[Federal Register Volume 71, Number 227 (Monday, November 27, 2006)]
[Notices]
[Pages 68613-68628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-20006]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 06-170; Report No. AUC-06-70-B (Auction No. 70); DA 06-
2248]


Auction of FM Broadcast Construction Permits Scheduled for March 
7, 2007; Notice and Filing Requirements, Minimum Opening Bids, Upfront 
Payments and Other Procedures for Auction No. 70

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: Applications to participate in FM Auction No. 70 must be filed 
before 6 p.m. on December 19, 2006. Bidding for Auction No. 70 is 
scheduled to begin on March 7, 2007.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions Spectrum and Access Division: For legal questions: Lynne Milne 
at (202) 418-0660. For general auction questions: Jeff Crooks at (202) 
418-0660 or Linda Sanderson at (717) 338-2868. Media Bureau, Audio 
Division: For service rule questions: Lisa Scanlan or Thomas Nessinger 
at (202) 418-0660. 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. 70 
Procedures Public Notice released on November 2, 2006. The complete 
text of

[[Page 68614]]

the Auction No. 70 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. on Friday at the 
FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. The Auction No. 70 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 Web site: http://www.BCPIWEB.com. When ordering documents from BCPI, 
please provide the appropriate FCC document number, for example, DA 06-
2248 for the Auction No. 70 Procedures Public Notice. The Auction No. 
70 Procedures Public Notice and related documents are also available on 
the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/70/.

I. General Information

A. Introduction

    1. The Media and Wireless Telecommunications Bureaus (collectively 
the Bureaus) announce the procedures and minimum opening bid amounts 
for the upcoming auction of certain FM broadcast construction permits 
scheduled to begin on March 7, 2007 (Auction No. 70). On September 21, 
2006, 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. 70. Interested parties submitted seven comments and one 
reply comment in response to the Auction No. 70 Comment Public Notice, 
71 FR 56977, September 28, 2006.
 i. Construction Permits To Be Auctioned
    2. Auction No. 70 will offer 121 construction permits in the FM 
broadcast service as listed in Attachment A of the Auction No. 70 
Procedures Public Notice. The construction permits to be auctioned are 
121 new FM allotments. 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, and are designated for use in the indicated communities.
    3. Pursuant to the policies established in the Broadcast 
Competitive Bidding 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. 70 Procedures Public Notice. When two 
or more short-form applications (FCC Form 175) specifying the same FM 
allotment are accepted for filing, mutual exclusivity (MX) exists for 
auction purposes, and thus, that construction permit for the FM 
allotment will be awarded by competitive bidding procedures. Once 
mutual exclusivity exists for auction purposes, even if only one 
applicant for a particular construction permit submits an upfront 
payment, that applicant is required to submit a bid in order to obtain 
the construction permit. Any applicant that submits a short-form 
application that is accepted for filing but fails to timely submit an 
upfront payment will retain its status as an applicant in Auction No. 
70 and will remain subject to the Commission's anti-collusion rules, 
but will not be eligible to bid, having purchased no bidding 
eligibility.

B. Rules and Disclaimers

i. Relevant Authority
    4. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules, including 
recent amendments and clarifications, as well as Commission decisions 
in proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Broadcasters 
should also familiarize themselves with the Commission's rules relating 
to the FM broadcast service contained in 47 CFR 73.201-73.333 and 
73.1001-73.5009. Prospective bidders must also be familiar with the 
rules relating to broadcast auctions and competitive bidding 
proceedings contained in 47 CFR 1.2001-1.2112 and 73.5000-73.5009. 
Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions contained in this public notice, the 
Auction No. 70 Comment Public Notice, the Broadcast Competitive Bidding 
First Report and Order, the Broadcast Competitive Bidding 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.
    5. The procedures, terms and conditions contained in the 
Commission's rules, relevant orders, and public notices are not 
negotiable. The Commission may amend or supplement the information 
contained in its 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; Compliance with Antitrust Laws
    6. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) prohibits applicants competing for construction permits in 
any of the same geographic license areas from communicating with each 
other about bids, bidding strategies, or settlements unless such 
applicants have identified each other on their short-form applications 
(FCC Forms 175) as parties with whom they have entered into agreements 
pursuant to Sec.  1.2105(a)(2)(viii). Thus, unless they have identified 
each other on their short-form applications as parties with whom they 
have entered into agreements under Sec.  1.2105(a)(2)(viii), applicants 
for construction permits in any of the same geographic license areas 
must affirmatively avoid all communications with or disclosures to each 
other that affect or have the potential to affect bids or bidding 
strategy. In some instances, this prohibition extends to communications 
regarding the post-auction market structure. 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.
    7. 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., New Hope, Alabama, Channel 278A, 
Market FM502-A). In Auction No. 70, for example, the rule would apply 
to applicants designating on the short-form application 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 short-
form application deadline until the down payment deadline following the 
close of the auction. In addition, even if auction applicants each 
designate on its application only one common FM allotment, they may not 
discuss with each other their bids or bidding strategies relating to 
any FM allotment that either designates on its short-form application.

[[Page 68615]]

