rescheduled for November 3, 2004; Comment 
Sought on Reserve Prices or Minimum Opening Bids and Other Auction 
Procedures; and Auction for FM Broadcast Construction Permits; 
Deadlines Extended for Comments and Reply Comments

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: By this document, the Wireless Telecommunications Bureau (WTB) 
and the Media Bureau (MB) (collectively referred to as the Bureaus) 
reschedule the postponed FM Broadcast auction (Auction No. 37) for 
November 3, 2004, and seek comment on previously announced procedures 
for Auction No. 37. Also this document announces the revised auction 
inventory for Auction No. 37.

DATES: Comments are due on or before May 17, 2004, and reply comments 
are due on or before May 24, 2004.

ADDRESSES: Comments and reply comments must be sent by electronic mail 
to the following address: [email protected].

FOR FURTHER INFORMATION CONTACT: For legal questions: Kenneth Burnley 
at (202) 418-0660. For general auction questions: Jeff Crooks at (202) 
418-0660 or Linda Sanderson at (717) 338-2851. For legal and service 
rule questions: Lisa Scanlan or Tom Nessinger at (202) 418-2700.

SUPPLEMENTARY INFORMATION: This is a summary of two public notices, DA 
04-1020 (``Auction No. 37 Comment Public Notice'') and DA 04-1275 
(``Auction No. 37 Comment Extension Public Notice'') released on April 
15, 2004 and May 5, 2004 respectively. The complete text of the Auction 
No. 37 Comment Public Notice and the Auction No. 37 Comment Extension 
Public Notice, including the attachments, 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-B402, Washington, DC 20554. The Auction No. 37 Comment Public Notice 
may also be purchased from the Commission's duplicating contractor, 
Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-
2898, or via e-mail [email protected].
    1. By the Auction No. 37 Comment Public Notice, the Wireless 
Telecommunications Bureau (``WTB'') and the Media Bureau (``MB'') 
(collectively referred to as the ``Bureaus'') reschedule the postponed 
auction for FM broadcast construction permits (Auction No. 37) for 
November 3, 2004, and seek comment on previously announced procedures 
for Auction No. 37. In addition, the Auction No. 37 Comment Public 
Notice announces the revised auction inventory for Auction No. 37. As 
discussed in greater detail herein, Auction No. 37 will be composed of 
290 construction permits in the FM broadcast service as listed in 
Attachment A of the Auction No. 37 Comment Public Notice.
    2. Specifically, Attachment A of the Auction No. 37 Comment Public 
Notice lists vacant FM allotments, reflecting FM channels assigned to 
the Table of FM Allotments, 47 CFR 73.202(b), pursuant to the 
Commission's

[[Page 26104]]

established rulemaking procedures, designated for use in the indicated 
community. Pursuant to the policies established in the Broadcast First 
Report and Order, 63 FR 48615 (September 11, 1998), applicants may 
apply for any vacant FM allotment, as specified in Attachment A of the 
Auction No. 37 Comment Public Notice; applicants specifying the same FM 
allotment will be considered mutually exclusive and, thus, the 
construction permit for the FM allotment will be awarded by competitive 
bidding procedures. The reference coordinates for each vacant FM 
allotment are also listed in Attachment A of the Auction No. 37 Comment 
Public Notice.

