[Federal Register Volume 69, Number 136 (Friday, July 16, 2004)]
[Notices]
[Pages 42729-42742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16221]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-04-37-K; DA 04-1699]


Auction of FM Broadcast Construction Permits Scheduled for 
November 3, 2004; 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, and minimum opening 
bids for the upcoming auction of certain FM Broadcast construction 
permits. This document is intended to familiarize prospective bidders 
with the procedures and minimum opening bids for this auction.

DATES: Auction No. 37 is scheduled for November 3, 2004.

FOR FURTHER INFORMATION CONTACT: Auctions and Spectrum Access Division, 
WTB: For legal questions: Kenneth Burnley at (202) 418-0660, for 
general auction questions: Jeff Crooks at (202) 418-0660 or Lisa Stover 
at (717) 338-2888. Media Contact: Lauren Patrich at (202) 418-7944.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 37 
Procedures Public Notice released on June 10, 2004. The complete text 
of the Auction No. 37 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. 37 
Procedures Public Notice may also be purchased from the Commission's 
duplicating contractor, Best Copy and Printing, Inc. (``BCPI''), 
Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, 
telephone 202-488-5300, facsimile 202-488-5563, or you may contact BCPI 
at their Web site: http://www.BCPIWEB.com. This document is also 
available on the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/37/.

I. General Information

A. Introduction

    1. The Auction No. 37 Procedures Public Notice, announces the 
procedures and minimum opening bids for the upcoming auction of certain 
FM Broadcast construction permits scheduled for November 3, 2004 
(Auction No. 37). On April 15, 2004, in accordance with the Balanced 
Budget Act of 1997, the Media Bureau (``MB'') and the Wireless 
Telecommunications Bureau (``WTB'') (collectively the ``Bureaus'') 
released a public notice seeking comment on previously announced 
procedures to be used in Auction No. 37. The Bureaus received eight 
comments and no reply comments in response to the 2004 Auction No. 37 
Revised Comment Public Notice, 69 FR 26103, May 11, 2004
i. Background of Proceeding
    2. As described in detail in the 2004 Auction No. 37 Revised 
Comment Public Notice, Auction No. 37 was originally scheduled for 
February 21, 2001, but was subsequently postponed. Before Auction No. 
37 was postponed in September 2001, on September 25, 2000, the Bureaus 
released the Auction No. 37 Comment Public Notice, 65 FR 59841, October 
6, 2000, 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. On September 29, 2000, the 
Bureaus released the Auction No. 37 Additional Comment Public Notice, 
65 FR 59841, October 6, 2000, 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. On January 19, 2001, the Bureaus released the Auction No. 
37 2001 Procedures Public Notice, 66 FR 8961, February 5, 2001, in 
which the Bureaus, inter alia, reduced the

[[Page 42730]]

minimum opening bids for the Auction No. 37 construction permits, and 
set forth the procedures to be followed in Auction No. 37.
    3. In the NCE Second Report and Order, 68 FR 26220, May 15, 2003, 
the Commission established revised procedures through which NCE 
applicants could seek to reserve non-reserved FM channels. Pursuant to 
the Public Notice, Media Bureau Opens Window to Permit Noncommercial 
Educational Reservation Showings for Certain Vacant FM Allotments, 
released September 30, 2003, 18 FCC Rcd 19600 (2003), MB opened a 
window to permit NCE reservation showings for certain FM allotments. By 
the reservation filing deadline, NCE applicants had filed petitions to 
reserve 60 of the channels previously included in the Auction No. 37 
inventory. Those channels have been removed from the auction inventory 
while reservation showings are being evaluated. Auction No. 37 will 
proceed with the remaining vacant FM allotments. In the 2004 Auction 
No. 37 Revised Comment Public Notice, the Bureaus again sought comment 
on the minimum opening bids and procedures for Auction No. 37.
ii. Construction Permits to Be Auctioned
    4. Auction No. 37 will consist of 290 construction permits in the 
FM Broadcast service for stations throughout the United States, Guam, 
and American Samoa. These construction permits are for vacant FM 
allotments, reflecting FM channels assigned to the Table of FM 
Allotments, 47 CFR 73.202(b), pursuant to the Commission's 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 
Procedures 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 Procedures Public 
Notice. When two or more short-form applications (FCC Form 175) for an 
FM allotment are accepted for filing, mutual exclusivity (``MX'') 
exists for auction purposes. Once mutual exclusivity exists for auction 
purposes, even if only one applicant within an MX Group submits an 
upfront payment, that applicant is required to submit a bid in order to 
obtain the construction permit.

B. Rules and Disclaimers

i. Relevant Authority
    5. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the FM broadcast service contained 
in Title 47, Part 73 of the Code of Federal Regulations. Prospective 
bidders must also be familiar with the rules relating to broadcast 
auctions and competitive bidding proceedings contained in Title 47, 
Part 1, subpart Q, and Part 73, subpart I of the Code of Federal 
Regulations. Prospective bidders must also be thoroughly familiar with 
the procedures, terms and conditions contained in Auction 37 Procedures 
Public Notice, the 2004 Auction No. 37 Revised Comment Public Notice, 
and the Broadcast First Report and Order, the Broadcast Reconsideration 
Order, 64 FR 56974, October 22, 1999, and the New Entrant Bidding 
Credit Reconsideration Order, 64 FR 44856, August 18, 1999. In 
particular, broadcasters should also familiarize themselves with the 
Commission's recent amendments and clarifications to its general 
competitive bidding rules.
    6. The terms contained in the Commission's rules, relevant orders 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in our public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction.
ii. Prohibition of Collusion
    7. To ensure the competitiveness of the auction process, the 
Commission's Part 1 rules prohibit applicants for any of the same 
geographic license areas from communicating with each other during the 
auction about bids, bidding strategies, or settlements unless such 
applicants have identified each other on their FCC Form 175 
applications as parties with whom they have entered into agreements 
under Sec.  1.2105(a)(2)(viii). Thus, applicants for any of the same 
geographic license areas must affirmatively avoid all discussions with 
each other that affect, or in their reasonable assessment, have the 
potential to affect, bids or bidding strategy. This prohibition begins 
at the short-form application filing deadline and ends at the down 
payment deadline after the auction. The ``geographic license area'' is 
the market designation of the particular service. For the FM service, 
the market designation is the particular vacant FM allotment (e.g., 
Bethel, Alaska Channel 252C3, Market FM001). In Auction No. 37, for 
example, the rule would apply to applicants bidding for any of the same 
FM allotments. Therefore, applicants that apply to bid for an FM 
construction permit for the same allotment would be precluded from 
engaging in prohibited communications after the FCC Form 175 short-form 
application deadline. In addition, even if auction applicants are each 
eligible to bid on only one common FM allotment, they may not discuss 
with each other their bids or bidding strategies relating to any FM 
allotment that either is eligible to bid on. For purposes of this 
prohibition, Sec.  1.2105(c)(7)(i) defines applicant as including all 
controlling interests in the entity submitting a short-form application 
to participate in the auction, as well as all holders of partnership 
and other ownership interests and any stock interest amounting to 10 
percent or more of the entity, or outstanding stock, or outstanding 
voting stock of the entity submitting a short-form application, and all 
officers and directors of that entity.
    8. Bidders competing for construction permits for any of the same 
designated markets are encouraged not to use the same individual as an 
authorized bidder. A violation of the anti-collusion rule could occur 
if an individual acts as the authorized bidder for two or more 
competing applicants, and conveys information concerning the substance 
of bids or bidding strategies between the bidders he or she is 
authorized to represent in the auction. Also, if the authorized bidders 
are different individuals employed by the same organization (e.g., law 
firm or consulting firm), a violation could similarly occur. In such a 
case, at a minimum, applicants should certify on their applications 
that precautionary steps have been taken to prevent communication 
between authorized bidders and that applicants and their bidding agents 
will comply with the anti-collusion rule. However, the Bureaus caution 
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.
    9. The Commission's anti-collusion rules allow applicants to form 
certain agreements during the auction, provided the applicants have not 
applied for construction permits in the same designated market. 
However, applicants may enter into bidding agreements

