[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Notices]
[Pages 12698-12702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2416]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-06-67-A (Auction No. 67); AU Docket No. 06-38; DA 06-
388]


Closed Auction of 400 MHz Air-Ground Radiotelephone Service 
Licenses Scheduled for August 23, 2006. Comments Sought on Reserve 
Price or Minimum Opening Bids and Other Procedures for Auction No. 67

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of nine site-based 
licenses in the 400 MHz general aviation Air-Ground Radiotelephone 
Service scheduled to commence on August 23, 2006 (Auction No. 67). This 
document also seeks comments on reserve prices or minimum opening bids 
and other procedures for Auction No. 67.

DATES: Comments are due on or before March 20, 2006 and reply comments 
are due on or before March 27, 2006.

ADDRESSES: You may submit comments, identified by AU Docket No. 06-381; 
DA 06-388 by any of the following methods:
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail (although the Bureau 
continues to experience delays in receiving U.S. Postal Service mail). 
All filings must be addressed to the Commission's Secretary Attn: WTB/
ASAD, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Commercial overnight mail 
(other than U.S. Postal Service Express Mail and Priority Mail) must be 
sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554. 
The Bureau also requests that a copy of all comments and reply comments 
be submitted electronically to the following address: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division, 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. Mobility 
Division, for service questions: Erin McGrath or Richard Arsenault 
(legal) or Dwain Livingston (technical) at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 67 
Comment Public Notice released on March 3, 2006. The complete text of 
the Auction No. 67 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 a.m. on Friday at the FCC Reference Information Center, 
Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. 
The Auction No. 67 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 06-388. The 
Auction No. 67 Comment Public Notice and related documents are also 
available on the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/67/.

I. Licenses To Be Offered and Limitations on Participation

    1. In Auction No. 67, the licenses to be auctioned are the subject 
of pending mutually exclusive applications for the referenced Air-
Ground service that were filed on FCC Form 601. Participation in 
Auction No. 67 is limited to the parties that filed these pending 
mutually exclusive applications. These applicants, and the filing 
groups of which they are part, are identified in Attachment A of the 
Auction No. 67 Comment Public Notice. The applicants identified in 
Attachment A of the Auction No. 67 Comment Public Notice that wish to 
participate in the auction are required to file a short-form 
application (FCC Form 175) by the short-form deadline, which will be 
announced in a subsequent public notice. Applicants may seek 
eligibility to bid only on those licenses for which they have 
previously submitted an application on FCC Form 601 as set forth in 
Attachment A of the Auction No. 67 Comment Public Notice.

II. Supplemental Information Required

    2. Each entity identified in Attachment A of the Auction No. 67 
Comment Public Notice that wishes to be eligible for competitive 
bidding in Auction No. 67 must provide its FCC Registration Number 
(FRN) to the Commission for association with its pending application 
prior to 6 p.m. Eastern Time (ET) on April 5, 2006. Submission of an 
FRN for association with a pending FCC Form 601 application is required 
so that the FCC Auction System will display the appropriate license 
selection list for each short-form application. If no FRN is submitted 
in the prescribed manner by the specified deadline, the applicant will 
not be able to select its appropriate license(s) in its electronic 
short-form application (FCC Form 175) and will be ineligible to bid in 
Auction No. 67. If an applicant fails to provide this information in 
the prescribed manner and before the deadline specified, its pending 
FCC Form 601 application will be dismissed and it will not be eligible 
for competitive bidding for any of the licenses identified in 
Attachment A of the Auction No. 67 Comment Public Notice for which it 
has previously applied.
    3. To submit an FRN, each listed applicant in Attachment A of the 
Auction No. 67 Comment Public Notice must provide, by 6 p.m. ET on 
April 5, 2006, its precise applicant name and FRN in an e-mail to 
[email protected] or by facsimile to Kathryn Garland at (717) 338-2850. 
Any applicant that does not have an FRN must obtain one by registering 
using the FCC's Commission Registration system (CORES).

