[Federal Register Volume 70, Number 138 (Wednesday, July 20, 2005)]
[Notices]
[Pages 41738-41754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14238]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-05-62-B (Auction No. 62); DA 05-1598]


Auction of FM Broadcast Construction Permits Scheduled for 
November 1, 2005, Notice and Filing Requirements, Minimum Opening Bids, 
Upfront Payments and Other Procedures for Auction No. 62

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. 62 is scheduled to begin on November 1, 2005.

FOR FURTHER INFORMATION CONTACT: Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau: For legal questions: Howard 
Davenport at (202) 418-0660. For general auction questions: Jeff Crooks 
at (202) 418-0660 or Linda Sanderson at (717) 338-2888: Media Contact: 
Lauren Patrich at (202) 418-7944. Media Bureau, Audio Division: For 
service rule questions: Lisa Scanlan at (202) 418-2700. To request 
materials in accessible formats (Braille, large print, electronic 
files, audio format) for people with disabilities, send an e-mail to 
[email protected] or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530 or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 62 
Procedures Public Notice, released on June 17, 2005. The complete text 
of the Auction No. 62 Procedures Public Notice, including attachments, 
as well as related Commission documents, are available for public 
inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) 
Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays at 
the FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. The Auction No. 62 Procedures 
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. 
The Auction No. 62 Procedures Public Notice and related documents are 
also available on the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/62/.

I. General Information

A. Introduction

    1. The Media Bureau and Wireless Telecommunications Bureau 
(collectively the Bureaus) announce the procedures and minimum opening 
bid amounts for the upcoming auction of certain FM broadcast 
construction permits scheduled for November 1, 2005. On April 14, 2005, 
in accordance with the Sec.  309(j)(3) of the Communications Act of 
1934, as amended, the Bureaus released a public notice seeking comment 
on reserve prices or minimum opening bid amounts and the procedures to 
be used in Auction No. 62. The Bureaus received 15 comments, one reply 
comment and one supplement to the reply comment in response to the 
Auction No. 62 Comment Public Notice 70 FR 21782, April 27, 2005.
i. Construction Permits To Be Auctioned
    2. Auction No. 62 will offer 172 construction permits in the FM 
broadcast service for stations throughout the United States and the 
U.S. Virgin Islands. The construction permits to be auctioned include 
172 new FM allotments, including 30 FM construction permits that were 
offered,

[[Page 41739]]

but not sold, in Auction No. 37. These construction permits are for 
vacant FM allotments, reflecting FM channels assigned to the FM Table 
of Allotments, pursuant to the Commission's established rulemaking 
procedures, designated for use in the indicated communities. Please 
note that the number assigned to each construction permit has been 
revised from those that were included in the Auction No. 62 Comment 
Public Notice. The updated construction permit numbers are listed in 
Attachment A of the Auction No. 62 Procedures Public Notice.
    3. Two commenters requested that specific additional FM channels be 
added to the list of FM allotments to be auctioned in Auction No. 62. 
In the interest of an effective and efficient auction process, the 
Bureaus decline to enlarge the Auction No. 62 inventory by adding 
additional FM allotments at this time. The specific vacant FM 
allotments at issue will however, be included in a subsequent FM 
auction. Two commenters ask that specific FM allotments be removed from 
the Auction No. 62 inventory, asserting that existing stations provide 
sufficient service and concluding that the communities at issue cannot 
support additional stations based on declining populations. The 
commenters requested that FM 169 and FM 170, Wheatland, WY, be removed, 
and that FM 110, Farmington, PA, and FM 112, Strattonville, PA, be 
removed. The Bureaus will not remove the four FM allotments from the 
auction inventory, in light of the expressions of interest filed in the 
respective rulemaking proceedings to amend the FM Table of Allotments. 
Simply removing the allotments from this auction does not delete the FM 
channel from the Table of Allotments. Rather, an entity must submit a 
petition for rulemaking to delete an allotment from the FM Table of 
Allotments. Finally, because the winning bidder for the Mason, Texas FM 
allotment in Auction No. 37 defaulted on its high bid, a commenter 
contends that as second highest bidder, it should be permitted the 
opportunity to purchase the FM construction permit at the net bid 
amount before the permit is included in another auction. The 
commenter's request is being considered separately along with other 
similar requests by unsuccessful bidders in Auction No. 37.
    4. 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 listed in Attachment A of the Auction No. 
62 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. Attachment A of the Auction No. 62 Procedures 
Public Notice also lists the reference coordinates for each vacant FM 
allotment. 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 general competitive bidding rules, including recent 
amendments and clarifications. Broadcasters should also familiarize 
themselves with the Commission's rules relating to the FM broadcast 
service contained in 47 CFR 73.201-73.333, 73.1001-73.5009. 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 this public notice, 
the Auction No. 62 Comment Public Notice and the Broadcast First Report 
and Order, the Broadcast First Reconsideration Order, 64 FR 24523, May 
7, 1999, and the New Entrant Bidding Credit Reconsideration Order, 64 
FR 44856, August 18, 1999, and the NCE Second Report and Order, 68 FR 
26220, May 15, 2003.
    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. This prohibition applies to all 
applicants regardless of whether such applicants become qualified 
bidders or actually bid. 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., Wasilla, 
Alaska, Channel 265C2, Market FM001). In Auction No. 62, 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 during the period from the FCC 
Form 175 short-form application deadline until the down payment 
deadline following the close of the auction. 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 must not communicate indirectly about bids or 
bidding strategy. Accordingly, such bidders 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

[[Page 41740]]

individuals employed by the same organization (e.g., law firm or 
consulting firm), a violation could likewise 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 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. If an applicant is found to have violated the antitrust 
laws in connection with its participation in the competitive bidding 
process, it may be subject to forfeiture of its upfront payment, down 
payment, or full bid amount and may be prohibited from participating in 
future auctions.
    12. A summary listing of documents issued by the Commission and the 
Bureaus addressing the application of the anti-collusion rule may be 
found in Attachment E of the Auction No. 62 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 Commission makes no representations or warranties 
about the use of this spectrum for particular services. Applicants 
should be aware that a Commission auction represents an opportunity to 
become a Commission permittee in the broadcast service, subject to 
certain conditions and regulations. A Commission auction does not 
constitute an endorsement by the Commission of any particular service, 
technology, or product, nor does a Commission 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. 62 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. 62 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. 62. In addition, pending and future 
judicial proceedings may relate to particular applicants or incumbent 
permittees, or the construction permits available in Auction No. 62. 
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. The Bureaus note that resolution of such matters could 
have an impact on the availability of spectrum for Auction No. 62. 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. 62.