I. Background

    3. Auction No. 37 was originally scheduled to commence February 21, 
2001 but was subsequently postponed. In Reexamination of the 
Comparative Standards for Noncommercial Educational Applicants, Report 
and Order, 65 FR 36375 (June 8, 2000) (``NCE Report and Order''), the 
Commission adopted new procedures to select among applicants competing 
for noncommercial educational (``NCE'') reserved channels. The 
Commission also concluded that it would use competitive bidding to 
select among competing applications for nonreserved channels even if 
NCE applicants are among the competitors. Several parties, including 
National Public Radio, sought judicial review of this decision in the 
U.S. Court of Appeals for the D.C. Circuit. In National Public Radio, 
Inc. et al. v. F.C.C., 254 F.3d 226 (D.C. Cir. 2001) (``NPR''), the 
court of appeals vacated the portion of the NCE Report and Order that 
required NCE applicants for authorizations in the nonreserved spectrum 
to participate in auctions with mutually exclusive commercial 
applicants. In light of NPR, the Commission postponed Auction No. 37 
while it formulated its response to the court's decision.
    4. In the NCE Second Report and Order, 68 FR 26220 (May 15, 2003), 
the Commission established new policies and procedures for licensing 
nonreserved broadcast spectrum in response to NPR. Pursuant to a Public 
Notice released September 30, 2003, 18 FCC Rcd 19600 (2003), the Media 
Bureau opened a window to permit NCE reservation showings for certain 
vacant FM allotments. The Public Notice established a November 21, 2003 
deadline for filing petitions for rulemaking to amend the FM Table of 
Allotments to reserve FM channels. By the reservation filing deadline, 
129 Petitions for Rulemaking had been filed, including petitions to 
reserve 60 vacant FM allotments previously scheduled to be included in 
Auction No. 37.
    5. In Attachment A of the Auction No. 37 Procedures Public Notice, 
66 FR 8961 (February 5, 2001), the Bureaus listed 351 FM allotments for 
which construction permits would be auctioned. The Bureaus subsequently 
added and removed certain allotments from the Auction No. 37 inventory, 
and the resulting FM allotments, minus those for which Petitions for 
Rulemaking requesting reservation as NCE channels have been filed, will 
comprise the inventory for Auction No. 37. Therefore, Auction No. 37 
will consist of 290 construction permits in the FM broadcast service 
for stations throughout the United States and Guam. These construction 
permits are for vacant FM allotments, reflecting FM channels assigned 
to the Table of FM Allotments, 47 CFR 73.202(b).
    6. Before Auction No. 37 was postponed, on September 25, 2000, the 
Bureaus released a public notice seeking comment on the establishment 
of reserve prices and/or minimum opening bids and procedures for 
Auction No. 37, in accordance with the Balanced Budget Act of 1997. 
Section 3002(a), Balanced Budget Act, 47 U.S.C. 309(j)(4)(F). On 
September 29, 2000, the Bureaus released a second public notice, adding 
eight additional vacant FM allotments to the auction inventory and 
seeking comment on auction procedures and minimum opening bids with 
respect to the additional allotments. The Bureaus received twenty 
comments and three reply comments in response to the 2000 Auction No. 
37 Comment Public Notice, 65 FR 59841 (October 6, 2000) and the Auction 
No. 37 Additional Comment Public Notice, 65 FR 59841 (October 6, 2000). 
Following this round of comments, on January 19, 2001, the Bureaus 
released the 2001 Auction No. 37 Procedures Public Notice, 66 FR 8961 
(February 5, 2001), in which the Bureaus, inter alia, reduced the 
minimum opening bids for the Auction No. 37 construction permits and 
set forth the procedures to be followed in Auction No. 37. We take this 
opportunity to seek comment again on the following issues related to 
Auction No. 37.

II. Auction Structure

A. Simultaneous Multiple Round Auction Design

    7. We propose to award all construction permits included in Auction 
No. 37 in a single stage, simultaneous multiple round auction. This 
methodology offers every construction permit for bid at the same time 
with successive bidding rounds in which bidders may place bids. We seek 
comment on this proposal.