[[Page 12699]]

III. Additional Pre-Auction Matters

    4. Each applicant identified in Attachment A of the Auction No. 67 
Comment Public Notice that wishes to participate in the auction is 
required to file a short-form application (FCC Form 175) by the short-
form deadline. That date will be announced in a subsequent public 
notice. Each such applicant is also required to submit an upfront 
payment by the upfront payment deadline, which date will also be 
announced in a subsequent public notice.
    5. The Bureau will dismiss the previously filed FCC Form 601 of any 
applicant that fails to timely file a short-form application to 
participate in the auction and otherwise comply with the terms and 
procedures governing Auction No. 67. If only one short-form application 
is accepted for filing for a particular license, that license will be 
removed from the auction, and the FCC Form 601 of the party filing the 
short-form application will be processed for that license under 
applicable Commission procedures. In the event that more than one 
short-form application for a license is accepted for filing, mutual 
exclusivity for auction purposes will have been established, even if 
only one applicant submits an upfront payment. Under these 
circumstances, the applicant that submits an upfront payment must 
participate in the auction, i.e., bid the minimum opening bid, in order 
to win the license.

IV. Bureau Seeks Comment on Auction Procedures

    6. Section 309(j)(3) of the Communications Act of 1934, as amended, 
requires the Commission to ``ensure that, in the scheduling of any 
competitive bidding under this subsection, an adequate period is 
allowed * * * before issuance of bidding rules, to permit notice and 
comment on proposed auction procedures * * *.'' Consistent with the 
provisions of section 309(j)(3) and to ensure that potential bidders 
have adequate time to familiarize themselves with the specific rules 
that will govern the day-to-day conduct of an auction, the Commission 
directed the Bureau, under its existing delegated authority, to seek 
comment on a variety of auction-specific procedures prior to the start 
of each auction. The Bureau therefore seeks comment on the following 
issues relating to Auction No. 67.

A. Auction Structure

i. Simultaneous Multiple-Round Auction Design
    7. The Bureau proposes to auction all licenses included in Auction 
No. 67 in a simultaneous multiple-round auction. As described further 
below, this type of auction offers every license for bid at the same 
time and consists of successive bidding rounds in which eligible 
bidders may place bids on individual licenses. Typically, bidding 
remains open on all licenses until bidding stops on every license. The 
Bureau seeks comment on this proposal.
ii. Round Structure
    8. The Commission will conduct Auction No. 67 over the Internet. 
Alternatively, telephonic bidding will also be available via the 
Auction Bidder Line. The toll free telephone number for telephonic 
bidding will be provided to qualified bidders closer to the auction 
event.
    9. The auction will consist of sequential bidding rounds. The 
initial bidding schedule will be announced in a public notice to be 
released at least one week before the start of the auction.
    10. The Bureau proposes to retain the discretion to change the 
bidding schedule in order to foster an auction pace that reasonably 
balances speed with the bidders' need to study round results and adjust 
their bidding strategies. Under this proposal, the Bureau may increase 
or decrease the amount of time for the bidding rounds and review 
periods, or the number of rounds per day, depending upon bidding 
activity levels and other factors. The Bureau seeks comment on this 
proposal.
iii. Stopping Rule
    11. The Bureau has discretion to establish stopping rules before or 
during multiple round auctions in order to terminate the auction within 
a reasonable time. For Auction No. 67, the Bureau proposes to employ a 
simultaneous stopping rule approach. A simultaneous stopping rule means 
that all licenses remain available for bidding until bidding closes 
simultaneously on all licenses. More specifically, bidding will close 
simultaneously on all licenses after the first round in which no bidder 
submits any new bids or applies a proactive waiver. Thus, unless 
circumstances dictate otherwise, bidding will remain open on all 
licenses until bidding stops on every license.
    12. Further, the Bureau proposes to retain the discretion to 
exercise any of the following options during Auction No. 67: (1). Use a 
modified version of the simultaneous stopping rule. The modified 
stopping rule would close the auction for all licenses after the first 
round in which no bidder applies a waiver or submits any new bids on 
any license for which it is not the provisionally winning bidder. Thus, 
absent any other bidding activity, a bidder placing a new bid on a 
license for which it is the provisionally winning bidder would not keep 
the auction open under this modified stopping rule; (2). Keep the 
auction open even if no bidder submits any new bids or applies a 
waiver. In this event, the effect will be the same as if a bidder had 
applied a waiver. The activity rule, therefore, will apply as usual and 
a bidder with insufficient activity will either lose bidding 
eligibility or use a remaining waiver; and (3). Declare that the 
auction will end after a specified number of additional rounds. If the 
Bureau invokes this special stopping rule, it will accept bids in the 
specified final round(s) after which the auction will close.
    13. The Bureau proposes to exercise these options only in certain 
circumstances, for example, where the auction is proceeding very 
slowly, there is minimal overall bidding activity, or it appears likely 
that the auction will not close within a reasonable period of time. 
Before exercising these options, the Bureau is likely to attempt to 
increase the pace of the auction by, for example, increasing the number 
of bidding rounds per day and/or changing the minimum acceptable bid 
percentage. The Bureau seeks comment on these proposals.
iv. Information Relating to Auction Delay, Suspension, or Cancellation
    14. For Auction No. 67, the Bureau proposes that, by public notice 
or by announcement during the auction, the Bureau may delay, suspend, 
or cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureau, in its 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 Bureau to delay or suspend 
the auction. The Bureau emphasizes that exercise of this authority is 
solely within the discretion of the Bureau, and its use is not intended 
to be a substitute for situations in which bidders may wish to apply 
their activity rule waivers.