[[Page 41741]]

    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/.
    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, 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.
    21. Potential applicants are strongly encouraged to physically 
inspect any sites located in, or near, the service area for which they 
plan to bid, and also to familiarize themselves with the environmental 
assessment obligations.
    22. Two commenters suggest reducing the risk attendant to bidding, 
and advocate that no FM allotment be offered at auction if that 
allotment is subject to an on-going rulemaking proceeding, remains 
under reconsideration, or still requires foreign concurrence. 
International coordination has been completed for all Auction No. 62 FM 
allotments listed in Attachment A of the Auction No. 62 Procedures 
Public Notice. Furthermore, concurrence data including approval dates 
are now available in CDBS regarding Canadian and Mexican approvals. 
With regard to allotment FM160, Meeteetse, WY, Channel 273C, the 
Bureaus agrees with the commenter that the FM channel was inadvertently 
allotted and will remove it from the Auction No. 62 inventory.
    23. The Bureaus decline, however, to remove any additional 
allotments from the auction based on the pendency of a rulemaking 
proceeding which may or may not ultimately affect the FM allotment at 
issue. All rulemaking proposals and counterproposals regarding FM 
allotments are entered into the Commission's CDBS system, thus giving 
notice of the proponent's specific technical proposal. To the extent 
the allotment proceeding is docketed, the release of a notice of 
proposed rulemaking or report and order provides further information 
about the specific technical proposal at hand. As is customary in 
broadcast auctions, to avoid conflicts with auction proposals and 
promote a more certain and speedy auction process, the Media Bureau 
will be releasing its public notice announcing an FM minor change 
application and petition for rulemaking freeze simultaneously with the 
Auction No. 62 Procedures Public Notice. The Bureaus caution bidders to 
exercise due diligence in researching whether prior or pending 
allotment proceedings could affect their bids. To proceed as the 
commenter suggests could potentially encourage the filing of frivolous 
petitions for rulemaking for the sole purpose of preventing an 
allotment from proceeding to auction. Furthermore, the commenter 
provides no evidence indicating that any of the winning bidders in 
Auction No. 37 were adversely affected by an ongoing rulemaking 
proceeding, or that any of the Auction No. 37 allotments were sold at 
substandard amounts due to a then-ongoing rulemaking proceeding. In 
fact, the commenter raised similar objections in Auction No. 37, 
requesting that 39 allotments be deleted from that auction. Of those 39 
allotments, 35 were won at auction for a total of over $22.8 million 
dollars (net), and 15 of those construction permits have already been 
granted. The Bureaus find that proceeding with the auction with the 
current allotment inventory provides an appropriate balance between the 
prompt initiation of FM service to those allotment communities and the 
provision of certainty to auction participants.
iv. Bidder Alerts
    24. The Commission makes no representations or warranties about the 
use of this spectrum for particular services. Applicants should be 
aware that a Commission auction represents an opportunity to become a 
Commission permittee in the broadcast service, subject to certain 
conditions and regulations. A Commission auction does not constitute an 
endorsement by the Commission of any particular services, technologies 
or products, nor does a Commission construction permit constitute a 
guarantee of business success. Applicants and interested parties should 
perform their own due diligence before proceeding, as they would with 
any new business venture.
    25. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 62 to 
deceive and defraud unsuspecting investors. Information about deceptive 
telemarking schemes is available from the FTC at (202) 326-2222 and 
from the SEC at (202) 942-7040.
v. National Environmental Policy Act Requirements
    26. 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
    27. Bidding in Auction No. 62 will begin on Tuesday, November 1, 
2005, as announced in the Auction No. 62 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
    28. Auction No. 62--FM Broadcast.
iii. Bidding Methodology
    29. The bidding methodology for Auction No. 62 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet using the FCC's Integrated Spectrum Auction System (ISAS 
or FCC Auction System), and telephonic bidding will be available as 
well. Qualified bidders are permitted to bid electronically via the 
Internet or by telephone.
iv. Pre-Auction Dates and Deadlines

 
 
 
Auction Seminar.................................  July 27, 2005.
Short-Form Application (FCC Form 175) Window      July 27, 2005; 12 p.m. ET.
 Opens.
Short-Form Application (FCC Form 175) Filing      August 12, 2005; 6 p.m. ET.
 Window Deadline.
Upfront Payments (via wire transfer)............  September 30, 2005; 6 p.m. ET.
Mock Auction....................................  October 28, 2005.
Auction Begins..................................  November 1, 2005.
 


[[Page 41742]]

v. Requirements for Participation
    30. Those wishing to participate in the auction must:
     Submit a short-form application (FCC Form 175) 
electronically prior to 6 p.m. Eastern Time (ET), August 12, 2005.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET, September 30, 2005.
     Comply with all provisions outlined in this public notice 
and applicable Commission rules.
vi. Proposals To Restrict Participation
    31. Two commenters suggest that the Bureaus establish restrictions 
on which entities are eligible to participate in Auction No. 62. The 
Bureaus will not impose any eligibility restrictions on bidders in 
Auction No. 62. Barring certain entities from participating in an 
auction based on the number of facilities they currently own would 
constitute a de facto amendment of the Commission's rules. In those 
cases where they are used, rules concerning eligibility to participate 
in an auction or hold a license are established in service specific 
rules adopted by the Commission. Requests made in comments filed to 
change the eligibility rules are beyond the scope of a public notice 
regarding the procedures for an auction. Such an issue should have been 
raised in the context of a rulemaking proceeding concerning service 
rules for the FM broadcast service. For this reason, the Bureaus also 
decline to base auction participation on the numerical limits of the 
broadcast multiple ownership rules, as the commenter suggests.

General Auction Information:    FCC Auctions Hotline (888) 225-5322,
 General Auction Questions,      option two; or (717) 338-2888. Hours of
 Seminar Registration.           service: 8 a.m.-5:30 p.m. ET, Monday
                                 through Friday.
Auction Legal Information:      Auctions and Spectrum Access Division
 Auction Rules, Policies,        (202) 418-0660.
 Regulations.
Licensing Information: Rules,   Audio Division (202) 418-2700
 Policies, Regulations
 Licensing Issues, Engineering
 Issues, Due Diligence,
 Incumbency Issues.
Technical Support: Electronic   FCC Auctions Technical Support Hotline
 Filing FCC Auction System.      (877) 480-3201, option nine; or (202)
                                 414-1250, (202) 414-1255 (TTY). Hours
                                 of service: 8 a.m.-6 p.m. ET, Monday
                                 through Friday.
Payment Information: Wire       FCC Auctions Accounting Branch (202) 418-
 Transfers, Refunds.             0578, (202) 418-2843 (Fax).
Telephonic Bidding............  Will be furnished only to qualified
                                 bidders.
FCC Copy Contractor:            Best Copy and Printing, Inc., 445 12th
 Additional Copies of            Street, SW., Room CY-B402, Washington,
 Commission Documents.           DC 20554, (800) 378-3160, http://
                                 www.bcpiweb.com.
Press Information.............  Lauren Patrich (202) 418-7944.
FCC Forms.....................  (800) 418-3676 (outside Washington, DC),
                                 (202) 418-3676 (in the Washington
                                 area), http://www.fcc.gov/formpage.html.
FCC Internet Sites............  http://www.fcc.gov, http://wireless.fcc.gov/auctions, http://wireless.fcc.gov/uls.
------------------------------------------------------------------------

II. Short-Form (FCC FORM 175) Filing Requirements

    32. A party's application to participate in an FCC auction, 
referred to as a short-form application or FCC Form 175, provides 
information used in determining whether the applicant is legally, 
technically, and financially qualified to participate in Commission 
auctions for licenses or permits. For Auction No. 62, if an applicant 
claims eligibility for a bidding credit, the information provided in 
its FCC Form 175 will be used in determining whether the applicant is 
eligible for the claimed bidding credit. Applicants to participate in 
Auction No. 62 must file FCC Form 175 electronically prior to 6 p.m. ET 
on August 12, 2005, following the procedures set forth in Attachment C 
of the Auction No. 62 Procedures Public Notice. Applicants bear full 
responsibility for submission of timely and complete FCC Form 175 
applications. 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. 
Applicants should read the instructions set forth in Attachment C to 
the Auction No. 62 Procedures Public Notice carefully and should 
consult the Commission's rules to ensure that, in addition to the 
materials described below, all the information that is required under 
the Commission's rules is included with their FCC Form 175 
applications.
    33. An entity may not submit more than one short-form application 
in a single auction. In the event that a party submits multiple FCC 
Forms 175, such additional applications will be dismissed. Applicants 
should further note that submission of an FCC Form 175 application 
constitutes a representation by the certifying official that he or she 
is an authorized representative of the applicant, has read the form's 
instructions and certifications, and that the contents of the 
application, its certifications, and any attachments are true and 
correct. Submission of a false certification to the Commission may 
result in penalties, including monetary forfeitures, license 
forfeitures, ineligibility to participate in future auctions, and/or 
criminal prosecution.