[[Page 42731]]

before filing their FCC Form 175, as long as they disclose the 
existence of the agreement(s) in their FCC Form 175. If parties agree 
in principle on all material terms prior to the short-form filing 
deadline, those parties must be identified on the short-form 
application under 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 the same designated market. By signing their FCC 
Form 175 short-form applications, applicants are certifying their 
compliance with Sec. Sec.  1.2105(c) and 73.5002.
    10. Section 1.65 of the Commission's rules requires an applicant to 
maintain the accuracy and completeness of information furnished in its 
pending application and to notify the Commission within 30 days of any 
substantial change that may be of decisional significance to that 
application. Thus, Sec.  1.65 requires auction applicants that engage 
in communications of bids or bidding strategies that result in a 
bidding agreement, arrangement or understanding not already identified 
on their short-form applications to promptly disclose any such 
agreement, arrangement or understanding to the Commission by amending 
their pending applications. In addition, Sec.  1.2105(c)(6) requires 
all auction applicants to report prohibited discussions or disclosures 
regarding bids or bidding strategy to the Commission in writing 
immediately, but in no case later than five business days after the 
communication occurs, even if the communication does not result in an 
agreement or understanding regarding bids or bidding strategy that must 
be reported under Sec.  1.65.
    11. Applicants that are winning bidders will be required to 
disclose in their long-form applications the specific terms, 
conditions, and parties involved in all bidding consortia, joint 
ventures, partnerships, and other arrangements entered into relating to 
the competitive bidding process. Any applicant found to have violated 
the anti-collusion rule may be subject to sanctions, including 
forfeiture of its upfront payment, down payment or full bid amount, and 
may be prohibited from participating in future auctions. In addition, 
applicants are reminded that they are subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace.
    12. A summary listing of documents from the Commission and the 
Bureaus addressing the application of the anti-collusion rules may be 
found in Attachment F of the Auction No. 37 Procedures Public Notice.
iii. Due Diligence
    13. Potential bidders are reminded that they 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.
    14. In particular, potential bidders are strongly encouraged to 
review all underlying Commission orders, such as the specific Report 
and Order 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. Bidders are also 
responsible for reviewing all pending rulemaking petitions and open 
proceedings that might affect the FM allotment(s) on which they plan to 
bid. Additionally, potential bidders should perform technical analyses 
sufficient to assure them that, should they prevail in competitive 
bidding for a given FM allotment, they will be able to build and 
operate facilities that will fully comply with the Commission's 
technical and legal requirements.
    15. Potential bidders are also strongly encouraged to conduct their 
own research prior to Auction No. 37 in order to determine the 
existence of any pending administrative or judicial proceedings that 
might affect their decision to participate in the auction. Participants 
in Auction No. 37 are strongly encouraged to continue such research 
throughout the auction.
    16. Potential bidders should also be aware that certain pending and 
future applications (including those for modification), petitions for 
rulemaking, requests for special temporary authority, waiver requests, 
petitions to deny, petitions for reconsideration, informal oppositions, 
and applications for review before the Commission may relate to 
particular applicants or incumbent permittees or the construction 
permits available in Auction No. 37. In addition, pending and future 
judicial proceedings may relate to particular applicants or incumbent 
permittees, or the construction permits available in Auction No. 37. 
Prospective bidders are responsible for assessing the likelihood of the 
various possible outcomes, and considering their potential impact on 
construction permits available in this auction.
    17. Prospective bidders should perform due diligence to identify 
and consider all proceedings that may affect the construction permits 
being auctioned. We note that resolution of such matters could have an 
impact on the availability of spectrum for Auction No. 37. In addition, 
although the Commission may continue to act on various pending 
applications, informal objections, petitions, and other requests for 
Commission relief, some of these matters may not be resolved by the 
time of the auction.
    18. 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 
the construction permits available in Auction No. 37. Potential bidders 
are strongly encouraged to physically inspect any sites located in, or 
near, the FM allotment for which they plan to bid.
    19. Potential bidders may research the licensing database for the 
Media Bureau on the Internet in order to determine which channels are 
already licensed to incumbent licensees. Licensing records for the 
Media Bureau are contained in the Media Bureau's Consolidated Data Base 
System (CDBS) and may be researched on the Internet at http://www.fcc.gov/mb/. Potential bidders may query the database online and 
download a copy of their search results if desired. Detailed 
instructions on using Search for Station Information, Search for 
Ownership Report Information and Search for Application Information and 
downloading query results are available online by selecting the CDBS 
Public Access (main) button at the bottom of the Electronic Filing and 
Public Access list section.
    20. 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. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by a bidder,

[[Page 42732]]

bidders may obtain or verify such information from independent sources 
or assume the risk of any incompleteness or inaccuracy in said 
databases. 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.
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 construction permit, and 
not in default on any payment for Commission construction permits or 
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, construction permit or license revocations, exclusion from 
participation in future auctions, and/or criminal prosecution.
    22. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 37 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
     The first contact is a ``cold call'' from a telemarketer, 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) The Internal Revenue Service (``IRS''), Federal Trade 
Commission (``FTC''), Securities and Exchange Commission (``SEC''), 
FCC, or other government agency has approved the investment; (b) the 
investment is not subject to State or Federal securities laws; or (c) 
the investment will yield unrealistically high short-term profits. In 
addition, the offering materials often include copies of actual FCC 
releases, or quotes from FCC personnel, giving the appearance of FCC 
knowledge or approval of the solicitation.
    23. 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. 37 may also call the FCC 
Consumer Center at (888) CALL-FCC ((888) 225-5322).
v. National Environmental Policy Act (NEPA) Requirements
    24. Permittees must comply with the Commission's rules regarding 
the National Environmental Policy Act (NEPA). The construction of a 
broadcast facility is a federal action and the permittee must comply 
with the Commission's NEPA rules for each such facility.