[[Page 12700]]

The Bureau seeks comment on this proposal.

B. Auction Procedures

i. Upfront Payments and Bidding Eligibility
    15. The Bureau has delegated authority and discretion to determine 
an appropriate upfront payment for each license being auctioned. As 
described further below, the upfront payment is a refundable deposit 
made by each bidder to establish eligibility to bid on licenses. 
Upfront payments related to the licenses for specific spectrum subject 
to auction protect against frivolous or insincere bidding and provide 
the Commission with a source of funds from which to collect payments 
owed at the close of the auction. With these factors in mind, the 
Bureau proposes to set the upfront payments for Auction No. 67 at $500 
per license.
    16. The Bureau further proposes that the amount of the upfront 
payment submitted by a bidder will determine the bidder's initial 
bidding eligibility in bidding units. The Bureau proposes that each 
license be assigned a specific number of bidding units equal to the 
upfront payment listed in Attachment A of the Auction No. 67 Comment 
Public Notice, on a bidding unit per dollar basis. Under this proposal, 
each license in Auction No. 67 will be associated with 500 bidding 
units. The number of bidding units for a given license is fixed and 
does not change during the auction as prices rise. A bidder's upfront 
payment is not attributed to specific licenses. Rather, a bidder may 
place bids on any combination of licenses it selected on its FCC Form 
175 as long as the total number of bidding units associated with those 
licenses 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 and hence its initial 
bidding eligibility, an applicant must determine the maximum number of 
bidding units it may wish to bid on (or hold provisionally winning bids 
on) in any single round, and submit an upfront payment amount covering 
that total number of bidding units. Provisionally winning bids are bids 
that would become final winning bids if the auction were to close in 
that given round.
    17. The Bureau lists all licenses, and the proposed upfront payment 
for each, in Attachment A of the Auction No. 67 Comment Public Notice. 
The Bureau seeks comment on these proposals.
ii. Activity Rule
    18. 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. A bidder's activity in a round will be the sum of 
the bidding units associated with any licenses upon which it places 
bids during the current round and the bidding units associated with any 
licenses for which it holds provisionally winning bids. Bidders are 
required to be active on a specific percentage of their current bidding 
eligibility during each round of the auction. Failure to maintain the 
requisite activity level will result in the use of an activity rule 
waiver, if any remain, or a reduction in the bidder's eligibility, 
possibly curtailing or eliminating the bidder's ability to place bids 
in the auction.
    19. The Bureau proposes a single stage auction with the following 
activity requirement: In each round of the auction, a bidder desiring 
to maintain its eligibility to participate in the auction is required 
to be active on one hundred (100) percent of its bidding eligibility. 
Failure to maintain the requisite activity level will result in a 
reduction in the bidder's bidding eligibility in the next round of 
bidding.
    20. The Bureau seeks comment on this proposal. Commenters that 
believe this activity rule should be modified should explain their 
reasoning and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with analyses and 
suggested alternative activity rules.
iii. Activity Rule Waivers and Reducing Eligibility
    21. Use of an activity rule waiver preserves the bidder's 
eligibility despite the bidder's activity in the current round being 
below the required minimum level. An activity rule waiver applies to an 
entire round of bidding. Activity rule waivers can be either proactive 
or automatic and are principally a mechanism for auction participants 
to avoid the loss of bidding eligibility in the event that exigent 
circumstances prevent them from placing a bid in a particular round.
    22. The FCC Auction System assumes that a bidder that does not meet 
the activity requirement would prefer to apply an activity rule waiver 
(if available) rather than lose bidding eligibility. Therefore, the 
system will automatically apply a waiver at the end of any bidding 
round in which a bidder's activity level is below the minimum required 
unless: (1) The bidder has no activity rule waivers remaining; or (2) a 
bidder eligible to bid on more than one license overrides the automatic 
application of a waiver by reducing eligibility, thereby meeting the 
minimum requirement. If a bidder that is eligible to bid on only one 
license has no waivers remaining and does not satisfy the required 
activity level, the bidder's eligibility will be reduced, eliminating 
it from the auction. If a bidder that is eligible to bid on more than 
one license has no waivers remaining and does not satisfy the required 
activity level, its eligibility will be permanently reduced, possibly 
curtailing or eliminating the bidder's ability to place additional bids 
in the auction.
    23. A bidder that is eligible to bid on more than one license and 
has insufficient activity may wish to reduce its bidding eligibility 
rather than use an activity rule waiver. If so, the bidder must 
affirmatively override the automatic waiver mechanism during the 
bidding 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 rule as 
described above. Reducing eligibility is an irreversible action. Once 
eligibility has been reduced, a bidder will not be permitted to regain 
its lost bidding eligibility, even if the round has not yet closed.
    24. 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 rule waiver (using the apply waiver 
function in the FCC Auction System) during a bidding round in which no 
bids are submitted, the auction will remain open and the bidder's 
eligibility will be preserved. An automatic waiver applied by the FCC 
Auction System in a round in which there are no new bids will not keep 
the auction open. A bidder cannot submit a proactive waiver after 
submitting a bid in a round, and submitting a proactive waiver will 
preclude a bidder from placing any bids in that round. Applying a 
waiver is irreversible; once a proactive waiver is submitted, that 
waiver cannot be unsubmitted, even if the round has not yet closed.
    25. The Bureau proposes that each bidder in Auction No. 67 be 
provided with three activity rule waivers that may be used at the 
bidder's discretion during the course of the auction as set forth 
above. The Bureau seeks comment on this proposal.

[[Page 12701]]

