[Federal Register Volume 72, Number 212 (Friday, November 2, 2007)]
[Notices]
[Pages 62360-62392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21528]



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Part IV





Federal Communications Commission





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Auction of 700 MHz Band Licenses Scheduled for January 24, 2008; Notice 
and Filing Requirements, Minimum Opening Bids, Reserved Prices, Upfront 
Payments and Other Procedures for Auctions 73 and 76; Notice

  Federal Register / Vol. 72, No. 212 / Friday, November 2, 2007 / 
Notices  

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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 07-157; Report No. AUC-07-73-B (Auctions 73 and 76); DA 
07-4171]


Auction of 700 MHz Band Licenses Scheduled for January 24, 2008; 
Notice and Filing Requirements, Minimum Opening Bids, Reserved Prices, 
Upfront Payments and Other Procedures for Auctions 73 and 76

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 700 MHz Band Licenses 
(Auctions 73 and 76). This document is intended to familiarize 
prospective bidders with the procedures and minimum opening bids for 
these auctions.

DATES: Applications to participate in 700 MHz Band Licenses Auctions 73 
and 76 must be filed before 6 p.m. ET on December 3, 2007. Bidding for 
Auction No. 73 is scheduled to begin on January 24, 2008. Contingent 
subsequent bidding in Auction 76, if necessary, will begin on a date to 
be announced after Auction 73 has closed.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions Spectrum and Access Division: For legal questions: Scott 
Mackoul, Stephen Johnson or Howard Davenport at (202) 418-0660. For 
general auction questions: Lisa Stover at (717) 338-2868. Mobility 
Division: For service rule questions: Erin McGraft (legal), Keith 
Harper (engineering) and Denise Walter (licensing) at (202) 418-0620. 
To request materials in accessible formats (Braille, large print, 
electronic files or 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 Auctions 73 and 76 
Procedures Public Notice released on October 5, 2007. The complete text 
of the Auctions 73 and 76 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. On October 19, 2007, a Public 
Notice was released announcing a change in the date of the bidders' 
seminar for Auctions 73 and 76 from November 19, 2007 to November 20, 
2007. The Auctions 73 and 76 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 07-4171 for the 
Auctions 73 and 76 Procedures Public Notice. The Auctions 73 and 76 
Procedures Public Notice and related documents are also available on 
the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/73/.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau (the Bureau) announces 
the procedures and minimum opening bid amounts for the upcoming auction 
of licenses for services in the 698-806 MHz band (700 MHz Band) 
scheduled to begin on January 24, 2008. This auction is designated as 
Auction 73. Auction 73 will offer 700 MHz Band licenses for initial 
bidding and the 700 MHz Band licenses may be offered in contingent 
subsequent bidding. In the event that any licenses are offered in 
contingent subsequent bidding, that event will be designated as Auction 
76. On August 17, 2007, in accordance with Section 309(j)(3) of the 
Communications Act of 1934, as amended, the Bureau released a public 
notice seeking comment on competitive bidding procedures for both the 
initial bidding and the contingent subsequent bidding for 700 MHz Band 
licenses. Interested parties submitted 12 comments and 8 reply comments 
in response to the 700 MHz Auction Public Notice, 72 FR 48272, August 
23, 2007, as well as a number of ex parte communications.
    2. In the 700 MHz Auction Public Notice, the Bureau proposed to 
include all available, commercial 700 MHz Band licenses (1,099 
licenses) for initial bidding in Auction 73 using the Commission's 
standard simultaneous multiple-round (SMR) auction format for the A, B, 
D, and E block licenses and an auction design with hierarchical package 
bidding (HPB) for the C Block licenses. The 700 MHz Auction Public 
Notice also proposed procedures for the contingent subsequent bidding, 
now designated Auction 76, on licenses for spectrum associated with any 
initially offered licenses for which the Auction 73 results do not 
satisfy applicable reserve prices. Based on the record and after 
considering comments provided in response to the 700 MHz Auction Public 
Notice, the Bureau hereby announces the final procedures for Auctions 
73 and Auction 76.
    3. The Auctions 73 and 76 Procedures Public Notice provides, among 
other things, procedures for the following: (1) Anonymous bidding, to 
enhance competition by safeguarding against potential anti-competitive 
auction strategies; (2) package bidding, to enable bidders trying to 
combine multiple C Block licenses to place bids on packages of those 
licenses; (3) block-specific aggregate reserve prices, to help assure 
that the public recovers a portion of the value of the spectrum 
resource; and (4) prompt subsequent bidding in Auction 76, to offer 
licenses for relevant block(s) in the event Auction 73 results do not 
satisfy applicable reserve prices.
    4. Anonymous Bidding. In the 700 MHz Second Report and Order, 65 FR 
17594, April, 4, 2000, the Commission found that the public interest 
would be served if the auction for new 700 MHz Band licenses is 
conducted using anonymous (or limited information) bidding procedures, 
regardless of any pre-auction measurement of likely auction 
competition. Such information procedures are intended to reduce the 
potential for anti-competitive bidding behavior, including bidding 
activity that aims to prevent the entry of new competitors. Having 
proposed and sought comment on more detailed procedures for employing 
anonymous bidding for the upcoming auction, the Bureau now announces 
the anonymous bidding procedures.
    5. Package Bidding for C Block Licenses. The Commission also 
determined in the 700 MHz Second Report and Order that providing for 
package bidding for C Block licenses would serve the public interest. 
The Commission found that package bidding for these licenses should 
facilitate the entry of entities seeking to create a nationwide 
footprint and whose business plans require the economies of scale that 
only can be obtained with nationwide operation. At Commission 
direction, the Bureau previously proposed and sought comment on 
detailed procedures for implementing package bidding for the C Block 
licenses and not for licenses in the other blocks to be auctioned. In 
the Auctions 73 and 76 Procedures Public Notice, the Bureau detailed 
the process for package bidding for the C Block licenses.
    6. Block-Specific Aggregate Reserve Prices. The Commission also 
decided to

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provide for aggregate reserve prices for licenses authorizing the use 
of each block of the commercial 700 MHz Band yet to be licensed. The 
Commission concluded that, consistent with its statutory mandate, 
disclosed reserve prices would promote the recovery of a portion of the 
value of the public spectrum resource. The Commission directed the 
Bureau to adopt aggregate reserve prices reflecting the potential 
market value of this spectrum based on a variety of factors including, 
but not limited to, the characteristics of this band and the auction 
prices of other recently auctioned licenses, such as licenses for 
Advanced Wireless Services in the 1710-1755 MHz and 2110-2155 MHz bands 
(AWS-1). Accordingly, the Bureau proposed and sought comment on the 
following block-specific aggregate reserve prices: Block A, $1.807380 
billion; Block B, $1.374426 billion; Block C, $4.637854 billion; Block 
D, $1.330000 billion; Block E, $0.903690 billion. Further, the Bureau 
proposed that if the sum of the provisionally winning bids for the 
licenses in a block does not satisfy the relevant aggregate reserve 
price, none of the relevant licenses for the particular block will be 
assigned based on the auction results. In the Auctions 73 and 76 
Procedures Public Notice, the Bureau adopted this proposal.
    7. Auction 76 Overview. The Commission decided that, if licenses 
initially offered for the A, B, C, or E Blocks are not assigned because 
the auction results do not satisfy the applicable aggregate reserve 
price(s) for those licenses, the Commission promptly will offer 
alternative licenses for those blocks. More specifically, the 
Commission will offer licenses for the A, B, and E Blocks subject to 
alternative performance requirements. With respect to the C Block, the 
Commission will offer alternative licenses without the open platform 
conditions and based on different geographic areas and spectrum 
bandwidth. If the D Block license is not assigned because the auction 
results do not satisfy the D Block reserve price, the Commission may 
re-offer that license subject to the same rules or reconsider the 
applicable rules. For administrative purposes, the Bureau will 
designate as Auction 76 any subsequent bidding for alternative licenses 
for the A, B, C or E Blocks or for the D Block license that occurs 
because Auction 73 results for licenses initially offered for the 
relevant blocks do not satisfy the applicable aggregate reserve 
price(s). In the Auctions 73 and 76 Procedures Public Notice, the 
Bureau announced detailed procedures for conducting Auction 76, if 
necessary.
    8. The Commission will conduct bidding in Auction 73 and any 
contingent subsequent bidding in Auction 76 for 700 MHz Band licenses 
as a single auction to the extent possible, given the strong public 
interest in promptly assigning all 700 MHz Band licenses for recovered 
analog spectrum and the related nature of the licenses being offered in 
Auctions 73 and 76. Thus, pursuant to the 700 MHz Second Report and 
Order, the Bureau will permit only qualified bidders in the initial 
auction to participate in the contingent subsequent auction. To enable 
a prompt start to Auction 76 after Auction 73, applicants must select 
any licenses on which they may bid in Auction 76 by the deadline for 
filing their Auction 73 application. Applicants must select those 
licenses by submitting a separate abbreviated short-form application to 
participate in Auction 76. The abbreviated Auction 76 application must 
be filed together with the applicant's standard application for Auction 
73, following procedures described in the Auctions 73 and 76 Procedures 
Public Notice. In the event that Auction 76 takes place, bidder 
identity and other information on the applicant's completed Auction 73 
short-form application will be combined with the licenses selected in 
the abbreviated Auction 76 application to create the applicant's 
Auction 76 application. This process will minimize the time period 
between auctions by eliminating any need for applicants to take time 
following Auction 73 to file new applications or select additional 
licenses, and for the Commission to review newly-filed short-form 
applications. Applicants in Auction 76, however, will have an 
opportunity after Auction 73 to obtain additional eligibility for any 
licenses offered in Auction 76 by supplementing their upfront monies on 
deposit with the Commission pursuant to the procedures as provided for 
in the 700 MHz Second Report and Order.
    9. The Bureau also will use the Auction 73 design in Auction 76, 
including an aggregate reserve price for each block that matches the 
applicable initial reserve price. In the event that alternative 
licenses for the C Block are offered for Blocks C1 and C2, the Bureau 
will conduct package bidding for the C2 Block only, using the pre-
determined packages. Alternative licenses for Blocks C1 and C2 will be 
subject to reserve prices. There will be a joint aggregate reserve 
price equal to the initial auction C Block aggregate reserve price, and 
separate aggregate reserve prices for the C1 and C2 Blocks that add to 
the joint aggregate reserve price. Licenses in both blocks will be 
assigned if the joint aggregate reserve price is met. If the joint 
aggregate reserve price is not met but one of the block-specific 
reserve prices is met, licenses in the block for which the reserve 
price is met will be assigned. Licenses in the other block will not be 
assigned. This will assure the aggregate reserve price in the initial 
auction continues to apply while maximizing the opportunity for 
licenses for either Block C1 or C2 to be assigned.
i. Background of Proceeding
    10. The Commission is offering the licenses in Auction 73 
consistent with the requirements of the Digital Television Transition 
and Public Safety Act of 2005 (DTV Act). Pursuant to the DTV Act the 
Commission must conduct the auction of licenses for recovered analog 
spectrum by commencing the bidding not later than January 28, 2008. A 
number of incumbent broadcasters are licensed and operating on these 
frequencies (TV Channels 52-53, 56-58, 60-62, and 65-67) and adjacent 
channels.
ii. Licenses To Be Offered in Auction 73
    11. Auction 73 will offer a total of 1,099 licenses: 176 Economic 
Area (EA) licenses in each of the A and E Blocks, 734 Cellular Market 
Area (CMA) licenses in the B Block, 12 Regional Economic Area Grouping 
(REAG) licenses in the C Block, and one nationwide license, to be used 
as part of the 700 MHz Public/Private Partnership, in the D Block.

B. Rules and Disclaimers

i. Relevant Authority
    12. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules set forth in 
Title 47, part 1, of the CFR, including recent amendments and 
clarifications; rules relating to the 700 MHz Band contained in Title 
47, part 27, of the CFR; rules relating to the public/private 
partnership applicable to the D Block contained in Title 47, part 90, 
of the CFR; and rules relating to applications, environment, practice 
and procedure contained in Title 47, part 1, of the CFR. Prospective 
applicants must also be thoroughly familiar with the procedures, terms 
and conditions (terms) contained in the Auctions 73 and 76 Procedures 
Public Notice and the Commission's decisions in proceedings regarding 
competitive bidding procedures, application requirements, and 
obligations of

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Commission licensees. For example, among other Commission orders, 
prospective bidders should be familiar with the 700 MHz First Report 
and Order, 65 FR 3139, January 20, 2000, and the 700 MHz Second Report 
and Order.
    13. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in 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 Auctions 73 and 76.
ii. Prohibition of Collusion; Compliance With Antitrust Laws
    14. To ensure the competitiveness of the auction process, Sec.  
1.2105(c) of the Commission's rules prohibits auction applicants for 
licenses in any of the same geographic license areas from communicating 
with each other about bids, bidding strategies, or settlements 9 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).
a. Entities Subject to Anti-Collusion Rule
    15. The anti-collusion rule will apply to any applicants that 
submit short-form applications for Auctions 73 or 76 and select 
licenses in the same or overlapping CMAs, EAs, REAGs or the nationwide 
license in the D Block. For example, assume that one applicant applies 
for a REAG license and a second applicant applies for an EA license 
covering any area within that REAG. The two entities will have applied 
for licenses covering the same geographic areas and would be precluded 
from communicating with each other under the rule. The rule also 
applies where one applicant has selected a license in Auction 73 and 
another applicant selects a license in Auction 76 that covers any of 
the same geographic area. In addition, the rule precludes applicants 
that apply to bid for the nationwide license in the D Block, or all the 
licenses in any other block, from communicating with all other 
applicants. Thus, applicants that have applied for licenses covering 
the same markets (unless they have identified each other on their FCC 
Form 175 applications as parties with whom they have entered into 
agreements under Sec.  1.2105(a)(2)(viii)) must affirmatively avoid all 
communications with or disclosures to each other that affect or have 
the potential to affect bids or bidding strategy, which may include 
communications regarding the post-auction market structure. This 
prohibition applies to all applicants regardless of whether such 
applicants become qualified bidders or actually bid. Information 
concerning applicants' license selections will not be available to the 
public. Therefore, the Commission will inform each applicant by letter 
of the identity of each of the other applicants that has applied for 
licenses covering any of the same geographic areas as the licenses that 
it has selected in its short-form application.
    16. 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.
    17. Entities and parties subject to the anti-collusion rule should 
take special care in circumstances where their employees may receive 
information directly or indirectly from a competing applicant relating 
to any competing applicant's bids or bidding strategies. In situations 
where the anti-collusion rule views the same person as the applicant 
with respect to two different entities filing competing applications, 
under Bureau precedent the bids and bidding strategies of one applicant 
are necessarily conveyed to the other and, absent a disclosed bidding 
agreement, an apparent violation of the anti-collusion rule occurs. The 
Bureau has not addressed situations where employees who do not qualify 
as the applicant, (e.g., are not officers or directors) receive 
information regarding a competing applicant's bids or bidding 
strategies and whether that information might be deemed to necessarily 
convey to the applicant. The Bureau notes that the exception to the 
anti-collusion rule providing that non-controlling interest holders may 
have interests in more than one competing bidder without violating the 
anti-collusion rule, provided specified conditions are met (including a 
certification that no prohibited communications have occurred or will 
occur), does not extend to controlling interest holders.
b. Prohibition Applies Until Down Payment Deadline
    18. Section 1.2105(c)'s anti-collusion prohibition begins at the 
short-form application filing deadline and ends at the down payment 
deadline after the auction. In recognition of the related nature of the 
initial auction and any contingent auction of alternative licenses, the 
Commission concluded in the 700 MHz Second Report and Order that the 
provisions of the anti-collusion rule would continue to apply until the 
down payment deadline for the subsequent auction.
    19. Some commenters argue that the Bureau should allow applicants 
to opt-out from the anti-collusion prohibition in the event Auction 76 
is conducted. A commenter proposed that an applicant that has no 
intention to bid in the subsequent auction could inform the Commission 
of its intent in writing with a certification that its decision is not 
based on any discussion with other competing bidders of auction 
strategy or post-auction market structure. As one commenter 
acknowledges, changing the application of the rule in this way is 
beyond the Bureau's delegated authority and beyond the scope of this 
non-rulemaking proceeding and would require action by the Commission to 
reconsider its determination in the 700 MHz Second Report and Order. 
Thus, the Bureau is unable to adopt the proposed opt-out certification 
procedure. If it is necessary to conduct Auction 76, the provisions of 
the anti-collusion rule will apply to all applicants until the down 
payment deadline, which will occur after the close of bidding on 
licenses offered in Auction 76.
c. Prohibited Communications
    20. Prospective applicants for upcoming Auctions 73 and 76 and 
other parties that may be engaged in discussion with such prospective 
applicants are cautioned of the need to comply with the Commission's 
anti-collusion rule, Sec.  1.2105(c). The anti-collusion rule prohibits 
not only a communication about an applicant's own bids or bidding 
strategy, but also a communication of another applicant's bids or 
bidding strategy. While the anti-collusion rule provisions do not 
prohibit business negotiations among auction applicants, applicants 
must remain vigilant so as not to communicate directly or indirectly 
information that affects, or could affect, bids or bidding strategy, or 
the negotiation of settlement agreements.
    21. The Commission remains vigilant about prohibited communications