B. Upfront Payments and Bidding Eligibility

    8. The Bureaus propose to make the upfront payments equal to the 
minimum opening bids, which are established based on various factors 
related to the efficiency of the auction and the potential value of the 
spectrum. The specific upfront payment for each FM construction permit 
is set forth in Attachment A of the Auction No. 37 Comment Public 
Notice. We seek comment on this proposal.
    9. We further propose that the amount of the upfront payment 
submitted by a bidder will determine the maximum number of bidding 
units on which a bidder may place bids. This limit is a bidder's 
initial eligibility. Each FM construction permit is assigned a specific 
number of bidding units equal to the upfront payment listed in 
Attachment A of the Auction No. 37 Comment Public Notice, on a bidding 
unit per dollar basis. This number does not change as prices rise 
during the auction. Rather, a bidder may place bids on multiple 
construction permits as long as the total number of bidding units 
associated with those construction permits does not exceed the bidder's 
current eligibility. Eligibility cannot be increased during the 
auction. In order to bid on a construction permit, qualified bidders 
must have an eligibility level that meets the number of bidding units 
assigned to that construction permit. Thus, in calculating its upfront 
payment amount, an applicant must determine the maximum number of 
bidding units it may wish to bid on (or hold high bids on) in any 
single round, and submit an upfront payment covering that number of 
bidding units. We seek comment on this proposal.

C. Activity Rules

    10. 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 late in the auction 
before participating. Bidders are required to be active on a specific 
percentage of their current eligibility during each round of the 
auction. A bidder that does not satisfy the activity rule will either 
lose bidding eligibility in the next round or must use an activity rule 
waiver (if any remain).
    11. We propose a single stage auction with the following activity 
requirement: In each round of the auction, a bidder desiring to 
maintain its current

[[Page 26105]]

eligibility is required to be active on construction permits 
representing one hundred (100) percent of its current bidding 
eligibility. A bidder's activity will be the sum of the bidding units 
associated with the construction permits upon which it places a bid 
during the current round and the bidding units associated with the 
construction permits upon which it is the standing high bidder. Failure 
to maintain the requisite activity level will result in the use of an 
activity rule waiver, if any remain, or a reduction in the bidder's 
eligibility, possibly eliminating the bidder from further bidding in 
the auction. We seek comment on this proposal.

D. Activity Rule Waivers and Reducing Eligibility

    12. Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular construction 
permit. Activity rule waivers can be either proactive or automatic and 
are principally a mechanism for auction participants to avoid the loss 
of bidding eligibility in the event that exigent circumstances prevent 
them from placing a bid in a particular round.
    13. 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 bidding period where a bidder's activity level is below 
the minimum required, unless (i) the bidder has no more activity rule 
waivers available; or (ii) the bidder overrides the automatic 
application of a waiver by reducing eligibility, thereby meeting the 
minimum requirements. If a bidder has no waivers remaining and does not 
satisfy the required activity level, its current eligibility will be 
permanently reduced, possibly eliminating the bidder from further 
bidding in the auction.
    14. A bidder that is eligible to bid on more than one construction 
permit and has insufficient activity may wish to reduce its bidding 
eligibility rather than use an activity rule waiver. If so, the bidder 
must affirmatively override the automatic waiver mechanism during the 
bidding period by using the reduce eligibility function in the bidding 
system. In this case, the bidder's eligibility is permanently reduced 
to bring the bidder into compliance with the activity rules; that is, 
the bidder's eligibility will be reduced to equal its current activity. 
Once eligibility has been reduced, a bidder will not be permitted to 
regain its lost bidding eligibility.
    15. A bidder may proactively use an activity rule waiver as a means 
to keep the auction open without placing a bid. If a bidder submits a 
proactive waiver (using the proactive waiver function in the bidding 
system) during a bidding period in which no bids or withdrawals are 
submitted, the auction will remain open and the bidder's eligibility 
will be preserved. An automatic waiver invoked in a round in which 
there are no new bids or withdrawals will not keep the auction open. 
The submission of a proactive waiver cannot occur after a bid has been 
submitted in a round and will preclude a bidder from placing any bids 
later in that round. Note: Once a proactive waiver is submitted during 
a round, that waiver cannot be unsubmitted.
    16. We propose that each bidder in Auction No. 37 be provided with 
five activity rule waivers that may be used at the bidder's discretion 
during the course of the auction. We seek comment on this proposal.