A. New Entrant Bidding Credit

    34. 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
    35. 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 12, 2005. Thus, the 
bidder's maximum new entrant bidding credit eligibility will be 
determined as of the short-form application filing deadline. 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 12, 2005. Prospective bidders are reminded, however, 
that events occurring after the short-form filing deadline, such as the 
acquisition of attributable interests in media of mass communications, 
may cause diminishment or loss of the

[[Page 41743]]

bidding credit, and must be reported immediately.
    36. 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.
    37. 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.
    38. 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 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.
    39. 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).

B. Application Requirements

    40. In addition to the ownership information required pursuant to 
Sec.  1.2112, applicants are required to establish on their FCC Form 
175 applications 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 provided in completing the applicant's FCC Form 175. 
An applicant claiming that it qualifies for a 35 percent new entrant 
bidding credit must certify 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 certify 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.
i. Bidding Credits
    41. Applicants that qualify for the New Entrant Bidding Credit, as 
set forth in the applicable rule, 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.
    42. 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.
    43. Several commenters request that the Bureaus revise the new 
entrant bidding credits available for Auction No. 62. The Bureaus are 
unable to adopt for Auction No. 62 the 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 Bureaus' process for seeking comment on auction procedures is not 
the appropriate forum in which to raise 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. 
With respect to one commenter's suggestion of an ``original petitioner 
bidding credit,'' the Commission previously addressed and rejected the 
idea of awarding a credit to an FM applicant that successfully 
petitioned for the FM allotment of the channel being auctioned in the 
Broadcast First Report and Order.
    44. One commenter's proposal sought to address constitutionally 
permissible measures to increase minority and female ownership of radio 
and television stations. The Bureaus believe that these proposals are 
more appropriately addressed in a separate proceeding rather than in 
response to a public notice seeking comment on the forthcoming auction 
of FM broadcast allotments. Accordingly, the Bureaus will incorporate 
these proposals into the record of the Commission's Sec.  257 
proceeding.

C. Permit Selection

    45. In Auction No. 62, applicants must select the construction 
permits on which they want to bid from the eligible permits list. In 
Auction No. 62, FCC Form 175 will include a filtering mechanism that 
allows an applicant to filter the available construction permits to 
create customized lists of construction permits. The applicant will 
make selections for one or more of the filter criteria and the system 
will produce a list of construction permits satisfying the specified 
criteria. In the FCC Form 175 for certain previous non-broadcast 
auctions, applicants could use

[[Page 41744]]

a Select All function to indicate that they wanted to pursue all 
markets being auctioned. One commenter states that the bidding strategy 
of identifying all available channels so that competitors are unable to 
determine which allotments ``are really of interest'' has the potential 
of discouraging truly new entrant applicants from bidding in the 
auction ``if they believe there are hundreds of bidders for the 
allotment they seek.'' Enhancements to the FCC Auction System make it 
easy for applicants to select multiple construction permits with or 
without a Select All function. The ability for applicants to select and 
bid on multiple construction permits can improve bidders' ability to 
pursue backup bidding strategies during the auction. Based upon the 
Bureau's experience in past auctions, the Bureaus adopt its proposal.
    46. There is no opportunity to change construction permit selection 
after the short-form filing deadline. It is critically important that 
an applicant confirm its construction permit selection because the FCC 
Auction System will not accept bids on construction permits that an 
applicant has not selected on its FCC Form 175.

D. Consortia and Joint Bidding Arrangements

    47. Applicants will be required to indicate on their applications 
whether they have 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. Applicants will also 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. 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 such discussions with applicants for 
the same market after the deadline.
    48. 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.

E. Ownership Disclosure Requirements

    49. 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, all applicants must comply with the uniform 
Part 1 ownership disclosure standards and provide information required 
by Sec. Sec.  1.2105 and 1.2112 of the Commission's rules. 
Specifically, in completing FCC Form 175, applicants will be required 
to fully disclose information on the real party or parties-in-interest 
and ownership structure of the bidding entity. The ownership disclosure 
standards for the short form are set forth in Sec.  1.2112 of the 
Commission's rules. Applicants are responsible for information 
submitted in FCC Form 175 being complete and accurate. Accordingly, 
applicants should carefully review any information automatically 
entered to confirm that it is complete and accurate as of the deadline 
for filing FCC Form 175. Applicants can update any information that 
needs to be changed directly in the FCC Form 175.
    50. To simplify filling out FCC Form 175, an applicant's most 
current ownership information on file with the Commission, if in an 
electronic format compatible with FCC Form 175, such as information 
submitted in an on-line FCC Form 602 in connection with wireless 
services, will automatically be entered into FCC Form 175.

F. Provisions Regarding Former and Current Defaulters

    51. Each applicant must state under penalty of perjury on its FCC 
Form 175 application whether or not the applicant, its affiliates, its 
controlling interests, and the affiliates of its controlling interests, 
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. In addition, each applicant must certify under penalty 
of perjury on its FCC Form 175 application that the applicant, its 
affiliates, its controlling interests, 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 
that they are not delinquent on any non-tax debt owed to any Federal 
agency. Prospective applicants are reminded that submission of a false 
certification to the Commission is a serious matter that may result in 
severe penalties, including monetary forfeitures, license revocations, 
exclusion from participation in future auctions, and/or criminal 
prosecution.
    52. Former defaulters--i.e., applicants, including their 
attributable interest holders, that in the past have defaulted on any 
Commission licenses or been delinquent on any non-tax debt owed to any 
Federal agency, but that have since remedied all such defaults and 
cured all of their outstanding non-tax delinquencies--are eligible to 
bid in Auction No. 62, provided that they are otherwise qualified. 
However, 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 defaulter and former defaulter 
certification requirement, suggests as an alternative that if a former 
defaulter has cured outstanding infractions and has not been delinquent 
on any non-tax debt owed to any Federal agency for at least a decade, 
it should only be required to pay the standard upfront payment. The 
Bureaus cannot adopt this proposal. 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.
    53. Current defaulters--i.e., applicants, including their 
attributable interest holders, that are in default on any payment for 
Commission licenses (including down payments) or are delinquent on any 
non-tax debt owed to any Federal agency--are not eligible to bid in 
Auction No. 62.
    54. Applicants are encouraged to review the Bureau's previous 
guidance on default and delinquency disclosure requirements in the 
context of the

[[Page 41745]]

Bureau's short-form application process. Applicants are reminded that 
the Commission's Red Light Display System, which provides information 
regarding debts owed to the Commission, may not be determinative of an 
applicant's ability to comply with the default and delinquency 
disclosure requirements.

G. Installment Payments

    55. One commenter suggests the Bureau allow small businesses to pay 
for their licenses by making installment payments throughout the eight-
year license period. In the Part 1 Third Report and Order, 65 FR 52401, 
August 29, 2000, the Commission suspended use of installment payments 
for the foreseeable future. Accordingly, installment payment plans will 
not be available in Auction No. 62.

H. Other Information

    56. Applicants owned by minorities or women, as defined in Sec.  
1.2110(c)(2), may identify themselves in filling out their FCC Form 175 
short-form application 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.

