[Federal Register Volume 70, Number 46 (Thursday, March 10, 2005)]
[Notices]
[Pages 11975-11980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-4727]



[[Page 11975]]

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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-05-81-C (Auction No. 81); DA 05-506]


Low Power Television Auction No. 81 Scheduled for September 14, 
2005; Auction No. 81 Applicants Must Provide Supplemental Information 
by March 18, 2005; Comment Sought on Reserve Prices or Minimum Opening 
Bids and Other Auction Procedures

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of construction permits 
for certain low power television (LPTV), television translator and 
Class A Television broadcast stations scheduled to commence on 
September 14, 2005 (Auction No. 81). This document also notifies 
Auction No. 81 applicants that they must provide their FCC Registration 
Number (FRN) and seeks comment on reserve prices or minimum opening 
bids and other procedures for Auction No. 81.

DATES: Comments are due on or before March 18, 2005, and reply comments 
are due on or before March 25, 2005.

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

FOR FURTHER INFORMATION CONTACT: For legal questions: Lynne Milne at 
(202) 418-0660. For general auction questions: Jeff Crooks at (202) 
418-0660 or Lisa Stover at (717) 338-2888. For service rule questions, 
contact the Video Division, Media Bureau, as follows: Shaun Maher or 
Hossein Hashemzadeh at (202) 418-1600.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Public 
Notice released February 28, 2005, Auction No. 81 Comment Public 
Notice. The complete text of the Auction No. 81 Comment Public Notice, 
including an attachment and any related Commission documents 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. 81 
Comment Public Notice and related Commission documents 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 its Web site: http://www.BCPIWEB.com. 
When ordering documents from BCPI, please provide the appropriate FCC 
document number (for example, DA 05-506 for the Auction No. 81 Comment 
Public Notice). The Auction No. 81 Comment Public Notice and related 
documents are also available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/81/.

I. General Information

    1. By the Auction No. 81 Comment Public Notice, the Wireless 
Telecommunications Bureau (the ``Bureau'') and the Media Bureau 
(collectively referred to as the ``Bureaus'') announce the auction of 
construction permits for certain LPTV, television translator and Class 
A Television broadcast stations, scheduled to commence on September 14, 
2005 (Auction No. 81). The construction permits to be auctioned are the 
subject of pending, mutually exclusive applications for referenced 
broadcast services for which the Commission has not approved settlement 
agreements or engineering amendments. Participation in this auction 
will be limited to those applicants for construction permits identified 
in Attachment A of the Auction No. 81 Comment Public Notice. Applicants 
will be eligible to bid only on those construction permits as set forth 
in Attachment A of the Auction No. 81 Comment Public Notice.
    2. Supplemental Information Required: The applicants listed in 
Attachment A of the Auction No. 81 Comment Public Notice may only 
continue to participate in Auction No. 81 if they provide their FCC 
Registration Number (FRN) no later than 5 p.m. Eastern Time (ET) on 
March 18, 2005, in accordance with public notice, Applicants for Low 
Power Television Construction Permits to be Awarded in Auction No. 81 
Must Submit Supplemental Information by March 18, 2005, DA 05-505, 
which was released concurrently with this public notice, February 28, 
2005. If an applicant fails to provide this information in the manner 
and time specified in that public notice, its engineering proposal(s) 
will be dismissed and it will not be permitted to participate in the 
auction.
    3. Attachment A of the Auction No. 81 Comment Public Notice sets 
forth the mutually exclusive applicant groups (``MX Groups'') 
accompanied by their respective minimum opening bids and upfront 
payments. Attachment A of the Auction No. 81 Comment Public Notice also 
lists the names of the applicants for construction permits in each MX 
Group. All MX Groups identified in Attachment A of the Auction No. 81 
Comment Public Notice have been subject to competition through the 
opening and closing of the relevant period for filing competing 
applications. All applications within an identified MX Group are 
directly mutually exclusive with one another, and therefore a single 
construction permit will be auctioned for each MX Group identified in 
Attachment A of the Auction No. 81 Comment Public Notice. An applicant 
may submit only one bid per round for a construction permit for a 
particular MX group, even if the applicant has submitted more than one 
engineering proposal that is included in the MX group.