E. Information Relating to Auction Delay, Suspension or Cancellation

    17. For Auction No. 37, we propose that, by public notice or by 
announcement during the auction, the Bureaus may delay, suspend or 
cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureaus, in their sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureaus to delay or 
suspend the auction. We emphasize that exercise of this authority is 
solely within the discretion of the Bureaus, and its use is not 
intended to be a substitute for situations in which bidders may wish to 
apply their activity rule waivers. We seek comment on this proposal.

III. Bidding Procedures

A. Round Structure

    18. The Commission will conduct Auction No. 37 over the Internet. 
Telephonic bidding will also be available. As a contingency plan, the 
FCC Wide Area Network will be available as well. The telephone number 
through which the backup FCC Wide Area Network may be accessed will be 
announced in a later public notice. Full information regarding how to 
establish such a connection will be provided in the public notice 
announcing details of auction procedures.
    19. In the 2001 Auction No. 37 Procedures Public Notice, the 
Bureaus announced that auction participants could place bids either by 
telephone or electronically by purchasing remote bidding software from 
the Commission. Bidders will still be able to place bids telephonically 
or electronically. However, the Commission's remote bidding software 
has been replaced by an Internet bidding system. The new bidding system 
does not require the purchase of software; however, it does require 
distribution of registration materials to each applicant's contact 
person. These materials include the confidential bidder identification 
number (BIN) and the SecurID cards, both of which are required to place 
bids.
    20. The initial schedule of bidding rounds will be announced in a 
public notice to be released at least one week before the start of the 
auction, and will be included in the registration mailings. The 
simultaneous multiple round format will consist of sequential bidding 
rounds, each followed by the release of round results. Details 
regarding the location and format of round results will be included in 
the same public notice.
    21. The Bureaus have the 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 Bureaus 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. We seek 
comment on this proposal.

B. Reserve Price or Minimum Opening Bid

    22. The Balanced Budget Act calls upon the Commission to prescribe 
methods for establishing a reasonable reserve price or a minimum 
opening bid when FCC licenses or construction permits are subject to 
auction, unless the Commission determines that a reserve price or 
minimum bid is not in the public interest. Consistent with this 
mandate, the Commission has directed the Bureaus to seek comment on the 
use of a minimum opening bid and/or reserve price prior to the start of 
each auction.
    23. Normally, a reserve price is an absolute minimum price below 
which

[[Page 26106]]

an item will not be sold in a given auction. Reserve prices can be 
either published or unpublished. A minimum opening bid, on the other 
hand, is the minimum bid price set at the beginning of the auction 
below which no bids are accepted. It is generally used to accelerate 
the competitive bidding process. Also, the auctioneer often has the 
discretion to lower the minimum opening bid amount later in the 
auction. It is also possible for the minimum opening bid and the 
reserve price to be the same amount.
    24. In light of the Balanced Budget Act's requirements, as well as 
comments received in response to the 2000 Auction 37 Comment Public 
Notice and Auction No. 37 Additional Comment Public Notice, the Bureaus 
propose to establish minimum opening bids for Auction No. 37. The 
Bureaus believe a minimum opening bid, which has been utilized in other 
broadcast auctions, is an effective bidding tool.
    25. Specifically, for Auction No. 37, the proposed minimum opening 
bids were determined by taking into account various factors related to 
the efficiency of the auction and the potential value of the spectrum, 
including the type of service and class of facility offered, market 
size, population covered by the proposed FM broadcast facility, 
industry cash flow data and recent broadcast transactions. The specific 
minimum opening bid for each construction permit available in Auction 
No. 37 is set forth in Attachment A of the Auction No. 37 Comment 
Public Notice. We seek comment on this proposal.
    26. If commenters believe that these minimum opening bids will 
result in unsold construction permits, or are not reasonable amounts, 
or should instead operate as reserve prices, they should explain why 
this is so, and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with valuation analyses 
and suggested reserve prices or minimum opening bid levels or formulas. 
We also seek comment on whether, consistent with the Balanced Budget 
Act, the public interest would be served by having no minimum opening 
bid or reserve price.