C. Auction Specifics

i. Auction Date
    25. The auction will begin on Wednesday, November 3, 2004, as 
announced in the Auction No. 37 Comment Public Notice. 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 construction permits will be conducted on each business 
day until bidding has stopped on all construction permits.
ii. Auction Title
    26. Auction No. 37--FM Broadcast.
iii. Bidding Methodology
    27. The bidding methodology for Auction No. 37 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet, and telephonic bidding will be available as well. As a 
contingency plan, bidders may also dial in to the FCC Wide Area 
Network. Qualified bidders are permitted to bid telephonically or 
electronically.
iv. Pre-Auction Dates and Deadlines
    28. The following is a list of important dates related to Auction 
No. 57:

Auction Seminar--July 22, 2004
Short-Form Application (FCC FORM 175) Filing Window Opens--July 22, 
2004; noon, e.t.
Short-Form Application (FCC FORM 175) Filing Window Deadline--August 6, 
2004; 6 p.m. e.t.
Upfront Payments (via wire transfer)--September 24, 2004; 6 p.m. e.t.
Mock Auction--October 29, 2004
Auction Begins--November 3, 2004
v. Requirements for Participation
    29. Those wishing to participate in the auction must:
     Submit a short form application (FCC Form 175) 
electronically by 6 p.m. e.t., August 6, 2004. No other application may 
be substituted for the FCC Form 175.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. e.t., September 24, 2004.
     Comply with all provisions outlined in this Auction No. 37 
Procedures Public Notice and applicable Commission rules.
    30. Two commenters suggest that we establish restrictions on which 
entities are eligible to participate in Auction No. 37. The Bureaus' 
process for seeking comment on auction procedures is not the 
appropriate forum to address such rule changes. Such an issue should 
have been raised in the context of a rulemaking proceeding establishing 
license eligibility rules for the FM Broadcast service.
vi. General Contact Information
General Auction Information, General Auction Questions, Seminar 
Registration
    FCC Auctions Hotline (888) 225-5322, Press Option 2 or 
direct (717) 338-2888. Hours of service: 8 a.m.-5:30 p.m. e.t. Monday 
through Friday
Auction Legal Information, Auction Rules, Policies, Regulations
    Auctions and Spectrum Access Division (202) 418-0660
Licensing Information Rules, Policies, Regulations, Licensing Issues, 
Engineering Issues, Due Diligence, Incumbency Issues
    Audio Division (202) 418-2700
Technical Support, Electronic Filing, FCC Automated Auction System
    FCC Auctions Technical Support Hotline (202) 414-1250 (Voice), 
(202) 414-1255 (TTY). Hours of service: 8 a.m. to 6:00 p.m. e.t., 
Monday through Friday
Payment Information, Wire Transfers, Refunds
    FCC Auctions Accounting Group (202) 418-0578, (202) 418-2843 (Fax)
Telephonic Bidding
    Will be furnished only to qualified bidders
Press Information
    Lauren Patrich at (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://www.fcc.gov/mb/audio, ftp://

[[Page 42733]]

ftp.fcc.gov

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

    31. Guidelines for completion of the short-form application (FCC 
Form 175) are set forth in Attachment D of the Auction No. 37 
Procedures Public Notice. The short-form application seeks the 
applicant's name and address, legal classification, status, new entrant 
bidding credit eligibility, identification of the construction 
permit(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 below 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. To participate in Auction No. 37, no other application 
may be substituted for the FCC Form 175.

A. Permit Selection

    32. In the FCC Form 175 for certain previous non-broadcast 
auctions, applicants could use a ``Save All Licenses'' function to 
indicate that they wanted to pursue all markets being auctioned. One 
commenter suggests we not include a ``Save All Licenses'' function in 
the Form 175 for Auction No. 37. The commenter claims that inclusion of 
this function will increase the likelihood that applicants will use the 
function rather than selecting only those allotments that they wish to 
construct and operate. We agree that a ``Save All Licenses'' function 
is appropriate for wireless auctions, but it is inappropriate in the 
broadcast context. Thus, on the FCC Form 175 for Auction No. 37, 
applicants must indicate FM construction permits that they want to 
pursue by selecting the FM allotments individually.

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

    33. The Commission indicated in the Broadcast First Report and 
Order that, for purposes of determining eligibility to participate in a 
broadcast auction, the uniform Part 1 ownership disclosure standards 
would apply. Therefore, in completing the FCC Form 175, all applicants 
will be required to file an ``Exhibit A'' and provide information 
required by Sec. Sec.  1.2105 and 1.2112 of the Commission's rules, 
thus 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)

    34. 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 that relate in any way to the construction 
permits 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 
construction permits on which they will or will not bid. As discussed 
above, 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 market after the 
deadline. Where applicants have entered into consortia or joint bidding 
arrangements, applicants must submit an ``Exhibit B'' to the FCC Form 
175.
    35. 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 construction permits in the same market 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, applicants are reminded that 
certain discussions or exchanges could touch upon impermissible subject 
matters because they may convey pricing information and bidding 
strategies. Such subject areas include, but are not limited to, issues 
such as management, sales, local marketing agreements, rebroadcast 
agreements, and other transactional agreements.

D. New Entrant Bidding Credit (FCC Form 175 Exhibit C)

    36. To fulfill its obligations under Sec.  309(j) and further its 
long-standing commitment to the diversification of broadcast facility 
ownership, the Commission adopted a tiered New Entrant Bidding Credit 
for broadcast auction applicants with no, or very few, other media 
interests.
i. Eligibility
    37. The interests of the bidder, and of any individuals or entities 
with an attributable interest in the bidder, in other media of mass 
communications shall be considered when determining a bidder's 
eligibility for the New Entrant Bidding Credit. The bidder's 
attributable interests shall be determined as of the short-form 
application (FCC Form 175) filing deadline--August 6, 2004. Bidders 
intending to divest a media interest or make any other ownership 
changes, such as resignation of positional interests, in order to avoid 
attribution for purposes of qualifying for the New Entrant Bidding 
Credit must have consummated such divestment transactions or have 
completed such ownership changes by no later than the short-form filing 
deadline--August 6, 2004.
    38. Under traditional broadcast attribution rules, those entities 
or individuals with an attributable interest in a bidder include:
     All officers and directors of a corporate bidder;
     Any owner of 5 percent or more of the voting stock of a 
corporate bidder;
     All partners and limited partners of a partnership bidder, 
unless the limited partners are sufficiently insulated; and
     All members of a limited liability company, unless 
sufficiently insulated.
    39. In cases where a bidder's spouse or close family member holds 
other media interests, such interests are not automatically 
attributable to the bidder. The Commission decides attribution issues 
in this context based on certain factors traditionally considered 
relevant. Bidders should note that the mass media attribution rules 
were recently revised.
    40. Bidders are also reminded that, by the New Entrant Bidding 
Credit Reconsideration Order, the Commission further refined the 
eligibility standards for the New Entrant Bidding Credit, judging it 
appropriate to attribute the media interests held by very substantial 
investors in, or creditors of, a bidder claiming new entrant status. 
Specifically, the attributable mass media interests held by an 
individual or entity with an equity and/or debt interest in a