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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.
    22. Applicants are hereby placed on notice that public disclosure 
of information relating to bidder interests and bidder identities that 
is confidential in both Auctions 73 and 76 at the time of disclosure 
may violate the anti-collusion rule. This is so even though similar 
types of information were revealed prior to and during other Commission 
auctions subject to different information procedures. Bidders should 
use caution in their dealings with other parties, such as members of 
the press, financial analysts, or others who might become a conduit for 
the communication of prohibited bidding information. For example, where 
limited information disclosure procedures are in place, as for Auctions 
73 and 76, a qualified bidder's statement to the press that it has lost 
bidding eligibility and stopped bidding in the auction could give rise 
to a finding of an anti-collusion rule violation. Similarly, an 
applicant's public statement of intent not to participate in Auction 76 
bidding could also violate the rule.
    23. Applicants for licenses for any of the same geographic license 
areas 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.
    24. In addition, when completing short-form applications, 
applicants should avoid any statements or disclosures that may violate 
the Commission's anti-collusion rule, particularly in light of the 
Commission's procedures for limited information. Specifically, 
applicants should avoid including any information in their short-form 
applications that might convey information regarding their license 
selection, such as using applicant names that refer to licenses being 
offered, referring to certain licenses or markets in describing bidding 
agreements, or including any information in attachments that may 
otherwise disclose applicants' license selections.
d. Disclosure of Bidding Agreements and Arrangements
    25. 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 for licenses 
covering any of the same or overlapping geographic areas after the 
short-form filing deadline.
e. Anti-Collusion Certification
    26. By electronically submitting a short-form application following 
the electronic filing procedures set forth in Attachments D and E to 
the Auctions 73 and 76 Procedures Public Notice, each applicant 
certifies its compliance with Sec.  1.2105(c). However, the Bureau 
cautions 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.
f. Antitrust Laws
    27. 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 Bureau has 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 
suggest that violations of the federal antitrust laws may have 
occurred, 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.
    28. One commenter urges the Commission to adopt an auction rule 
that states that a bidder cannot release any bidding information to the 
public during the course of the auction, and provide notice that all 
parties remain subject to the antitrust laws. As another commenter 
points out, however, the

[[Page 62364]]

Commission has consistently provided such guidance in prior auctions. 
The Bureau does so again here: All parties remain subject to the 
antitrust laws.
g. Duty to Report Prohibited Communications
    29. If an applicant makes or receives a communication that appears 
to violate the anti-collusion rule, it must report such communication 
in writing to the Commission immediately and in no case later than five 
business days after the communication occurs. The Commission recently 
clarified that each applicant's obligation to report any such 
communication continues beyond the five-day period after the 
communication is made, even if the report is not made within the five 
day period.
    30. Section 1.65 of the Commission's rules requires an applicant to 
maintain the accuracy and completeness of information furnished in its 
pending application and to notify the Commission within 30 days of any 
substantial change that may be of decisional significance to that 
application. Thus, Sec.  1.65 requires 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).
    31. Applicants must be aware that failure to comply with the 
Commission's rules can result in enforcement action.
h. Winning Bidders Must Disclose Terms of Agreements
    32. 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 
ventures, partnerships, and other arrangements entered into relating to 
the competitive bidding process.
i. Additional Information Concerning Anti-Collusion Rule
    33. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of the anti-collusion rule may be 
found in Attachment I of the Auctions 73 and 76 Procedures Public 
Notice. These documents are available on the Commission's auction anti-
collusion Web page.
iii. Protection of Incumbent Operations
    34. A number of incumbent broadcasters are licensed and operating 
on these frequencies (TV Channels 52-53, 56-58, 60-62, and 65-67) and 
adjacent channels. In accordance with the Commission's rules, 700 MHz 
Band licensees must protect analog and digital TV incumbents from 
harmful interference through February 17, 2009, the end of the DTV 
transition period. After February 17, 2009, 700 MHz licensees must 
continue to operate in accordance with the Commission's rules to reduce 
the potential for interference to public reception of the signals of 
DTV broadcast stations transmitting on DTV Channel 51. These 
limitations may restrict the ability of such geographic area licensees 
to use certain portions of the electromagnetic spectrum or provide 
service to some parts of their geographic license areas.
    35. In the 700 MHz Second Report and Order, the Commission 
grandfathered an incumbent guard band B Block licensee in Major 
Economic Areas (MEAs) 21 and 39 at 761-763 MHz and 791-793 MHz of the D 
Block. The new D Block licensee will be authorized on a secondary basis 
at 761-763 MHz and 791-793 MHz in these markets, and it may not cause 
interference to the primary operations of the grandfathered licensee. 
If the grandfathered licensee, or a successor or assignee, cancels 
either of the grandfathered licenses, or if either license cancels 
automatically, is terminated by the Commission, or expires, then the 
licensed geographic area will revert to the D Block licensee 
automatically.
a. International Coordination
    36. Potential bidders seeking licenses for geographic areas that 
are near the Canadian or Mexican borders are subject to international 
agreements with Canada and Mexico. Pursuant to these agreements, the 
U.S. must protect the signals of Canadian and Mexican television 
broadcast stations located in the border area. Unless otherwise 
modified by international treaty, licensees must not cause interference 
to, and must accept harmful interference from, television broadcast 
operations in Mexico and Canada. Further, until such time as existing 
agreements are replaced or modified to reflect the new uses, licensees 
in the band will be subject to existing agreements.
b. Quiet Zones
    37. 700 MHz Band licensees must protect the radio quiet zones set 
forth in the Commission's rules. Licensees are cautioned that they must 
receive the appropriate approvals directly from the relevant quiet zone 
entity prior to operating within the areas described in the 
Commission's rules.
iv. Due Diligence
    38. The Bureau cautions potential applicants formulating their 
bidding strategies to investigate and consider the extent to which 700 
MHz Band frequencies are occupied. Applicants and their investors 
should also understand that Commission rules and requirements place 
limitations on the ability of 700 MHz Band licensees to use this 
spectrum. There are a number of incumbent broadcast television 
licensees already licensed and operating in the band that will be 
subject to the upcoming auction. Geographic area licensees operating on 
the spectrum associated with Channels 52-53, 56-58, 60-62, and 65-67 
must comply with the co-channel and the adjacent channel provision of 
Sec.  27.60 of the Commission's rules. These limitations may restrict 
the ability of such geographic area licensees to use certain portions 
of the electromagnetic spectrum or provide service to certain areas in 
their geographic license areas. For example, bidders should become 
familiar with any petitions or other pleadings filed in response to the 
700 MHz First Report and Order, 700 MHz Second Report and Order, and 
any other orders that have been or may be released affecting the 700 
MHz Band.
    39. Potential bidders 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 700 MHz Band licenses. 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 licensee in the 700 MHz Band 
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 license constitute a guarantee 
of business success. Applicants should perform their individual due 
diligence before proceeding as they would with any new business 
venture.
    40. Potential bidders are strongly encouraged to conduct their own 
research prior to the beginning of

[[Page 62365]]

bidding in Auction 73 in order to determine the existence of any 
pending legislative, administrative or judicial proceedings that might 
affect their decision regarding participation in the auction, including 
any subsequent auction (if necessary). Participants in Auctions 73 and 
76 are strongly encouraged to continue such research throughout the 
auction. In addition, potential bidders should perform technical 
analyses sufficient to assure themselves that, should they prevail in 
competitive bidding for a specific license, they will be able to build 
and operate facilities that will fully comply with the Commission's 
technical and legal requirements as well as other applicable Federal, 
state, and local laws.
    41. Applicants should also be aware that certain pending and future 
proceedings, including rulemaking proceedings or petitions for 
rulemaking, applications (including those for modification), requests 
for special temporary authority, waiver requests, petitions to deny, 
petitions for reconsideration, informal oppositions, and applications 
for review, before the Commission may relate to particular applicants 
or incumbent licensees or the licenses available in Auctions 73 and 76. 
For example, bidders should note that petitions have been filed for 
reconsideration of certain decisions made in the 700 MHz First Report 
and Order and the 700 MHz Second Report and Order. In addition, 
applicants should be aware that the Commission has sought comment on a 
range of proposals concerning consumer education about the DTV 
transition, including the possible imposition of reporting requirements 
on winning bidders for 700 MHz band licenses. Of course, pending and 
future judicial proceedings may relate to particular applicants or 
incumbent licensees, or the licenses available in Auctions 73 and 76. 
Prospective bidders are responsible for assessing the likelihood of the 
various possible outcomes, and considering their potential impact on 
spectrum licenses available in Auctions 73 and 76.
    42. Applicants should perform due diligence to identify and 
consider all proceedings that may affect the spectrum licenses being 
auctioned and that could have an impact on the availability of spectrum 
for Auction 73. 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.
    43. 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 licenses being offered.
    44. Applicants may use the licensing database for the Media Bureau 
on the Internet in order to determine which frequencies are already 
licensed to incumbent licensees. Licensing records for the Media Bureau 
are contained in the Media Bureau's Consolidated Data Base System 
(CDBS) and may be researched on the Internet at http://www.fcc.gov/mb/cdbs.html. Potential bidders should direct questions regarding the 
search capabilities of CDBS to the Media Bureau help line at (202) 418-
2662, or via e-mail at [email protected].
    45. 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.
    46. Potential applicants are strongly encouraged to physically 
inspect any prospective sites located in, or near, the geographic area 
for which they plan to bid, and also to familiarize themselves with the 
environmental review obligations.
v. Use of Integrated Spectrum Auction System
    47. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction 73 over the Internet 
using the Commission's Integrated Spectrum Auction System (ISAS or FCC 
Auction System). The Commission makes no warranty 21 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 Auctions 73 and 76. 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.
vi. Fraud Alert
    48. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction 73 to 
deceive and defraud unsuspecting investors. Information about deceptive 
telemarketing investment schemes is available from the Commission as 
well as the FTC and SEC. Complaints about specific deceptive 
telemarketing investment schemes should be directed to the FTC, the 
SEC, or the National Fraud Information Center at (800) 876-7060.
vii. Environmental Review Requirements
    49. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act and other 
federal environmental statutes. The construction of a wireless antenna 
facility is a federal action and the licensee must comply with the 
Commission's environmental rules for each such facility. The 
Commission's environmental rules require, among other things, that the 
licensee consult with expert agencies having environmental 
responsibilities, including the U.S. Fish and Wildlife Service, the 
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 licensee must follow the 
provisions of the Nationwide Programmatic Agreement Regarding the 
Section 106 National Historic Preservation Act Review Process. The 
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 licensee also must prepare 
environmental assessments for facilities that include high intensity 
white lights in residential neighborhoods or excessive radio frequency 
emission.

[[Page 62366]]

C. Auction Specifics

i. Auction 73 Start Date
    50. Bidding in Auction 73 will begin on Thursday, January 24, 2008.
    51. This change of the previously-announced start date for Auction 
73 will provide interested parties with additional time after this 
announcement of competitive bidding procedures to develop business 
plans, assess market conditions, and evaluate the availability of 
equipment for new 700 MHz Band services.
    52. Some commenters had sought a postponement of the previously-
announced start date until January 25 or 28, 2008. Pursuant to the 
Congressional mandate, the Commission must conduct the auction of 
licenses for recovered analog spectrum in the 700 MHz Band by 
commencing the bidding not later than January 28, 2008. Starting the 
auction on the statutory deadline for commencing the auction, or one 
business day prior to the deadline would provide insufficient time to 
address unexpected matters that might arise just prior to the start of 
bidding.
    53. The initial schedule for bidding will be announced by public 
notice at least one week before the start of the auction. Moreover, 
unless otherwise announced, bidding on all licenses and packages will 
be conducted on each business day until bidding has stopped on all 
licenses and packages.
ii. Auction Title
    54. The auction in which the 700 MHz Band licenses will initially 
be offered is designated as Auction 73--700 MHz Band. In the event that 
any licenses, including alternative licenses, are offered in contingent 
subsequent bidding, that will be designated as Auction 76.
iii. Bidding Methodology
    55. The bidding methodology for Auction 73 will be simultaneous 
multiple round (SMR) bidding for the A, B, D, and E Block licenses and 
an auction design with hierarchical package bidding (HPB) for the C 
Block licenses. The Commission will conduct Auctions 73 and 76 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. Pre-Auction Dates and Deadlines
    56. The following dates and deadlines apply:

Auction Seminar........................  November 20, 2007.
Auction 73 and 76 Short-Form             November 19, 2007; 12 noon ET.
 Application (FCC Form 175) Filing
 Window Opens.
Auction 73 and 76 Short-Form             December 3, 2007; prior to 6 p.m. ET.
 Application (FCC Form 175) Filing
 Window Deadline.
Auction 73 Upfront Payments (via wire    December 28, 2007; 6 p.m. ET.
 transfer).
Mock Auction...........................  January 18, 2008.
Auction 73 Begins......................  January 24, 2008.
 