iv. Reserve Price or Minimum Opening Bid
    26. Section 309(j) calls upon the Commission to prescribe methods 
for establishing a reasonable reserve price or a minimum opening bid 
amount when FCC licenses are subject to auction, unless the Commission 
determines that a reserve price or minimum opening bid amount is not in 
the public interest. Consistent with this mandate, the Commission has 
directed the Bureau to seek comment on the use of a minimum opening bid 
amount and/or reserve price prior to the start of each auction.
    27. Normally, a reserve price is an absolute minimum price below 
which an item will not be sold in a given auction. Reserve prices can 
be either published or unpublished. A minimum opening bid amount, on 
the other hand, is the minimum bid price set at the beginning of the 
auction below which no bids are accepted. It is generally used to 
accelerate the competitive bidding process. The auctioneer, however, 
has the discretion to lower the minimum opening bid amount during the 
course of the auction. It is also possible for the minimum opening bid 
amount and the reserve price to be the same amount.
    28. In light of section 309(j)'s requirements, the Bureau proposes 
to establish minimum opening bid amounts for Auction No. 67. The Bureau 
believes a minimum opening bid amount, which has been used in other 
auctions, is an effective bidding tool for accelerating the competitive 
bidding process.
    29. Specifically, for Auction No. 67, the Bureau proposes to set 
the minimum opening bids at $500 per license. This proposed minimum 
opening bid amount for each license available in Auction No. 67 is set 
forth in Attachment A of the Auction No. 67 Comment Public Notice. The 
Bureau seeks comment on this proposal.
    30. If commenters believe that this minimum opening bid amount will 
result in unsold licenses, or is not a reasonable amount, or should 
instead operate as a reserve price, they should explain why this is so, 
and comment on the desirability of an alternative approach. Commenters 
are advised to support their claims with valuation analyses and 
suggested reserve prices or minimum opening bid amount levels or 
formulas. In establishing minimum opening bid amounts, the Bureau 
particularly seeks comment on such factors as the amount of spectrum 
being auctioned, the availability of technology to provide service, the 
size of the service areas, issues of interference with other spectrum 
bands and any other relevant factors that could reasonably have an 
impact on valuation of the 400 MHz Air-Ground Radiotelephone Service 
licenses being auctioned. The Bureau also seeks comment on whether, 
consistent with section 309(j), the public interest would be served by 
having no minimum opening bid amount or reserve price.
v. Bid Amounts
    31. The Bureau proposes that, in each round, eligible bidders be 
able to place a bid on a given license in any of nine different 
amounts. Under this proposal, the FCC Auction System interface will 
list the nine acceptable bid amounts for each license.
    32. The first of the nine acceptable bid amounts is called the 
minimum acceptable bid amount. The minimum acceptable bid amount for a 
license will be equal to its minimum opening bid amount until there is 
a provisionally winning bid for the license. After there is a 
provisionally winning bid for a license, the minimum acceptable bid 
amount will be calculated by multiplying the provisionally winning bid 