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

    57. After the short-form filing deadline (6 p.m. ET August 12, 
2005), applicants may make only minor changes to their applications. 
Applicants will not be permitted to make major modifications to their 
applications (e.g., change their construction permit selections, change 
control of the applicant, increase a previously claimed bidding credit, 
or change their self-identification as noncommercial educational). 
Permissible minor changes include, for example, deletion and addition 
of authorized bidders (to a maximum of three) and addresses and phone 
numbers of the applicants and their contact persons. Applicants must 
click on the SUBMIT button in the FCC Auction System for the changes to 
be submitted and considered by the Commission. After the revised 
application has been submitted, a confirmation page will be displayed 
that states the submission time and date, along with a unique file 
number. In addition, applicants should 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. 
62 and the name of the applicant. The Bureaus request that parties 
format any attachments to electronic mail as Adobe[supreg] 
Acrobat[supreg] (pdf) or Microsoft[supreg] Word documents.

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

    58. 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. Changes that cause a loss of or reduction in eligibility 
for a new entrant bidding credit should be reported immediately. 
Amendments reporting substantial changes of possible decisional 
significance in information contained in FCC Form 175 applications 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--July 27, 2005

    59. On Wednesday, July 27, 2005, the FCC will sponsor a seminar for 
parties interested in participating in Auction No. 62 at the Federal 
Communications Commission headquarters, located at 445 12th Street, 
SW., Washington, DC. The seminar will provide attendees with 
information about pre-auction procedures, completing FCC Form 175, 
auction conduct, the FCC 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.
    60. To register, complete the registration form Attachment B of the 
Auctions No. 62 Procedures Public Notice and submit it by Monday, July 
25, 2005. Registrations are accepted on a first-come, first-served 
basis. The seminar is free of charge.
    61. For individuals who are unable to attend, an Audio/Video of 
this seminar will be available via webcast from the FCC's Auction 62 
Web page at http://wireless.fcc.gov/auctions/62/.

B. Short-Form Application (FCC Form 175)--Due by August 12, 2005, 6 
p.m. ET

    62. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application. This application must be 
submitted electronically and received at the Commission prior to 6 p.m. 
ET on August 12, 2005. Late applications will not be accepted. There is 
no application fee required when filing FCC Form 175. However, to be 
eligible to bid, an applicant must submit an upfront payment.
    63. Applications may generally be filed at any time beginning at 
noon ET on July 27, 2005, until 6 p.m. ET on August 12, 2005. 
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 12, 2005.
    64. Applicants must always click on the SUBMIT button on the 
Certify and Submit screen of the electronic form to successfully submit 
their FCC Form 175s or modifications. Any form that is not submitted 
will not be reviewed by the FCC.

C. Application Processing and Minor Corrections

    65. 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: (1) Those applications accepted for 
filing; (2) those applications rejected; and (3) those applications 
which have minor defects that may be corrected, and the deadline for 
resubmitting such corrected applications.
    66. 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. 62 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.

[[Page 41746]]

    67. As described more fully in the Commission's rules, after the 
August 12, 2005, short-form filing deadline, applicants may make only 
minor corrections to their FCC Form 175 applications. Applicants will 
not be permitted to make major modifications to their applications 
(e.g., change their construction permit selections, change control of 
the applicant, increase a previously claimed bidding credit, or change 
their self-identification as NCE).

D. Upfront Payments--Due September 30, 2005

    68. 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 in the proper account at Mellon Bank by 6 p.m. ET on 
September 30, 2005.
i. Making Auction Payments by Wire Transfer
    69. Wire transfer payments must be received by 6 p.m. ET on 
September 30, 2005. 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.
    70. Applicants must fax a completed FCC Form 159 (Revised 2/03) 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 No. 62. 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. FCC Form 159
    71. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be faxed to Mellon Bank to accompany each upfront payment. 
Proper completion of FCC Form 159 (Revised 2/03) is critical to 
ensuring correct crediting of upfront payments. Detailed instructions 
for completion of FCC Form 159 are included in Attachment D of the 
Auction No. 62 Procedures Public Notice. An electronic pre-filled 
version of the FCC Form 159 is available after submitting the FCC Form 
175. Payors using a pre-filled FCC Form 159 are responsible for 
ensuring that all of the information on the form, including payment 
amounts, is accurate. The FCC Form 159 can be completed electronically, 
but must be filed with Mellon Bank via facsimile.
iii. 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 make 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. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed that the amount of the upfront payment would determine a 
bidder's initial bidding eligibility, the maximum 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 a current 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 permits 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 FCC Form 
175, but rather to cover the number of bidding units that are 
associated with construction permits on which the bidder wishes to 
place bids and hold provisionally winning bids at any given time.
    74. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed upfront payments for each construction permit taking into 
account various factors related to the efficiency of the auction 
process and the potential value of similar spectrum. One commenter 
suggests having no minimum opening bid amount or reserve price. The 
same commenter alternatively suggests limiting upfront payments to no 
more than $50,000 for any allotment, and to $5,000 for allotments for 
the first local transmission services to communities with populations 
under 10,000. The commenter suggests that lower upfront payment amounts 
will increase bidder participation and ensure that smaller populations 
will receive service. However, the Bureaus' auction experience has 
shown no such correlation between the amount of the upfront payment and 
bidder interest. Moreover, the Bureaus' method of setting upfront 
payments is designed to ensure that permits will be awarded to the 
parties that value them most, rather than encouraging speculation by 
potentially discounting prices. The Bureaus thus decline to adopt the 
commenter's proposal. The specific upfront payment and bidding units 
for each construction permit are set forth in Attachment A of the 
Auction No. 62 Procedures Public Notice.
    75. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active on (bid on or hold provisionally winning bids on) in any 
single round, and submit an upfront payment amount 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 be active in any given round. Applicants should 
check their calculations carefully, as there is no provision for 
increasing a bidder's eligibility after the upfront payment deadline.

                                Example: Upfront Payments and Bidding Flexibility
----------------------------------------------------------------------------------------------------------------
                                                                                          Bidding      Upfront
             Market No.                    Channel/class               Location            units       payment
----------------------------------------------------------------------------------------------------------------
FM362...............................  232C3..................  Viola, AR..............       50,000       50,000

[[Page 41747]]

 
FM015...............................  279C3..................  Flagstaff, AZ..........       70,000       70,000
----------------------------------------------------------------------------------------------------------------

    76. Former defaulters should calculate their upfront payment for 
all construction permits by multiplying the number of bidding units on 
which they wish to be active 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. If a former defaulter fails to submit a 
sufficient upfront payment to establish eligibility to bid on at least 
one of the construction permits applied for on its FCC Form 175, the 
applicant will not be eligible to participate in the auction.
iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    77. The Commission will use wire transfers for all Auction No. 62 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed in the Auction No. 62 Procedures Public Notice be 
supplied to the FCC. Applicants can provide the information 
electronically during the initial short-form filing window after the 
form has been submitted. Wire Transfer Instructions can also be 
manually faxed to the FCC, Financial Operations Center, Auctions 
Accounting Group, Attn: Gail Glasser, at (202) 418-2843. 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

    78. 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.
    79. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by overnight mail. The mailing will be sent only to the contact 
person at the contact address listed in the FCC Form 175 and will 
include the SecurID cards that will be required to place bids (or 
access the FCC Auction System) and the telephonic bidding phone number. 
Qualified bidders that do not receive this registration mailing will 
not be able to submit bids. Therefore, any qualified bidder that has 
not received this mailing by noon on Thursday, October 27, 2005, should 
call (717) 338-2888. Receipt of this registration mailing is critical 
to participating in the auction, and each applicant is responsible for 
ensuring it has received all of the registration material.
    80. Qualified bidders should note that lost SecurID cards can be 
replaced only by appearing in person at the FCC headquarters, located 
at 445 12th St., SW., Washington, DC 20554. Only an authorized 
representative or certifying official, as designated on an applicant's 
FCC Form 175, may appear in person with two forms of identification 
(one of which must be a photo identification) in order to receive 
replacements. Qualified bidders requiring replacements must call 
technical support prior to arriving at the FCC.