[[Page 42734]]

bidder shall be attributed to that bidder for purposes of determining 
its eligibility for the New Entrant Bidding Credit, if the equity and 
debt interests, in the aggregate, exceed 33 percent of the total asset 
value of the bidder, even if such an interest is non-voting.
    41. Generally, media interests will be attributable for purposes of 
the New Entrant Bidding Credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. However, attributable interests held by a 
winning bidder in existing low power television, television translator 
or FM translator facilities will not be counted among the bidders' 
other mass media interests in determining its eligibility for a New 
Entrant Bidding Credit. A medium of mass communications is defined in 
47 CFR 73.5008(b). Full service noncommercial educational stations, on 
both reserved and non-reserved channels, are included among ``media of 
mass communications'' as defined in Sec.  73.5008(b).
ii. Application Requirements
    42. In addition to the ownership information required on Exhibit A, 
applicants are required to file supporting documentation on Exhibit C 
to their FCC Form 175 applications to establish that they satisfy the 
eligibility requirements to qualify for a New Entrant Bidding Credit. 
In those cases where a New Entrant Bidding Credit is being sought, a 
certification under penalty of perjury must be set forth in Exhibit C. 
An applicant claiming that it qualifies for a 35 percent new entrant 
bidding credit must provide a certification, under penalty of perjury, 
that neither it nor any of its attributable interest holders have any 
attributable interests in any other media of mass communications. An 
applicant claiming that it qualifies for a 25 percent new entrant 
bidding credit must provide a certification, under penalty of perjury, 
that neither it nor any of its attributable interest holders have any 
attributable interests in more than three media of mass communications, 
and must identify and describe such media of mass communications.
iii. Bidding Credits
    43. Applicants that qualify for the New Entrant Bidding Credit, as 
set forth in 47 CFR 73.5007, are eligible for a bidding credit that 
represents the amount by which a bidder's winning bid is discounted. 
The size of a New Entrant Bidding Credit depends on the number of 
ownership interests in other media of mass communications that are 
attributable to the bidder-entity and its attributable interest-
holders:
     A 35 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has no attributable interest in any 
other media of mass communications, as defined in 47 CFR 73.5008;
     A 25 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has an attributable interest in no more 
than three mass media facilities, as defined in 47 CFR 73.5008;
     No bidding credit will be given if any of the commonly 
owned mass media facilities serve the same area as the proposed 
broadcast station, as defined in 47 CFR 73.5007(b), or if the winning 
bidder, and/or any individual or entity with an attributable interest 
in the winning bidder, has attributable interests in more than three 
mass media facilities.
    44. Bidding credits are not cumulative; qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both. Attributable interests are defined in 47 CFR. 73.3555 and Note 2 
of that section. Bidders should note that unjust enrichment provisions 
apply to a winning bidder that utilizes a bidding credit and 
subsequently seeks to assign or transfer control of its license or 
construction permit to an entity not qualifying for the same level of 
bidding credit.
    45. Several commenters request that we revise the new entrant 
bidding credits available for Auction No. 37. One commenter suggests we 
adopt certain measures to prevent what it terms ``bidding credit 
fraud,'' whereby certain bidders initially claim eligibility for new 
entrant bidding credits and thereafter change their status to the 
alleged disadvantage of other bidders. Another commenter suggests that 
we revise the eligibility criteria for new entrant bidding credits. A 
third commenter, suggests a graduated scale of bidding credits ranging 
from a 10 to 50 percent discount for bidders with no commercial 
stations and proposes that bidders with a large number of commercial 
stations pay up to five times the amount of their winning bid.
    46. Several commenters provide suggestions relating to the broad 
context of bidding credits and bidding preferences in Auction No. 37. 
For example, one commenter requests that the Commission provide bidding 
credits for minority-owned businesses in Auction No. 37. Another 
commenter requests that we first auction the construction permits 
offered in Auction No. 37 to minority businesses before the announced 
start date for Auction No. 37. A third commenter suggests a bidding 
credit for an applicant that has its main office within 50 miles of the 
allotment on which it is bidding.
    47. First, we disagree with the assumption underlying comments that 
applicants that lose or change their new entrant bidding credit status 
have necessarily engaged in fraudulent misrepresentation. To the extent 
that an applicant makes a misrepresentation or lacks candor in the 
course of its claim for a bidding credit, the Commission has sufficient 
mechanisms to address such conduct, including the petition to deny 
process. We therefore find no reason to adopt special measures to 
address these concerns.
    48. We also reject various suggestions by commenters to revise the 
criteria for and the amount of the new entrant bidding credit and to 
adopt new bidding credits based on other criteria. Implementation of 
these proposals would require amendment of the Commission's competitive 
bidding and broadcast service rules, which can only be accomplished 
through a Commission rulemaking proceeding. The Bureau's process for 
seeking comment on auction procedures is not the appropriate forum to 
address such rule changes. Such rule changes should have been raised in 
the context of the rulemaking proceeding establishing bidding credits 
for the FM Broadcast service.

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

    49. Each applicant must certify on its FCC Form 175 application 
under penalty of perjury that the applicant, its controlling interests, 
its affiliates, and the affiliates of its controlling interests, as 
defined by Sec.  1.2110, are not in default on any payment for 
Commission licenses (including down payments) and not delinquent on any 
non-tax debt owed to any Federal agency. In addition, each applicant 
must include in its FCC Form 175 application a statement made under 
penalty of perjury indicating whether or not the applicant, its 
affiliates, its controlling interests, or the affiliates of its 
controlling interest, as defined by Sec.  1.2110, have ever been in 
default on any Commission licenses or have ever been delinquent on any 
non-tax debt owed to any Federal agency. Applicants must include this 
statement as Exhibit D of the FCC Form 175. Prospective applicants are 
reminded that submission of a false certification to the

[[Page 42735]]

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.
    50. ''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. 37, provided that they are otherwise qualified. 
However, as discussed infra in section III.D.iii, former defaulters are 
required to pay upfront payments that are fifty percent more than the 
normal upfront payment amounts. One commenter, although agreeing with 
the current defaulter and former defaulter certification requirement, 
suggests as an alternative that if a former defaulter has remedied all 
defaults, cured all outstanding delinquencies and remained debt-free 
for at least ten years, it only be required to pay the standard upfront 
payment. However, implementation of this suggestion would require 
amendment of Sec.  1.2106(a) of the Commission's rules, which can only 
be accomplished through a Commission rulemaking proceeding.