amount times one plus the minimum acceptable bid percentage. If, for 
example, the minimum acceptable bid percentage is 5 percent, the 
minimum acceptable bid amount will equal (provisionally winning bid 
amount) * (1.05), rounded.
    33. The eight additional bid amounts are calculated using the 
minimum acceptable bid amount and a bid increment percentage, which 
need not be the same as the percentage used to calculate the minimum 
acceptable bid amount. The first additional acceptable bid amount 
equals the minimum acceptable bid amount times one plus the bid 
increment percentage, rounded. If, for example, the bid increment 
percentage is 5 percent, the calculation is (minimum acceptable bid 
amount) * (1 + 0.05), rounded, or (minimum acceptable bid amount) * 
1.05, 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) * 
1.10, 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) * 
1.15, rounded; etc. The Bureau will round the result using its standard 
rounding procedures.
    34. For Auction No. 67, the Bureau proposes to use a minimum 
acceptable bid percentage of 10 percent. This means that the minimum 
acceptable bid amount for a license will be approximately 10 percent 
greater than the provisionally winning bid amount for the license. The 
Bureau also proposes to use a bid increment percentage of 10 percent to 
calculate the eight additional acceptable bid amounts.
    35. The Bureau retains the discretion to change the minimum 
acceptable bid amounts, the parameters of the formula to determine the 
percentage increment, and the bid increment percentage if it determines 
that circumstances so dictate. The Bureau will do so by announcement in 
the FCC Auction System during the auction. We seek comment on these 
proposals.
vi. Provisionally Winning Bids
    36. At the end of a bidding round, a provisionally winning bid 
amount for each license will be determined based on the highest bid 
amount received for the license. In the event of identical high bid 
amounts being submitted on a license in a given round (i.e., tied 
bids), the Bureau will use a random number generator to select a single 
provisionally winning bid from among the tied bids. (Each bid is 
assigned a random number, and the tied bid with the highest random 
number wins the tiebreaker.) The remaining bidders, as well as the 
provisionally winning bidder, can submit higher bids in subsequent 
rounds. However, if the auction were to end with no other bids being 
placed, the winning bidder would be the one that placed the 
provisionally winning bid. If any bids are received on the license in a 
subsequent round, the provisionally winning bid again will be 
determined by the highest bid amount received for the license.
    37. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the license at the close of 
a subsequent round. Bidders are reminded that provisionally winning 
bids count toward activity for purposes of the activity rule.
vii. Bid Removal and Bid Withdrawal
    38. For Auction No. 67, the Bureau proposes the following bid 
removal procedures. Before the close of a bidding round, a bidder has 
the option of removing any bid placed in that round. By removing 
selected bids in the FCC Auction System, a bidder may effectively 
unsubmit any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to any penalties. Once a round 
closes, a bidder may no longer remove a bid.
    39. For Auction No. 67, the Bureau proposes to prohibit bidders 
from withdrawing any bids after the round in which the bids were placed 
has closed.