    57. If contingent subsequent bidding is necessary, the Bureau 
intends to announce the start date for Auction 76 and the deadline for 
additional upfront payments within five business days after the end of 
bidding in Auction 73. The Bureau expects that Auction 76 would begin 
within three weeks of that announcement.
v. Requirements for Participation in Auction 73 and 76
    58. Those wishing to participate in Auction 73 and 76 (should any 
subsequent auction become necessary), must: (1) For Auction 73, submit 
a short-form application (FCC Form 175) electronically prior to 6 p.m. 
ET, December 3, 2007, following the electronic filing procedures set 
forth in Attachment D to the Auctions 73 and 76 Procedures Public 
Notice; (2) for Auction 76, submit short-form applications (FCC Form 
175) electronically prior to 6 p.m. ET, December 3, 2007, for each 
auction following the electronic filing procedures set forth in 
Attachments D and E to the Auctions 73 and 76 Procedures Public Notice. 
Bidding in Auction 76 is open only to applicants that qualify to 
participate in Auction 73, and that comply with all of the requirements 
for participating in Auction 76, including submitting a separate short-
form application; (3) for Auction 73, submit a sufficient upfront 
payment and an FCC Remittance Advice Form (FCC Form 159) by 6 p.m. ET, 
December 28, 2007, following the procedures and instructions set forth 
in Attachment F to the Auctions 73 and 76 Procedures Public Notice; (4) 
for Auction 76 (if necessary), submit a sufficient upfront payment and 
an FCC Remittance Advice Form (FCC Form 159) by the deadline to be 
announced following the end of bidding in Auction 73; and (5) comply 
with all provisions outlined in this Public Notice and applicable 
Commission rules.

D. Other Issues Raised by Commenters

    59. Two commenters raised issues that are unrelated to those raised 
in the 700 MHz Auction Public Notice. One commenter proposes that the 
Commission should require that all licenses offered in Auction 73 be 
made available to public safety personnel for priority use during 
critical emergencies. The commenter also suggests that such a 
requirement be considered in the event of a contingent auction, if any. 
Another commenter urges the Commission to require applicants to 
disclose on their short-form applications whether winning the licenses 
they have selected would cause their spectrum holdings to exceed 70 MHz 
of spectrum in the markets of the selected licenses. In the event that 
any applicants indicate that their spectrum holdings would exceed this 
amount, the commenter proposed that their short-form applications 
should be dismissed before the commencement of Auction 73. The 
commenter also requests that the Commission investigate alleged 
violations of the Commission's ex parte rules by a wireless company 
concerning policy on the open platform provisions for C Block licenses, 
and proposes excluding that company from Auction 73 as a possible 
sanction for violating the Commission's rules.
    60. These issues are outside the scope of this non-rulemaking 
proceeding, which is confined to establishing competitive bidding 
procedures for Auction 73. The Bureau notes that some of these issues 
have been presented to the Commission in petitions for reconsideration 
of the 700 MHz Second Report and Order and will be addressed in that 
proceeding.

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

    61. Entities seeking licenses available in Auction 73 must file a 
short-form application electronically via the FCC Auction System prior 
to 6 p.m. ET on December 3, 2007, following the procedures prescribed 
in Attachment D to the Auctions 73 and 76 Procedures Public Notice. 
Applicants filing a short-form application are subject to the 
Commission's anti-collusion rules beginning on the deadline for filing. 
For Auctions 73 and 76, applicants filing a short-form application for 
Auction 73 will remain subject to the Commission's anti-collusion rules 
through the

[[Page 62367]]

completion of Auction 76, if conducted. 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 on their short-form applications under penalty 
of perjury that they are legally, technically, financially and 
otherwise qualified to hold a license. Applicants should read the 
instructions set forth in Attachment D to the Auctions 73 and 76 
Procedures Public Notice carefully and should consult 26 the 
Commission's rules to ensure that all the information that is required 
under the Commission's rules is included with their short-form 
applications.
    62. Entities seeking licenses that may be offered in Auction 76, if 
Auction 76 is conducted, must file electronically via the FCC Auction 
System prior to 6 p.m. ET on December 3, 2007 both a short-form 
application for Auction 73, following the procedures prescribed in 
Attachment D to the Auctions 73 and 76 Procedures Public Notice, and an 
abbreviated short-form application for Auction 76, following the 
procedures prescribed in Attachment E to the Auctions 73 and 76 
Procedures Public Notice. Applicants filing short-form applications for 
both Auctions 73 and 76 are subject to the Commission's anti-collusion 
rules beginning on the deadline for filing both applications.
    63. To streamline the application process, other than license 
selection requirements, all relevant information for the application to 
participate in Auction 76 must be submitted as part of the application 
to participate in Auction 73. The Auction 76 abbreviated application 
will request--and will accept--only information that the FCC Auction 
System requires in order to enable applicants to submit license 
selections for Auction 76. For example, applicants seeking to submit 
information regarding bidding agreements with respect to licenses 
offered in Auction 76 will not be able to access the bidding agreement 
screens that are usually part of the short-form application in the 
Auction 76 abbreviated application. Instead, such applicants must 
submit information regarding those agreements as part of their Auction 
73 short-form application.
    64. To comply with FCC Auction System requirements, however, 
applicants will be required to repeat some information submitted in 
their Auction 73 application, e.g., their FCC Registration Number 
(FRN), their name and address, certification of the form's contents, 
etc. As noted in the procedures for filing the abbreviated short-form 
application for Auction 76, applicants must provide the same 
information submitted in their application for Auction 73 as they 
provide in their Auction 76 application. Most importantly, if an entity 
wishes to submit a short-form application for Auction 76, it must do so 
using the same FRN that it uses for its short-form application for 
Auction 73. In addition, the same person must certify both 
applications, as the certification applies to information submitted in 
both applications.
    65. An entity may not submit more than one short-form application 
for Auction 73. Similarly, an entity may not submit more than one 
short-form application for Auction 76. If a party submits multiple 
short-form applications for either Auction 73 or Auction 76, only one 
application for each will be accepted for filing.
    66. Applicants also should note that submission of a short-form 
application (and any amendments thereto) 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 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. Preferences for Small Businesses and Others

i. Size Standards for Bidding Credits
    67. A bidding credit represents the amount by which a bidder's 
winning bid will be discounted. For Auction 73 and Auction 76, bidding 
credits will be available to small businesses and very small 
businesses, and consortia thereof, as follows: (1) A bidder with 
attributed average annual gross revenues that exceed $15 million and do 
not exceed $40 million for the preceding three years (small business) 
will receive a 15 percent discount on its winning bid; and (2) a bidder 
with attributed average annual gross revenues that do not exceed $15 
million for the preceding three years (very small business) will 
receive a 25 percent discount on its winning bid.
    68. Bidding credits are not cumulative; a qualifying applicant 
receives either the 15 percent or 25 percent bidding credit on its 
winning bid, but not both.
    69. Every applicant that claims eligibility for a bidding credit as 
either a small business or a very small business, or a consortium of 
small businesses or very small businesses, will be required to provide 
information regarding revenues attributable to the applicant, its 
affiliates, its controlling interests, and the affiliates of its 
controlling interests on its FCC Form 175 short-form application for 
Auction 73 to establish that it satisfies the applicable eligibility 
requirement. An applicant's disclosure of this information in the 
short-form application for Auction 73 will become part of the 
applicant's Auction 76 application, in the event the Commission 
conducts Auction 76. Accordingly, applicants are not required--and will 
not be able to--submit this information in their abbreviated Auction 76 
application. Applicants claiming eligibility as a designated entity in 
Auction 73 and Auction 76 should review carefully the CSEA/Part 1 
Report and Order, 71 FR 6992, February 10, 2006, the Designated Entity 
Second Report and Order, 71 FR 26245, May 5, 2006, and the Order on 
Reconsideration of the Designated Entity Second Report and Order, 71 FR 
34272, June 14, 2006. In that connection, the Commission adopted rules 
governing eligibility for designated entity benefits in the Designated 
Entity Second Report and Order. The Commission's rules regarding 
applicants seeking eligibility for designated entity benefits require 
the disclosure of: (1) All parties with which the applicant has entered 
into arrangements for the lease or resale (including wholesale 
agreements) of any of the capacity of any of the applicant's spectrum; 
and (2) the gross revenues, separately and in the aggregate, of 
entities with which the applicant has an attributable material 
relationship, as defined in Sec.  1.2110(b)(3)(iv)(B).
    70. The Commission has adopted a narrow exemption from the 
attribution rule for the officers and directors of a rural telephone 
cooperative pursuant to which the gross revenues of the affiliates of 
the cooperative's officers and directors are not attributed to the 
applicant. An applicant (or controlling interest) seeking to claim this 
exemption must include in its short-form application a certification 
that it is validly organized under the most

[[Page 62368]]

closely applicable organizing statute for a cooperative, and that such 
organization is reflected in its articles of incorporation, bylaws, 
and/or other relevant organic documents. Applicants seeking to claim 
this exemption must meet all of the conditions specified in Sec.  
1.2110(b)(3)(iii) of the Commission's rules. Additional guidance on 
completing the FCC Form 175 to claim this exemption may be found in 
Attachment D to the Auctions 73 and 76 Procedures Public Notice.
ii. Tribal Lands Bidding Credit
    71. To encourage the growth of wireless services in federally 
recognized tribal lands, the Commission has implemented a tribal lands 
bidding credit. Applicants do not provide information regarding tribal 
lands bidding credits on their FCC Form 175 short-form applications. 
Instead, winning bidders may apply for the tribal lands bidding credit 
after the auction when they file their FCC Form 601 long-form 
applications.
iii. Installment Payments
    72. Installment payment plans will not be available in Auction 73 
or in Auction 76.

B. License Selection

    73. An applicant must select the initially offered licenses on 
which it wants to bid individually or as part of a pre-defined package 
in Auction 73 from the Eligible Licenses list on its short-form 
application for Auction 73. An applicant interested in bidding on 
licenses in the contingent subsequent auction must select those 
licenses from the Eligible Licenses list on its short-form application 
for Auction 76. Applicants will be able to bid on pre-defined packages 
of initially offered C Block licenses and alternative C2 Block 
licenses, if offered in subsequent bidding, pursuant to the package 
bidding procedures, only if they have selected all the individual 
licenses that comprise the relevant package on their respective short-
form applications.
    74. To assist applicants in identifying licenses of interest that 
will be available in Auctions 73 and 76, FCC Form 175 will include a 
filtering mechanism that allows an applicant to filter the Eligible 
Licenses list. The applicant will make selections for one or more of 
the filter criteria and the system will produce a list of licenses 
satisfying the specified criteria. The applicant may select all the 
licenses in the customized list or select individual licenses from the 
list. Applicants also will be able to select licenses from one 
customized list and then create additional customized lists to select 
additional licenses.
    75. Applicants will not be able to change their license selections 
for either Auction 73 or Auction 76 after the short-form application 
filing deadline. Applicants interested in participating in Auctions 73 
and 76 must have selected license(s) available in the respective 
auction by the short-form application deadline. Applicants must confirm 
their license selections before the deadline for submitting FCC Form 
175. The FCC Auction System will not accept bids from an applicant on 
individual licenses that the applicant has not selected on its FCC Form 
175. In addition, the FCC Auction System will not accept bids from an 
applicant on a pre-defined hierarchical package unless the applicant 
selected on its FCC Form 175 all the individual licenses that comprise 
the package.

C. Disclosure of Bidding Arrangements

    76. Applicants will be required to identify in their short-form 
application for Auction 73 all parties with whom they have entered into 
any agreements, arrangements, or understandings of any kind relating to 
the licenses being auctioned in Auctions 73 and 76, including any 
agreements relating to post-auction market structure. The agreements 
identified in the short-form application for Auction 73 will become 
part of the applicant's Auction 76 application, in the event the 31 
Commission conducts Auction 76. Accordingly, applicants are not 
required--and will not be able to--disclose bidding agreements in their 
abbreviated Auction 76 application.
    77. 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 to participate in Auction 73, regarding 
the amount of their bids, bidding strategies, or the particular 
licenses on which they will or will not bid. If an applicant has had 
discussions, but has not reached an 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.
    78. 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: (1) 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 (2) the arrangements do not result in a change 
in control of any of the applicants. While the anti-collusion rules do 
not prohibit non-auction-related business negotiations among auction 
applicants, applicants are reminded that certain discussions or 
exchanges could touch upon impermissible subject matters because they 
may convey pricing information and bidding strategies. Compliance with 
the disclosure requirements of the Commission's anti-collusion rule 
will not insulate a party from enforcement of the antitrust laws.

D. Ownership Disclosure Requirements

    79. All applicants must comply with the uniform part 1 ownership 
disclosure standards and provide information required by Sec.  1.2105 
and 1.2112 of the Commission's rules. Specifically, in completing the 
short-form application for Auction 73, 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 Sec.  1.2105 
and 1.2112 of the Commission's rules. Each applicant is responsible for 
information submitted in its short-form application being complete and 
accurate. An applicant's disclosure of ownership information in the 
short-form application for Auction 73 will become part of the 
applicant's Auction 76 application, in the event the Commission 
conducts Auction 76. Accordingly, applicants are not required--and will 
not be able to--submit ownership disclosure information in their 
abbreviated Auction 76 application.
    80. 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 
online 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. An applicant is responsible for ensuring that the 
information submitted in its short-form application for Auction 73 is 
complete and accurate. Accordingly, applicants should carefully review 
any information automatically entered to confirm that it is complete 
and accurate

[[Page 62369]]

as of the deadline for filing the short-form application. Applicants 
can update any information that was entered automatically and needs to 
be changed directly in the short-form application.