    Note: In no instance will more than a single construction permit 
be awarded to a winning bidder for a particular MX group, even if a 
winning bidder has submitted more than one engineering proposal that 
is included in that MX group.

    4. Auction No. 81 will use the FCC's Integrated Spectrum Auction 
System (``ISAS'' or ``FCC Auction System''), an extensive redesign of 
the previous auction application and bidding systems. The redesign 
includes FCC Form 175 application enhancements such as discrete data 
elements in place of free-form exhibits and improved data accuracy 
through automated checking of FCC Form 175 applications. Enhancements 
have also been made to the FCC Form 175 application search function. 
The auction bidding system has also been updated for easier navigation, 
customizable results, and improved functionality.
    5. Section 309(j)(3) of the Communications Act of 1934, as amended, 
requires the Commission to ``ensure that, in the scheduling of any 
competitive bidding under this subsection, an adequate period is 
allowed * * * before issuance of bidding rules, to permit notice and 
comment on proposed auction procedures * * *.'' Consistent with the 
provisions of Section 309(j)(3) and to ensure that potential bidders 
have adequate time to familiarize themselves with the specific rules 
that will govern the day-to-day conduct of an auction, the Commission 
directed the Bureaus, under existing delegated authority, to seek 
comment on a variety of auction-specific procedures prior to the start 
of each auction. The Bureaus therefore seek comment on the following 
issues relating to Auction No. 81.

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II. Auction Structure

A. Simultaneous Multiple-Round Auction Design

    6. We propose to award all construction permits included in Auction 
No. 81 in a simultaneous multiple-round auction. As described further 
below, this methodology offers every construction permit for bid at the 
same time with successive bidding rounds in which bidders may place 
bids. We seek comment on this proposal.

B. Upfront Payment and Bidding Eligibility

    7. The Bureaus have delegated authority and discretion to determine 
an appropriate upfront payment for each construction permit being 
auctioned, taking into account such factors as the efficiency of the 
auction process and the potential value of similar spectrum. As 
described further below, the upfront payment is a refundable deposit 
made by each bidder to establish eligibility to bid on LPTV, television 
translator, and Class A television station construction permits. 
Upfront payments related to the specific spectrum subject to auction 
protect against frivolous or insincere bidding and provide the 
Commission with a source of funds from which to collect payments owed 
at the close of the auction. With these guidelines in mind, we propose 
the schedule of upfront payments contained in Attachment A of the 
Auction No. 81 Comment Public Notice. We seek comment on this proposal.
    8. We further propose that the amount of the upfront payment 
submitted by a bidder will determine the maximum number of bidding 
units on which a bidder may place bids. This limit is a bidder's 
initial bidding eligibility. Each construction permit is assigned a 
specific number of bidding units equal to the upfront payment listed in 
Attachment A of the Auction No. 81 Comment Public Notice, on a bidding 
unit per dollar basis. Bidding units for a given construction permit do 
not change as prices rise during the auction. A bidder's upfront 
payment is not attributed to specific construction permits. Rather, a 
bidder may place bids on any combination of construction permits as 
long as the total number of bidding units associated with those 
construction permits does not exceed its current eligibility. 
Eligibility cannot be increased during the auction; it can only remain 
the same or decrease. Thus, in calculating its upfront payment amount, 
an applicant must determine the maximum number of bidding units it may 
wish to bid on (or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that total number 
of bidding units. Provisionally winning bids are bids that would become 
final winning bids if the auction were to close in that given round. We 
seek comment on this proposal.