F. Remote Electronic Bidding

    81. The Commission will conduct this auction over the Internet, and 
telephonic bidding will be available as well. Qualified bidders are 
permitted to bid electronically and telephonically. 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, the telephonic 
bidding phone number, and the Integrated Spectrum Auction System (ISAS) 
Bidder's Guide 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. 62.
    82. Please note that the SecurID cards can be recycled, and the 
Bureaus encourage bidders to return the cards to the FCC. The Bureaus 
will provide pre-addressed envelopes that bidders may use to return the 
cards once the auction is over.

G. Mock Auction--October 28, 2005

    83. All qualified bidders will be eligible to participate in a mock 
auction on Friday, October 28, 2005. The mock auction will enable 
applicants to become familiar with the FCC Auction System prior to the 
auction. Participation by all bidders is strongly recommended. Details 
will be announced by public notice.

IV. Auction Event

    84. The first round of bidding for Auction No. 62 will begin on 
Tuesday, November 1, 2005. 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
    85. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed to award all construction permits in Auction No. 62 in a 
simultaneous multiple round auction. In a simultaneous multiple round 
auction, all construction permits are available during the entire 
auction, and bids are accepted on any construction permit until the 
auction concludes. Two commenters found the structure unfair to new 
entrant bidders. One commenter argued that keeping the bidding open on 
all permits forces the continued monitoring of all permits after each 
round of bidding and therefore unduly increases the administrative 
costs for these smaller applicants. Both commenters suggest that after 
a designated number of consecutive rounds ensue without additional 
activity, the auction for that particular FM channel should be declared 
closed and the permit awarded to the provisionally winning bidder. 
Through its experience with auctions, the Commission has found that the 
simultaneous multiple round bidding design best advances the goals of 
competitive bidding. This auction

[[Page 41748]]

design generates the most information about relative prices during the 
course of the auction and provides bidders with the greatest 
flexibility to pursue back-up strategies. Furthermore, in addition to 
the informational and bidding flexibility advantages, simultaneous 
multiple round auctions engender vigorous competition and are more 
likely to place construction permits in the hands of the bidder with 
the highest valuation. The Bureaus therefore 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. Eligibility and Activity Rules
    86. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed that the amount of the upfront payment submitted by a bidder 
would determine the initial (maximum) eligibility (as measured in 
bidding units) for each bidder. The Bureaus received no comments on 
this issue.
    87. For Auction No. 62 the Bureaus adopts this proposal. The amount 
of the upfront payment submitted by a bidder determines initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
be active. 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. 62 Procedures 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 selected on its FCC Form 175 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. The 
total upfront payment does not affect the total dollar amount a bidder 
may bid on any given construction permit.
    88. 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.
    89. A bidder's activity level in a round is the sum of the bidding 
units associated with construction permits on which the bidder is 
active. A bidder is considered active on a construction permit in the 
current round if it is either the provisionally winning bidder at the 
end of the previous bidding round and does not withdraw the 
provisionally winning bid in the current round, or if it submits a bid 
in the current round. The minimum required activity is expressed as a 
percentage of the bidder's current eligibility, and increases by stage 
as the auction progresses. Because these procedures have proven 
successful in maintaining the pace of previous auctions, the Bureaus 
adopt them for Auction No. 62.
iii. Auction Stages
    90. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed to conduct the auction in two stages and employ an activity 
rule. The Bureaus further proposed that, in each round of Stage One, a 
bidder desiring to maintain its current bidding eligibility would be 
required to be active on construction permits representing at least 75 
percent of its current bidding eligibility. Finally, the Bureaus 
proposed that in each round of Stage Two, a bidder desiring to maintain 
its current bidding eligibility would be required to be active on at 
least 95 percent of its current bidding eligibility.
    91. Two commenters, opposed the introduction of staged bidding, 
which they believe will confuse bidders and, in one's view, advantage 
larger bidders who ``can hire a math strategy expert'' to determine 
optimal bids. Both commenters favor retention of a 100 percent activity 
requirement. The Bureaus disagree. If anything, the 100 percent bidding 
requirement is more difficult, as it forces bidders to assemble groups 
of bids--often in a short time--that taken together equal exactly the 
number of bidding units the bidders possess. Under the Bureau's 
proposal, a bidder's Stage One bids and provisionally winning bids need 
only total three-quarters or more of the bidder's eligibility--a level 
that is neither difficult to calculate nor to implement. Bidders do not 
need to calculate their required activity; the FCC Auction System 
clearly displays for a bidder whether its bids meet the activity 
requirement. Moreover, even though the 95 percent activity level in 
Stage Two is close to the former 100 percent activity requirement, the 
five percent difference provides enough flexibility to enable 
participants to bid without having to match exactly their bidding 
eligibility. Further, the lack of a 100 percent activity requirement 
can improve bidders' ability to pursue backup bidding strategies during 
the auction. Thus the Bureaus believe that a staged bidding approach 
will better serve Auction No. 62 applicants than the activity 
requirement advocated by the commenters.
    92. Another commenter proposed that the minimum activity level in 
Stage One of the auction be 50 percent of bidding eligibility (Rounds 
1-20), with minimum activity in Stage Two set for 75 percent (Rounds 21 
and thereafter), suggesting in the alternative that the Bureaus adopt a 
100 percent minimum activity requirement in Stage Three, which would 
commence with Round 41. The commenter believes the lower activity 
requirements will result in higher bids, by allowing bidders to monitor 
activity on certain allotments without being forced to bid or drop out. 
However, the Bureaus believe that such lower activity requirements will 
prolong the auction by allowing bidders to postpone bidding activity 
until the later rounds of the auction. The Bureaus believe the 75 
percent Stage One activity requirement represents the best compromise 
between allowing auction participants time to learn from the 
information revealed in the auction, and requiring them to participate 
actively throughout the auction. The Bureaus thus decline to adopt the 
commenter's suggestion.
    93. The Bureaus adopt the following activity levels for each stage 
of the auction. The Bureaus reserve the discretion to further alter the 
activity percentages before and/or during the auction.
    94. Stage One: During the first stage of the auction, a bidder 
desiring to maintain its current bidding eligibility will be required 
to be active on construction permits representing at least 75 percent 
of its current bidding eligibility in each bidding round. Failure to 
maintain the required activity level will result in a reduction in the 
bidder's bidding eligibility in the next round of bidding unless an 
activity rule waiver is used. During Stage One, reduced eligibility for 
the next round will be calculated by multiplying the bidder's current 
round activity (the sum of bidding units of the bidder's provisionally 
winning bids and bids during the current round) by four-thirds (\4/3\).