[[Page 12702]]

In the Part 1 Third Report and Order, 65 FR 13540, May 27, 1997, the 
Commission explained that allowing bid withdrawals may facilitate 
efficient aggregation of licenses and the pursuit of efficient backup 
strategies as information becomes available during the course of an 
auction. In Auction No. 67, because bidders may bid only on licenses 
for which they previously submitted an application on FCC Form 601, it 
is unlikely that bidders will need to use withdrawals as anticipated by 
the Part 1 Third Report and Order. Accordingly, for this auction, the 
Bureau proposes that bidders not be permitted to withdraw bids placed 
in any round after it has closed. The Bureau seeks comment on these 
proposals.

C. Post-Auction Procedures

i. Default and Disqualification
    40. Any winning bidder that defaults or is disqualified after the 
close of an 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) is liable for a default payment under 47 CFR 
1.2104(g)(2). 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.
    41. On January 24, 2006, the Commission released the CSEA/Part 1 
Report and Order, 71 FR 6214, February 7, 2006, in which it modified 47 
CFR 1.2104(g)(2) by, inter alia, increasing the 3 percent limit on the 
additional default payment for non-combinatorial auctions to 20 
percent. Under the modified rule, the Commission will, in advance of 
each non-combinatorial auction, establish an additional default payment 
for that auction of 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.
    42. For Auction No. 67, the Bureau proposes to establish an 
additional default payment of 10 percent. As noted in the CSEA/Part 1 
Report and Order, defaults weaken the integrity of the auctions process 
and impede the deployment of service to the public, and an additional 
default payment of more than the previous 3 percent will be more 
effective in deterring defaults. Because there are limited 
opportunities to provide general aviation air-ground service, defaults 
in this auction could potentially deprive the public of service in a 
particular locale, or at a minimum significantly delay such service. In 
light of this circumstance, the Bureau proposes an additional default 
payment of 10 percent of the relevant bid. The Bureau seeks comment on 
this proposal.

V. Conclusion

    43. Comments are due on or before March 20, 2006, and reply 
comments are due on or before March 27, 2006. All filings related to 
the auction of 400 MHz Air-Ground Radiotelephone Service licenses 
should refer to AU Docket No. 06-38. Comments may be submitted using 
the Commission's Electronic Comment Filing System (ECFS) or by filing 
paper copies. The Bureau strongly encourages interested parties to file 
comments electronically, and requests submission of a copy via the 
Auction No. 67 e-mail box ([email protected]).
    44. 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 47 CFR 1.1206(b) of the Commission's 
rules.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division.
[FR Doc. 06-2416 Filed 3-10-06; 8:45 am]
BILLING CODE 6712-01-P