C. Activity Rules

    9. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction. A bidder that does not satisfy the activity rule either 
will lose bidding eligibility in the next round or must use an activity 
rule waiver (if any remain).
    10. We propose to divide the auction into two stages, each 
characterized by a different activity requirement. The auction will 
start in Stage One. We propose that the auction generally will advance 
from Stage One to Stage Two when the auction activity level, as 
measured by the percentage of bidding units receiving new provisionally 
winning bids, is approximately twenty percent or below for three 
consecutive rounds of bidding. However, we further propose that the 
Bureaus retain the discretion to change stages unilaterally by 
announcement during the auction. In exercising this discretion, the 
Bureaus will consider a variety of measures of bidder activity, 
including, but not limited to, the auction activity level, the 
percentage of construction permits (as measured in bidding units) on 
which there are new bids, the number of new bids, and the percentage 
increase in revenue. We seek comment on these proposals.
    11. For Auction No. 81, we propose the following activity 
requirements:
    Stage One: In each round of the first stage of the auction, a 
bidder desiring to maintain its current bidding eligibility is required 
to be active on construction permits representing at least 80 percent 
of its current bidding eligibility. Failure to maintain the requisite 
activity level will result in a reduction in the bidder's bidding 
eligibility in the next round of bidding (unless an activity rule 
waiver is used). During Stage One, a bidder's reduced eligibility for 
the next round will be calculated by multiplying the bidder's current 
round activity by five-fourths (\5/4\).
    Stage Two: In each round of the second stage, a bidder desiring to 
maintain its current bidding eligibility is required to be active on 95 
percent of its current bidding eligibility. During Stage Two, a 
bidder's reduced eligibility for the next round will be calculated by 
multiplying the bidder's current round activity by twenty-nineteenths 
(\20/19\).
    12. We seek comment on these proposals. Commenters that believe 
these activity rules should be modified should explain their reasoning 
and comment on the desirability of an alternative approach. Commenters 
are advised to support their claims with analyses and suggested 
alternative activity rules.

D. Activity Rule Waivers and Reducing Eligibility

    13. Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular construction 
permit. Activity rule waivers can be either proactive or automatic and 
are principally a mechanism for auction participants to avoid the loss 
of bidding eligibility in the event that exigent circumstances prevent 
them from placing a bid in a particular round.
    14. The FCC Auction System assumes that bidders with insufficient 
activity would prefer to apply an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver at the end of any bidding round where a 
bidder's activity level is below the minimum required unless: (1) The 
bidder has no activity rule waivers available; or (2) the bidder 
overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the minimum requirement.

    Note: If a bidder has no waivers remaining and does not satisfy 
the required activity level, its eligibility will be permanently 
reduced, possibly eliminating the bidder from further bidding in the 
auction.

    15. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the ``reduce eligibility'' function 
in the FCC Auction System. In this case, the bidder's eligibility is 
permanently reduced to bring the bidder into compliance with the 
activity rules as described above. Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    16. A bidder may apply an activity rule waiver proactively as a 
means to

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keep the auction open without placing a bid. If a bidder proactively 
applies an activity rule waiver (using the ``apply waiver'' function in 
the FCC Auction System) during a bidding round in which no bids or 
withdrawals are submitted, the auction will remain open and the 
bidder's eligibility will be preserved. An automatic waiver applied by 
the FCC Auction System in a round in which there are no new bids or 
withdrawals will not keep the auction open.

    Note: Applying a waiver is irreversible; once a proactive waiver 
is submitted that waiver cannot be unsubmitted, even if the round 
has not yet closed.

    17. We propose that each bidder in Auction No. 81 be provided with 
three activity rule waivers that may be used at the bidder's discretion 
during the course of the auction as set forth above. We seek comment on 
this proposal.

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

    18. For Auction No. 81, we propose that, by public notice or by 
announcement during the auction, the Bureaus may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureaus, in their sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureaus to delay or 
suspend the auction. We emphasize that exercise of this authority is 
solely within the discretion of the Bureaus, and its use is not 
intended to be a substitute for situations in which bidders may wish to 
apply their activity rule waivers. We seek comment on this proposal.