C. Minimum Acceptable Bids and Bid Increments

    27. In each round, eligible bidders will be able to place bids on a 
given construction permit in any of nine different amounts. The FCC 
Automated Auction System interface will list the nine acceptable bid 
amounts for each construction permit. Until a bid has been placed on a 
construction permit, the minimum acceptable bid for that construction 
permit will be equal to its minimum opening bid. In the rounds after a 
bid is placed on a construction permit, the minimum acceptable bid for 
that construction permit will be equal to the standing high bid plus 
the defined increment.
    28. Once there is a standing high bid on a construction permit, the 
FCC Automated Auction System will calculate a minimum acceptable bid 
for that construction permit for the following round. The difference 
between the minimum acceptable bid and the standing high bid for each 
construction permit will define the bid increment. The nine acceptable 
bid amounts for each construction permit 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.).
    29. For Auction No. 37, we propose to use a 10 percent bid 
increment. This means that the minimum acceptable bid for a 
construction permit will be approximately 10 percent greater than the 
previous standing high bid received on the construction permit. The 
minimum acceptable bid amount will be calculated by multiplying the 
standing high bid times one plus the increment percentage--i.e., 
(standing high bid) * (1.10). We will round the result using our 
standard rounding procedure for minimum acceptable bid calculations: 
Results above $10,000 are rounded to the nearest $1,000; results below 
$10,000 but above $1,000 are rounded to the nearest $100; and results 
below $1,000 are rounded to the nearest $10.
    30. Until a bid has been placed on a construction permit, the 
minimum acceptable bid for that construction permit will be equal to 
its minimum opening bid. The additional bid amounts are calculated 
using the difference between the minimum opening bid times one plus the 
percentage increment, rounded as described, and the minimum opening 
bid. That is, the increment used to calculate additional bid amounts = 
(minimum opening bid)(1 + percentage increment){rounded{time}  - 
(minimum opening bid). Therefore, when the percentage increment equals 
0.1 (i.e., 10%), the first additional bid amount will be approximately 
ten percent higher than the minimum opening bid; the second, twenty 
percent higher; the third, thirty percent higher; etc.
    31. The Bureaus retain the discretion to change the minimum 
acceptable bids and bid increments if they determine that circumstances 
so dictate. The Bureaus will do so by announcement in the FCC Automated 
Auction System. We seek comment on these proposals.

D. High Bids

    32. At the end of a bidding round, a high bid for each construction 
permit will be determined based on the highest gross bid amount 
received for the construction permit. The Internet bidding system does 
not allow the Commission to determine the relative order in which bids 
are placed during a round. Because of this, in the event of identical 
high bids on a construction permit in a given round (i.e., tied bids), 
a Sybase[reg] SQL pseudo-random number generator will be used to assign 
a random number to each bid. The tied bid having the highest random 
number will become the standing high bid. If the auction were to end 
with no higher bids being placed for that construction permit, the 
winning bidder would be the one that placed the selected high bid. 
However, the remaining bidders, as well as the high bidder, can submit 
higher bids in subsequent rounds. If any bids are received on the 
construction permit in a subsequent round, the high bid again will be 
determined by the highest gross bid amount received for the 
construction permit. We seek comment on this proposal.
    33. A high bid will remain the high bid until there is a higher bid 
on the same construction permit at the close of a subsequent round. A 
high bid from a previous round is sometimes referred to as a ``standing 
high bid.'' Bidders are reminded that standing high bids are counted as 
activity for purposes of the activity rule.