E. Bidding Credit Revenue Disclosures

    81. To determine which applicants qualify for bidding credits as 
small businesses or very small businesses, the Commission considers the 
gross revenues of the applicant, its affiliates, its controlling 
interests, and the affiliates of its controlling interests. Therefore, 
entities applying to bid as small businesses or very small businesses 
(or consortia of small businesses or very small businesses) will be 
required to disclose on their short-form applications for Auction 73 
the gross revenues of the preceding three years for each of the 
following: (1) The applicant; (2) its 33 affiliates; (3) its 
controlling interests; and (4) the affiliates of its controlling 
interests. Certification that the average annual gross revenues of such 
entities and individuals for the preceding three years do not exceed 
the applicable limit is not sufficient. Applicants must also disclose 
the gross revenues of the entities with which they have attributable 
material relationships, as defined by the Commission's rules. 
Additionally, if an applicant is applying as a consortium of small 
businesses or very small businesses, this information must be provided 
for each consortium member. An applicant's disclosure of bidding credit 
revenue information in the short-form application for Auction 73 will 
become part of the applicant's Auction 76 application, in the event the 
Commission conducts Auction 76. Accordingly, applicants are not 
required and will not be able to submit bidding credit revenue 
information in their abbreviated Auction 76 application.
    82. Controlling interests of an applicant include individuals and 
entities with either de facto or de jure control of the applicant. 
Typically, ownership of at least 50.1 percent of an entity's voting 
stock evidences de jure control. De facto control is determined on a 
case-by-case basis. The following are some common indicia of de facto 
control: (1) The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee; (2) the entity has 
authority to appoint, promote, demote, and fire senior executives that 
control the day-to-day activities of the licensee; and (3) the entity 
plays an integral role in management decisions.
    83. Officers and directors of an applicant are also considered to 
have controlling interest in the applicant. The Commission does not 
impose specific equity requirements on controlling interest holders. 
Once the principals or entities with a controlling interest are 
determined, only the revenues of those principals or entities; the 
affiliates of those principals or entities; the applicant and its 
affiliates; and any parties having an attributable material 
relationship with the applicant will be counted in determining small 
business eligibility.
    84. In the Designated Entity Second Report and Order, the 
Commission adopted material relationship rules. The Commission now 
requires the consideration of certain leasing and resale (including 
wholesale) relationships--material relationships--in determining 
designated entity eligibility. Material relationships fall into two 
categories: impermissible and attributable. An applicant or licensee 
has an impermissible material relationship when it has agreements with 
one or more other entities for the lease or resale (including under a 
wholesale agreement) of, on a cumulative basis, more than 50 percent of 
the spectrum capacity of any of its licenses. If an applicant or a 
licensee has an impermissible material relationship, it is, as a 
result, (1) ineligible for the award of designated entity benefits, and 
(2) subject to unjust enrichment on a license-bylicense basis.
    85. An applicant or licensee has an attributable material 
relationship when it has one or more agreements with any individual 
entity for the lease or resale (including under a wholesale agreement) 
of, on a cumulative basis, more than 25 percent of the spectrum 
capacity of any individual license held by the applicant or licensee. 
The attributable material relationship will cause the gross revenues 
and, if applicable, total assets of that entity and its attributable 
interest holders to be attributed to the applicant or licensee for the 
purposes of determining the applicant's or licensee's (1) eligibility 
for designated entity benefits and (2) liability for unjust enrichment 
on a license-by-license basis.
    86. The Commission grandfathered material relationships in 
existence before the release of the Designated Entity Second Report and 
Order, meaning that those preexisting relationships would not alone 
cause the Commission to examine a designated entity's ongoing 
eligibility for benefits or its liability for unjust enrichment. The 
Commission did not, however, grandfather preexisting material 
relationships for determinations of an applicant's or licensee's 
designated entity eligibility for future auctions or in the context of 
future assignments, transfers of control, spectrum leases, or other 
reportable eligibility events. Rather, the occurrence of any of those 
35 eligibility events after the release date of the Designated Entity 
Second Report and Order triggers a reexamination of the applicant's or 
licensee's designated entity eligibility, taking into account all 
existing material relationships, including those previously 
grandfathered.
    87. In recent years the Commission has also made other 
modifications to its rules governing the attribution of gross revenues 
for purposes of determining small business eligibility. These changes 
include exempting the gross revenues of the affiliates of a rural 
telephone cooperative's officers and directors from attribution to the 
applicant if certain specified conditions are met. The Commission has 
also clarified that, in calculating an applicant's gross revenues under 
the controlling interest standard, it will not attribute the personal 
net worth, including personal income, of its officers and directors to 
the applicant.
    88. A consortium of small businesses or very small businesses is a 
conglomerate organization composed of two or more entities, each of 
which individually satisfies the definition of a small business or very 
small business as those terms are defined in the service-specific 
rules. Thus, each member of a consortium of small or very small 
businesses that applies to participate in Auction 73 must individually 
meet the definition of small business or very small business adopted by 
the Commission for the 700 MHz Band. Each consortium member must 
disclose its gross revenues along with those of its affiliates, its 
controlling interests, the affiliates of its controlling interests, and 
any entities having an attributable material relationship with the 
member. Although the gross revenues of the consortium members will not 
be aggregated for purposes of determining the consortium's eligibility 
as a small business or very small business, this information must be 
provided to ensure that each individual consortium member qualifies for 
any bidding credit awarded to the consortium.

F. Provisions Regarding Former and Current Defaulters

    89. 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 36 controlling 
interests, as defined by Sec.  1.2110, have ever been in default on any 
Commission licenses or have ever

[[Page 62370]]

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 Sec.  1.2110, 
are not in default on any payment for Commission licenses (including 
down payments) and that they are not delinquent on any non-tax debt 
owed to any Federal agency. Prospective applicants are reminded that 
submission of a false certification to the Commission is a serious 
matter that may result in severe penalties, including monetary 
forfeitures, license revocations, exclusion from participation in 
future auctions, and/or criminal prosecution. These statements and 
certifications are prerequisites to submitting an application in the 
FCC Auction System. Accordingly, applicants seeking licenses that may 
be offered in Auction 76 will be required to make these statements and 
certifications in both their short-form application for Auction 73 and 
their abbreviated Auction 76 application.
    90. 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 licenses or been delinquent on any non-tax 
debt owed to any Federal agency, but that have since remedied all such 
defaults and cured all of their outstanding non-tax delinquencies--are 
eligible to bid in Auctions 73 and 76, provided that they are otherwise 
qualified. Former defaulters are required to pay upfront payments that 
are fifty percent more than the normal upfront payment amounts.
    91. 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 licenses (including down payments) or are 
delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for short-form applications--are not eligible to bid in 
either Auction 73 or Auction 76.
    92. Applicants are encouraged to review the 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 Sec.  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 Sec.  
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.
    93. 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 Sec.  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 Sec.  1.2105. Thus, 
while the red light rule ultimately may prevent the processing of long-
form 38 applications by auction winners, an auction applicant's red 
light status is not necessarily determinative of its eligibility to 
participate in an auction or of its upfront payment obligation.
    94. Prospective applicants 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.

G. Other Information

    95. Applicants owned by members of minority groups and/or women, as 
defined in Sec.  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 of designated 
entities in its auctions.

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

    96. Applicants are not permitted to make major modifications to 
their short-form applications (e.g., change their license selections, 
change control of the applicant, change the certifying official, or 
change their size to claim eligibility for a higher bidding credit) 
after the short-form application deadline. Thus, any change in control 
of an applicant, resulting from a merger for example, will be 
considered a major modification to the applicant's FCC Form 175, which 
will consequently be dismissed.
    97. Applicants are, however, permitted to make only minor changes 
to their FCC Form 175 after the short-form application deadline. 
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.
    98. If an applicant wishes to make permissible minor changes to its 
short-form application, such changes should be made electronically to 
its Auction 73 short-form application using the FCC Auction System. 
Applicants should not make changes to short-form applications 39 
associated with Auction 76. Applicants are reminded to 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.
    99. In addition, during those periods outside of the initial and 
resubmission filing windows (i.e., when an applicant cannot 
electronically update its FCC Form 175), an applicant should submit a 
letter briefly summarizing the changes and subsequently update its 
short-form applications in ISAS as soon as possible. After the filing 
window has closed, the auction system will not permit applicants to 
make certain changes, such as legal classification and bidding credit. 
Any letter describing changes to an applicant's short-form application 
should 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 73 and the name of 
the applicant (e.g.,

[[Page 62371]]

RE: Changes to Auction 73 Short-Form Application of ABC Corp.), and 
should not reference Auction 76.
    100. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System (ECFS).

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

    101. Section 1.65 of the Commission's rules requires an applicant 
to maintain the accuracy and completeness of information furnished in 
its pending application and to notify the Commission within 30 days of 
any substantial change that may be of decisional significance to that 
application. Changes that cause a loss of or reduction in eligibility 
for a bidding credit must be reported immediately. If an amendment 
reporting substantial changes is a major amendment as defined by Sec.  
1.2105, the major amendment will not be accepted and may result in the 
dismissal of the short-form application.
    102. After the short-form filing deadline, applicants may make only 
minor changes to their short-form applications, such as deleting or 
adding 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 73 and the name of the applicant. Applicants must not submit 
application-specific material through ECFS.

III. Pre-Auction Procedures

A. Auction Seminar--November 20, 2007

    103. On Tuesday November 20, 2007, the FCC will sponsor a free 
seminar for parties interested in participating in Auctions 73 and 76 
at the FCC headquarters, located at 445 12th Street, SW., Washington, 
DC. The seminar will provide attendees with information about pre-
auction procedures, completing FCC Form 175, auction conduct, the FCC 
Auction System, auction rules, and the 700 MHz Band 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 Auctions 73 and 76.
    104. To register, please provide the information listed on the 
Auctions 73 and 76 Public Notice released October 19, 2007 (DA 07-
4236), by fax (717) 338-2850, e-mail [email protected] or telephone (717) 
338-2868 to the FCC by Friday, November 16, 2007. For individuals who 
are unable to attend, an Audio/Video webcast of this seminar will be 
available from the FCC's Auction 73 Web page at http://wireless.fcc.gov/auctions/73/.

B. Short-Form Applications (FCC Form 175)--Due Prior to 6 p.m. ET on 
December 3, 2007

    105. In order to be eligible to bid in Auction 73 or Auction 76, 
applicants must first follow the procedures set forth in Attachments D 
and E to the Auctions 73 and 76 Procedures Public Notice to submit an 
FCC Form 175 application electronically via the FCC Auction System. The 
application must be received at the Commission prior to 6 p.m. ET on 
December 3, 2007. Late applications will not be accepted. There is no 
application fee required when filing an FCC Form 175, but an applicant 
must submit an upfront payment to be eligible to bid.
    106. Applications may generally be filed at any time beginning at 
noon ET on November 19, 2007, and the filing window will close prior to 
6 p.m. ET on December 3, 2007. 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 3, 2007.
    107. Applicants must always click on the SUBMIT button on the 
Certify & Submit screen of the electronic form to successfully submit 
or modify their FCC Form 175. Any form that is not submitted will not 
be reviewed by the FCC. Additional information about accessing, 
completing, and viewing the FCC Form 175 is included in Attachments D 
and E of the Auctions 73 and 76 Procedures Public Notice. FCC Auctions 
Technical Support is available at (877) 480-3200, or (202) 414-1255 
(text telephone (TTY)); hours of service are Monday through Friday, 
from 8 a.m. to 6 p.m. ET.

C. Application Processing and Minor Corrections

    108. After the deadline for filing short-form applications, the 
Commission 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.
    109. After the December 3, 2007, short-form filing deadline, 
applicants may make only minor corrections to their applications. 
Applicants will not be permitted to make major modifications to their 
applications (e.g., change their license selections, change control of 
the applicant, change certifying official, or change their size to 
claim eligibility for a higher bidding credit). Accordingly, applicants 
interested in participating in any potential contingent subsequent 
bidding must have selected license(s) available in the initial bidding 
as well as licenses that may be available in contingent subsequent 
bidding, including alternative licenses, by the deadline for submitting 
their application to participate in Auction 73. FCC personnel will 
communicate regarding a short-form application only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 175, unless the applicant's certifying official or contact 
person notifies the Commission in writing that applicant's counsel or 
other representative is authorized to speak on its behalf.

D. Upfront Payments--Due December 28, 2007

    110. In order to be eligible to bid in Auction 73 and any 
contingent subsequent auction, applicants must submit an upfront 
payment accompanied by an FCC Remittance Advice Form (FCC Form 159). 
Only applicants that become qualified bidders in Auction 73, by, among 
other things, making upfront payments to be eligible to bid in Auction 
73, will be eligible to participate in any contingent subsequent 
auction. However, qualified bidders in Auction 73 will be permitted to 
make additional upfront payments with respect to licenses being offered 
in any contingent subsequent auction at a later date. 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 for Auction 73 must be 
received in the proper account at Mellon Bank by 6 p.m. ET on December 
28, 2007.
i. Making Upfront Payments by Wire Transfer
    111. Wire transfer payments for Auction 73 must be received by 6 
p.m.

[[Page 62372]]

ET on December 28, 2007. No other payment method is acceptable. 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. The 
BNF and Lockbox number are specific to the upfront payments for Auction 
73. Do not use BNF or Lockbox numbers from previous auctions. Wire 
transfer information for Auction 76 will be made available in a future 
public notice.
    112. 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 at 
(412) 209-6045. On the cover sheet of the facsimile, write Wire 
Transfer--Auction Payment for Auction 73. 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.
    113. 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 73 go to a lockbox number 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 as instructed by the December 28, 2007, deadline 
will result in dismissal of the application and disqualification from 
participation in the auction as well as ineligibility for participation 
in any contingent subsequent bidding for 700 MHz Band licenses.
ii. FCC Form 159
    114. 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 
F to the Auctions 73 and 76 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
    115. In the 700 MHz Auction Public Notice, the Bureau 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 addition, consistent with the Commission's 
direction in the 700 MHz Second Report and Order, the Bureau proposed 
that qualified bidders in Auction 73 would have an opportunity to 
submit additional upfront payments to obtain bidding eligibility for 
licenses in any contingent subsequent auction (Auction 76).
    116. Under the Bureau's proposal, in order to bid on a particular 
license or package, qualified bidders must have selected the license(s) 
on FCC Form 175 and must have a current eligibility level that meets or 
exceeds the number of bidding units assigned to that license or 
package. For a package, the bidding units are calculated by adding 
together the bidding units of the individual licenses that make up the 
package. At a minimum, therefore, an applicant's total upfront payment 
must be enough to establish eligibility to bid on at least one of the 
licenses selected on its FCC Form 175 for Auction 73, or else the 
applicant will not be eligible to participate in Auction 73 or in 
Auction 76. An applicant does not have to make an upfront 45 payment to 
cover all licenses the applicant selected on its FCC Form 175, but 
rather to cover the maximum number of bidding units that are associated 
with licenses on which the bidder wishes to place bids and hold 
provisionally winning bids (via bids on licenses and/or packages) at 
any given time in Auction 73. If contingent subsequent bidding is 
necessary, qualified bidders for Auction 73 will be given an 
opportunity to supplement their upfront payments in order to increase 
their bidding eligibility for Auction 76.
    117. In the 700 MHz Auction Public Notice, the Bureau proposed to 
calculate upfront payments as follows: (1) For licenses covering CMAs 
in the 50 states in which the licenses offered in Auction 66 were sold, 
$0.05 per MHz per population (MHz-pop) for Metropolitan Statistical 
Area (MSA) licenses and $0.03/MHz-pop for Rural Service Area (RSA) 
licenses; (2) for licenses covering EAs in the 50 states in which the 
corresponding licenses in both EA blocks offered in Auction 66 were 
sold, the sum of $0.05/MHz-pop for counties contained within an MSA and 
$0.03/MHz-pop for counties contained within an RSA; (3) for licenses 
covering REAGs in the 50 states in which the corresponding licenses in 
all three REAG blocks offered in Auction 66 were sold, the sum of 
$0.05/MHz-pop for counties contained within an MSA and $0.03/MHz-pop 
for counties contained within an RSA; (4)for licenses covering 
geographic areas for which an Auction 66 license was unsold, $0.01/MHz-
pop; (5)for licenses covering the Gulf of Mexico, $1,000 per MHz; and 
(6) for all remaining licenses, $0.01/MHz-pop. For all licenses, the 
results of the above calculations are subject to a minimum of $500 per 
license and are rounded using its standard rounding procedure.
    118. The Bureau set forth the specific upfront payments and bidding 
units for each license in Attachment A of the 700 MHz Auction Public 
Notice and sought comment on this proposal. The Bureau did not receive 
any comments in response to the proposed upfront payments, or on its 
proposal that the upfront payment amount would determine a bidder's 
initial bidding eligibility. Therefore, the Bureau adopt the upfront 
payments and bidding units for each 46 license in Auction 73 as 
proposed and set forth in Attachment A of the Auctions 73 and 76 
Procedures Public Notice.
    119. In calculating its upfront payment amount, an applicant 
interested in bidding only on individual licenses 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 in 
Auction 73, and submit an upfront payment amount covering that number 
of bidding units. Applicants interested in bidding on packages should 
determine their upfront payment amount by calculating the sum of 
bidding units associated with each discrete license they wish to 
include in new bids (package or individual bids) or have included in 
provisionally winning bids in any single round. The bidding units 
associated with a given license, even if the license is included in 
more than one bid, will be counted only once per bidder per round. In 
order to make this calculation, an applicant should add together the 
upfront payments for all licenses comprising all combinations of 
licenses and packages of licenses on which it seeks to be active in any 
given round. If a bidder has enough eligibility to bid on certain 
licenses, it can place bids on the licenses individually and on 
packages containing those licenses without needing additional 
eligibility. For example, if licenses A, B, and C