III. Bidding Procedures

A. Round Structure

    19. The Commission will conduct Auction No. 81 over the Internet. 
Alternatively, telephonic bidding will also be available. The toll free 
telephone number through which telephonic bidding may be accessed will 
be provided to bidders.
    20. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of the 
auction. The simultaneous multiple-round format will consist of 
sequential bidding rounds, each followed by the release of round 
results. Details regarding the location and format of round results 
will be included in the same public notice.
    21. The Bureaus have 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 rounds, or the number of rounds per day, 
depending upon the bidding activity level and other factors. We seek 
comment on this proposal.

B. Reserve Price or Minimum Opening Bid

    22. Section 309(j) calls upon the Commission to prescribe methods 
for establishing a reasonable reserve price or a minimum opening bid 
amount when FCC licenses or construction permits are subject to auction 
(i.e., because the Commission has accepted mutually exclusive 
applications for those construction permits), unless the Commission 
determines that a reserve price or minimum opening bid amount is not in 
the public interest. Consistent with this mandate, the Commission has 
directed the Bureaus to seek comment on the use of minimum opening bid 
amounts and/or reserve price prior to the start of each auction of 
broadcast construction permits.
    23. Normally, a reserve price is an absolute minimum price below 
which an item will not be sold in a given auction. Reserve prices can 
be either published or unpublished. A minimum opening bid amount, on 
the other hand, is the minimum bid price set at the beginning of the 
auction below which no bids are accepted. It is generally used to 
accelerate the competitive bidding process. Also, the auctioneer often 
has the discretion to lower the minimum opening bid amount later in the 
auction. It is also possible for the minimum opening bid amount and the 
reserve price to be the same amount.
    24. In light of Section 309(j)'s requirements, the Bureaus propose 
to establish minimum opening bid amounts for Auction No. 81. The 
Bureaus believe a minimum opening bid amount, which has been used in 
other auctions, is an effective bidding tool.
    25. For Auction No. 81, the proposed minimum opening bid for each 
MX Group, as listed in Attachment A of the Auction No. 81 Comment 
Public Notice, was determined by taking into account various factors 
related to the efficiency of the auction and the potential value of the 
spectrum, including the type of service and class of facility offered, 
market size, population covered by the proposed LPTV, television 
translator or Class A Television facility, industry cash flow data and 
recent broadcast transactions. We seek comment on this proposal.
    26. If commenters believe that these minimum opening bid amounts 
will result in substantial numbers of unsold construction permits, or 
are not reasonable amounts, or should instead operate as reserve 
prices, they should explain why this is so, and comment on the 
desirability of an alternative approach. Commenters are advised to 
support their claims with valuation analyses and suggested reserve 
prices or minimum opening bid amount levels or formulas. In 
establishing the minimum opening bid amounts, we particularly seek 
comment on such factors as the potential value of the spectrum being 
auctioned including the type of service and class of facility offered, 
market size, population covered by the proposed LPTV, television 
translator or Class A television facility, industry cash flow and 
recent broadcast transactions and other relevant factors that could 
reasonably have an impact on valuation of the broadcast spectrum. We 
also seek comment on whether, consistent with Section 309(j), the 
public interest would be served by having no minimum opening bid amount 
or reserve price.

C. Minimum Acceptable Bid Amounts and Bid Increments

    27. In each round, eligible bidders will be able to place bids on a 
given construction permit in any of nine different amounts. The FCC 
Auction System interface will list the nine acceptable bid amounts for 
each construction permit.
    28. The minimum acceptable bid amount for a construction permit 
will be equal to its minimum opening bid amount until there is a 
provisionally winning bid for the construction permit. After there is a 
provisionally winning bid for a construction permit, the minimum 
acceptable bid amount for that construction permit will be equal to the 
amount of the provisionally winning bid plus an additional amount. The 
minimum acceptable bid amount will be calculated by multiplying the 
provisionally winning bid amount times one plus the minimum acceptable 
bid percentage--e.g., if the minimum acceptable bid percentage is 10 
percent, the minimum acceptable bid amount will equal (provisionally 
winning bid amount) * * * (1.10), rounded. We will round the result 
using our standard rounding procedures.
    29. The nine acceptable bid amounts for each construction permit 
consist of