    8. For purposes of this prohibition, Sec.  1.2105(c)(7)(i) defines 
applicant as including all officers and directors of the entity 
submitting a short-form application to participate in the auction, all 
controlling interests of that entity, 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.
    9. Applicants for construction permits for any of the same 
allotments must not communicate directly or indirectly about bids or 
bidding strategy. Accordingly, such applicants 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 such 
applicants. Also, if the authorized bidders are different individuals 
employed by the same organization (e.g., law firm or engineering firm 
or consulting firm), a violation similarly could 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. A violation of the anti-collusion 
rule could occur in other contexts, such as an individual serving as an 
officer for two or more applicants. Moreover, the Commission has found 
a violation of the anti-collusion rule where a bidder used the 
Commission's bidding system to disclose its bidding strategy in a 
manner that explicitly invited other auction participants to cooperate 
and collaborate in specific markets, and has placed auction 
participants on notice that the use of its bidding system to disclose 
market information to competitors will not be tolerated and will 
subject bidders to sanctions. Bidders are cautioned that the Commission 
remains vigilant about prohibited communications taking place in other 
situations. For example, the Commission has warned that prohibited 
communications concerning bids and bidding strategies may include 
communications regarding capital calls or requests for additional funds 
in support of bids or bidding strategies to the extent such 
communications convey information concerning the bids and bidding 
strategies directly or indirectly. Bidders should use caution in their 
dealings with other individuals, such as members of the press, 
financial analysts, or others who might become a conduit for the 
communication of prohibited bidding information.
    10. The Commission's rules do not prohibit applicants from entering 
into otherwise lawful bidding agreements before filing their short-form 
applications, as long as they disclose the existence of the 
agreement(s) in their short-form application. If parties agree in 
principle on all material terms prior to the short-form filing 
deadline, each party to the agreement must identify the other party or 
parties to the agreement on its 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 short-form filing 
deadline, they should not include the names of parties to discussions 
on their applications, and they may not continue negotiations, 
discussions or communications with any other applicants after the 
short-form filing deadline.
    11. By electronically submitting its short-form application, each 
applicant certifies its compliance with 47 CFR 1.2105(c) and 73.7002. 
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. The Commission has stated that it 
intends to scrutinize carefully any instances in which bidding patterns 
suggest that collusion may be occurring. Any applicant found to have 
violated the anti-collusion rule may be subject to sanctions.
    12. Applicants are also reminded that, regardless of compliance 
with the Commission's rules, they remain subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace. Compliance with the disclosure requirements of the 
Commission's anti-collusion rule will not insulate a party from 
enforcement of the antitrust laws. For instance, a violation of the 
antitrust laws could arise out of actions taking place well before any 
party submits a short form application. The Commission has cited a 
number of examples of potentially anticompetitive actions that would be 
prohibited under antitrust laws: for example, actual or potential 
competitors may not agree to divide territories horizontally in order 
to minimize competition, regardless of whether they split a market in 
which they both do business, or whether they merely reserve one market 
for one and another for the other. Similarly, the Bureaus have long 
reminded potential applicants and others that even where the applicant 
discloses parties with whom it has reached an agreement on the short-
form application, thereby permitting discussions with those parties, 
the applicant is nevertheless subject to existing antitrust laws. To 
the extent the Commission becomes aware of specific allegations that 
may give rise to violations of the federal antitrust laws, the 
Commission may refer such allegations to the United States Department 
of Justice for investigation. If an applicant is found to have violated 
the antitrust laws or the Commission's rules 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, among other 
sanctions.
    13. As required by 47 CFR 1.65, an applicant must maintain the 
accuracy and completeness of information furnished in its pending 
application and must notify the Commission within 30 days of any 
substantial change that may be of decisional significance to that 
application. Thus, Sec.  1.65 requires an auction applicant to notify 
the Commission of any substantial change to the information or 
certifications included in its pending short-form application. 
Applicants are therefore required by Sec.  1.65 to report to the 
Commission any communications they have made to or received from 
another applicant after the short-form filing deadline that affect or 
have the potential to affect bids or bidding strategy unless such 
communications are made to or received from parties to agreements 
identified under Sec.  1.2105(a)(2)(viii). In addition, Sec.  
1.2105(c)(6) requires that any applicant that makes or receives a 
communication prohibited by Sec.  1.2105(c) must report such 
communication to the Commission in writing immediately, and in no case 
later than five business days after the communication occurs.
    14. As required by 47 CFR 1.1207, applicants that are winning 
bidders will be required to disclose in their long-form applications 
the specific terms, conditions, and parties involved in any bidding 
consortia, joint venture, partnership, or agreement or other 
arrangement entered into relating to the competitive bidding process.
    15. 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. 70 Procedures Public Notice. 
These documents are available on the

[[Page 68616]]

Commission's auction anti-collusion web page.
 iii. Due Diligence
    16. Potential applicants are reminded that they are solely 
responsible for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the value of the 
broadcast facilities in this auction. The FCC makes no representations 
or warranties about the use of this spectrum for particular services. 
Applicants should be aware that an FCC auction represents an 
opportunity to become an FCC permittee in the broadcast service, 
subject to certain conditions and regulations. An FCC auction does not 
constitute an endorsement by the FCC of any particular service, 
technology, or product, nor does an FCC construction permit or license 
constitute a guarantee of business success. Applicants should perform 
their individual due diligence before proceeding as they would with any 
new business venture.
    17. In particular, potential applicants 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. 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 in order to make reasoned, appropriate decisions about their 
participation in Auction No. 70 and their bidding strategy. 
Additionally, potential bidders should perform technical analyses 
sufficient to assure themselves 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.
    18. Potential applicants are also strongly encouraged to conduct 
their own research prior to the beginning of bidding in Auction No. 70 
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. 70 are strongly encouraged to 
continue such research throughout the auction.
    19. Applicants should also be aware that certain pending and future 
proceedings, including applications (including those for modification), 
petitions for rulemaking, requests for special temporary authority, 
waiver requests, petitions to deny, petitions for reconsideration, 
informal objections, and applications for review, before the Commission 
may relate to particular applicants or incumbent permittees, or 
incumbent licensees, or the construction permits available in Auction 
No. 70. In addition, pending and future judicial proceedings may relate 
to particular applicants or incumbent permittees, or incumbent 
licensees, or the construction permits available in Auction No. 70. 
Prospective applicants are responsible for assessing the likelihood of 
the various possible outcomes, and considering their potential impact 
on construction permits available in this auction.
    20. Applicants should perform due diligence to identify and 
consider all proceedings that may affect the construction permits being 
auctioned and that could have an impact on the availability of spectrum 
for Auction No. 70. 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 beginning of bidding in the auction.
    21. Applicants 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. 70. Potential 
applicants are strongly encouraged to physically inspect any 
prospective sites located in, or near, the service area for which they 
plan to bid, and also to familiarize themselves with the environmental 
review obligations.
    22. Applicants may research the licensing database for the Media 
Bureau on the Internet in order to determine which channels are already 
licensed to incumbent licensees or previously-authorized to 
construction permittees. 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.
    23. 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 an applicant, applicants 
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 its databases.
    24. A commenter lists eleven conflicted channels that it contended 
that certain permits must be removed from the auction. Upon further 
review, three permits were removed from the auction, specifically FM-
619-C3, Crandon, Wisconsin, FM-527-A, Channel 247A, Lake City, 
Colorado, and FM-299-A, Diamond Lake, Oregon.
 iv. Use of Integrated Spectrum Auction System
    25. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction No. 70 over the 
Internet using the Commission's Integrated Spectrum Auction System 
(ISAS or FCC Auction System). The Commission makes no warranty 
whatsoever with respect to the FCC Auction System. In no event shall 
the Commission, or any of its officers, employees or agents, be liable 
for any damages whatsoever (including, but not limited to, loss of 
business profits, business interruption, loss of business information, 
or any other loss) arising out of or relating to the existence, 
furnishing, functioning or use of the FCC Auction System that is 
accessible to qualified bidders in connection with this auction. 
Moreover, no obligation or liability will arise out of the Commission's 
technical, programming or other advice or service provided in 
connection with the FCC Auction System.
 v. Bidder Alerts
    26. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 70 to 
deceive and defraud unsuspecting investors. Information about deceptive 
telemarketing investment schemes is available from the Commission, as 
well as the Federal Trade Commission (FTC) and the Securities and 
Exchange Commission (SEC).
 vi. Environmental Review Requirements
    27. Permittees or licensees must comply with the Commission's rules 
regarding implementation of the National Environmental Policy Act 
(NEPA) and other federal environmental statutes. The construction of a 
broadcast facility is a federal action and the permittee or licensee 
must comply with the Commission's environmental rules for each such 
facility. The Commission's

[[Page 68617]]

environmental rules require, among other things, that the permittee or 
licensee consult with expert agencies having environmental 
responsibilities, including the U.S. Fish and Wildlife Service, the 
relevant State Historic Preservation Office, the Army Corps of 
Engineers and the Federal Emergency Management Agency (through the 
local authority with jurisdiction over floodplains). In assessing the 
effect of facilities construction on historic properties, the permittee 
or licensee must follow the provisions of the Nationwide Programmatic 
Agreement Regarding the Section 106 National Historic Preservation Act 
Review Process. The permittee or licensee must prepare environmental 
assessments for facilities that may have a significant impact in or on 
wilderness areas, wildlife preserves, threatened or endangered species 
or designated critical habitats, historical or archaeological sites, 
Indian religious sites, floodplains, and surface features. The 
permittee or licensee also must prepare environmental assessments for 
facilities that include high intensity white lights in residential 
neighborhoods or excessive radio frequency emission.