[[Page 41749]]

    95. Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current bidding eligibility is required to be 
active on 95 percent of its current bidding eligibility. Failure to 
maintain the required activity level will result in a reduction in the 
bidder's bidding eligibility in the next round of bidding unless an 
activity rule waiver is used. During Stage Two, reduced eligibility for 
the next round will be calculated by multiplying the bidder's current 
round activity (the sum of bidding units of the bidder's provisionally 
winning bids and bids during the current round) by twenty-nineteenths 
(\20/19\).
    96. Caution: Since activity requirements increase in Stage Two, 
bidders must carefully check their activity during the first round 
following a stage transition to ensure that they are meeting the 
increased activity requirement. This is especially critical for bidders 
that have provisionally winning bids and do not plan to submit new 
bids. In past auctions, some bidders have inadvertently lost bidding 
eligibility or used an activity rule waiver because they did not re-
verify their activity status at stage transitions. Bidders may check 
their activity against the required activity level by either logging in 
to the FCC Auction System or by accessing the bidder summaries on the 
public results page.
iv. Stage Transitions
    97. The auction will start in Stage One and will generally advance 
to Stage Two when, in each of three consecutive rounds of bidding, the 
provisionally winning bids have been placed on 20 percent or less of 
the construction permits being auctioned (as measured in bidding 
units). In addition, the Bureaus will retain the discretion to regulate 
the pace of the auction by announcement. This determination will be 
based on a variety of measures of bidder activity, including, but not 
limited to, the auction activity level, the percentages of construction 
permits (as measured in bidding units) on which there are new bids, the 
number of new bids, and the percentage increase in revenue. The Bureaus 
believe that these stage transition rules, having proven successful in 
prior auctions, are appropriate for use in Auction No. 62.
v. Activity Rule Waivers and Reducing Eligibility
    98. The Bureaus adopt their proposal that each bidder be provided 
three activity rule waivers. Bidders may use an activity rule waiver 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 minimum 
activity 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 applied proactively by the bidder (known as a 
proactive waiver) or applied automatically by the FCC Auction System 
(known as an automatic waiver) 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. The Bureaus are satisfied that its practice of 
providing three 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.
    99. 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 round where a bidder's 
activity level is below the minimum required unless: (1) There are no 
activity rule waivers available; or (2) 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, the eligibility will 
be permanently reduced, possibly eliminating the bidder from further 
bidding in the auction.
    100. A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the 
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 in Auction Stages. Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    101. Finally, a bidder may apply an activity rule waiver 
proactively as a means to keep the auction open without placing a bid. 
If a bidder proactively applies an activity 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. However, 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.
vi. Auction Stopping Rules
    102. For Auction No. 62, the Bureaus proposed to employ a 
simultaneous stopping rule approach. The Bureaus also sought comment on 
a modified version of the simultaneous stopping rule. The modified 
version of the 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 on 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.
    103. The Bureaus further proposed retaining the discretion to keep 
the auction open even if no new bids or proactive waivers are submitted 
and no previous provisionally winning bids are withdrawn in a round. In 
this event, the effect will be the same as if a bidder had applied a 
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.
    104. In addition, the Bureaus proposed that the Bureaus reserve the 
right to 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.
    105. The Bureaus proposed to exercise these options 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 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.
    106. Two commenters suggest using a non-simultaneous stopping rule. 
The Bureaus believe that experience in prior

[[Page 41750]]

auctions demonstrates that their proposed auction stopping rules 
balance the interests of administrative efficiency and maximum bidder 
participation. The Bureaus therefore decline the commenters suggestion 
and adopt the Bureaus' proposed stopping rules. Auction No. 62 will 
begin under the simultaneous stopping rule approach, and the Bureaus 
will retain the discretion to invoke the other versions of the stopping 
rule.
vii. Auction Delay, Suspension, or Cancellation
    107. Because the Bureaus' approach to notification of delay during 
an auction has proven effective in resolving exigent circumstances in 
previous auctions, the Bureaus adopt their proposed auction 
cancellation rules. 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. The 
Bureaus 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
    108. 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 round results. Multiple bidding 
rounds may be conducted in a given day. Details regarding round results 
formats and locations will also be included in the qualified bidders 
public notice.
    109. 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
    110. Section 309(j) of the Communications Act of 1934, as amended, 
calls upon the Commission to prescribe methods by which a reasonable 
reserve price will be required or a minimum opening bid established 
when applications for FCC licenses or construction permits are subject 
to auction (i.e., because they are mutually exclusive), unless the 
Commission determines that a reserve price or minimum opening bid is 
not in the public interest. Consistent with this mandate, the 
Commission directed the Bureaus to seek comment on the use of a minimum 
opening bid and/or reserve price prior to the start of each auction. 
Among other factors, the Bureaus must consider the amount of spectrum 
being auctioned, levels of incumbency, the availability of technology 
to provide service, the size of the geographic service areas, the 
extent of interference with other spectrum bands, and any other 
relevant factors that could have an impact on the spectrum being 
auctioned. The Commission concluded that the Bureaus should have the 
discretion to employ either or both of these mechanisms for future 
auctions. This is consistent with policy applied in earlier spectrum 
auctions, including Auction Nos. 25, 27, and 54 (Closed Broadcast); 
Auction No. 32 (AM Broadcast); and Auction No. 37 (FM Broadcast).
    111. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed to establish minimum opening bids for Auction No. 62, 
reasoning that a minimum opening bid, successfully used in other 
broadcast auctions, is a valuable tool, effectively regulating the pace 
of the auction. Specifically, a minimum opening bid was proposed for 
each MX group listed in Attachment A of the Auction No. 62 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 the Bureaus' experience in using 
minimum opening bids in other auctions, the Bureaus 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.
    112. In the alternative, the Bureaus sought comment on whether, 
consistent with the Sec.  309(j), the public interest would be served 
by having no minimum opening bid or reserve price.
    113. One commenter requests that the Bureaus lower the minimum 
opening bids for two FM allotments--FM145, Arnoldsburg, WV and FM146, 
Burnsville, WV, claiming that the communities are within two of West 
Virginia's poorest rural counties and the population within each county 
is decreasing. As discussed above, population is but one factor in 
determining minimum opening bid amounts. Furthermore, the Bureaus 
consider population estimates within the proposed FM service contour at 
the allocation reference coordinates, not county population data. 
Generally, the service area of an FM station proposal extends beyond 
the boundaries of a particular county, and the population within that 
service area is therefore greater than the population of the county. 
Moreover, many allotments in Auction No. 62 with similar population 
coverage are in rural areas with lower than average household income 
and have experienced a population decline. Under these circumstances, 
the Bureaus are not persuaded that the minimum bid amounts are 
unreasonable, and decline to modify the minimum opening bid amounts for 
the two West Virginia FM allotments.
    114. Another commenter seeks to reduce the minimum opening bid 
amount for FM 113, Due West, SC, Channel 237A. As the original 
proponent of the FM allotment, the commenter asserts that the proposed 
minimum opening bid amount is excessive, considering the population of 
the community of Due West, the area demographics, and the potential for 
upgrade and maximization. While conceding that the total population for 
the proposed Due West facility is over 100,000 persons, the commenter 
claims that the dominant market that the station would serve is already 
a depressed market for radio stations. The Bureaus are not persuaded 
that the minimum bid amount is disproportionate to the population to be 
served by the proposed FM facility in this instance, and accordingly 
decline to modify the minimum opening bid amount for the Due West, SC, 
FM allotment.
    115. More generally, a commenter alleges that the Commission has 
oversimplified the method used to ascertain the population for each FM 
allotment. Specifically, in calculating