F. Installment Payments

    51. One commenter suggests we allow small businesses to pay for 
their licenses by making installment payments throughout the eight-year 
initial license period. In the Part 1 Third Report and Order, 63 FR 770 
(January 7, 1998), the Commission suspended the use of installment 
payments for the foreseeable future. Accordingly, installment payment 
plans will not be available in Auction No. 37.

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

    52. Applicants owned by minorities or women, as defined in 47 CFR 
2110(b)(2), may attach an exhibit (Exhibit E) regarding this status. 
This applicant status information is collected for statistical purposes 
only and assists the Commission in monitoring the participation of 
``designated entities'' in its auctions. Applicants wishing to submit 
additional information may do so on Exhibit F.

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

    53. After the short-form filing deadline (6 p.m. e.t. on August 6, 
2004), 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 construction 
permit selections, change the certifying official, change control of 
the applicant). 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 certain exhibits. Applicants should make 
these modifications to their FCC Form 175 electronically and submit a 
letter, briefly summarizing the changes, by electronic mail to the 
attention of Margaret Wiener, Chief, Auctions and Spectrum Access 
Division, at the following address: [email protected]. The electronic 
mail summarizing the changes must include a subject or caption 
referring to Auction No. 37. The Bureaus request that parties format 
any attachments to electronic mail as Adobe[reg] Acrobat[reg] (pdf) or 
Microsoft[reg] Word documents.
    54. A separate copy of the letter should be faxed to the attention 
of Kathryn Garland at (717) 338-2850.

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

    55. Section 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. 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

    56. On Thursday, July 22, 2004, the FCC will sponsor a seminar for 
Auction No. 37 at the Federal Communications Commission, located at 445 
12th Street, SW., Washington, DC. The seminar will provide attendees 
with information about pre-auction procedures, auction conduct, the FCC 
Automated Auction System, auction rules, and the FM broadcast service 
rules. The seminar will also provide an opportunity for prospective 
bidders to ask questions of FCC staff.
    57. To register, complete the registration form attached hereto as 
Attachment B of the Auction No. 37 Procedures Public Notice and submit 
it by Monday, July 19, 2004. Registrations are accepted on a first-
come, first-served basis. The seminar is free of charge.
    58. For potential bidders who are unable to attend, Audio/Video of 
this seminar will be webcast live from the FCC's Audio/Video Events 
page at http://www.fcc.gov/realaudio/. A recording of the webcast will 
also be available for playback from the FCC's A/V Archives Page 
following the meeting.

B. Short-Form Application (FCC Form 175)--Due August 6, 2004

    59. In order to be eligible to bid in this auction, applicants must 
first submit a FCC Form 175 application. This application must be 
submitted electronically and received at the Commission no later than 6 
p.m. e.t. on August 6, 2004. Late applications will not be accepted.
    60. 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, infra. Applicants must submit only 
one FCC Form 175, regardless of the number of vacant FM allotments 
selected.
    61. Pursuant to procedures established in the Broadcast First 
Report and Order, the Media Bureau will impose a temporary freeze on 
the filing of FM minor modification applications during the period that 
FCC Form 175 applications may be filed for FM Auction No. 37. A 
separate public notice addressing this temporary freeze has been 
released.
i. Electronic Filing
    62. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time 
beginning at noon e.t. on July 22, 2004, until 6 p.m. e.t. on August 6, 
2004. 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 6, 2004.
    63. Applicants must press the ``SUBMIT Application'' button on the 
``Submission'' page of the electronic form to successfully submit their 
FCC Form 175s. Any form that is not submitted will not be reviewed by 
the FCC. Information about accessing the FCC Form 175 is included in 
Attachment C of the Auction No. 37 Procedures Public Notice. Technical 
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text 
telephone (TTY)); hours of service are

[[Page 42736]]

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.
ii. Completion of the FCC Form 175
    64. Applicants should carefully review 47 CFR 1.2105 and 73.5002, 
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. 37 
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. 37 Procedures Public Notice 
provide information on the required attachments and appropriate 
formats.
iii. Electronic Review of FCC Form 175
    65. The FCC Form 175 electronic review system may be used to locate 
and print applicants' FCC Form 175 information. There is no fee for 
accessing this system. See Attachment C of the Auction No. 37 
Procedures Public Notice for details on accessing the review system.
    66. 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 their TIN/EIN or other 
sensitive information on any exhibit/attachment to be uploaded. 
Contents of exhibits/attachments become available for public access 
once the Status Public Notice is released.

C. Application Processing and Minor Corrections

    67. 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.
    68. Non-mutually exclusive applications will be listed in a 
subsequent Public Notice to be released by the Bureaus. Such 
applications will not proceed to auction, but will proceed in 
accordance with instructions set forth in the Public Notice. All 
mutually exclusive applications will be considered under the relevant 
procedures for conflict resolution. Mutually exclusive commercial 
applications will proceed to auction. In the NCE Second Report and 
Order, the Commission held that applications for NCE FM stations on 
non-reserved spectrum, filed during an FM filing window, will be 
returned as unacceptable for filing if mutually exclusive with any 
application for a commercial station. Accordingly, if an FCC Form 175 
filed during the Auction No. 37 filing window identifying the applicant 
as noncommercial educational is mutually exclusive with any application 
filed during that window by an applicant for a commercial station, the 
former will be returned as unacceptable for filing.

D. Upfront Payments--Due September 24, 2004

    69. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159 that can be printed 
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must 
be received at Mellon Bank by 6 p.m. e.t. on September 24, 2004. 
Failure to deliver the upfront payment by the September 24, 2004, 
deadline will result in dismissal of the application and 
disqualification from participation in the auction. For specific 
details regarding upfront payments, see III.D. of the Auction No. 37 
Procedures Public Notice.
i. Making Auction Payments by Wire Transfer
    70. Wire transfer payments must be received by 6 p.m. e.t. on 
September 24, 2004. 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.
    71. Applicants must fax a completed FCC Form 159 (Revised Feb. 
2003) 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. 37.'' In order to meet the Commission's upfront 
payment deadline, an applicant's payment must be credited to the 
Commission's account by the deadline. Applicants are responsible for 
obtaining confirmation from their financial institution that Mellon 
Bank has timely received their upfront payment and deposited it in the 
proper account.
ii. Amount of Upfront Payment
    72. In the Part 1 Order, 62 FR 13540, March 21, 1997, the 
Commission delegated to the Bureaus the authority and discretion to 
determine appropriate upfront payment(s) for each auction. In addition, 
in the Part 1 Fifth Report and Order, 65 FR 52323, August 29, 2000, 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 50 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.
    73. The Auction No. 37 Comment Public Notice and the 2004 Auction 
No. 37 Revised Comment Public Notice, proposes that the amount of the 
upfront payment would determine the number of bidding units on which a 
bidder may place bids. In order to bid on a construction permit, 
otherwise qualified bidders that applied for that construction permit 
on FCC Form 175 must have an eligibility level that meets or exceeds 
the number of bidding units assigned to that construction permit. At a 
minimum, therefore, an applicant's total upfront payment must be enough 
to establish eligibility to bid on at least one of the construction 
permit applied for on FCC 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 construction permits for which the 
applicant has applied on its FCC Form 175, but rather to cover the 
maximum number of bidding units that are associated with construction 
permits on which the bidder wishes to place bids and hold high bids at 
any given time.
    74. In the 2001 Procedures Public Notice, after reviewing comments 
received in response to the Auction No. 37 Comment Public Notice, we 
reduced the upfront payments originally proposed in that Public Notice, 
setting forth the revised upfront payment amounts in Attachment A to 
the 2001 Procedures Public Notice. One commenter, in response to the 
2004 Auction No. 37 Revised Comment Public Notice, suggests we further 
reduce the upfront payments so that none is greater than $125,000, and 
that any allotment representing the first local transmission service to 
a community with a population under 10,000 have an