E. Information Regarding Bid Withdrawal and Bid Removal

    34. For Auction No. 37, we propose the following bid removal and 
bid withdrawal procedures. Before the close of a bidding period, a 
bidder has the option of removing any bid placed in that round. By 
removing selected bids in the bidding system, a bidder may effectively 
``unsubmit'' any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to a withdrawal payment. Once a 
round closes, a bidder may no longer remove a bid.
    35. A high bidder may withdraw standing high bids from previous 
rounds using the withdraw function in the bidding system. A high bidder 
that withdraws its standing high bid from a previous round is subject 
to the bid

[[Page 26107]]

withdrawal payment provisions of the Commission rules. We seek comment 
on these bid removal and bid withdrawal procedures.
    36. In the Part 1 Third Report and Order, 65 FR 52401 (August 29, 
2000), the Commission explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and the pursuit of 
efficient backup strategies as information becomes available during the 
course of an auction. The Commission noted, however, that in some 
instances bidders may seek to withdraw bids for improper reasons. The 
Bureaus, therefore, have the discretion, in managing the auction, to 
limit the number of withdrawals to prevent any bidding abuses. The 
Commission stated that the Bureaus should assertively exercise their 
discretion, consider limiting the number of rounds in which bidders may 
withdraw bids, and prevent bidders from bidding on a particular market 
if the Bureaus find that a bidder is abusing the Commission's bid 
withdrawal procedures.
    37. Applying this reasoning, we propose to limit each bidder in 
Auction No. 37 to withdraw standing high bids in no more than two 
rounds during the course of the auction. The two rounds in which 
withdrawals are utilized will be at the bidder's discretion; 
withdrawals otherwise must be in accordance with the Commission's 
rules. There is no limit on the number of standing high bids that may 
be withdrawn in either of the rounds in which withdrawals are utilized. 
Withdrawals will remain subject to the bid withdrawal payment 
provisions specified in the Commission's rules. We seek comment on 
these proposals.

F. Stopping Rule

    38. The Bureaus have the discretion ``to establish stopping rules 
before or during multiple round auctions in order to terminate the 
auction within a reasonable time.'' For Auction No. 37, the Bureaus 
propose to employ a simultaneous stopping rule approach. A simultaneous 
stopping rule means that all construction permits remain available for 
bidding until bidding closes simultaneously on all construction 
permits.
    39. Bidding will close simultaneously on all construction permits 
after the first round in which no new bids, proactive waivers or 
withdrawals are received. Thus, unless circumstances dictate otherwise, 
bidding would remain open on all construction permits until bidding 
stops on every permit.
    40. However, the Bureaus propose to retain the discretion to 
exercise any of the following options during Auction No. 37:
    i. Utilize a modified version of the simultaneous stopping rule. 
The modified stopping rule would close the auction for all construction 
permits after the first round in which no bidder submits a proactive 
waiver, withdrawal, or a new bid on any construction permit on which it 
is not the standing high bidder. Thus, absent any other bidding 
activity, a bidder placing a new bid on a construction permit for which 
it is the standing high bidder would not keep the auction open under 
this modified stopping rule.
    ii. Keep the auction open even if no new bids or proactive waivers 
are submitted and no previous high bids are withdrawn. In this event, 
the effect will be the same as if a bidder had submitted a proactive 
waiver. The activity rule, therefore, will apply as usual and a bidder 
with insufficient activity will either lose bidding eligibility or use 
a remaining activity rule waiver.
    iii. Declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the Bureaus invoke 
this special stopping rule, it will accept bids in the specified final 
round(s) only for construction permits on which the high bid increased 
in at least one of a specified preceding number of rounds.
    41. The Bureaus propose to exercise these options only in certain 
circumstances, for example, where the auction is proceeding very 
slowly, there is minimal overall bidding activity, or it appears likely 
that the auction will not close within a reasonable period of time. 
Before exercising these options, the Bureaus are likely to attempt to 
increase the pace of the auction by, for example, increasing the number 
of bidding rounds per day, and/or increasing the amount of the minimum 
bid increments for the limited number of construction permits where 
there is still a high level of bidding activity. We seek comment on 
these proposals.