[[Page 62373]]

each have 10,000 bidding units, and a bidder wishes in a single round 
to be able to bid on licenses A, B, and C individually and on packages 
AB and ABC, the bidder needs 30,000 bidding units of eligibility. 
Applicants should check their calculations carefully, as there is no 
provision for increasing a bidder's eligibility for Auction 73 after 
the upfront payment deadline.
    120. The Bureau reiterates that, in the event it is necessary to 
conduct Auction 76, bidders will have an opportunity to supplement 
their upfront payments in order to increase their bidding eligibility 
for Auction 76. The instructions and deadline for doing so would be 
announced within five business days after the end of bidding in Auction 
73.
    121. For Auction 73 and any contingent subsequent auction, former 
defaulters must calculate their upfront payment for all licenses and 
packages 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.
iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    122. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information be supplied to the FCC. Applicants can provide the 
information electronically during the initial short-form application 
filing window after the form 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.

E. Auction Registration

    123. Approximately ten days before the auction, the FCC will issue 
a public notice announcing all qualified bidders for Auction 73. 
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 license(s) 
initially offered in Auction 73.
    124. 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] tokens that will be required to place 
bids, the Integrated Spectrum Auction System (ISAS) Bidder's Guide, and 
the Auction Bidder Line phone number.
    125. 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 Tuesday, January 
15, 2008, should call (717) 338-2868. Receipt of this registration 
mailing is critical to participating in the auction, and each applicant 
is responsible for ensuring it has received all of the registration 
material.
    126. In the event that SecurID [supreg] tokens 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 at (877) 480-3201 or (202) 414-1255 (TTY).

F. Remote Electronic Bidding

    127. The Commission will conduct Auctions 73 and 76 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] token, which the FCC will provide at 
no charge. Each applicant with one authorized bidder will be issued two 
SecurID [supreg] tokens, while applicants with two or three authorized 
bidders will be issued three tokens. For security purposes, the SecurID 
[supreg] tokens, 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] token is tailored to a 
specific auction; therefore, SecurID [supreg] tokens issued for other 
auctions or obtained from a source other than the FCC will not work for 
Auction 73. In the event that it is necessary to conduct Auction 76, 
qualified bidders for Auction 76 will use the same SecurID [supreg] 
tokens as they used for Auction 73.
    128. Please note that the SecurID [supreg] tokens can be recycled, 
and the Bureau encourages bidders to return the tokens to the FCC. The 
Bureau will provide pre-addressed envelopes that bidders may use to 
return the tokens once the auction is closed.

G. Mock Auction--January 18, 2008

    129. All qualified bidders will be eligible to participate in a 
mock auction on Friday, January 18, 2008. 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 73

    130. The first round of bidding for Auction 73 will begin on 
Thursday, January 24, 2008. 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 73 Structure

i. Simultaneous Multiple Round Auction With Package Bidding on C Block 
Licenses
    131. In the 700 MHz Auction Public Notice, the Bureau proposed 
using the Commission's standard simultaneous multiple-round (SMR) 
auction format for the A, B, D, and E Block licenses, while enabling 
package bidding for C Block licenses using an auction design with 
hierarchical package bidding (HPB). An SMR-HPB auction format offers 
every license for bid at the same time and consists of successive 
bidding rounds in which eligible bidders may place bids on individual 
licenses and on certain pre-defined packages of specified licenses, 
which, for Auction 73, only include C Block licenses. A bidder may bid 
on, and potentially win, any number of licenses and/or packages. 
Typically, bidding remains open on all licenses until bidding stops on 
every license, unless an alternative version of the stopping rule is 
invoked.
    132. The 700 MHz Auction Public Notice proposed pre-defined 
packages for C Block licenses according to a hierarchical structure. 
The initial level consists of individual licenses, and the next level 
consists of non-overlapping packages of those licenses, such that a 
given license is included only once in each level. The winning set of 
bids could therefore consist of bids from various levels as long as 
each license is included in only one winning bid. The Bureau proposed 
to accept individual bids on C Block licenses for REAGs 1-12 (Level 1) 
and package bids on the following combinations of C Block REAG licenses 
(Level 2): (1) REAGs 1-8 (the 50 States package); (2) REAGs 10 and 12, 
comprising Puerto Rico, the U.S. Virgin Islands and the Gulf of Mexico 
(the Atlantic package); and (3) REAGs 9

[[Page 62374]]

and 11, comprising the U.S. Pacific territories (the Pacific package).
    133. The Bureau also sought comment on alternative levels or 
alternative ways of packaging licenses within levels. Additionally, the 
Bureau proposed to conduct the auction using standard SMR procedures 
for all of the licenses, including the C Block licenses in the event 
that currently unforeseen difficulties make it impracticable to 
implement package bidding.
    134. The majority of commenters support package bidding for C Block 
licenses either in general or for the HPB auction format specifically. 
Some commenters, however, urge the Bureau to abandon package bidding 
for Auction 73 under the unforeseen difficulties exception to the 
Commission's directive to use package bidding for the C Block licenses. 
These parties assert that the SMR-HPB format is too complex, will 
disadvantage bidders interested in only individual licenses, and will 
not be fully understood by bidders or implemented by the Bureau in time 
for the start of the auction. When the Commission directed the Bureau 
to adopt package bidding for the C Block, it noted that package bidding 
minimizes exposure risk for applicants whose business plans require the 
economies of scale that only can be obtained with nationwide operation, 
but would not preclude the participation of entities wishing to bid on 
individual licenses. The HPB auction format was chosen in part because 
it mitigates issues inherent in some other package bidding formats that 
give bidders interested in large packages an advantage over bidders 
interested in individual licenses. Of course, to the extent that 
providing bidders the option of package bidding favors those bidders 
seeking packages over those seeking individual licenses, the Bureau 
notes that the same argument could be applied in reverse to the other 
1,087 licenses in Auction 73 that bidders will not have the option to 
package in order to decrease their exposure risk. After review of the 
record, the Bureau concluded that considerations raised in the comments 
opposing package bidding are not the kinds of unforeseen difficulties 
regarding the feasibility of package bidding for the C Block licenses 
that the Commission envisioned in the 700 MHz Second Report and Order.
    135. Therefore, the Bureau concludes that the SMR format for A, B, 
E and D Block licenses, and the HPB auction format for the C Block 
licenses, will best meet the needs of bidders in Auction 73, and 
therefore adopt them as proposed. As is typical with both formats, bids 
will be accepted on all individual licenses and on pre-defined packages 
of licenses in each round of the auction until bidding stops on every 
license, allowing bidders to take advantage of synergies that exist 
among licenses.
    136. With regard to the proposed pre-defined packages for C Block 
licenses, the Bureau declines to adopt the alternate packages suggested 
by two commenters. One commenter asserts that it sees value in adopting 
a 12 REAG package or even allowing bidders to choose their own package. 
The second commenter proposed adopting packages of regions larger than 
REAGs (e.g., East, Midwest, West Coast) and a package of only the lower 
48 States. The commenter bases its proposal for a lower 48 State 
package on the premise that prospective nationwide bidders have limited 
interest in Hawaii and Alaska, and that these states would be better 
served if they are not included in a nationwide package. The State of 
Hawaii submitted reply comments challenging the assertion that 
nationwide carriers have little interest in providing coverage to 
Hawaii, noting several major carriers already do in fact operate in 
Hawaii. The State of Hawaii also asserts that any nationwide package 
without Hawaii and Alaska unfairly discriminates against these states 
and its inhabitants, which would not only be inconsistent with the 
Communications Act, but also with Commission precedent. The commenter 
also suggests that the Bureau eliminate the Atlantic and Pacific 
packages on the grounds that bidders would not obtain any benefits from 
bidding on the licenses as packages. The Bureau sees no disadvantages 
to including the packages.
    137. The Commission adopted package bidding for C Block licenses to 
reduce the exposure problem that might otherwise inhibit bidders 
seeking to create a nationwide footprint. At the same time, the 
Commission directed the Bureau to implement package bidding without 
imposing disadvantages on parties that wish to bid on individual 
licenses comprising the nationwide footprint. The Bureau finds that 
offering three packages--the 50 States, Atlantic, and Pacific 
packages--meets this balance by reducing exposure risk of bidders 
seeking to provide nationwide coverage without disadvantaging those 
bidders seeking individual licenses. Therefore, the Bureau adopts the 
pre-defined packages as proposed in the 700 MHz Auction Public Notice.
ii. Information Available to Bidders Before and During the Auctions
    138. In the 700 MHz Second Report and Order, the Commission found 
that the public interest would be served if the auction for new 700 MHz 
Band licenses is conducted using anonymous (or limited information) 
bidding procedures, regardless of any pre-auction measurement of likely 
auction competition. Such information procedures are intended to reduce 
the potential for anti-competitive bidding behavior, including bidding 
activity that aims to prevent the entry of new competitors. The 
Commission therefore directed the Bureau to propose and seek comment on 
more detailed procedures for employing anonymous bidding for the 700 
MHz auction.
    139. In the 700 MHz Auction Public Notice, the Bureau proposed to 
withhold, until after the close of bidding, public release of (1) 
bidders' license selections on their short-form applications, (2) the 
amounts of bidders' upfront payments and bidding eligibility, and (3) 
information that may reveal the identities of bidders placing bids and 
taking other bidding-related actions. In contrast to procedures 
implemented for anonymous bidding in past auctions, and consistent with 
the 700 MHz Second Report and Order, the Bureau proposed to withhold 
this information irrespective of any pre-auction measurement of likely 
auction competition.
    140. Commenters generally support the proposal to implement limited 
information disclosure procedures for the 700 MHz auction, though they 
differ on the disclosure of specific data elements. Some commenters 
suggest that the Commission should inform bidders of the license(s) or 
license block(s) for which an overlap occurs with other applicants, 
citing fundamental differences between the different 700 MHz license 
blocks and the particular needs of small and rural bidders to better 
identify those bidders interested in nationwide/open access licenses. A 
commenter opposes disclosure of this information. The Bureau finds that 
revealing information on license blocks selected by competing 
applicants would be inconsistent with the goals of limiting information 
disclosure. Thus, the Bureau will not release information on licenses 
or license blocks selected until after the close of bidding.
    141. Commenters also recommend releasing each bidder's upfront 
payment amount and initial bidding eligibility before the auction on 
the grounds that this information would help small companies better 
gauge the level of competition. Some entities also seek disclosure of 
an aggregate eligibility ratio after each round. A commenter advocates 
releasing the total number of

[[Page 62375]]