[[Page 41751]]

the coverage area of an allotment, he claims that the Commission used 
perfect circles of coverage instead of the preferred terrain-dependant 
coverage. Contrary to a commenter's contention, the Commission 
calculated coverage areas and associated populations using terrain-
dependant coverages. Specifically, the staff used 360 evenly spaced 
radials for each allotment, starting at true north, and calculated the 
specific antenna height above mean sea level to achieve the correct 
class maximum antenna height above average terrain (HAAT). Then, using 
class maximum facilities centered at the allotment reference 
coordinates, the staff determined the contour distance for all 
azimuths. These contours were then used to calculate the population for 
each FM allotment. This method provides more than adequate accuracy to 
determine the population to be served by the proposed FM facility for 
the purpose of calculating minimum opening bid amounts.
    116. The Bureaus believe that the proposed minimum bid amounts are 
appropriate, and the Bureaus adopt their proposal. The minimum opening 
bid amounts the Bureaus adopt for Auction No. 62 are reducible at the 
discretion of the Bureaus. The Bureaus 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 Bureaus 
will not entertain requests to reduce the minimum opening bid amount on 
specific construction permits.
    117. The specific minimum opening bid amounts for each construction 
permit available in Auction No. 62 are set forth in Attachment A of the 
Auction No. 62 Procedures Public Notice.
iii. Minimum Acceptable Bid Amounts and Bid Increment Amounts
    118. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed to use a minimum acceptable bid increment 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. The minimum acceptable bid 
amount will be calculated by multiplying the provisionally winning bid 
amount times one plus the minimum acceptable bid percentage--i.e., 
(provisionally winning bid amount) * (1.10). The Bureaus will round the 
result using its standard rounding procedures. The Bureaus further 
proposed to retain the discretion to change the minimum acceptable bid 
amounts and bid increments amounts if the Bureaus determine that 
circumstances so dictate. One commenter suggests reducing the minimum 
bid increment to five percent after ten rounds or once the high bid 
exceeds $100,000, arguing that the ten percent increment disadvantages 
smaller entities as the high bids increase. The Bureaus believe that a 
bid increment smaller than ten percent has the potential to prolong the 
auction, but note again that the Bureaus retain the discretion to 
change the minimum acceptable bid amounts and bid increments if events 
so warrant. Thus, the Bureaus will begin the auction with a minimum 
acceptable bid percentage of 10 percent.
    119. 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 Auction System will list the nine 
acceptable bid amounts for each construction permit. Until a bid has 
been placed on a construction permit, the minimum acceptable bid amount 
for that construction permit will be equal to its minimum opening bid 
amount.
    120. The nine acceptable bid amounts for each construction permit 
consist of the minimum acceptable bid amount and eight other bid 
amounts based on the bid increment percentage. The first additional 
acceptable bid amount, above the minimum acceptable bid amount, equals 
the minimum acceptable bid amount times one plus the bid increment 
percentage, rounded--e.g., if the bid increment percentage is 10 
percent, then the next bid amount will equal (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. The Bureaus will begin the auction with a bid 
increment percentage of 10 percent. Note that the bid increment 
percentage need not be the same as the minimum acceptable bid 
percentage.
    121. In the case of a construction permit for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the amount of the second highest bid received for 
the construction permit. The additional bid amounts above the minimum 
acceptable bid amount are calculated using the bid increment percentage 
as described in the previous paragraph.
    122. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, and the 
bid increment percentage if they determine that circumstances so 
dictate. The Bureaus will do so by announcement in the FCC Auction 
System. The Bureaus may also use their discretion to adjust the minimum 
bid increment amount without prior notice if circumstances warrant.
iv. Provisionally Winning Bids
    123. At the end of each bidding round, a provisionally winning bid 
will be determined based on the highest bid amount received for each 
construction permit. 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. Provisionally 
winning bids at the end of the auction become the winning bids. Bidders 
are reminded that provisionally winning bids count toward activity for 
purposes of the activity rule.
    124. In the Auction No. 62 Comment Public Notice, the Bureaus 
proposed to use a random number generator to select a provisionally 
winning bid in the event of identical high bid amounts being submitted 
on a construction permit in a given round (i.e., tied bids). No 
comments were received on this proposal. Therefore, the Bureaus adopt 
their proposal. A 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 provisionally 
winning bid. Eligible bidders, including the provisionally winning 
bidder, will be able to submit a higher bid in a subsequent round. If 
no bidder submits a higher bid in subsequent rounds, the provisionally 
winning bid from the previous round will win the construction permit, 
unless that provisionally winning bid was withdrawn. If any bids are 
received on the construction permit in a subsequent round, the 
provisionally winning bid will once again be determined based on the 
highest bid amount received for the construction permit.
v. Bidding
    125. During a round, a bidder may submit bids for as many 
construction permits as it wishes (subject to its eligibility), 
withdraw provisionally winning bids from previous bidding rounds, 
remove bids placed in the

[[Page 41752]]

current bidding round, or permanently reduce eligibility. Bidders also 
have the option of submitting and removing multiple bids and 
withdrawing multiple provisionally winning bids (subject to the 
limitation on withdrawal rounds discussed below) during a 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 current activity.
    126. All bidding will take place remotely either through the FCC 
Auction System or by telephonic bidding. There will be no on-site 
bidding during Auction No. 62. Please note that 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, five to ten minutes are necessary to 
complete a telephonic bid submission.
    127. A bidder's ability to bid on specific construction permits in 
the first round of the auction is determined by two factors: (1) The 
construction permits applied for on the bidder's FCC Form 175 and (2) 
the bidder's upfront payment amount. 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.
    128. In order to access the bidding function of the FCC Auction 
System, bidders must be logged in during the bidding round using the 
passcode generated by the SecurID card and a personal identification 
number (PIN) created by the bidder. Bidders are strongly encouraged to 
print a round summary for each round after they have completed all of 
their activity for that round.
    129. 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 Auction System will list the nine 
acceptable bid amounts in a drop-down box. Bidders use the drop-down 
box to select from among the acceptable bid amounts. The FCC Auction 
System also includes an ``upload'' function that allows bidders to 
upload text files containing bid information.
    130. Until a bid has been placed on a construction permit, the 
minimum acceptable bid amount for that construction permit will be 
equal to its minimum opening bid amount. Once there is a provisionally 
winning bid on a construction permit, the FCC Auction System will 
calculate a minimum acceptable bid amount for that construction permit 
for the following round.
    131. Finally, bidders are cautioned to select their bid amounts 
carefully because, as explained in the following section, bidders that 
withdraw a provisionally winning 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
    132. In the Auction No. 62 Comment Public Notice, the Commission 
proposed bid removal and bid withdrawal procedures. With respect to bid 
withdrawals, the Commission proposed limiting each bidder to 
withdrawals in no more than one round during the course of the auction. 
The round in which withdrawals are used would be at each bidder's 
discretion.
    133. Some commenters suggested modifications to the Bureau's bid 
withdrawal procedures. One commenter notes that, in Auction 37, some 
high bids were withdrawn late in the auction, returning those permits 
to the Commission after competing bidders had reduced their bidding 
eligibility below the level necessary to place new bids for the 
permits. The commenter suggests that, if a bidder withdraws a standing 
high bid for a particular permit, any applicant that had previously 
been a high bidder for that permit should, if necessary, have its 
bidding eligibility restored to enable it to resume bidding for the 
permit. The commenter's solution would involve substantial additional 
programming of the FCC Auction System. Instead, the Bureaus have opted 
for an alternative approach toward reducing the number of construction 
permits that remain unsold at the end of the auction due to withdrawn 
bids. First, by allowing bid withdrawals in only one round, the Bureaus 
are restricting the opportunity for withdrawing provisionally winning 
bids. Secondly, by implementing a staged auction and using activity 
requirements of less than 100 percent, the Bureaus are increasing the 
chance that other bidders might have sufficient eligibility to bid on 
constructions permits for which provisionally winning bids have been 
withdrawn.
    134. A commenter suggests that the Commission allow the ``second-
place bidder to be designated as a winner [of a permit] when the high 
bidder withdraws'' a high bid during the auction and no other bidder 
places a high bid on the permit by the end of the auction. The 
Commission's rules do not provide for the procedure suggested by the 
commenter. Pursuant to Sec.  1.2109(b) of the Commission's rules, 
however, the Bureaus retain the discretion to offer licenses to the 
next-highest bidder if a winning bidder withdraws or defaults after the 
Commission has declared competitive bidding closed. Thus, the 
commenter's suggestion would require a change of the Commission's 
rules, which is beyond the scope of this proceeding. Moreover, after 
the close of Auction No. 44, WTB rejected a similar request by a 
second-highest bidder that sought a waiver of Sec.  1.2109(b) of the 
Commission's rules.
    135. Another commenter argues that bidders who withdrew bids in 
Auction No. 37 should be prohibited from bidding on those permits in 
Auction No. 62 for which they previously withdrew bids. As noted 
previously, bid withdrawals during an auction are allowed by the 
Bureaus' procedures, and the Bureaus' rules and auction procedures are 
designed to allow bidders to withdraw a limited number of bids for 
entirely legitimate reasons. The commenter's suggestion could result in 
an inefficient auction result: If bidding in a reauction is restricted, 
a construction permit may be won by a party other than the one that 
values the permit the most. For these reasons, the Bureaus decline to 
adopt the two commenter's proposals.
    136. 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 bids function 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 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 
toward bidding activity. These procedures will enhance bidder 
flexibility during the auction, and therefore the Bureaus adopt them 
for Auction No. 62.
    137. Once a round closes, a bidder may no longer remove a bid. 
However, in later rounds, a bidder may withdraw provisionally winning 
bids from previous rounds using the withdraw bids function in the FCC 
Auction System (assuming that the bidder has not reached its withdrawal 
limit). A provisionally winning bidder that withdraws its provisionally 
winning 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