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the minimum acceptable bid amount and additional amounts calculated 
using the minimum acceptable bid amount and the bid increment 
percentage. We will round the results using our standard rounding 
procedures. The first additional acceptable bid amount equals the 
minimum acceptable bid amount times one plus the bid increment 
percentage, rounded--e.g., if the increment percentage is 10 percent, 
the calculation is (minimum acceptable bid amount) * * * (1 + 0.10), 
rounded, or (minimum acceptable bid amount) * * * 1.10, rounded; the 
second additional acceptable bid amount equals the minimum acceptable 
bid amount times one plus two times the bid increment percentage, 
rounded, or (minimum acceptable bid amount) * * * 1.20, rounded; the 
third additional acceptable bid amount equals the minimum acceptable 
bid amount times one plus three times the bid increment percentage, 
rounded, or (minimum acceptable bid amount) * * * 1.30, rounded; etc. 
Note that the bid increment percentage need not be the same as the 
minimum acceptable bid percentage.
    30. In the case of a construction permit for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the second highest bid received for the 
construction permit.
    31. For Auction No. 81, the Bureaus propose to use a minimum 
acceptable bid percentage of 10 percent. This means that the minimum 
acceptable bid amount for a construction permit will be approximately 
10 percent greater than the provisionally winning bid amount for the 
construction permit.
    32. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, and the 
bid increment percentage if it determines that circumstances so 
dictate. The Bureaus will do so by announcement in the FCC Auction 
System during the auction. We seek comment on these proposals.

D. Provisionally Winning Bids

    33. At the end of a bidding round, a provisionally winning bid 
amount for each construction permit will be determined based on the 
highest bid amount received for the construction permit. In the event 
of identical high bid amounts being submitted on a construction permit 
in a given round (i.e., tied bids), we propose to use a random number 
generator to select a single provisionally winning bid from among the 
tied bids. If the auction were to end with no higher bids being placed 
for that construction permit, the winning bidder would be the one that 
placed the selected provisionally winning bid. However, the remaining 
bidders, as well as the provisionally winning bidder, can submit higher 
bids in subsequent rounds. If any bids are received on the construction 
permit in a subsequent round, the provisionally winning bid again will 
be determined by the highest bid amount received for the construction 
permit.
    34. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the same construction permit 
at the close of a subsequent round, unless the provisionally winning 
bid is withdrawn. Bidders are reminded that provisionally winning bids 
confer credit for activity.

E. Information Regarding Bid Withdrawal and Bid Removal

    35. For Auction No. 81, we propose the following bid removal and 
bid withdrawal procedures. Before the close of a bidding round, a 
bidder has the option of removing any bid placed in that round. By 
removing selected bids in the FCC Auction System, a bidder may 
effectively ``unsubmit'' any bid placed within that round. A bidder 
removing a bid placed in the same round is not subject to a withdrawal 
payment. Once a round closes, a bidder may no longer remove a bid.
    36. A bidder may withdraw its provisionally winning bids using the 
``withdraw bids'' function in the FCC Auction System. A bidder that 
withdraws its provisionally winning bid(s) is subject to the bid 
withdrawal payment provisions of the Commission rules. We seek comment 
on these bid removal and bid withdrawal procedures.
    37. In the Part 1 Third Report and Order, 63 FR 770, January 7, 
1998, the Commission explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and construction permits 
and the pursuit of efficient backup strategies as information becomes 
available during the course of an auction. The Commission noted, 
however, that, in some instances, bidders may seek to withdraw bids for 
improper reasons. The Bureaus, therefore, have discretion, in managing 
the auction, to limit the number of withdrawals to prevent any bidding 
abuses. The Commission stated that the Bureaus should assertively 
exercise their discretion, consider limiting the number of rounds in 
which bidders may withdraw bids, and prevent bidders from bidding on a 
particular construction permit if the Bureaus find that a bidder is 
abusing the Commission's bid withdrawal procedures.
    38. Applying this reasoning, we propose to limit each bidder in 
Auction No. 81 to withdrawing provisionally winning bids in no more 
than one round during the course of the auction. To permit a bidder to 
withdraw bids in more than one round may encourage insincere bidding or 
the use of withdrawals for anti-competitive purposes. The round in 
which withdrawals may be used will be at the bidder's discretion; 
withdrawals otherwise must be in accordance with the Commission's 
rules. There is no limit on the number of provisionally winning bids 
that may be withdrawn in the round in which withdrawals are used. 
Withdrawals will remain subject to the bid withdrawal payment 
provisions specified in the Commission's rules. We seek comment on this 
proposal.

