[Federal Register Volume 71, Number 39 (Tuesday, February 28, 2006)]
[Notices]
[Pages 10034-10035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1836]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-06-65-C (Auction No. 65); DA 06-376]


Auction of 800 MHz Air-Ground Radiotelephone Service Licenses; 
Comment Sought on Additional Payment Component of Default Payments for 
Auction No. 65

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This document seeks comments on additional payment component 
of default payments for the auction of new nationwide commercial Air-
Ground Radiotelephone Service licenses in the 800 MHz band (Auction No. 
65), scheduled to commence on May 10, 2006.

DATES: Comments are due on or before March 7, 2006 and reply comments 
are due on or before March 14, 2006.

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

FOR FURTHER INFORMATION CONTACT: For legal questions: Brian Carter at 
(202) 418-0660. For general auction questions: Jeff Crooks at (202) 
418-0660. For service rules questions: Erin McGrath or Richard 
Arsenault (legal); or Jay Jackson or Moslem Sawez (technical) at (202) 
418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Supplemental 
Auction No. 65 Comment Public Notice released on February 21, 2006. The 
complete text of the Supplemental Auction No. 65 Comment Public Notice, 
including attachments and related Commission documents is available for 
public inspection and copying from 8 a.m. to 4:30 p.m. Monday through 
Thursday or from 8 a.m. to 11:30 p.m. on Friday at the FCC Reference 
Information Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The Supplemental Auction No. 65 Comment Public 
Notice and related Commission documents may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 
20554, telephone 202-488-5300, facsimile 202-488-5563, or you may 
contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering 
documents from BCPI please provide the appropriate FCC document number 
for example, DA 06-376. The Supplemental Auction No. 65 Comment Public 
Notice and related documents are also available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/65/.
    1. On January 10, 2006, in the Auction No. 65 Comment Public 
Notice, 71 FR 3513, January 23, 2006, the Wireless Telecommunications 
Bureau (``Bureau'') announced the auction of new nationwide commercial 
Air-Ground Radiotelephone Service licenses in the 800 MHz band and 
sought comment on procedures for the auction of these licenses (Auction 
No. 65). Auction No. 65 is scheduled to commence on May 10, 2006.
    2. After the release of the Auction No. 65 Comment Public Notice, 
the Commission released the CSEA/Part 1 Report and Order, 71 FR 6214, 
February 7, 2006, in which it modified Sec.  1.2104(g)(2) of its rules. 
This provision, which is part of the Commission's general competitive

[[Page 10035]]

bidding rules, governs default payments that must be paid by winning 
bidders that default on a down payment or final payment obligation or 
are disqualified after the close of an auction. Under the modified 
rule, the Commission will, as part of its determination of competitive 
bidding procedures in advance of a particular auction, establish the 
amount of the additional payment component of such default payments for 
that auction. Because Sec.  1.2104(g)(2) was modified after the release 
of the Auction No. 65 Comment Public Notice, the Bureau did not seek 
comment therein on the appropriate level of this payment for Auction 
No. 65, nor did it establish the amount of this payment in the Auction 
No. 65 Procedures Public Notice released on February 21, 2006. 
Therefore, as explained below, the Commission seeks comment in this 
Public Notice on the appropriate level of this payment for Auction No. 
65.
    3. Section 1.2104(g)(2) provides that if, after the close of an 
auction, a winning bidder defaults on a down payment or final payment 
obligation or is disqualified (e.g., fails to submit a timely long-form 
application), the bidder is liable for a default payment. This payment 
consists of a deficiency payment, equal to the difference between the 
amount of the bidder's bid and the amount of the winning bid the next 
time a license covering the same spectrum is won in an auction, plus an 
additional payment equal to a percentage of the defaulter's bid or of 
the subsequent winning bid, whichever is less. Until recently this 
additional payment for non-combinatorial auctions has been set at 3 
percent of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    4. Pursuant to the modification of Sec.  1.2104(g)(2) adopted in 
the CSEA/Part 1 Report and Order, the 3 percent limit on the additional 
default payment for non-combinatorial auctions has been increased to 20 
percent. Thus, the Commission will, for each non-combinatorial auction, 
establish an additional default payment from 3 percent up to a maximum 
of 20 percent. As the Commission has indicated, the level of this 
payment in each case will be based on the nature of the service and the 
inventory of the licenses being offered.
    5. For Auction No. 65, the Bureau proposes to establish an 
additional default payment of 20 percent. In this auction, licenses in 
three band plans will be available, but the only licenses that will be 
awarded will be those that comprise the band plan that receives the 
highest aggregate bid. Consequently, a bid on a single license may 
determine not only the winner of that license but also the winning band 
plan, and thus affect the ability of other bidders to win other 
licenses in the auction. By contrast, a bid on a license in an auction 
using the Commission's standard simultaneous multiple round auction 
format (``SMR'') may determine only the winner of that license. Because 
of the particular interdependence among bids in Auction No. 65 and the 
potential effects of one winning bidder's default on bidders for other 
licenses, the Commission believes that the detrimental effects of a 
default may be significantly greater than in a standard SMR auction. 
Accordingly, the Commission proposes a higher additional default 
payment in order to deter such defaults. The Commission seeks comment 
on this proposal.
    6. Comments are due on or before March 7, 2006, and reply comments 
are due on or before March 14, 2006. All filings must be addressed to 
the Commission's Secretary Attn: WTB/ASAD, Office of the Secretary, 
Federal Communications Commission. Parties who file comments by paper 
must file an original and four copies of each filing. U.S. Postal 
Service first-class, Express, and Priority mail should be addressed to 
445 12th Street, SW., Washington, DC 20554. Filings can be sent by hand 
or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. The Bureau also requires 
that all comments and reply comments be filed electronically to the 
following address: [email protected]. The electronic mail containing 
the comments or reply comments must include a subject or caption 
referring to ``Auction No. 65 Comments'' and the name of the commenting 
party. The Bureau requests that parties format any attachments to 
electronic mail as Adobe[supreg] Acrobat[supreg] (pdf) or 
Microsoft[supreg] Word documents. Copies of comments and reply comments 
will be available for public inspection between 8 a.m. and 4:30 p.m. 
eastern time (e.t.) Monday through Thursday or 8 a.m. to 11:30 a.m. 
e.t. on Fridays in the FCC Reference Information Center, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554, and will also be posted on 
the Web page for Auction No. 65 at http://wireless.fcc.gov/auctions/65/.
    7. This proceeding has been designated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in Sec.  1.1206(b) of the Commission's rules.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 06-1836 Filed 2-27-06; 8:45 am]
BILLING CODE 6712-01-P