active bidders and, for each license and package, the number of bids 
and amount of the bids after each round. While these parties contend 
that release of this information would not facilitate anticompetitive 
practices and would not disclose bidder identities, the Bureau 
disagrees. As a commenter notes, release of bidder eligibility before 
the auction could be used by incumbents to block new entrants or for 
other strategic purposes. Similarly, a commenter contends that release 
of this information weakens anonymous bidding. This information could 
potentially be used to discern the identities of individual bidders. 
Moreover, the Bureau is particularly concerned that release of such 
information could foster anticompetitive bidding activity, particularly 
in light of the use of reserve prices in this auction.
    142. Two commenters urge the Commission to release names of auction 
applicants and provide access to the ownership information in 
applicants' short form applications. This information has been made 
publicly available in past auctions even where limited information 
procedures have been implemented. The Bureau plans to continue to make 
available the names of applicants and their ownership information, as 
release of that information is necessary for other applicants to comply 
with the anti-collusion rules and does not undermine the purpose of its 
anonymous bidding procedures. To enable applicants to comply with the 
Commission's anti-collusion rules, once the Bureau has conducted its 
initial review of applications to participate in Auction 73 and Auction 
76, each applicant will receive a letter that lists the other 
applicants in Auction 73 and Auction 76 that have applied for licenses 
in any of the same geographic areas as the applicant.
    143. The Bureau adopts the proposals set out in the 700 MHz Auction 
Public Notice. Thus, the Bureau will disclose after the conclusion of 
each round the amount of every bid placed and whether a bid was 
withdrawn. More generally, the Bureau will disclose, after the 
conclusion of each round, all relevant information about all bids 
placed, withdrawn, or dropped except for the identities of the bidders 
performing the actions and the net amounts of the bids placed, 
withdrawn, or dropped. As in past auctions conducted with limited 
information procedures, for each license the Bureau will indicate the 
minimum acceptable bid amount for the next round and whether the 
license has a provisionally winning bid. After each round, the Bureau 
will also release for each license the number of bidders that placed a 
bid on the license. Furthermore, the Bureau will indicate whether any 
proactive waivers were submitted in each round, and the Bureau will 
release the stage transition percentage--the percentages of licenses 
(as measured in bidding units) on which there were new bids--for the 
round. In addition, after each round, bidders logged in to the FCC 
Auction System will be able to see whether their own bids are 
provisionally winning. The Bureau will provide samples of publicly-
available and bidder-specific (non-public) results files prior to the 
start of the auction.
    144. Several commenters argue that information about the initial 
auction results (for Auction 73) should not be withheld in the event 
that a contingent auction (Auction 76) must be conducted. Some 
commenters urge disclosure of initial auction results for blocks that 
meet their reserve prices before the contingent auction, claiming that 
such information may be necessary to meet Securities and Exchange 
Commission and other regulatory requirements, to allow bidders to 
communicate with financial institutions, and to facilitate network 
build-out. Similarly, other commenters favor allowing bidders to 
announce that they won licenses in a block that has met its reserve 
price if required by law or regulation. These parties do not, however, 
cite any specific regulatory requirements that would compel such 
disclosures, and the Bureau is not aware of any such regulations. To 
the extent that any such requirements are related to winning bidders' 
payments, the Bureau notes that if Auction 76 were to be held, winning 
bidders in Auction 73 of licenses in the A, B, C, or E Blocks will not 
be required to make down payments until after the subsequent bidding. 
The Bureau finds that premature disclosure to financial institutions, 
vendors, and others of identities of successful bidders in Auction 73 
would undermine the purposes of the limited information procedures.
    145. Regarding Auction 76 and the timing of information disclosure, 
the Bureau adopts its proposal not to release until after the close of 
bidding in both auctions: (a) Information on the winning bidders for 
licenses in blocks for which the reserve price was met in the first 
auction, (b) information on bidder license selections and eligibility, 
and (c) any other information that may reveal the identities of bidders 
placing bids and taking other bidding-related actions on licenses in 
all blocks. For the D Block, however, in the event there is a winning 
bidder for the D Block license in Auction 73, the Bureau will make 
public before the close of bidding in an Auction 76 only such 
information as may be necessary to proceed with promptly facilitating 
the D Block winner's obligations to negotiate a Network Sharing 
Agreement with the national Public Safety Broadband Licensee in the 
adjacent spectrum block.
    146. Commenting parties also urge the Commission to allow 
applicants to opt-out of Auction 76 in order to be free of anti-
collusion prohibition, so long as bidder certifies that its decision 
has not been based on discussion with other parties concerning auction 
strategy or post-auction market structure. As one commenter 
acknowledges, reversal of the Commission's determination on this issue 
would need to be addressed by full Commission. As such, the Bureau 
cannot implement such a change in this proceeding.
    147. Other Issues. The Bureau concluded in the rulemaking 
proceeding that the information disclosure procedures established for 
this auction will not interfere with the administration of or 
compliance with the Commission's anti-collusion rule. Section 
1.2105(c)(1) of the Commission's rules provides that after the short-
form application filing deadline, all applicants for licenses in any of 
the same geographic license areas are prohibited from disclosing to 
each other in any manner the substance of bids or bidding strategies 
until after the down payment deadline, subject to specified exceptions. 
When limited information procedures are not in effect for a particular 
auction, each applicant's selection of licenses has been publicly 
available through the Commission's online short-form application 
database. In Auction 73 and Auction 76, however, the Commission will 
not disclose information regarding license selection or the amounts of 
bidders'' upfront payments and bidding eligibility. As in the past, the 
Commission will disclose the other portions of applicants'' short-form 
applications, through its online database and certain application-based 
information through public notices. Thus, even without information 
regarding license selection, applicants would be able to comply with 
Sec.  1.2105(c) by not disclosing bids or bidding strategies to any 
other applicants in the auction. This approach, however, could inhibit 
otherwise lawful communications with applicants for licenses in other 
geographic license areas, which the Commission's anti-collusion rule 
permits.

[[Page 62376]]

    148. Consequently, the Bureau will notify separately each applicant 
with short-form applications to participate in a pending auction 
whether applicants in Auction 73 and Auction 76 have applied for 
licenses in any of the same geographic areas as that applicant. 
Specifically, after the Bureau conducts its initial review of 
applications to participate in Auction 73 and Auction 76, each 
applicant with a pending short-form application will receive a letter 
that lists the applicants in Auction 73 and Auction 76 that have 
applied for licenses in any of the same geographic areas as the 
applicant. The list will identify the Auction 73 and Auction 76 
applicant(s) by name but will not list the license selections of the 
Auction 73 and Auction 76 applicant(s). As in past auctions, additional 
information regarding applicants in Auction 73 and Auction 76 that is 
needed to comply with Sec.  1.2105(c), e.g., the identities of 
controlling interest(s) in an applicant and ownership interests greater 
than ten percent, will be available through the publicly accessible 
online short-form application database.
    149. When completing short-form applications, applicants should 
avoid any statements or disclosures that may violate the Commission's 
anti-collusion rule, particularly in light of the Commission's 
procedures regarding the availability of certain information in Auction 
73 and Auction 76. While applicants'' license selection will not be 
disclosed until after Auction 73 and Auction 76 close, the Commission 
will disclose other portions of short-form applications through its on-
line database and public notices. Accordingly, applicants should avoid 
including any information in their short-form applications that might 
convey information regarding license selections. For example, 
applicants should avoid using applicant names that refer to licenses 
being offered, referring to certain licenses or markets in describing 
bidding agreements, or including any information in attachments that 
may otherwise disclose applicants'' license selections. If an applicant 
is found to have violated the Commission's rules or antitrust laws in 
connection with its participation in the competitive bidding process, 
the applicant may be subject to various sanctions, including forfeiture 
of its upfront payment, down payment, or full bid amount and 
prohibition from participating in future auctions.
iii. Eligibility and Activity Rules
    150. The Bureau will use upfront payments to determine initial 
(maximum) eligibility (as measured in bidding units) for Auction 73. 
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. Each license is assigned a specific 
number of bidding units listed in Attachment A of the Auctions 73 and 
76 Procedures Public Notice. Bidding units for a given license do not 
change as prices rise during the auction. A bidder's upfront payment is 
not attributed to specific licenses or packages. Rather, a bidder may 
place bids on any of the licenses selected on its FCC Form 175 as long 
as the total number of bidding units associated with those licenses 
does not exceed its current eligibility. Eligibility cannot be 
increased during Auction 73; 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. At 
a minimum, an applicant's upfront payment must cover the bidding units 
for at least one of the licenses it selected on its FCC Form 175 for 
Auction 73. The total upfront payment does not affect the total dollar 
amount a bidder may bid on any given license or package of licenses.
    151. A bidder is eligible to bid on a package of licenses if it 
selected all the licenses in the package on its FCC Form 175 and has 
sufficient eligibility. The bidding units for a package are calculated 
by adding together the bidding units of the individual licenses that 
make up the package.
    152. 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 
minimum percentage of their current bidding eligibility during each 
round of the auction.
    153. A bidder's activity level in a round is the sum of the bidding 
units associated with any licenses covered by new and provisionally 
winning bids. The bidding units associated with a given license will be 
counted only once in a bidder's activity calculation for the round, 
even if the bidder places a bid on the license and a bid on a package 
containing the license. For example, consider two licenses, A and B, 
each having 10,000 bidding units. Assuming a bidder bids on license A 
as well as the package AB in a given round, the bidder's activity would 
be 20,000 bidding units, calculated as the sum of the bidding units of 
licenses A and B. Note that the bidding units for license A are not 
counted twice. A bidder is considered active on a license in the 
current round if it is either the provisionally winning bidder at the 
end of the previous bidding round and does not withdraw the 
provisionally winning bid in the current round, or if it submits a bid 
in the current round.
    154. 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 Commission adopts them 
for Auction 73. 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 additional bids in the 
auction.
    155. With package bidding in the C Block, it is possible that a 
bidder may have an activity level that exceeds its eligibility, since 
the FCC Auction System considers bids placed in 60 previous rounds when 
determining the provisionally winning set. If a non-winning bid placed 
in a previous round later becomes provisionally winning, the bidder 
will receive activity for the newly provisionally winning bid. When 
added to the activity for the bidder's provisionally winning bids from 
the previous round and its new bids--which were limited by the bidder's 
current bidding eligibility--the total activity may exceed the bidder's 
current bidding eligibility. If this occurs, the bidder's current 
bidding eligibility will not increase to accommodate the additional 
activity. In subsequent rounds, the bidder will not be permitted to 
place new bids if its total activity from provisionally winning bids 
exceeds its bidding eligibility.
    156. A commenter argues that the Bureau should allow bidders 
limited additional eligibility so that they can continue to bid on 
licenses or packages that become provisionally winning in later rounds. 
The Bureau finds that allowing maximum eligibility to be increased in 
this way may provide an incentive for bidders to intentionally place 
bids that are likely to become provisionally winning in later rounds, 
so as to increase their eligibility outside of the usual pre-auction 
process that requires them to purchase eligibility with upfront 
payments. Thus, the Bureau will not modify its procedures as suggested.

[[Page 62377]]

    157. A commenter proposes that the Bureau modify the activity rules 
to reduce the difference between the number of bidding units associated 
with the C Block licenses and the bidding units associated with the D 
Block license. It maintains that the C and D Blocks are in many ways 
substitutes, but notes that since the C Block has a bandwidth of 22 MHz 
compared to 10 MHz for the D Block, the C Block has many more bidding 
units. The commenter contends that because of the activity rule, the 
effect of this difference is to harm bidders that alternatively bid in 
the C and D Blocks. It therefore favors the modification of the 
activity rules through the attribution of a total bandwidth of 22 MHz 
to the D Block. The commenter maintains that this would enable bidders 
to freely alternate between the C and D Blocks, increasing auction 
efficiency and revenues. Another commenter criticizes this proposal on 
several grounds, including arguing that the proposal would depart from 
established auction practice and is inconsistent with the reserve 
prices. The Bureau declines to adopt the proposal. The Bureau finds 
that its current method of determining bidding units, combined with its 
activity and eligibility rules, offer bidders adequate opportunities to 
change bidding strategies.
iv. Auction Stages
    158. In the 700 MHz Auction Public Notice, the Bureau proposed to 
conduct the auction in two stages and employ an activity rule. The 
Bureau 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 licenses representing at least 80 percent of its 
current bidding eligibility. Finally, the Bureau 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.
    159. Some commenters favor the addition of a third stage with 
either a reduced eligibility threshold (before the two proposed stages) 
or a higher threshold (after the two proposed stages). According to a 
commenter small and regional bidders need time to acquaint themselves 
with the many new features and procedures in Auction 73. Therefore, the 
commenter proposes creating a new Stage One with a 60 percent activity 
threshold and moving the 80 percent and 95 percent activity thresholds 
to Stages Two and Three, respectively. While some other commenters 
support adopting a 60 percent activity threshold for Stage One, one 
commenter opposes any minimum activity level decrease and instead 
proposes a Stage Three with a 98 percent activity threshold.
    160. The Bureau finds that adding a new initial first stage with a 
lower eligibility threshold is at this time unnecessary. When 
determining the bidding schedule, the Bureau needs to balance the 
desirability of concluding the auction reasonably swiftly with the 
benefit in giving bidders sufficient time for placing bids during 
rounds and for analysis between rounds. The Bureau finds no compelling 
reason to create a new first stage that requires only a 60 percent 
eligibility requirement. Such a lower activity requirement would 
unnecessarily prolong the auction by allowing bidders to postpone 
bidding activity until the later rounds of the auction. Establishing an 
80 percent activity threshold to start the auction, and retaining the 
discretion to make changes as circumstances warrant represents the best 
compromise between allowing auction participants time to learn from the 
information revealed in the auction, and requiring them to participate 
actively throughout the auction.
    161. The Bureau likewise sees no need to establish, at this time, a 
third stage with a 98 percent eligibility requirement, finding that a 
95 percent threshold should be a sufficiently high activity requirement 
for the final stage of the auction. In past auctions, the Bureau 
established three stages using 80 percent, 90 percent, and 98 percent 
activity requirements. In many of these auctions, however, implementing 
Stage Two had little effect in terms of increasing bidding activity, 
and Stage Three was implemented shortly thereafter. Based on this 
experience, the Bureau has generally moved away from three-stage 
auctions in favor of two-stage auctions. Moreover, a 95 percent 
threshold allows bidders a little more flexibility in fulfilling their 
activity requirements during the final stage of the auction. Therefore, 
the Bureau declines to establish a 98 percent activity threshold at 
this time. The Bureau has the discretion to further alter the activity 
requirements before and/or during the auction as circumstances warrant, 
and also has other mechanisms by which it may influence the speed of an 
auction. The Bureau finds that, for now, two stages for an activity 
requirement adequately balances the desire to conclude the auction 
quickly with giving sufficient time for bidders to consider the status 
of the bidding and to place bids. Therefore, the Bureau adopts the two 
stages.
    162. Stage One: During the first stage of the auction, a bidder 
desiring to maintain its current bidding eligibility will be required 
to be active on licenses representing at least 80 percent of its 
current bidding eligibility in each bidding round. Failure to maintain 
the required activity level will result in the use of an activity rule 
waiver or, if the bidder has no activity rule waivers remaining, a 
reduction in the bidder's bidding eligibility in the next round. 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 five-fourths (5/4).
    163. Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current bidding eligibility is required to be 
active on 95 percent of its current bidding eligibility. Failure to 
maintain the required activity level will result in the use of an 
activity rule waiver or, if the bidder has no activity rule waivers 
remaining, a reduction in the bidder's bidding eligibility in the next 
round. 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). Since activity 
requirements increase in Stage Two, bidders must carefully check their 
activity during the first round following a stage transition to ensure 
that they are meeting the increased activity requirement. This is 
especially critical for bidders that have provisionally winning bids 
and do not plan to submit new bids. In past auctions, some bidders have 
inadvertently lost bidding eligibility or used an activity rule waiver 
because they did not re-verify their activity status at stage 
transitions. Bidders may check their activity against the required 
activity level by logging into the FCC Auction System.
    164. Because the foregoing procedures have proven successful in 
maintaining the proper pace in previous auctions, the Bureau adopts 
them for Auction 73.
v. Stage Transitions
    165. In the 700 MHz Auction Public Notice, the Bureau proposed that 
the auction would advance to the next stage (i.e., from Stage One to 
Stage Two) after considering a variety of measures of auction activity, 
including, but not limited to, the percentages of licenses (as measured 
in bidding units) on which there are new bids, the number of new bids, 
and the increase in revenue. The

[[Page 62378]]