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during a round, that withdrawal cannot be unsubmitted.
    138. In previous auctions, the Bureaus have detected bidder conduct 
that, arguably, may have constituted anti-competitive behavior through 
the use of bid withdrawals. While the Bureaus continue 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, the Bureaus conclude that, for Auction No. 62, adoption of 
a limit on the use of withdrawals to one round per bidder is 
appropriate. By doing so the Bureaus believe the Bureaus strike a 
reasonable compromise that will allow bidders to use withdrawals. The 
Bureaus base their decision on this issue upon their experience with 
bid withdrawals in prior auctions, including PCS D, E and F block, 800 
MHz SMR, and FM broadcast auctions. The Bureaus' decision is in no way 
a reflection of its view regarding the likelihood of any gaming in this 
auction.
    139. The Bureaus will therefore limit the number of rounds in which 
bidders may place withdrawals to one round. The round will be at the 
bidder's discretion and there will be no limit on the number of bids 
that may be withdrawn in the round. 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.
    140. If a provisionally winning bid is withdrawn, the minimum 
acceptable bid amount will equal the amount of the second highest bid 
received for the construction permit, which may be less than, or in the 
case of tied bids, equal to, the amount of the withdrawn bid. To set 
the additional bid amounts, the second highest bid amount also will be 
used in place of the provisionally winning bid in the formula used to 
calculate bid increment amounts. The Commission will serve as a place 
holder provisionally winning bidder on the construction permit until a 
new bid is submitted on that construction permit.
    141. 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 provisionally 
winning 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.
    142. Section 1.2104(g)(1) of the rules sets forth the payment 
obligations of a bidder that withdraws a high bid on a construction 
permit during the course of an auction, and provides for the assessment 
of interim bid withdrawal payments. As amended, Sec.  1.2104(g)(1) 
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. Section 1.2104(g) provides specific examples showing 
application of the bid withdrawal payment rule.
vii. Round Results
    143. Bids placed during a round will not be made public until the 
conclusion of that round. After a round closes, the Bureaus will 
compile reports of all bids placed, bids withdrawn, current 
provisionally winning bids, new minimum acceptable bid amounts, and 
bidder eligibility status (bidding eligibility and activity rule 
waivers), and post the reports for public access. Reports reflecting 
bidders' identities for Auction No. 62 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
    144. The FCC will use auction announcements to announce items such 
as schedule changes and stage transitions. All FCC auction 
announcements will be available by clicking a link in the FCC Auction 
System.

IV. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    145. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed and identifying winning bidders, 
down payments, final payments, and any withdrawn bid payments due.
    146. 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. 62 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. (Upfront payments are applied first to 
satisfy any withdrawn bid liability, before being applied toward down 
payments.)
i. Final Payments
    147. If a winning bidder's long-form application is uncontested, 
after the termination of the pleading cycle for petitions to deny, the 
Commission will issue a public notice announcing that it is prepared to 
grant the winning bidder's long-form application. If a petition to deny 
is filed within the pleading cycle for petitions to deny, and if the 
petition to deny is dismissed or denied, the Commission will issue a 
public notice announcing that it is prepared to grant the winning 
bidder's long-form application promptly after the Media Bureau disposes 
of any such petition to deny and is otherwise satisfied that the 
applicant is qualified to hold the specified construction permit. 
Within ten (10) business days after the date of the release of the 
public notice announcing that the Commission is prepared to grant a 
winning bidder's long-form application, each winning bidder will be 
required to submit the balance of the net amount of its winning bids 
(gross bids less any applicable new entrant bidding credits). Broadcast

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construction permits will be granted only after the full and timely 
payment of winning bids and any applicable late fees, in accordance 
with 47 CFR 1.2109(a).
ii. Long-Form Applications
    148. Within thirty days after the release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
FCC Form 301, Application for FM Construction Permit, and required 
exhibits for each construction permit won through Auction No. 62. 
Winning bidders claiming new entrant status must include an exhibit 
demonstrating their eligibility for the bidding credit. Further filing 
instructions will be provided to auction winners at the close of the 
auction.
    149. One commenter suggests that the FCC Form 301 deadline be 
extended beyond 30 days, arguing that the Auction No. 37 FCC Form 301 
deadline occurred immediately after the end-of-year holiday period, and 
at a time of year when the locations of many allotments were subject to 
winter weather (snow & ice). The commenter implies, without 
explanation, that the winter weather interferes with winning bidders' 
``finding and negotiating for a parcel of property.'' However, the 
Bureaus'' rules provide for FCC Form 301 filing within 30 days of the 
auction's close, which itself is not a fixed date. In Auction No. 37, 
all winning bidders timely filed their FCC Form 301 applications, and 
over half of the applicants, 139, received grants within 90 days of the 
FCC Form 301 filing deadline. Thus, the Bureaus see no reason to alter 
the filing deadline.
iii. Default and Disqualification
    150. Any high bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) will be subject to the payments described in 47 CFR 
1.2104(g)(2). In such event the Commission may re-auction the 
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.
vi. Refund of Remaining Upfront Payment Balance
    151. All applicants that submit upfront payments but are not 
winning bidders for a construction permit in Auction No. 62 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.
    152. Bidders that drop out of the auction completely may be 
eligible for a refund of their upfront payments before the close of the 
auction. Qualified bidders that have exhausted all of their activity 
rule waivers, have no remaining bidding eligibility, and have not 
withdrawn a provisionally winning 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 requests to: Federal Communications 
Commission, Financial Operations Center, Auctions Accounting Group, 
Gail Glasser, 445 12th Street, SW., Room 1-C864, Washington, DC 20554.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division.
[FR Doc. 05-14238 Filed 7-19-05; 8:45 am]
BILLING CODE 6712-01-P