C. Auction Specifics

 i. Auction Date
    28. Bidding in Auction No. 70 will begin on Wednesday, March 7, 
2007. The initial schedule for bidding will be announced by public 
notice at least one week before the start of the auction.
    29. Unless otherwise announced, bidding on construction permits 
will be conducted on each business day until bidding has stopped on all 
construction permits.
 ii. Auction Title
    30. Auction No. 70--FM Broadcast
iii. Bidding Methodology
    31. The bidding methodology for Auction No. 70 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet using the FCC Auction System, and telephonic bidding will 
be available as well. Qualified bidders are permitted to bid 
electronically via the Internet or by telephone. All telephone calls 
are recorded.
iv. Dates and Deadlines

 
 
 
Auction Seminar.........................  December 6, 2006.
Short-Form Application (FCC Form 175)     December 6, 2006; 12:00 noon
 Filing Window Opens.                      ET.
Short-Form Application (FCC Form 175)     December 19, 2006; before 6:00
 Filing Window Deadline.                   p.m. ET.
Upfront Payments (via wire transfer)....  February 5, 2006; 6:00 p.m.
                                           ET.
Mock Auction............................  March 5, 2007.
Auction Begins..........................  March 7, 2007.
 

 v. Requirements for Participation
    32. Those wishing to participate in the auction must: (1) Submit a 
short-form application (FCC Form 175) electronically prior to 6 p.m. 
Eastern Time (ET), on December 19, 2006, following the electronic 
filing procedures set forth in Attachment C of the Auction No. 70 
Procedures Public Notice; (2) submit a sufficient upfront payment and 
an FCC Remittance Advice Form (FCC Form 159) before 6:00 p.m. ET, on 
February 5, 2007; and (3) comply with all provisions outlined in the 
Auction No. 70 Procedures Public Notice and applicable Commission 
rules.

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

    33. An 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. The short-form application is the first part of 
the Commission's two-phased auction application process. In the first 
phase of this process, parties desiring to participate in the auction 
file streamlined, short-form applications in which they certify under 
penalty of perjury as to their qualifications. Eligibility to 
participate in bidding is based on the applicants' short-form 
applications and certifications, as well as their upfront payments. In 
the second phase of the process, winning bidders file a more 
comprehensive long-form application.
    34. Entities and individuals seeking construction permits available 
in Auction No. 70 must file a short-form application electronically via 
the FCC Auction System prior to 6 p.m. ET on December 19, 2006, 
following the procedures prescribed in Attachment C of the Auction No. 
70 Procedures Public Notice. 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 bear full responsibility for submitting 
accurate, complete and timely short-form applications. All applicants 
must certify under penalty of perjury on their short-form applications 
that they are legally, technically, financially and otherwise qualified 
to hold a license. Applicants should read the instructions set forth in 
Attachment C of the Auction No. 70 Procedures Public Notice carefully 
and should consult the Commission's rules to ensure that all the 
information that is required under the Commission's rules and relevant 
public notices is included with their short-form applications.
    35. An entity may not submit more than one short-form application 
for a single auction. In the event that a party submits multiple short-
form applications, only one application will be accepted for filing.
    36. Applicants also should note that submission of a short-form 
application constitutes a representation by the certifying official 
that he or she is an authorized representative of the applicant, that 
he or she has read the form's instructions and certifications, and that 
the contents of the application, its certifications, and any 
attachments are true, complete and correct. Applicants are not 
permitted to make major modifications to their applications; such 
impermissible changes include a change of the certifying official to 
the application. 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. Noncommercial Educational Facilities

    37. The opening of a window for nonreserved vacant FM allotments 
provides a filing opportunity for an applicant to apply for both 
noncommercial educational (NCE) and commercial facilities. However, 
while non-mutually exclusive NCE applications will not be resolved 
through competitive bidding, any applications specifying NCE facilities 
that are mutually exclusive with any applications specifying commercial 
facilities will be returned as unacceptable for filing pursuant to 47 
CFR 73.5002(b).

[[Page 68618]]

    38. As with the previous two FM auction proceedings, applicants for 
NCE broadcast stations will be allowed to submit Form 175 applications 
for the specific non-reserved spectrum to be auctioned in Auction No. 
70 in the forthcoming filing window. The instant public notice 
recognizes the opportunity for NCE applicants to participate in the 
upcoming auction process and amply addresses the process for 
participation.

B. New Entrant Bidding Credit

    39. The Commission has adopted a tiered New Entrant Bidding Credit 
for broadcast auction applicants with no, or very few, other media 
interests.
    40. The interests of the applicant, and of any individuals or 
entities with an attributable interest in the applicant, in other media 
of mass communications, including both NCE and commercial full-power 
broadcast stations, shall be considered when determining an applicant'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--December 19, 2006. Thus, 
the applicant's maximum new entrant bidding credit eligibility will be 
determined as of the short-form application filing deadline. Applicants 
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--December 19, 2006. 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 bidding credit, and must be 
reported immediately.
    41. Under traditional broadcast attribution rules, including 47 CFR 
73.3555 Note 2, those entities or individuals with an attributable 
interest in a bidder include: (1) All officers and directors of a 
corporate bidder; (2) any owner of 5 percent or more of the voting 
stock of a corporate bidder; (3) all partners and limited partners of a 
partnership bidder, unless the limited partners are sufficiently 
insulated; and (4) all members of a limited liability company, unless 
sufficiently insulated.
    42. In cases where an applicant'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. Applicants should note that the mass media attribution rules 
were revised in 1999.
    43. 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, an applicant claiming new entrant 
status. Specifically, the attributable mass media interests held by an 
individual or entity with an equity and/or debt interest in an 
applicant 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 applicant, even if such an interest is non-
voting.
    44. 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. Further, any bidder asserting new entrant 
status must have de facto as well as de jure control of the entity 
claiming the bidding credit pursuant to 47 CFR 73.5007. Typically, de 
jure control is evidenced by ownership of at least 50.1 percent of an 
entity's voting stock or equivalent level of interest in cases where 
the bidder is not a corporate entity. De facto control is determined on 
a case-by-case basis.
    45. 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 bidder's 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 nonreserved channels, are included among media of mass 
communications as defined in Sec.  73.5008(b).