F. Stopping Rule

    39. The Bureaus have discretion ``to establish stopping rules 
before or during multiple round auctions in order to terminate the 
auction within a reasonable time.'' For Auction No. 81, the Bureaus 
propose to employ a simultaneous stopping rule approach. A simultaneous 
stopping rule means that all construction permits remain available for 
bidding until bidding closes simultaneously on all construction 
permits.
    40. Bidding will close simultaneously on all construction permits 
after the first round in which no bidder submits any new bids, applies 
a proactive waiver, or places any withdrawals. Thus, unless 
circumstances dictate otherwise, bidding will remain open on all 
construction permits until bidding stops on every construction permit.
    41. However, the Bureaus propose to retain the discretion to 
exercise any of the following options during Auction No. 81:
    i. Use a modified version of the simultaneous stopping rule. The 
modified stopping rule would close the auction for all construction 
permits after the first round in which no bidder applies a waiver, 
places a withdrawal or submits any new bids on any construction permit 
for which it is not the provisionally winning bidder. Thus, absent any 
other bidding activity, a bidder placing a new bid on a construction 
permit for which it is the provisionally winning bidder would not keep 
the auction open under this modified stopping rule. The Bureaus further 
seek comment on whether this modified stopping rule should be used

[[Page 11979]]

at any time or only in stage two of the auction.
    ii. Keep the auction open even if no bidder submits any new bids, 
applies a waiver or places any withdrawals. In this event, the effect 
will be the same as if a bidder had applied a waiver. The activity 
rule, therefore, will apply as usual and a bidder with insufficient 
activity will either lose bidding eligibility or use a remaining 
activity rule waiver.
    iii. Declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the Bureaus invoke 
this special stopping rule, it will accept bids in the specified final 
round(s) and the auction will close.
    42. The Bureaus propose to exercise these options only in certain 
circumstances, for example, where the auction is proceeding very 
slowly, there is minimal overall bidding activity, or it appears likely 
that the auction will not close within a reasonable period of time. 
Before exercising these options, the Bureaus are likely to attempt to 
increase the pace of the auction by, for example, increasing the number 
of bidding rounds per day, and/or increasing the amount of the minimum 
bid increments for the limited number of construction permits where 
there is still a high level of bidding activity. We seek comment on 
these proposals.

III. Due Diligence

    43. Potential bidders are solely responsible for investigating and 
evaluating all technical and market place factors that may have a 
bearing on the value of the broadcast facilities in this auction. The 
FCC makes no representations or warranties about the use of this 
spectrum for particular services. Applicants should be aware that an 
FCC auction represents an opportunity to become an FCC permittee in the 
broadcast service, subject to certain conditions and regulations. An 
FCC auction does not constitute an endorsement by the FCC of any 
particular service, technology, or product, nor does an FCC 
construction permit or license constitute a guarantee of business 
success. Applicants should perform their individual due diligence 
before proceeding as they would with any new business venture.
    44. Potential bidders are strongly encouraged to conduct their own 
research prior to Auction No. 81 in order to determine the existence of 
pending proceedings that might affect their decisions regarding 
participation in the auction. Participants in Auction No. 81 are 
strongly encouraged to continue such research during the auction.
    45. Potential bidders should note that LPTV and TV translator 
stations are authorized with ``secondary'' frequency use status. These 
stations may not cause interference to, and must accept interference 
from, full service television stations, certain land mobile radio 
operations, and other primary services. See, e.g., 47 CFR 74.703, 
74.709 and 90.303.