[[Page 42737]]

upfront payment not to exceed $5,000, regardless of station class. This 
commenter further suggests that the upfront payments be reduced to 10 
percent of the minimum opening bid values listed in the 2004 Auction 
No. 37 Revised Comment Public Notice, and that a bidders upfront 
payment should be no higher than the single highest minimum opening bid 
for any allotment the bidder has selected in its FCC Form 175. We do 
not adopt these suggestions. The Media Bureau has evaluated each 
allotment and assigned an upfront payment amount, 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. Having once revised these amounts, in the 2001 
Procedures Public Notice, the Media Bureau has determined that the 
revised upfront payment amounts set forth in Attachment A to the 2004 
Auction No. 37 Revised Comment Public Notice are appropriate for these 
allotments.
    75. We adopt our proposal. The specific upfront payments and 
bidding units for each construction permit are set forth in Attachment 
A of the Auction No. 37 Procedures Public Notice.
    76. 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 construction permits on which 
the bidder has the standing high bid from the previous round and 
construction permits 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 construction 
permits 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.
    77. Former defaulters should calculate their upfront payment for 
all construction permits by multiplying the number of bidding units 
they wish to purchase by 1.5. In order to calculate the number of 
bidding units to assign to former defaulters, the Commission will 
divide the upfront payment received by 1.5 and round the result up to 
the nearest bidding unit.

    Note: An applicant's actual bidding in any round will be limited 
by the bidding units reflected in its upfront payment, 
notwithstanding the number of construction permits the applicant has 
indicated in its FCC Form 175.

iii. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    78. The Commission will use wire transfers for all Auction No. 37 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed below be supplied to the FCC.
    Name of Bank, ABA Number, Contact and Phone Number, Account Number 
to Credit, Name of Account Holder, FCC Registration Number (FRN), 
Taxpayer Identification Number (see below), Correspondent Bank (if 
applicable), ABA Number, and Account Number.
    79. 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: Gail 
Glasser, at (202) 418-2843 by September 24, 2004. 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.

E. Auction Registration

    80. 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 
construction permits for which they applied.
    81. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by two separate overnight mailings, each containing the 
confidential bidder identification number (BIN) and the other 
containing the SecurID cards, both of which are required to place bids. 
These mailings will be sent only to the contact person at the contact 
address listed in the FCC Form 175.
    82. 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, October 27, 2004, 
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.
    83. Qualified bidders should note that lost bidder identification 
numbers or SecurID cards can be replaced only by appearing in person at 
the FCC Headquarters located at 445 12th Street, SW., Washington, DC 
20554. Only an authorized representative or certifying official, as 
designated on an applicant's FCC Form 175, may appear in person with 
two forms of identification (one of which must be a photo 
identification) in order to receive replacements. Qualified bidders 
requiring replacements must call technical support prior to arriving at 
the FCC.

F. Remote Electronic Bidding

    84. The Commission will conduct this auction over the Internet, and 
telephonic bidding will be available as well. As a contingency plan, 
bidders may also dial in to the FCC Wide Area Network. Qualified 
bidders are permitted to bid telephonically or electronically. Each 
applicant should indicate its bidding preference--electronic or 
telephonic--on the FCC Form 175. In either case, each authorized bidder 
must have its own 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. 37. The 
telephonic bidding phone number will be supplied in the first overnight 
mailing, which also includes the confidential bidder identification 
number.

G. Mock Auction

    85. All qualified bidders will be eligible to participate in a mock 
auction on Friday, October 29, 2004. 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.

[[Page 42738]]

IV. Auction Event

    86. The first round of bidding for Auction No. 37 will begin on 
Wednesday, November 3, 2004. 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 2004 Auction No. 37 Revised Comment Public Notice, we 
proposed to award all construction permits in Auction No. 37 in a 
simultaneous multiple round auction. One commenter objects to the 
simultaneous multiple round bidding methodology, claiming that it is 
unfair for individuals and small groups who wish to bid on multiple 
construction permits. Bidding rounds at the beginning of the auction 
should provide sufficient time for bidders to enter bids on as many 
allocations as they have selected. We will modify the round schedule as 
the auction continues, making rounds shorter and more frequent as 
bidding activity decreases, which is typical as auctions progress. Any 
changes to the round schedule will be done based on our analysis of the 
bidding activity and should not prevent bidders from being able to 
place their bids before the conclusion of a round. We adopt our 
proposal. We conclude that it is operationally feasible and appropriate 
to auction the FM broadcast stations construction permits through a 
simultaneous multiple round auction. Unless otherwise announced, bids 
will be accepted on all construction permits in each round of the 
auction.
ii. Maximum Eligibility and Activity Rules
    88. In the Auction No. 37 Comment Public Notice and the 2004 
Auction No. 37 Revised Comment Public Notice, we propose 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. No comments were received concerning the eligibility rule, and 
we adopted the proposal in the 2001 Procedures Public Notice.
    89. For Auction No. 37, we adopt the maximum eligibility proposal. 
The amount of the upfront payment submitted by a bidder determines the 
initial eligibility (in bidding units) for each bidder. Note again that 
each construction permit is assigned a specific number of bidding units 
equal to the upfront payment listed in Attachment A of the Auction No. 
37 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 in a 
round. As there is no provision for increasing a bidder's eligibility 
after the upfront payment deadline, applicants are cautioned to 
calculate their upfront payments carefully. The total upfront payment 
does not affect the total dollar amount a bidder may bid on any given 
construction permit.
    90. In addition, we received no comments on our proposal for a 
single stage auction, and therefore adopted this proposal in the 2001 
Procedures Public Notice. In response to the 2004 Auction No. 37 
Revised Comment Public Notice, one commenter disagreed with the 100 
percent activity level requirement and the potential eligibility 
reduction for failure to maintain a 100 percent activity level. 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. Therefore, we adopt this proposal with the following activity 
requirement: In each round of the auction, a bidder desiring to 
maintain its current eligibility is required to be active on 
construction permits representing one hundred (100) percent of its 
current 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 
construction permits upon which it is the standing high bidder. That 
is, a bidder must either place a bid and/or be the standing high bidder 
during each round of the auction.
    91. Failure to maintain the requisite activity level will result in 
the use of an activity rule waiver, if any remain, or a permanent 
reduction in the bidder's bidding eligibility, possibly eliminating the 
bidder from further bidding in the auction. To the extent that 
potential bidders require assistance in understanding these rules, we 
encourage them to attend the July 22, 2004, auction seminar, and 
participate in the October 29, 2004, mock auction.
iii. Activity Rule Waivers and Reducing Eligibility
    92. Based upon our experience in previous auctions, we adopt our 
proposal that each bidder will be provided five activity rule waivers 
that may be used in any round during the course of the auction. Use of 
an activity rule waiver preserves the bidder's current bidding 
eligibility despite the bidder's activity in the current round being 
below the required level. An activity rule waiver applies to an entire 
round of bidding and not to a particular construction permit. We are 
satisfied that our practice of providing five waivers over the course 
of the auction provides a sufficient number of waivers and flexibility 
to the bidders, while safeguarding the integrity of the auction.
    93. 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) 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.
    94. 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 as 
described in ``Maximum Eligibility and Activity Rules'' (see Section 
IV.A.ii. above). Once eligibility has been reduced, a bidder will not 
be permitted to regain its lost bidding eligibility.
    95. 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 bidding period in which no bids 
or withdrawals are submitted, the auction will remain open and the 
bidder's eligibility will be preserved. However, 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.