C. Application Requirements

    46. In addition to the ownership information required pursuant to 
47 CFR 1.2112, applicants are required to establish on their short-form 
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 short-form 
application. 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
    47. Applicants that qualify for the New Entrant Bidding Credit, as 
specified in 47 CFR 73.5007, are eligible for a bidding credit that 
represents the amount by which a bidder's winning bid is discounted. 
The size of a New Entrant Bidding Credit depends on the number of 
ownership interests in other media of mass communications that are 
attributable to the bidder-entity and its attributable interest-
holders: (1) 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; (2) 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; (3) 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.
    48. 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. Applicants 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.
    49. The Bureaus are unable to adopt for Auction No. 70 the 
suggestions by commenters to revise the criteria for and

[[Page 68619]]

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 
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 change suggestions should have been raised in 
the context of the rulemaking proceeding establishing bidding credits 
for the FM broadcast service.
ii. Installment Payments
    50. Installment payment plans will not be available in Auction No. 
70.

D. Permit Selection

    51. In Auction No. 70, applicants must select the construction 
permits on which they want to bid from the Eligible Permits list. There 
will be no opportunity to change construction permit selection after 
the short-form filing deadline. It is critically important that an 
applicant confirm its construction permit selections before submitting 
its short-form application because the FCC Auction System will not 
accept bids on construction permits that an applicant has not selected 
on its short-form application.

E. Disclosure of Bidding Arrangements

    52. Applicants will be required to identify in their short-form 
applications all parties with whom they have entered into any 
agreements, arrangements, or understandings of any kind relating to the 
construction permits being auctioned, including any agreements relating 
to post-auction market structure. Applicants also will be required to 
certify under penalty of perjury in their short-form applications that 
they have not entered and will not enter into any explicit or implicit 
agreements, arrangements or understandings of any kind with any 
parties, other than those identified in the application, regarding the 
amount of their bids, bidding strategies, or the particular 
construction permits on which they will or will not bid. If an 
applicant has had discussions, but has not reached a joint bidding 
agreement by the short-form application filing deadline, it would not 
include the names of parties to the discussions on its application and 
may not continue such discussions with any applicants after the 
deadline.
    53. After the filing of short-form applications, the Commission's 
rules do not prohibit a party holding a non-controlling, attributable 
interest in one applicant from acquiring an ownership interest in or 
entering into a joint bidding arrangement with other applicants 
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 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 matter 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. Further, as discussed above, compliance with 
the disclosure requirements of the Commission's anti-collusion rule 
will not insulate a party from enforcement of the antitrust laws.

F. Ownership Disclosure Requirements

    54. The Commission specified in the Broadcast Competitive Bidding 
First Report and Order that, for purposes of determining eligibility to 
participate in a broadcast auction, all applicants must comply with the 
uniform part 1 ownership disclosure standards and provide information 
required by 47 CFR 1.2105 and 1.2112. Specifically, in completing the 
short-form application, applicants will be required to fully disclose 
information on the real party-or parties-in-interest and ownership 
structure of the applicant. The ownership disclosure standards for the 
short-form application are prescribed in 47 CFR 1.2105 and 1.2112. Each 
applicant is responsible for information submitted in its short-form 
application being complete and accurate.
    55. In certain circumstances, an applicant's most current ownership 
information on file with the Commission, if in an electronic format 
compatible with the short-form application (FCC Form 175) (such as 
information submitted in an on-line FCC Form 602 or in an FCC Form 175 
filed for a previous auction using ISAS) will automatically be entered 
into the applicant's short-form application. Applicants are responsible 
for ensuring that the information submitted in their short-form 
application for Auction No. 70 is 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 the short-form application. Applicants can update directly 
in the short-form application any information that was entered 
automatically and needs to be changed.

G. Provisions Regarding Former and Current Defaulters

    56. Each applicant must state under penalty of perjury on its 
short-form application whether or not the applicant, its affiliates, 
its controlling interests, and the affiliates of its controlling 
interests, as defined by 47 CFR 1.2110, have ever been in default on 
any Commission construction permit or license 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 short-form 
application that as of the short-form filing deadline, the applicant, 
its affiliates, its controlling interests, and the affiliates of its 
controlling interests, as defined by 47 CFR 1.2110, are not in default 
on any payment for a Commission construction permit or license 
(including a down payment) 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.
    57. Former defaulters--i.e., applicants, including any of their 
affiliates, any of their controlling interests, or any of the 
affiliates of their controlling interests, that in the past have 
defaulted on any Commission construction permit or license 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. 
70, 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.
    58. Current defaulters--i.e., applicants, including any of their 
affiliates, any of their controlling interests, or any of the 
affiliates of their controlling interests, that are in default on any 
payment for any Commission construction permit or license (including a 
down payment) or are

[[Page 68620]]

delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for applications to participate in this auction--are 
not eligible to bid in Auction No. 70.
    59. Applicants are encouraged to review the Wireless 
Telecommunications Bureau's previous guidance on default and 
delinquency disclosure requirements in the context of the short-form 
application process. For example, it has been determined that to the 
extent that Commission rules permit late payment of regulatory or 
application fees accompanied by late fees, such debts will become 
delinquent for purposes of 47 CFR 1.2105(a) and 1.2106(a) only after 
the expiration of a final payment deadline. Therefore, with respect to 
regulatory or application fees, the provisions of 47 CFR 1.2105(a) and 
1.2106(a) regarding default and delinquency in connection with 
competitive bidding are limited to circumstances in which the relevant 
party has not complied with a final Commission payment deadline. 
However, even where Commission rules expressly permit late payment 
subject to payment of an additional late fee, and do not imposed a 
final payment deadline, the Commission may in some cases issue a demand 
for payment by a certain date. Failure to comply with the terms of a 
particular demand letter in the time period provided may render the 
subject debt delinquent, notwithstanding rules generally permitting 
late payments.
    60. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the red 
light rule, that implement the Commission's obligations under the Debt 
Collection Improvement Act of 1996, which governs the collection of 
claims owed to the United States. Under the red light rule, the 
Commission will not process applications and other requests for 
benefits filed by parties that have outstanding debts owed to the 
Commission. In the same rulemaking order, the Commission explicitly 
declared, however, that the Commission's competitive bidding rules are 
not affected by the red light rule. As a consequence, the Commission's 
adoption of the red light rule does not alter the applicability of any 
of the Commission's competitive bidding rules, including the provisions 
and certifications of 47 CFR 1.2105 and 1.2106, with regard to current 
and former defaults or delinquencies. Applicants are reminded, however, 
that the Commission's Red Light Display System, which provides 
information regarding debts owed to the Commission, may not be 
determinative of an auction applicant's ability to comply with the 
default and delinquency disclosure requirements of 47 CFR 1.2105. Thus, 
while the red light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's red light 
status is not necessarily determinative of its eligibility to 
participate in this auction or of its upfront payment obligation.
    61. Prospective applicants in Auction No. 70 should note that any 
long-form applications filed after the close of competitive bidding 
will be reviewed for compliance with the Commission's red light rule, 
and such review may result in the dismissal of a winning bidder's long-
form application. Applicants that have their long-form application 
dismissed will be deemed to have defaulted and will be subject to 
default payments under 47 CFR 1.2104(g) and 1.2109(c).