IV. Prohibition of Collusion

    46. Auction No. 81 applicants are reminded that the anti-collusion 
rules found at Sec. Sec.  1.2105(c) and 73.5002(d) of the Commission's 
rules are in effect. These rules prohibit applicants competing for 
construction permits in either the same geographic license area or the 
same MX Group from communicating with each other during the auction 
about bids, bidding strategies, or settlements unless they have 
identified each other as parties with whom they have entered into 
agreements under Sec.  1.2105(a)(2)(viii). For Auction No. 81, this 
prohibition became effective at the short-form application filing 
deadline on August 4, 2000, and will end on the post-auction down 
payment deadline, which will be announced in a future public notice. 
This prohibition applies to all applicants regardless of whether such 
applicants become qualified bidders or actually bid. 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. If parties 
had agreed in principle on all material terms, those parties must have 
been identified on the short-form application under Sec.  1.2105(c), 
even if the agreement had not been reduced to writing. If parties had 
not agreed in principle by the filing deadline, an applicant should not 
have included the names of those parties on its application, and must 
not have continued negotiations with other applicants for licenses in 
the same geographic area.
    47. By electronically submitting their FCC Form 175 short-form 
applications, applicants certified their compliance with Sec. Sec.  
1.2105(c) and 73.5002. In addition, Sec.  1.65 of the Commission's 
Rules requires an applicant to maintain the accuracy and completeness 
of information furnished in its pending application and to notify the 
Commission within 30 days of any substantial change that may be of 
decisional significance to that application. Thus, Sec.  1.65 requires 
an auction applicant to notify the Commission of any violation of the 
anti-collusion rules upon learning of such violation. Applicants are 
therefore required by Sec.  1.65 to make such notification to the 
Commission immediately upon discovery. In addition, Sec.  1.2105(c)(6) 
requires that any applicant that makes or receives a communication 
prohibited by Sec.  1.2105(c) must report such communication to the 
Commission in writing immediately, and in no case later than five 
business days after the communication occurs.

V. Conclusion

    Comments are due on or before March 18, 2005, and reply comments 
are due on or before March 25, 2005. Because of the disruption of 
regular mail and other deliveries in Washington, DC, the Bureaus 
require that all comments and reply comments be filed electronically. 
Comments and reply comments, and copies of material filed with the 
Commission pertaining to Auction No. 81, must be sent by electronic 
mail to the following address: [email protected]. The electronic mail 
containing the comments or reply comments must include a subject or 
caption referring to Auction No. 81 Comments and the name of the 
commenting party. The Bureaus request that parties format any 
attachments to electronic mail as Adobe[reg] Acrobat[reg] (pdf) or 
Microsoft[reg] Word documents. Copies of comments and reply comments 
will be available for public inspection during regular business hours 
in the FCC Reference Information Center, Room CY-A257, 445 12th Street, 
SW., Washington, DC 20554, and will also be posted on the Web page for 
Auction No. 81 at http://wireless.fcc.gov/auctions/81. In addition, the 
Bureaus request that commenters fax a courtesy copy of their comments 
and reply comments to the attention of Kathryn Garland at (717) 338-
2850.
    48. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making oral ex parte presentations are reminded that 
memoranda summarizing the presentations must contain summaries of the 
substance of the presentations and not merely a listing of the subjects 
discussed. More than a one

[[Page 11980]]

or two sentence description of the views and arguments presented is 
generally required. Other rules pertaining to oral and written ex parte 
presentations in permit-but-disclose proceedings are set forth in Sec.  
1.1206(b) of the Commission's rules.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auction and Spectrum Access Division, WTB.
[FR Doc. 05-4727 Filed 3-9-05; 8:45 am]
BILLING CODE 6712-01-P