IV. Due Diligence

    42. Potential bidders are solely responsible for investigating and 
evaluating all technical and market place factors that may have a 
bearing on the value of the broadcast facilities in this auction. 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 permittee in the 
broadcast service, subject to certain conditions and regulations. An 
FCC auction does not constitute an endorsement by the FCC of any 
particular service, technology, or product, nor does an FCC 
construction permit or license constitute a guarantee of business 
success. Applicants should perform their individual due diligence 
before proceeding as they would with any new business venture. In 
particular, potential bidders are strongly encouraged to review all 
underlying Commission orders, such as the specific Report and Orders 
amending the FM Table of Allotments and allotting the FM channel(s) on 
which they plan to bid. Reports and Orders adopted in FM allotment 
rulemaking proceedings often include anomalies such as site 
restrictions or expense reimbursement requirements. Additionally, 
potential bidders should perform technical analyses sufficient to 
assure them that, should they prevail in competitive bidding for a 
given FM construction permit, they will be able to build and operate 
facilities that will fully comply with the Commission's technical and 
legal requirements.
    43. Potential bidders are strongly encouraged to conduct their own 
research prior to Auction No. 37 in order to determine the existence of 
pending proceedings that might affect their decisions regarding 
participation in the auction. Participants in Auction No. 37 are 
strongly encouraged to continue such research during the auction.

V. Dates and Deadlines

    44. The auction is scheduled to begin on November 3, 2004. In the 
public notice announcing the auction procedures, we will announce the 
following additional pre-auction dates and deadlines:
     Auction Seminar
     Short-Form Application (FCC Form 175) Filing Window Opens
     Short-Form Application (FCC Form 175) Filing Window 
Deadline
     Upfront Payments (via wire transfer)
     Mock Auction
    45. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed and identifying winning bidders, 
down payments, final payments, and any withdrawn bid payments due.
    46. 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 Commission for Auction No. 37 to 20 percent of the net amount 
of its winning bids (gross bids less any applicable bidding credits). 
In addition, by the same deadline, all bidders must pay any

[[Page 26108]]

bid withdrawal payments due under 47 CFR 1.2104(g).
    47. WTB now employs a final payment deadline different from that 
announced in the 2001 Procedures Public Notice. Consistent with current 
practice, for Auction No. 37, the Bureaus are considering requiring 
each winning bidder to submit the balance of the net amount of its 
winning bids within 10 business days after the deadline for submitting 
down payments.

VI. Conclusion

    48. Comments are due on or before May 17, 2004, and reply comments 
are due on or before May 24, 2004. Because of the disruption of regular 
mail and other deliveries in Washington, DC, the Bureaus require that 
all comments and reply comments be filed electronically. Comments and 
reply comments must be sent by electronic mail to the following 
address: [email protected]. The electronic mail containing the comments 
or reply comments must include a subject or caption referring to 
Auction No. 37 Comments and the name of the commenting party. The 
Bureaus request that parties format any attachments to electronic mail 
as Adobe[reg] Acrobat[reg] (pdf) or Microsoft[reg] Word documents. 
Copies of comments and reply comments will be available for public 
inspection during regular business hours in the FCC Reference 
Information Center, Room CY-A257, 445 12th Street, SW., Washington, DC 
20554. In addition, the Bureaus request that commenters fax a courtesy 
copy of their comments and reply comments to the attention of Kathryn 
Garland at (717) 338-2850.
    49. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making oral ex parte presentations are reminded that 
memoranda summarizing the presentations must contain summaries of the 
substance of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in Sec.  1.1206(b) of the Commission's rules.

Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 04-10662 Filed 5-6-04; 3:54 pm]
BILLING CODE 6712-01-P