H. Other Information

    62. Applicants owned by members of minority groups and/or women, as 
defined in 47 CFR 1.2110(c)(3), may identify themselves in filling out 
their short-form applications regarding this status. This applicant 
status information is collected for statistical purposes only and 
assists the Commission in monitoring the participation in its auctions 
of designated entities, which include rural telephone companies.

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

    63. After the deadline for filing short-form applications (FCC 
Forms 175) at 6 p.m. ET on December 19, 2006, applicants are permitted 
to make only minor changes to their applications. Applicants are not 
permitted to make major modifications to their applications (e.g., 
change their construction permit selections, change control of the 
applicant, change the certifying official, claim eligibility for a 
higher percentage of bidding credit or change their identification of 
the application's proposed facilities as noncommercial educational). 
Permissible minor changes include, for example, deletion and addition 
of authorized bidders (to a maximum of three) and revision of addresses 
and telephone numbers of the applicants and their contact persons.
    64. Any application amendment and related statements of fact must 
be certified by: (1) The applicant, if the applicant is an individual, 
(2) one of the partners if the applicant is a partnership, (3) an 
officer, director, or duly authorized employee, if the applicant is a 
corporation, (4) by a member who is an officer, if the applicant is an 
unincorporated association, (5) the trustee if the applicant is an 
amateur radio service club, or (6) a duly elected or appointed official 
who is authorized to make such certifications under the laws of the 
applicable jurisdiction, if the applicant is a governmental entity.
    65. An applicant must make permissible minor changes to its short-
form application, as such changes are defined by 47 CFR 1.2105(b), 
electronically, using the FCC Auction System. 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. Applicants should note, however, that after the filing window 
has closed, the FCC Auction System will not permit applicants to make 
certain changes , such as legal classification or NCE identification.
    66. In addition, an applicant should submit a letter briefly 
summarizing the changes and subsequently update their short-form 
applications in ISAS as soon as possible. Any letter describing changes 
to an applicant's short-form application must be submitted by 
electronic mail to the following address: [email protected]. The 
electronic mail summarizing the changes must include a subject or 
caption referring to Auction No. 70 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.
    67. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System (ECFS), which 
was used for submitting comments regarding Auction No. 70 procedures.

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

    68. 47 CFR 1.65 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 the percentage of bidding credit specified on 
the originally submitted Form 175 application must be reported

[[Page 68621]]

immediately. If an amendment reporting substantial changes is a major 
amendment as defined by 47 CFR 1.2105, the major amendment will not be 
accepted and may result in the dismissal of the short-form application.
    69. After the short-form filing deadline, applicants may make only 
minor changes to their FCC Form 175 applications, for example, deletion 
and addition of authorized bidders (to a maximum of three). Applicants 
must click on the SUBMIT button in the FCC Auction System for the 
changes to be submitted and considered by the Commission. In addition, 
applicants must submit a letter, briefly summarizing the changes, by 
electronic mail at the following address: [email protected]. The 
electronic mail summarizing the changes must include a subject or 
caption referring to Auction No. 70 and the name of the applicant. The 
Bureaus requests that parties format any attachments to electronic mail 
as Adobe[supreg] Acrobat[supreg] (pdf) or Microsoft[supreg] Word 
documents.
    70. Applicants must not submit application-specific material 
through the Commission's electronic comment filing system (ECFS) into 
the record of the proceeding concerning Auction No. 70 procedures.

III. Pre-Auction Procedures

A. Auction Seminar

    71. On Wednesday, December 6, 2006, the FCC will sponsor a free 
seminar for parties interested in participating in Auction No. 70 at 
the FCC headquarters, located at 445 12th Street, SW., Washington, DC. 
The seminar will provided 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 concerning the auction, auction procedures, 
filing requirements and other matters related to this auction.
    72. To register, complete the registration form in Attachment B of 
the Auction No. 70 Procedures Public Notice and submit it by Monday, 
December 4, 2006. Registrations are accepted on a first-come, first-
served basis. For individuals who are unable to attend, an Audio/Video 
webcast of this seminar will be available from the FCC's Auction No. 70 
web page at http://wireless.fcc.gov/auctions/70/.

B. Short-Form Application (FCC Form 175)--Due Before 6:00 p.m. ET on 
December 19, 2006

    73. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application electronically via the FCC 
Auction System. This application must be received at the Commission 
prior to 6 p.m. ET on December 19, 2006. Late applications will not be 
accepted. There is no application fee required when filing an FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment.
    74. Applications may generally be filed at any time beginning at 
noon ET on December 6, 2006, and the filing window will close at 6 p.m. 
ET on December 19, 2006. Applicants are strongly encouraged to file 
early and are responsible for allowing adequate time for filing their 
applications. Applicants may update or amend their applications 
multiple times until the filing deadline on December 19, 2006.
    75. An applicant must always click on the SUBMIT button on the 
Certify & Submit screen of the electronic form to successfully submit 
its FCC Form 175 or modifications. Any form that is not submitted will 
not be reviewed by the FCC. Information about accessing, completing, 
and viewing the FCC Form 175 is included in Attachment C of the Auction 
No. 70 Procedures Public Notice.

C. Application Processing and Minor Corrections

    76. 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 corrected applications.
    77. 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 that public notice. All 
mutually exclusive applications will be considered under the relevant 
procedures for conflict resolution. Mutually exclusive commercial 
applications will proceed to auction. Applications for NCE FM stations 
on nonreserved 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. 70 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. However, if 
stations are not identified as NCE by applicants on the short-for 
application, the applications will be considered, as a matter of law, 
as applications for commercial broadcast stations.
    78. After the short-form filing deadline on December 19, 2006, 
applicants may make only minor corrections to their FCC Form 175 
applications. Applicants will not be permitted to make major 
modifications to their applications.