[[Page 42739]]


iv. Auction Stopping Rules
    96. For Auction No. 37, the Commission will employ a simultaneous 
stopping rule. Under this rule, bidding will remain open on all 
construction permits until bidding stops on every construction permit. 
The auction will close for all construction permits when one round 
passes during which no bidder submits a proactive waiver, a withdrawal, 
or a new bid on any construction permit. After the first such round, 
bidding closes simultaneously on all construction permits.
    97. The modified version of the stopping rule would close the 
auction for all construction permits after the first round in which no 
bidder submits a proactive waiver, a withdrawal, or a new bid on a 
construction permit when 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.
    98. The Bureaus retain the discretion to keep an auction open even 
if no new 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.
    99. The Bureaus reserve the right to declare that the auction will 
end after a designated number of additional rounds (``special stopping 
rule''). If the Bureaus invoke this special stopping rule, they will 
accept bids in the final round(s) only for construction permits on 
which the high bid increased in at least one of the preceding specified 
number of rounds. The Bureau may 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 Bureaus are likely to attempt 
to increase the pace of the auction by, for example, increasing the 
number of rounds per day, and/or adjusting the minimum acceptable bids 
and bid increments for the construction permits. In 2004, one commenter 
objected to the modified stopping rule, special stopping rule, and 
option to keep the auction open, supporting only the simultaneous 
stopping rule.
    100. Auction No. 37 will begin under the simultaneous stopping 
rule, and the Bureaus retain the discretion to invoke the other 
versions of the stopping rule. We believe that these stopping rules are 
most appropriate for Auction No. 37, because our experience in prior 
auctions demonstrates that the auction stopping rules balance the 
interests of administrative efficiency and maximum bidder 
participation.
v. Auction Delay, Suspension, or Cancellation
    101. 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 competitive conduct 
of competitive bidding.
    102. 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 competitive 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.

B. Bidding Procedures

i. Round Structure
    103.The initial schedule of bidding rounds 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 result 
formats and locations will also be included in the qualified bidders 
public notice.
    104. 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 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.
ii. Reserve Price or Minimum Opening Bid
    105. The Bureaus will establish minimum opening bids for Auction 
No. 37, reasoning that a minimum opening bid, successfully used in 
other broadcast auctions, is a valuable bidding tool, effectively 
regulating the pace of the auction. Specifically, a minimum opening bid 
was proposed for each FM allotment listed in Attachment A of the 
Auction No. 37 Procedures Public Notice. The minimum opening bid was 
determined by taking into account various factors relating 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. Based on 
our experience in using minimum opening bids in other auctions, we 
believe that minimum opening bids speed the course of the auction and 
ensure that valuable assets are not sold for nominal prices, without 
unduly interfering with the efficient awarding of construction permits.
    106. We adjusted the minimum opening bids and upfront payments in 
the 2001 Procedures Public Notice, to reduce the possibility of unsold 
construction permits and the likelihood that excessive minimum opening 
bid and upfront payment amounts could discourage auction participation.
    107. We adopt our proposed minimum opening bids for Auction No. 37. 
We note that the minimum opening bids adopted here are 50 percent less 
than those originally proposed for this auction. Based on this 
reduction and the other considerations, we believe the proposed minimum 
opening bids are appropriate. Thus, for these reasons and those set 
forth in our discussion of Auction No. 37 upfront payments, we are not 
persuaded that the proposed minimum opening bids are unreasonable.
    108. The minimum opening bids we adopt for Auction No. 37 are 
reducible at the discretion of the Bureaus. We emphasize, 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

[[Page 42740]]

Bureaus will not entertain any requests to reduce the minimum opening 
bid on specific construction permits.
    109. The specific minimum opening bids for each construction permit 
available in Auction No. 37 are set forth in Attachment A of the 
Auction No. 37 Procedures Public Notice.
iii. Minimum Acceptable Bids and Bid Increments
    110. In the Auction No. 37 Comment Public Notice and again in the 
2004 Auction No. 37 Revised Comment Public Notice, the Commission 
proposed to apply a minimum bid increment of 10 percent. We further 
proposed to retain the discretion to change the minimum acceptable bids 
and bid increments if circumstances so dictate. After receiving a 
comment in 2000 in support of this proposal, we adopted the proposal in 
the 2001 Procedures Public Notice. Having received no further comments, 
we adopt this proposal here as well.
    111. In each round, each eligible bidder will be able to place a 
bid on a particular construction permit for which it applied in any of 
nine different amounts. The FCC Automated Auction System will list the 
nine bid amounts for each construction permit.
    112. 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, as described 
below. The difference between the minimum acceptable bid and the 
standing high bid for each construction permit will define the bid 
increment - i.e., bid increment = (minimum acceptable bid)-(standing 
high bid). 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.).
    113. For Auction No. 37 we will 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.
    114. At the start of the auction and 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. Corresponding 
additional bid amounts are calculated using bid increments defined as 
the difference between the minimum opening bid times one plus the 
percentage increment, rounded as described above, 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.
    115. In the case of a construction permit for which the standing 
high bid has been withdrawn, the minimum acceptable bid will equal the 
second highest bid received for the construction permit. The additional 
bid amounts are calculated using the difference between the second 
highest bid times one plus the minimum percentage increment, rounded, 
and the second highest bid.
    116. The Bureaus retain the discretion to change the minimum 
acceptable bids and bid increments and the methodology for determining 
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. The Bureaus may also use their discretion 
to adjust the minimum bid increment without prior notice if 
circumstances warrant.
iv. High Bids
    117. At the end of a bidding round, the high bids will be 
determined based on the highest gross bid amount received for each 
construction permit. A high bid from a previous round is sometimes 
referred to as a ``standing high bid.'' A ``standing 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. Bidders are 
reminded that standing high bids are counted as activity for purposes 
of the activity rule.
    118. The Bureaus propose to use a random number generator to select 
a high bid 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 based on the L'Ecuyer algorithms 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. The remaining bidders, 
as well as the high 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 construction 
permit. If any bids are received on the construction permit in a 
subsequent round, the high bid will once again be determined on the 
highest gross bid amount received for the construction permit.
v. Bidding
    119. During a round, a bidder may submit bids for as many 
construction permits 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 construction 
permit 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 construction permits for which the bidder has removed 
or withdrawn its bid do not count towards the bidder's activity at the 
close of the round.
    120. 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. 37.
    121. A bidder's ability to bid on specific construction permits in 
the first round of the auction is determined by two factors: (i) The 
construction permits 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 construction permits for which the bidder 
applied on its FCC Form 175.
    122. 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