Bureau further proposed that the Bureau would retain the discretion to 
change the activity requirements during the auction. For example, the 
Bureau could decide not to transition to Stage Two if it believes the 
auction is progressing satisfactorily under the Stage One activity 
requirement, or to transition to Stage Two with an activity requirement 
that is higher or lower than the 95 percent. The Bureau proposed to 
alert bidders of stage advancements by announcement during the auction.
    166. The Bureau adopts this proposal for stage transitions. Thus, 
the auction will start in Stage One. The Bureau will regulate the pace 
of the auction by announcement. The Bureau retains the discretion to 
transition the auction to Stage Two, add an additional stage with a 
higher activity requirement, not to transition to Stage Two, or to 
transition to Stage Two with an activity requirement that is higher or 
lower than 95 percent. This determination will be based on a variety of 
measures of auction activity, including, but not limited to, the number 
of new bids and the percentages of licenses (as measured in bidding 
units) on which there are new bids.
vi. Activity Rule Waivers
    167. In the 700 MHz Auction Public Notice, the Bureau proposed that 
each bidder in the auction be provided with three activity rule 
waivers. Commenters proposed two variations on the Bureau's proposal 
regarding activity rule waivers. The Bureau declines to adopt these 
alternatives and adopts the proposed three activity rule waivers per 
bidder.
    168. One commenter advocates providing bidders with two additional 
activity rule waivers to allow more time for decision-making during the 
auction. The commenter suggests that the two additional waivers would 
provide bidders, especially those that are consortia, greater 
flexibility during the auction. Another commenter opposes any 
additional activity rule waivers because, it argues, no clear 
connection exists between having additional waivers and decision-
making. The Bureau agrees with the opposing commenter that the request 
for additional waivers does not demonstrate why the proposed three 
waivers are insufficient, or why consortia might have a greater need 
for flexibility than any other bidder. The Bureau is satisfied that 
providing three waivers over the course of the auction will give 
bidders a sufficient number of waivers and flexibility, while also 
safeguarding the integrity of the auction.
    169. Another commenter proposes a limit on activity rule waivers 
for bidders that are closely affiliated. That commenter expresses 
concern with bidders entering more than one entity in the auction in 
order to receive more than standard three activity rule waivers, 
allowing it to preserve bidding eligibility for later in the auction. 
The commenter proposes a total limit of three activity rule waivers for 
all closely affiliated applicants, i.e., under common control, applying 
for overlapping licenses. Still another commenter disagrees noting 
that, while affiliated bidders may get twice the number of waivers, 
they would use them twice as fast as a single bidder in rounds in which 
they were not bidding. The Bureau agrees with the other commenter that 
no clear advantage seems possible. The Bureau also adds that entities 
are prohibited from submitting more than one application. This measure 
prevents bidders from entering multiple entities while permitting 
legitimate business plans that entail common control among more than 
one applicant.
    170. Therefore, the Bureau adopts its proposal to provide bidders 
with three activity rule waivers. Bidders may use an activity rule 
waiver in any round during the course of the auction. Use of an 
activity rule waiver preserves the bidder's current bidding eligibility 
despite the bidder's activity in the current round being below the 
required minimum activity level. An activity rule waiver applies to an 
entire round of bidding and not to a particular license. 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.
    171. 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.
    172. 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 
ended.
    173. 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 placed or withdrawn, 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, withdrawals, 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. It is important 
for bidders to understand that applying a waiver is irreversible. Once 
a bidder submits a proactive waiver, the bidder cannot unsubmit the 
waiver even if the round has not yet ended.
vii. Auction Stopping Rules
    174. For Auction 73, the Bureau proposed to employ a simultaneous 
stopping rule approach. A simultaneous stopping rule means that all 
licenses remain available for bidding until bidding closes 
simultaneously on all licenses. More specifically, bidding will close 
simultaneously on all licenses and packages after the first round in 
which no bidder submits any new bids, applies a proactive waiver, or 
withdraws any provisionally winning bids.
    175. The Bureau also sought comment on alternative versions of the 
simultaneous stopping rule for Auction 73: Option 1. The auction would 
close for all licenses after the first round in which no bidder applies 
a waiver, withdraws a provisionally winning bid, or places any new bids 
on any license or package on which it is not the provisionally winning 
bidder. Thus, absent any other bidding activity, a bidder placing a new 
bid on a license or a package of licenses for which it is the 
provisionally winning bidder would not keep the auction open under this 
modified stopping rule; Option 2. The auction would end after a 
specified

[[Page 62379]]

number of additional rounds. If the Bureau invokes this special 
stopping rule, it will accept bids in the specified final round(s) and 
the auction will close; and Option 3. The auction would remain open 
even if no bidder places any new bids, applies a proactive waiver, or 
withdraws any provisionally winning bids 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.
    176. The Bureau proposed to exercise these options only in 
circumstances such as where the auction is proceeding unusually slowly 
or quickly, where there is minimal overall bidding activity, or where 
it appears likely that the auction will not close within a reasonable 
period of time or will close prematurely, e.g., before bidders have had 
an adequate opportunity to satisfy any applicable reserve prices. The 
Bureau noted that before exercising these options, it is likely to 
attempt to increase the pace of the auction by, for example, changing 
the number of bidding rounds per day and/or changing the minimum 
acceptable bids.
    177. One commenter advocates explicitly adopting an alternate 
stopping rule that would give bidders one final opportunity to place 
bids that would meet the reserve prices. The commenter believes 
adopting this measure will curb any incentive by some to bid in such a 
way to avoid the reserves being met. Another commenter opposes the 
proposal, given the unique nature of this auction and the complexity of 
the eligibility management issues.
    178. The Bureau finds that the stopping rules as proposed are 
appropriate for Auction 73. The Bureau's experience in prior auctions 
demonstrates that these stopping rules balance interests of 
administrative efficiency and maximum bidder participation. Therefore, 
Auction 73 will begin under the simultaneous stopping rule approach.
    179. While the Bureau declines to adopt any of the alternate 
stopping rules at this time, the Bureau retains the discretion to 
employ the alternative versions of the stopping rule, with or without 
prior announcement during the auction. The Bureau will not, however, 
employ the first alternative (i.e., Option 1) until the reserve prices 
have been met. This will allow bidders to continue to place new bids 
even if they are the provisional winning bidders. Bidders, therefore, 
will continue to have the opportunity to place bids until the reserve 
prices are met.
viii. Auction Delay, Suspension, or Cancellation
    180. In the 700 MHz Auction Public Notice, the Bureau proposed 
that, by public notice or by announcement during the auction, the 
Bureau may delay, suspend, or cancel the auction in the event of 
natural disaster, technical obstacle, administrative or weather 
necessity, evidence of an auction security breach or unlawful bidding 
activity, or for any other reason that affects the fair and efficient 
conduct of competitive bidding. The Bureau received no comment on this 
issue.
    181. Because the Bureau's approach to notification of delay during 
an auction has proven effective in resolving exigent circumstances in 
previous auctions, the Bureau adopts its proposed rules regarding 
auction delay, suspension, or cancellation. By public notice or by 
announcement during the auction, the Bureau may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, administrative or weather necessity, evidence of an auction 
security breach or unlawful bidding activity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureau, in its sole discretion, may elect to resume the 
auction starting from the beginning of the current round, resume the 
auction starting from some previous round, or cancel the auction in its 
entirety. Network interruption may cause the Bureau to delay or suspend 
the auction. The Bureau emphasize that exercise of this authority is 
solely within the discretion of the Bureau, and its use is not intended 
to be a substitute for situations in which bidders may wish to apply 
their activity rule waivers.

B. Bidding Procedures

i. Round Structure
    182. The initial schedule of bidding rounds will be announced in 
the public notice listing the qualified bidders, which is released 
approximately 10 days before the start of the auction. Each bidding 
round is followed by the release of round results. Multiple bidding 
rounds may be conducted in a given day. Details regarding round results 
formats and locations will also be included in the qualified bidders 
public notice.
    183. The Bureau has discretion to change the bidding schedule in 
order to foster an auction pace that reasonably balances speed with the 
bidders'' need to study round results and adjust their bidding 
strategies. The Bureau may increase or decrease the amount of time for 
the bidding rounds, the amount of time between rounds, or the number of 
rounds per day, depending upon bidding activity and other factors.
    184. A commenter advocates limiting the number of rounds per day in 
the first phase (Stage One) of Auction 73. More than four rounds in the 
auction's early stage would place substantial strains on consortia's 
more deliberate decision-making processes. The commenter, however, 
suggests lifting the limit for Stage Two. Another commenter opposes 
limiting the number of rounds per day. The Bureau agrees with the 
opposing commenter that lifting the limited for Stage Two fails to 
demonstrate why consortia would be disadvantaged vis-[agrave]-vis other 
bidders unless Stage One had a maximum of four rounds per day. The 
Bureau add that the commenter does not provide any rationale why, if a 
limit were necessary to allow effective decision-making amongst 
consortia members, it would not hold true in Stage Two of the auction, 
particularly when the stakes are even higher. Therefore, the Bureau 
declines to adopt any limit on rounds per day. Rather, the Bureau will 
continue to exercise discretion with regard to the number of rounds per 
day under the particular circumstances of the auction.
ii. Reserve Price and Minimum Opening Bids
    185. Section 309(j) of the Communications Act of 1934, as amended, 
calls upon the Commission to prescribe methods by which a reasonable 
reserve price will be required or a minimum opening bid established 
when applications for FCC licenses are subject to auction (i.e., 
because they are mutually exclusive), unless the Commission determines 
that a reserve price or minimum opening bid is not in the public 
interest. Consistent with this mandate, the Commission directed the 
Bureau to seek comment on the use of a minimum opening bid and/or 
reserve price prior to the start of each auction. Among other factors, 
the Bureau must consider the amount of spectrum being auctioned, levels 
of incumbency, the availability of technology to provide service, the 
size of the geographic service areas, the extent of interference with 
other spectrum bands, and any other relevant factors that could have an 
impact on the spectrum being auctioned. The Commission concluded that 
the Bureau should have the discretion to employ either or both of these 
mechanisms for future auctions.
a. Reserve Price
    186. In the 700 MHz Second Report and Order, the Commission 
concluded

[[Page 62380]]

that establishing separate aggregate reserve prices for all the 
licenses in each block of the 700 MHz Band spectrum to be offered in 
Auction 73 will serve the public interest. More specifically, the 
Commission directed the Bureau to adopt and publicly disclose block-
specific aggregate reserve prices, pursuant to its existing delegated 
authority and the regular pre-auction process and consistent with the 
Commission's conclusions in the 700 MHz Second Report and Order. In the 
700 MHz Auction Public Notice, the Bureau proposed that the sum of the 
provisionally winning gross bids for all licenses in each block must 
equal or exceed the disclosed aggregate reserve price for the block 
before the Commission will assign licenses in that block. More 
specifically, the Bureau proposed the following block-specific 
aggregate reserve prices to be used under this proposal: Block A, 
$1.807380 billion; Block B, $1.374426 billion; Block C, $4.637854 
billion; Block D, $1.330000 billion; Block E, $0.903690 billion. The 
Bureau adopts this proposal.
    187. Background. In the 700 MHz Second Report and Order, the 
Commission concluded that the block-specific aggregate prices should 
reflect current assessments of the potential market value of licenses 
for the 700 MHz Band. The Commission directed that this assessment be 
based on various factors including, but not limited to, the 
characteristics of this band and the value of other recently auctioned 
licenses, such as licenses for Advanced Wireless Services. The 
Commission reasoned that using AWS-1 auction results might be an 
appropriate guide for setting block-specific reserve prices reflecting 
a conservative estimate of final market value. Spectrum in the 700 MHz 
Band possesses superior propagation characteristics to AWS-1 spectrum. 
In addition, as of February 18, 2009, the 700 MHz Band spectrum will be 
unencumbered, while full access to AWS-1 spectrum requires the 
relocation of both Government and commercial incumbent users. Thus, 
other factors aside, 700 MHz Band licenses with comparable geographic 
service areas and bandwidth should have a higher market value than AWS-
1 licenses.
    188. The Commission expressly noted that the detailed rules 
regarding the D Block license, the D Block licensee's required 
construction of a network to be shared by public safety service users, 
and the resulting limitations on the flexibility of the D Block 
licensee, should be given weight in assessing the D Block's potential 
market value. Based solely on geographic area and spectrum block size, 
AWS-1 auction results might suggest a D Block reserve price of $1.7 
billion. However, in light of the D Block license conditions essential 
to the public safety purpose of the public/private partnership, it 
might be appropriate to expect bidders to bid only about 75 percent to 
80 percent of such an amount, or about $1.33 billion. In addition, when 
determining relative valuation of other blocks, the Bureau should 
consider the relative valuation of differing blocks in the recent 
auction of AWS-1 licenses.
    189. The Commission further noted that in setting block-specific 
reserve prices, the Bureau should also give consideration to Congress's 
view as to the value of the spectrum, as reflected in Congressional 
mandates regarding the uses for revenues from this auction.
    190. Comments. A commenter contends that the proposed reserve 
prices are excessive and proposes an alternative set of reserve prices 
roughly equal to one-fifth the reserve prices proposed by the Bureau. 
The commenter asserts that the Bureau's proposed reserve price 
represent an estimate of final license values and that establishing 
such a reserve, particularly in light of the potential subsequent 
auction of alternative licenses, is misguided. The commenter further 
argues that the Bureau's reliance on bidding for AWS licenses is 
misplaced in that it does not take into account subsequent changes in 
the credit markets or significant differences between AWS licenses and 
700 MHz licenses, which should reduce the relative value of the 700 MHz 
licenses.
    191. In reply, and in opposition to the comments, two commenters 
echo the Commission's observation that that the value of the 700 MHz 
licenses in fact should be greater than the AWS licenses and contend 
that the Bureau's proposed reserve prices reflect a conservative 
estimate of the likely value of the 700 MHz licenses. As one commenter 
notes, attempts to take into account the fluctuating state of the 
credit market are not appropriate, given the degree of uncertainty 
inherent in such attempts. While another commenter notes that the 
Bureau's proposal takes into account conditions placed on the various 
blocks of 700 MHz spectrum. Finally, the same commenter notes that the 
proposed reserves are consistent with Congressional expectations.
    192. Discussion. The Bureau does not find the commenters arguments 
for reducing the proposed reserve prices persuasive. The commenter errs 
in asserting that the Bureau's proposed reserves seek to estimate the 
final value of the licenses. The Bureau has not attempted to determine 
the value of the licenses but will rely on the auction process to do 
so. Rather, pursuant to statutory mandate and Commission direction, the 
Bureau proposed reserve prices intended to represent a likely low end 
of the licenses' potential value, in order to assure that the public 
recovers a portion of the value of the public spectrum resource. 
Consistent with the guidance of the Commission, the Bureau adopts the 
proposal and will use the following block-specific aggregate reserve 
prices for Auction 73: Block A, $1.807380 billion; Block B, $1.374426 
billion; Block C, $4.637854 billion; Block D, $1.330000 billion; Block 
E, $0.903690 billion. Together, these block-specific aggregate reserves 
sum to $10.053350 billion.
    193. The D Block reserve price of $1.33 billion is discounted from 
an amount based more closely on AWS-1 bids because of the unique 
service rules and related obligations imposed upon the D Block 
licensee. For the A, B, C, and E Blocks, the Bureau based the reserve 
prices on the respective market value reflected in AWS-1 bids, adding 
one percent, and rounding to the nearest thousand dollars. Because of 
the value-enhancing propagation characteristics and relatively 
unencumbered nature of the 700 MHz Band spectrum, the Bureau believes 
these are conservative estimates, at the low end of the spectrum's 
potential value. Given this approach, there is no need to further 
reduce the proposed reserves based on the specific rules applicable to 
licenses for the A, B, C, and E Blocks.
    194. As proposed in the 700 MHz Auction Public Notice, the Bureau 
will use gross bid amounts rather than net bid amounts in determining 
whether the block-specific reserve prices have been met. No commenter 
suggested any alternative to this aspect of the Bureau's reserve price 
procedures. Anonymous bidding procedures that will be used in Auction 
73 preclude disclosing the identity of bidders and the net amounts of 
bids made until after the close of bidding. Consequently, if net bids 
determined whether or not reserves had been met, publicly disclosing 
whether reserves had been met might inadvertently disclose whether 
applicants eligible for bidding credits held certain provisionally 
winning bids, potentially disclosing the identity of the bidders. For 
example, presuming net bids determined whether or not the reserve is 
met, for the reserve not to be met when the provisionally winning bid 
on the D Block license is for $1.5 billion dollars, the party making 
the bid must be an applicant eligible for a bidding credit. Depending 
on the number of