D. Upfront Payments--Due February 5, 2007

    79. 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 sent by facsimile to Mellon Bank in Pittsburgh, PA. All upfront 
payments must be received in the proper account at Mellon Bank before 6 
p.m. ET on February 5, 2007.
i. Making Auction Payments by Wire Transfer
    80. 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.
    81. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must send by 
facsimile a completed FCC Form 159 (Revised 2/03) to Mellon Bank, using 
the specified telephone number. In order to meet the Commission's 
upfront payment deadline, an applicant's payment must be credited to 
the Commission's account before 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.
    82. Please note that: (1) All payments must be made in U.S. 
dollars; (2) all payments must be made by wire transfer; (3) upfront 
payments for Auction No. 70 go to a lockbox number

[[Page 68622]]

different from the lockboxes used in previous FCC auctions, and 
different from the lockbox number to be used for post-auction payments; 
and (4) failure to deliver the upfront payment by the specified 
deadline on February 5, 2007 will result in dismissal of the 
application and disqualification from participation in the auction.
ii. FCC Form 159
    83. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be sent by facsimile 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. 70 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. Upfront Payments and Bidding Eligibility
    84. In the Auction No. 70 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 selected 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 selected on its 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 the applicant selected on its FCC Form 175, but 
rather to cover the maximum number of bidding units that are associated 
with construction permits on which the bidder wishes to place bids and 
hold provisionally winning bids at any given time. Provisionally 
winning bids are bids that would become final winning bids if the 
auction were to close after the given round.
    85. In the Auction No. 70 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 and sought comment 
on this proposal. The Bureaus received no comments in response to the 
proposed upfront payments. The specific upfront payments and bidding 
units for each construction permit are set forth in Attachment A of the 
Auction No. 70 Procedures Public Notice.
    86. Applicants must make upfront payments sufficient to obtain 
bidding eligibility on the construction permits on which they will bid. 
In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (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, because it is not possible to increase a 
bidder's eligibility after the upfront payment deadline. In some cases, 
a qualified bidder's maximum eligibility may be less than the amount of 
its upfront payment because the qualified bidder, pursuant to 47 CFR 
1.1206(a), has either previously been in default on a Commission 
license or delinquent on a non-tax debt owned to a Federal agency, or 
has submitted an upfront payment that exceeds the total amount of 
bidding units associated with the construction permits the applicant 
selected on its FCC Form 175 application.
    87. Applicants that are former defaulters are required to pay 
upfront payments 50 percent greater than non-former defaulters. For 
purposed of this calculation, the applicant includes the applicant 
itself, its affiliates, its controlling interests, and affiliates of 
its controlling interest, as defined by 47 CFR 1.2110. Accordingly, 
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 for which the applicant applied 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
    88. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information specified in the Auction No. 70 Procedures Public Notice be 
supplied to the FCC. For example, the Commission must be provided with 
a Taxpayer Identification Number (TIN) before it can disburse refunds. 
Applicants can provide the information electronically during the 
initial short-form application filing window after the application has 
been submitted. (Applicants are reminded that information submitted as 
part of an FCC Form 175 will be available to the public; for that 
reason, wire transfer information should not be included in an FCC Form 
175.) Wire Transfer Instructions can also be manually sent by facsimile 
to the FCC, Financial Operations Center, Auctions Accounting Group, 
ATTN: Gail Glasser, using the specified telephone number. 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.

E. Auction Registration

    89. 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.
    90. 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[supreg] cards that will be required to place bids, 
the Integrated Spectrum Auction System (ISAS) Bidder's Guide, and the 
Auction Bidder Line phone number.
    91. 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, March 1, 2007, 
should call (717) 338-2868. Receipt of this registration mailing is 
critical to participating in the auction, and each applicant is 
responsible for

[[Page 68623]]

ensuring it has received all of the registration material.
    92. In the event that SecurID[supreg] cards are lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request replacement registration material. 
Qualified bidders requiring the replacement of these items must call 
Technical Support.

F. Remote Electronic Bidding

    93. 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[supreg] card, which the FCC will provide at no charge. Each 
applicant with one authorized bidder will be issued two SecurID[supreg] 
cards, while applicants with two or three authorized bidders will be 
issued three cards. For security purposes, the SecurID[supreg] cards, 
the telephonic bidding telephone 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[supreg] card is tailored to a specific auction; 
therefore, SecurID[supreg] cards issued for other auctions or obtained 
from a source other than the FCC will not work for Auction No. 70.

G. Mock Auction--March 5, 2007

    94. All qualified bidders will be eligible to participate in a mock 
auction on Monday, March 5, 2007. 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

    95. The first round of bidding for Auction No. 70 will begin on 
Wednesday, March 7, 2007. The initial bidding schedule will be 
announced in a public notice listing the qualified bidders, which is to 
be released approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    96. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed to auction all construction permits in Auction No. 70 in a 
single auction using the Commission's standard simultaneous multiple-
round (SMR) auction format. This type of auction offers every 
construction permit for bid at the same time and consists of successive 
bidding rounds in which eligible bidders may place bids on individual 
construction permits. A bidder may bid on, and potentially win, any 
number of construction permits. Typically, bidding remains open on all 
construction permits until bidding stops on every construction permit, 
unless a modified stopping rule is invoked.
    97. Despite the suggestions made by one commenter, the Bureaus 
therefore concluded that it is operationally feasible and appropriate 
to auction these FM broadcast stations construction permits through a 
simultaneous multiple round auction and the Bureaus declined to adopt 
the commenter's proposal. Unless otherwise announced, bids will be 
accepted on all construction permits in each round of the auction until 
bidding stops on every construction permit.
ii. Eligibility and Activity Rules
    98. In the Auction No. 70 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 
concerning the eligibility rule.
    99. Accordingly, the Bureaus adopted the proposed use of upfront 
payments to determine initial (maximum) eligibility (as measured in 
bidding units) for Auction No. 70. 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. As 
noted earlier, each construction permit is assigned a specific number 
of bidding units equal to the upfront payment listed in Attachment A of 
the Auction No. 70 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 of the 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.
    100. In order to ensure that an 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.
    101. 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 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 adopted them for 
Auction No. 70. 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.
iii. Auction Stages
    102. In the Auction No. 70 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. The Bureaus also 
invited comment on conducting the auction with a single stage that 
would use an activity requirement of 100 percent. The Bureaus received 
no comments on any of these proposals.
    103. The Bureaus adopted their proposals for the activity rules and 
stages, while reserving the discretion to further alter the activity 
percentages

[[Page 68624]]