[[Page 42741]]

password generated by the SecurID card. Bidders are strongly encouraged 
to print bid confirmations for each round after they have completed all 
of their activity for that round.
    123. In each round, eligible bidders will be able to place bids on 
a given construction permit in any of nine different amounts. For each 
construction permit, 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 bid amounts. The 
FCC Automated Auction System also includes an import function that 
allows bidders to upload text files containing bid information and a 
Type Bids function that allows bidders to enter specific construction 
permits for filtering.
    124. 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. 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, as described in section IV.B.iii.
    125. Finally, bidders are cautioned to select their bid amounts 
carefully because, as explained in the following section, bidders that 
withdraw a standing high bid from a previous round, even if the bid was 
mistakenly or erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    126. For Auction No. 37 the Commission adopts bid removal and bid 
withdrawal procedures. With respect to bid withdrawals, the Commission 
will limit each bidder to withdrawals in no more than two rounds during 
the course of the auction. The two rounds in which withdrawals are used 
would be at the bidder's discretion.
    127. 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 removed does not count towards 
bidding activity. These procedures will enhance bidder flexibility 
during the auction.
    128. 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 reached its withdrawal 
limit). 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.
    129. In previous auctions, the Bureau has detected bidder conduct 
that, arguably, may have constituted strategic bidding through the use 
of bid withdrawals. While the Bureau continues to recognize the 
important role that bid withdrawals play in an auction, i.e., reducing 
risk associated with efforts to secure various construction permits in 
combination, we conclude that, for Auction No. 37, adoption of a limit 
on the use of withdrawals to two rounds per bidder is appropriate. By 
doing so we believe we strike a reasonable compromise that will allow 
bidders to use withdrawals. Our decision on this issue is based upon 
our 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.
    130. The Bureaus will therefore limit the number of rounds in which 
bidders may place withdrawals to two rounds. These rounds will be at 
the bidder's discretion and there will be no limit on the number of 
bids that may be withdrawn in either of the rounds. Withdrawals during 
the auction will 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 construction permit.
    131. If a high bid is withdrawn, the minimum acceptable bid will 
equal the second highest bid received for the construction permit, 
which may be less than, or equal to, in the case of tied bids, the 
amount of the withdrawn bid. The Bureau retain the discretion to lower 
the minimum acceptable bid on such construction permits in the next 
round or in later rounds. 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 construction permit until a new 
bid is submitted on that construction permit.
    132. 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 high bid in the 
same or subsequent auction(s). In the case of multiple bid withdrawals 
on a single construction permit, within the same or subsequent 
auctions(s), the payment for each bid withdrawal will be calculated 
based on the sequence of bid withdrawals and the amounts withdrawn. No 
withdrawal payment will be assessed for a withdrawn bid if either the 
subsequent winning bid or any of the intervening subsequent withdrawn 
bids, in either the same or subsequent 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 
most efficiently to allocate their resources as well as to evaluate 
their bidding strategies and business plans during an auction while, at 
the same time, maintaining the integrity of the auction process. The 
Bureaus retain the discretion to scrutinize multiple bid withdrawals on 
a single construction permit for evidence of anti-competitive strategic 
behavior and take appropriate action when deemed necessary.
    133. Section 1.2104(g)(1) of the Commission's rules provides that 
in instances in which bids have been withdrawn on a construction permit 
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 construction permit. 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
    134. Bids placed during a round will not be made public until the 
conclusion of that bidding period. After a round closes, the Bureaus 
will compile reports of all bids placed, bids withdrawn, current high 
bids, new minimum accepted bids, and bidder eligibility

[[Page 42742]]

status (bidding eligibility and activity rule waivers), and post the 
reports for public access. Reports reflecting bidders' identities for 
Auction No. 37 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
    135. The FCC will use auction announcements to announce items such 
as schedule changes. All FCC auction announcements will be available by 
clicking a link on the FCC Automated Auction System.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

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

B. Final Payments

    138. After the termination of the pleading cycle for petitions to 
deny, the Commission will issue a public notice announcing that it is 
prepared to award the construction permits to the winning bidders, if 
the applications are uncontested. Within ten business days after the 
date of that public notice, the uncontested winning bidders will be 
required to make full payment of the balance of their winning bids. 
Broadcast construction permits will be granted only after the full and 
timely payment of winning bids and any applicable late fees, in 
accordance with Sec.  1.2109(a). The previously filed long-form 
applications of the unsuccessful competing bidders will be dismissed 
following the grant of the winning bidder's construction permit.
    139. WTB now employs a final payment deadline different from that 
described above. Consistent with current WTB practice, for Auction No. 
37, the Bureaus are considering rule changes to conform Sec. Sec.  
73.3573(f)(5)(ii) and 73.5006(d) to analogous Part 1 auction rules. If 
adopted, each winning bidder would be required to submit the balance of 
the net amount of its winning bids within 10 business days after the 
deadline for submitting down payments.

C. Long-Form Application

    140. Within thirty days after the release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
Form 301, Application for FM Construction Permit, and required exhibits 
for each construction permit won through Auction No. 37. Further filing 
instructions will be provided to auction winners at the close of the 
auction.

D. Default and Disqualification

    141. 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 
construction permit 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 or construction permits held by the 
applicant.

E. Refund of Remaining Upfront Payment Balance

    142. All applicants that submit upfront payments but are not 
winning bidders for a construction permit in Auction No. 37 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 the 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.
    143. 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, Taxpayer 
Identification Number (``TIN'') and FCC Registration Number (``FRN''). 
Send refund request to Federal Communications Commission, Financial 
Operations Center, Auctions Accounting Group, Gail Glasser, 445 12th 
Street, SW., Room 1-C864, Washington, DC 20554.
    144. 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 Gail 
Glasser at (202) 418-0578.


Federal Communications Commission.
Margaret Wiener,
Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 04-16221 Filed 7-15-04; 8:45 am]
BILLING CODE 6712-01-P