before and/or during the auction. As explained further in the Auction 
No. 70 Procedures Public Notice, 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\). 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\). Because the procedures have proven successful in maintaining 
the proper pace in previous auctions, the Bureaus adopted them for 
Auction No. 70.
    104. Failure by a bidder 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, if any 
remain. Because 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 logging in to the FCC Auction 
System.
iv. Stage Transitions
    105. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed that the auction would generally advance to the next stage 
(i.e., from Stage One to Stage Two) when the auction activity level, as 
measured by the percentage of bidding units receiving new provisionally 
winning bids, is approximately 20 percent or lower for three 
consecutive rounds of bidding. The Bureaus further proposed that the 
Bureaus would retain the discretion to change stages unilaterally by 
announcement during the auction. This determination, the Bureaus 
proposed, would 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 received no comments on this issue.
    106. The Bureaus believed that these stage transition rules, having 
proven successful in prior auctions, are appropriate for use in Auction 
No. 70. Thus, the Bureaus adopted their proposal. 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.
v. Activity Rule Waivers
    107. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed that each bidder in the auction be provided with three 
activity rule waivers. The Bureaus received no comments on this issue. 
The Bureaus adopted their proposal that each bidder be provided three 
activity rule waivers.
    108. 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 (a proactive waiver) or applied 
automatically by the FCC Auction System (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.
    109. The FCC Auction System assumes that bidders with insufficient 
activity would prefer to apply an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver at the end of any bidding round where a 
bidder's activity level is below the minimum required unless: (1) There 
are no activity rule waivers available; or (2) the bidder overrides the 
automatic application of a waiver by reducing eligibility. If a bidder 
has no waivers remaining and does not satisfy the activity requirement, 
the FCC Auction System will permanently reduce the bidder's 
eligibility, possibly curtailing or eliminating the bidder's ability to 
place additional bids in the auction.
    110. 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. 
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.
    111. 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 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 proactive waivers 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.
vi. Auction Stopping Rules
    112. For Auction No. 70, the Bureaus proposed to employ a 
simultaneous stopping rule approach. The Bureaus also sought comment on 
a modified version of the simultaneous stopping rule (modified stopping 
rule). The modified stopping rule would close the auction for all 
construction permits after the first round in which no bidder applies a 
waiver 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.
    113. The Bureaus further proposed retaining the discretion to keep 
the auction open even if no new bids or proactive waivers are submitted 
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.
    114. In addition, the Bureaus proposed that the Bureaus reserve the 
right to declare that the auction will end

[[Page 68625]]

after a specified number of additional rounds (special stopping rule). 
If the Bureaus invoke this special stopping rule, they will accept bids 
in the specified final round(s) and the auction will close.
    115. 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. The Bureaus noted that 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.
    116. The Bureaus received no comments on the proposals about 
stopping rules. The Bureaus found that the proposed stopping rules are 
appropriate for Auction No. 70, because experience in prior auctions 
demonstrates that these stopping rules balance interests of 
administrative efficiency and maximum bidder participation. Therefore, 
the Bureaus adopted the stopping rule proposals made in the Auction No. 
70 Comment Public Notice. Auction No. 70 will begin under the 
simultaneous stopping rule approach, and the Bureaus will retain the 
discretion to employ the other versions of the stopping rule. Moreover, 
the Bureaus will retain the discretion to use the modified stopping 
rule with or without prior announcement during the auction.
vii. Auction Delay, Suspension, or Cancellation
    117. Because the Bureaus approach to notification of delay during 
an auction has proven effective in resolving exigent circumstances in 
previous auctions, the Bureaus adopted their proposal that, by public 
notice or by announcement during the auction, the Bureaus may delay, 
suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, evidence of an auction security breach, unlawful 
bidding activity, administrative or weather necessity, or for any other 
reason that affects the fair conduct of competitive bidding. Network 
interruption may cause the Bureaus to delay or suspend the auction. 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. The Bureaus emphasized 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
    118. 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.
    119. The Bureaus have 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. 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 and Minimum Opening Bids
    120. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed to establish minimum opening bids for Auction No. 70, 
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 construction permit listed in Attachment A of the Auction No. 70 
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. The Bureaus sought comment on the 
proposed minimum opening bids. In the alternative, the Bureaus sought 
comment on whether, consistent with 47 U.S.C. 309(j), the public 
interest would be served by having no minimum opening bid or reserve 
price.
    121. A commenter sought to reduce the minimum opening bid amount 
for MM-FM 620-A, Ephraim, Wisconsin, Channel 295A. The Bureaus were 
persuaded that lowering the minimum opening bid amount for Ephraim, 
Wisconsin, Channel 295A, to $5,000 would serve the public interest, and 
adopted this change.
    122. The Bureaus concluded that the proposed minimum opening bid 
amounts with the exception of Ephraim, Wisconsin, are appropriate, and 
the Bureaus adopted those proposed amounts. The Bureaus did not receive 
any comments in response to the proposal in the Auction No. 70 Comment 
Public Notice that the Bureaus would retain the discretion to lower the 
minimum opening bid amounts. Thus, the Bureaus adopted this proposal. 
The minimum opening bid amounts the Bureaus adopted for Auction No. 70 
are reducible at the discretion of the Bureaus. The Bureaus emphasized, 
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. The Bureaus noted 
that effectively the minimum opening bid amounts operate as reserve 
prices.
    123. The specific minimum opening bid amounts for each construction 
permit available in Auction No. 70 are set forth in Attachment A of the 
Auction No. 70 Procedures Public Notice. 
iii. Bid Amounts
    124. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed that in each round, eligible bidders be able to place a bid on 
a given construction permit in any of nine different amounts. Under the 
proposal, the FCC Auction System interface will list the nine 
acceptable bid amounts for each construction permit. Contrary to the 
suggestion of one commenter that, as an alternative to using large 
minimum opening bids, the Commission increase the number of acceptable 
bid amounts so that the maximum acceptable bid amount is three times 
higher than the current bid, the Bureaus decided that the minimum 
opening bid amounts and the number of additional bid amounts that the 
Bureaus have established for this auction should help ensure that the 
bidding moves at a sufficient pace and will help promote an efficient 
outcome. Based on experience in prior auctions, the Bureaus adopted 
this proposal.
    125. The first of the nine acceptable bid amounts is called the 
minimum acceptable bid amount. The minimum acceptable bid amount for a 
construction permit will be equal to its minimum opening bid amount 
until there is a provisionally winning bid for the construction permit. 
After there is a

[[Page 68626]]

provisionally winning bid for a permit, the minimum acceptable bid 
amount will be calculated by multiplying the provisionally winning bid 
amount times one plus the minimum acceptable bid percentage. For 
example, if the minimum acceptable bid percentage is 10 percent, the 
minimum acceptable bid amount will equal (provisionally winning bid 
amount) * (1.10). The Bureaus will round the result using its standard 
rounding procedures.
    126. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed to use a minimum acceptable bid percentage of 10 percent. The 
Bureaus did not receive any comments on this proposal. Experience in 
the previous FM auctions provides assurance that a bid increment 
percentage of 10 percent is sufficient to ensure active bidding. 
Therefore, the Bureaus will begin the auction with a minimum acceptable 
bid percentage of 10 percent.
    127. The eight additional bid amounts are calculated using the 
minimum acceptable bid amount and a bid increment percentage. The first 
additional acceptable bid amount equals the minimum acceptable bid 
amount times one plus the bid increment percentage, rounded. If, for 
example, the increment percentage is 10 percent, the calculation is 
(minimum acceptable bid amount) * (1 + 0.10), rounded, or (minimum 
acceptable bid amount) * 1.10, rounded; the second additional 
acceptable bid amount equals the minimum acceptable bid amount times 
one plus two times the bid increment percentage, rounded, or (minimum 
acceptable bid amount) * 1.20, rounded; the third additional acceptable 
bid amount equals the minimum acceptable bid amount times one plus 
three times the bid increment percentage, rounded, or (minimum 
acceptable bid amount) * 1.30, rounded; etc. The Bureaus will round the 
results of these calculations using its standard rounding procedures. 
Note that the bid increment percentage need not be the same as the 
minimum acceptable bid percentage.
    128. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed to use a bid increment percentage of 10 percent. The Bureaus 
received no comment on this issue. Believing that a bid increment 
percentage of 10 percent will give bidders the flexibility to speed up 
the pace of the auction, if appropriate, the Bureaus therefore adopted 
their proposal, and will begin the auction with a bid increment 
percentage of 10 percent.
    129. The Bureaus did not receive any comments on their proposal to 
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 during the auction.
iv. Provisionally Winning Bids
    130. 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.
    131. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed to use a random number generator to select a single 
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 adopted their proposal.
    132. 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 with the highest random number wins the tiebreaker, and becomes the 
provisionally winning bid. The remaining eligible 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 selected 
provisionally winning bid.
v. Bidding
    133. During a round, a bidder may submit bids for as many 
construction permits as it wishes (providing that it is eligible to 
bid), remove bids placed in the current bidding round, or permanently 
reduce eligibility. Bidders also have the option of submitting and 
removing multiple bids 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 its bid do not count towards the 
bidder's current activity.
    134. 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. 70. 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.
    135. A bidder's ability to bid on specific construction permits is 
determined by two factors: (1) The construction permits selected on the 
bidder's FCC Form 175 and (2) the bidder's eligibility. The bid 
submission screens will allow bidders to submit bids on only those 
construction permits the bidder selected on its FCC Form 175.
    136. 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[supreg] 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.
    137. In each round, eligible bidders will be able to place bids on 
a given construction permit in any of nine different amounts, if the 
bidder has sufficient eligibility to place a bid on the particular 
construction permit. 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.
    138. 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 are bids on a 
construction permit, minimum acceptable bids for a construction permit 
for the following round will be determined.
vi. Bid Removal
    139. In the Auction No. 70 Comment Public Notice, the Bureaus 
proposed bid removal 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

[[Page 68627]]

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. Once a round closes, a bidder may no longer 
remove a bid. The Bureaus received no comments on the issue of bid 
removals. To enhance bidder flexibility during the auction, the Bureaus 
adopted their proposed procedures concerning bid removals for Auction 
No. 70.
 vii. Bid Withdrawal
    140. Once a round closes, a bidder may no longer remove a bid. In 
the Auction No. 70 Comment Public Notice, the Bureaus proposed bid 
withdrawal procedures. The Bureaus proposed to prohibit bidders from 
withdrawing any bids after the round in which bids were placed has 
closed. This proposal was made in recognition of the site-specific 
nature and wide geographic dispersion of the permits available in this 
auction. As an alternative, the Bureaus sought comment on whether to 
permit each bidder to withdraw provisionally winning bids in no more 
than one round during the course of the auction.
    141. Experience with auctions generally, and with past FM auctions 
in particular, convinces the Bureaus that bid withdrawals are 
unnecessary in FM broadcast auctions. Because of the stand-alone nature 
of FM facilities, it is not necessary for bidders to aggregate 
facilities being offered in the same FM auction in order to realize 
full value from those facilities, or to put the spectrum to effective 
and efficient use. On the other hand, evidence suggests that some 
bidders may have used the bid withdrawal mechanism improperly to keep 
new facilities out of the hands of competitors, thus delaying 
implementation of new service. Accordingly, the Bureaus adopted their 
proposal prohibiting bid withdrawals in FM Auction No. 70. Bidders are 
cautioned to select bid amounts carefully because no bid withdrawals 
will be allowed in Auction No. 70, even if a bid was mistakenly or 
erroneously made.
viii. Round Results
    142. 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, current provisionally winning bids, 
new minimum acceptable bid amounts for the following round, whether the 
construction permit is FCC held, and bidder eligibility status (bidding 
eligibility and activity rule waivers), and post the reports for public 
access. Reports reflecting bidders' identities for Auction No. 70 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.
ix. Auction Announcements
    143. The Commission will use auction announcements to announce 
items such as schedule changes and stage transitions. All auction 
announcements will be available by clicking a link in the FCC Auction 
System.

V. Post-Auction Procedures

A. Down Payments

    144. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed and identifying winning bidders, 
down payments and final payments due.
    145. 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. 70 to 20 percent of the net amount 
of its winning bids (gross bids less any applicable new entrant bidding 
credits).

B. Final Payments

    146. Recognizing the public benefit of maintaining a consistent set 
of auction procedures across the various auctionable services, in the 
CSEA/Part 1 Report and Order, 71 FR 6214, February 7, 2006, the 
Commission recently conformed the broadcast final payment procedures to 
the analogous part 1 requirements. Specifically, the part 1 rules 
provide that, unless otherwise specified by public notice, auction 
winners are required to pay the balance of their winning bids in a lump 
sum within ten business days following the release of a public notice 
establishing the payment deadline. In recent spectrum auctions, the 
Commission has required each winning bidder to submit the balance of 
the net amount of its winning bid(s) within ten business days after the 
deadline for submitting down payments. Consistent with this approach, 
in the Auction No. 70 Comment Public Notice, the Bureaus announced that 
for this auction each winning bidder will be required to submit the 
balance of the net amount of its winning bids within 10 business days 
after the deadline for submitting down payments.

C. Long-Form Application

    147. 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. 70. 
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.

D. Default and Disqualification

    148. Any winning 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 prescribed in 47 CFR 
1.2104(g)(2). The payments include both 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 construction permit 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. Pursuant to recent modifications to the rule 
governing default payments, the percentage of the applicable bid to be 
assessed as an additional payment for defaults in a particular auction 
is established in advance of the auction. Accordingly, in the Auction 
No. 70 Comment Public Notice, the Bureaus proposed to set the 
additional default payment for the auction of these FM broadcast 
construction permits at twenty percent (20%) of the applicable bid. The 
Bureaus sought comment on their proposal. No comments were received on 
this proposal. Based on experience and the record before the Bureaus, 
the additional default payment for this auction of FM broadcast 
construction permits was set at twenty percent (20%) of the applicable 
bid.
    149. Finally, the Bureaus note that in the event of a default, the 
Commission may re-auction the construction permit or offer it to the 
next highest bidder (in descending order) at its final bid amount. 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 
authorizations held by the applicant.

[[Page 68628]]

E. Refund of Remaining Upfront Payment Balance

    150. All applicants that submit upfront payments but after the 
close of the auction are not winning bidders for a construction permit 
in Auction No. 70 may be entitled to a refund of their remaining 
upfront payment balance after the conclusion of the auction. 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.
    151. 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 and have no remaining bidding eligibility may also be 
eligible for a refund of their upfront payment before the close of the 
auction. Instructions for seeking refunds may be found in the Auction 
No. 70 Procedures Public Notice.

    Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
 [FR Doc. E6-20006 Filed 11-24-06; 8:45 am]
BILLING CODE 6712-01-P