[[Page 62381]]

parties eligible for a bidding credit competing for the D Block 
license, this information might disclose the identity of the 
provisionally winning bidder, thwarting the Commission's anonymous 
bidding procedures. Moreover, net bid amounts, unlike gross bid 
amounts, may decline even as the gross bids increase. For example, a 
party not eligible for a bidding credit might hold a provisionally 
winning bid of $1.4 billion on the D Block license, in which case the 
reserve would be met. However, in the next round, a party eligible for 
a bidding credit might place a provisionally winning bid of $1.5 
billion, increasing the value bid for the license. However, because the 
party eligible for a bidding credit might have a net bid less than the 
reserve, now the reserve would not be met. The Bureau believes that it 
serves the public interest for bidders to know when the reserve is met 
and to know that once a reserve is met that fact will not change. This 
certainty will give bidders greater confidence in the significance of 
their bids and therefore may enhance competition. For these reasons, 
the Bureau will use gross bid amounts rather than net bid amounts in 
determining whether block-specific reserve prices have been met.
    195. The Bureau will count the gross amount of any withdrawn bids 
for licenses toward meeting the reserve prices for several reasons. 
First, withdrawn bids presumably reflect sincere valuations of the 
license, notwithstanding the withdrawal and the reserve is intended to 
measure that valuation. Second, counting withdrawn bids assures that 
once a reserve is met that fact will not change. Third, if the Bureau 
did not count withdrawn bids, bidders could attempt to use bid 
withdrawals as a strategic mechanism to prevent auction results from 
satisfying a reserve in order to force an auction of alternative 
licenses.
    196. The Commission's rules and the procedures for Auction 73 allow 
each bidder one round in which the bidder may withdraw provisionally 
winning bids for licenses not subject to package bidding. Allowing 
bidders to withdraw provisionally winning bids enables bidders to 
respond to price discovery as the auction develops by adopting 
alternative plans, thereby encouraging bidders to compete at early 
stages in the auction. Accordingly, the Bureau presumes that bids 
placed and withdrawn reflect bidders' sincere valuations of the 
relevant licenses. Consistent with this presumption, the Commission's 
rules require bidders to cover any shortfall if a subsequent winning 
bid for a license is less than a withdrawn provisionally winning bid.
    197. Second, counting withdrawn bids is essential to assuring that 
once a reserve price is met, that fact does not change. With regards to 
bid withdrawals, when a bid is withdrawn, there is no provisionally 
winning bid on that license until a new high bid is placed on it in a 
subsequent round. Accordingly, if the Bureau does not count withdrawn 
bids, then the amount counted for a particular license toward meeting 
the reserve price could drop from whatever the withdrawn bid is to 
zero. For example, if a provisionally winning bid on the D Block 
license of $2.66 billion is withdrawn and only a provisionally winning 
high bid is counted toward the reserve, the reserve will not be met, 
notwithstanding the fact that a round before there was a provisionally 
winning bid in an amount equal to twice the reserve.
    198. Third, if the Bureau does not count a withdrawn bid toward 
meeting the reserve, the Bureau would allow a bidder's decision to 
withdraw a bid to affect whether or not the reserve price has been met. 
As the foregoing example indicates, a bidder could outbid rivals for a 
license in amounts far in excess of the reserve and then, at the last 
minute, withdraw its bid in an attempt to prevent the auction results 
from meeting the applicable reserve price. If the withdrawing bidder's 
competitors had moved to other blocks due to the withdrawn bid, they 
may no longer have an interest or the budget to return and bid again on 
the license subject to the withdrawal. In that event, the withdrawal 
might succeed at preventing the reserve from being met and at forcing 
an auction of alternative licenses.
    199. The Bureau will count the gross amount of either the 
provisionally winning bid on a license, or on a package that includes 
the license, or, if higher, the highest withdrawn provisionally winning 
bid on a license when determining whether a reserve price has been met. 
The Bureau will not count more than one bid per license, be it a 
provisionally winning or withdrawn bid, towards meeting the relevant 
reserve price. In the case of licenses with multiple withdrawn bids or 
a withdrawn bid and a provisionally winning bid, the Bureau will count 
the highest of the gross bid amounts toward the reserve price. Other 
than the gross amounts of withdrawn bids, licenses without 
provisionally winning bids will not count towards meeting a reserve 
price.
    200. Finally, the Bureau will issue an announcement in the FCC 
Auction System stating that a reserve has been met immediately 
following the first round in which that occurs. Both the registered 
bidders and the general public will be able to view such announcements 
through the Commission's Web site. The current total of relevant 
provisionally winning bids may not determine whether or not the reserve 
has been met, given that the Bureau also will count withdrawn bids 
toward meeting the reserve. By making an announcement when the reserve 
is met, the Bureau will free auction observers and participants 
therefore from a need to monitor withdrawn bids over the course of the 
auction in order to determine whether the reserve has been met and 
avoid any uncertainty.
b. Minimum Opening Bids
    201. In addition to proposing aggregate reserve prices, the Bureau 
proposed in the 700 MHz Auction Public Notice to establish minimum 
opening bids for each license, while retaining discretion to lower the 
minimum opening bids. Specifically, for Auction 73, the Bureau proposed 
to calculate minimum opening bid amounts as follows: (1) For licenses 
covering geographic areas in the 50 states for which all of the 
corresponding licenses offered in Auction 66 for the exact same 
geographic area were sold, 25 percent of the dollars per MHz per 
population (MHz-pop) of the net amounts of the Auction 66 winning bids 
for licenses covering the same geographic license area, subject to a 
minimum of $0.03/MHz-pop; (2) for licenses covering geographic areas 
for which a corresponding Auction 66 license was unsold, $0.01/MHz-pop; 
(3) for licenses covering the Gulf of Mexico, $1,000 per MHz; and 
(4)for all remaining licenses, $0.01/MHz-pop. For all licenses, the 
results of the above calculations are subject to a minimum of $500 per 
license and are rounded using the Bureau's standard rounding procedure. 
The Bureau proposed to calculate the minimum opening bid for any 
package as the sum of the minimum opening bids for the licenses in the 
package. The Bureau sought comment on this proposal and, in the 
alternative, whether, consistent with Section 309(j), the public 
interest would be served by having no minimum opening bids.
    202. The Bureau received a range of comments concerning the 
proposed minimum opening bids. One commenter supports the Bureau's 
proposed method for establishing minimum opening bid amounts. However, 
another commenter advocates calculating minimum opening bids on the 
same basis that was used for Auction 66, rather than on one that uses

[[Page 62382]]

the winning bids from that auction. A third commenter opposes using 
minimum opening bids based on Auction 66 results, arguing that the 700 
MHz Band spectrum is not readily comparable to that offered in Auction 
66. It maintains that some prices in that auction resulted from one-
time bidding wars, so that RSA minimum opening bids based on these 
prices would be overly high and harm small and rural carriers. A 
commenter also contends that the proposed minimum opening bids would 
discourage these carriers from participating. It proposes that the 
minimum opening bids from Auction 66 should generally be used. In 
addition, the same commenter claims that reducing the minimum opening 
bids would prevent the auction from proceeding at too rapid a pace. RTG 
agrees that the proposed minimum opening bids for some RSAs are too 
high, and proposes that these be reduced to either the same level as 
the upfront payments or capped at 25 percent of the median net high bid 
for all RSAs sold in Auction 66. Another commenter generally criticizes 
as arbitrary the proposals to lower the minimum opening bids to the 
value of the upfront payments, but agrees that certain RSA minimum 
opening bids may be overly high. A commenter expresses support for the 
argument that reducing the minimum opening bids will make the auction 
less likely to proceed overly quickly.
    203. The Bureau finds that the minimum opening bid amounts proposed 
in the 700 MHz Auction Public Notice are generally appropriate. While 
the record indicates that the proposed minimum opening bid amounts are 
higher than many parties would like, the proposed amounts better enable 
the Commission to meet the statutory objective of recovering for the 
public a portion of the value of the spectrum resource made available 
for commercial use. The proposed minimum opening bid amounts also will 
help the Commission meet its statutory deadlines for auctioning this 
spectrum.
    204. In response to comments, however, the Bureau modifies the 
proposed minimum opening bids for certain rural licenses. The Bureau 
recognize concerns commenters raised regarding proposed minimum opening 
bids and the potential for some licenses, particularly those in rural 
areas, to remain unsold after the auction. Thus, for RSA licenses only 
(CMAs 307-734), minimum opening bids will not be greater than $0.10/
MHz-pop. Accordingly, the Bureau adopts the revised minimum opening bid 
amounts and set the minimum opening bids using the revised formulas as 
follows: (1) For licenses covering geographic areas in the 50 states 
for which all of the corresponding licenses offered in Auction 66 for 
the exact same geographic area were sold, 25 percent of the dollars per 
MHz per population (MHz-pop) of the net amounts of the Auction 66 
winning bids for licenses covering the same geographic license area, 
subject to a minimum of $0.03/MHz-pop, for RSA licenses only, subject 
to a maximum of $0.10/MHz-pop; (2) for licenses covering geographic 
areas for which a corresponding Auction 66 license was unsold, $0.01/
MHz-pop; (3)for licenses covering the Gulf of Mexico, $1,000 per MHz; 
and (4) for all remaining licenses, $0.01/MHz-pop.
    205. Two commenters suggest that the minimum opening bid for the D 
Block should be set at its reserve price since it is only one license 
and will not be assigned if the reserve is not met. Another commenter 
opposes this suggestion, arguing that setting the D Block minimum 
opening bid at the reserve bid would deny bidders the opportunity to 
determine the relative value of the D Block, and may even hurt the 
winning bidder's ability to finance its bid for the D Block. The Bureau 
agrees that there may be value, to bidders and others, in accepting 
bids for the D Block short of the reserve. Therefore, the Bureau adopts 
the minimum opening bid for the D Block as proposed in the 700 MHz 
Auction Public Notice.
    206. The Commission did not receive any comments addressing the 
proposal that the Bureau retain the discretion to reduce minimum 
opening bid amounts. The Bureau adopts this proposal. The minimum 
opening bid amounts are reducible at the discretion of the Bureau. The 
Bureau emphasize, however, that such discretion will be exercised, if 
at all, sparingly and early in the auction, i.e., before bidders lose 
all activity waivers. During the course of the auction, the Bureau will 
not entertain requests to reduce the minimum opening bid amount on 
specific licenses or packages.
    207. The specific minimum opening bid amounts for each license 
available in Auction 73 calculated pursuant to the procedures set forth 
in Attachment A of the Auctions 73 and 76 Procedures Public Notice.
iii. Bid Amounts
    208. In the 700 MHz Auction Public Notice, the Bureau proposed that 
in each round, eligible bidders be able to place a bid on a given 
license or package using one or more predefined bid amounts. Under the 
proposal, the FCC Auction System interface will list the acceptable bid 
amounts for each license or package. A commenter proposed best and 
final bid procedures to allow bidders a chance to enter their own bid 
amounts, if they wish to bid more for a license but less than the 
minimum acceptable bid increment would require. The commenter believes 
adopting a best and final bid procedure would give bidders a better 
opportunity to bid up to the full amount of their final license 
valuations. Two commenters oppose creating this best and final bid 
procedure because it may encourage gaming the auction system and would 
be unfair to bidders that have a provisionally winning bid. The Bureau 
recognize that there may be circumstances under which the proposed 
procedure could enhance the economical efficiency of the auction, but 
find that the costs in terms of increased auction complexity and 
opportunity for anti-competitive signaling would outweigh the benefits 
in Auction 73. The Bureau adopts the proposal set out in the 700 MHz 
Auction Public Notice.
    209. Minimum Acceptable Bids. Under the Bureau's proposed 
procedures, the first of the acceptable bid amounts is called the 
minimum acceptable bid amount. The minimum acceptable bid amount for a 
license will be equal to its minimum opening bid amount until there is 
a provisionally winning bid for the license or package that includes 
the license. The minimum acceptable bid amount for a package will be 
the sum of the minimum acceptable bid amounts for the licenses in the 
package. Minimum acceptable bids are calculated based on current price 
estimates and an activity-based formula.
    210. Current Price Estimates. Under the proposed HPB auction 
procedures, after there is a provisionally winning bid for a license, 
the FCC will determine a current price estimate (CPE) for each license 
in each round as a basis for calculating minimum acceptable bids. For 
non-C Block licenses the CPE will be the provisionally winning bid 
amount, so that minimum acceptable bids are based on provisionally 
winning bid amounts, as in an SMR auction without package bidding. For 
licenses in the C Block subject to HPB, if a bid on an individual 
license is provisionally winning, the CPE for that license will be the 
provisionally winning bid amount. If a package bid is provisionally 
winning, the CPEs for individual licenses in the package will be 
constructed by scaling up the bids on individual licenses so that the 
sum of

[[Page 62383]]

the license CPEs equals the provisionally winning package bid. Bids are 
scaled up by adding shares to the highest bid received so far in the 
auction for each license in the package. These shares are proportional 
to the bidding units associated with each license relative to the total 
number of bidding units in the package. The proposed mechanism for 
determining CPEs in an HPB auction format is described in more detail 
in Attachment H of the Auctions 73 and 76 Procedures Public Notice.
    211. Commenters disagree on the method for calculating the CPEs for 
C Block packages. One commenter suggests using current high bids as 
weights when scaling up bids. Another commenter advocates using 
provisionally winning bids, not bidding units, to determine CPEs for C 
Block bids while other commenters support the Bureaus proposed method 
of calculating CPEs.
    212. The Bureau does not agree that it should scale up license 
prices using current bid amounts, since doing so may encourage 
undesirable strategic bidding. Bidders would have an incentive to bid 
up the prices of other licenses while holding back on the licenses they 
are interested in, in order to force other license prices to bear a 
larger share of the shortfall.
    213. The Bureau also declines to adopt the suggestions of 
commenters that it base the minimum acceptable bids for C Block REAG 
licenses directly on the highest bids for those licenses. Scaling up 
the minimum acceptable bid amounts for licenses in a package, so that 
the sum of bids on individual licenses equals the minimum acceptable 
bid on the package, mitigates the coordination or threshold problem 
that may face bidders trying to compete with a large package bid in a 
package bidding auction. Absent such a procedure, package bid prices 
could become disproportionately large relative to the prices for the 
package components, making it difficult for bidders on the individual 
licenses to compete with the package bid, especially since bidders on 
the individual licenses may bid cautiously, hoping that bidders on 
other licenses will make up the difference required to catch up with 
the package bid.
    214. The Bureau does not believe that the proposed method of 
calculating CPEs is overly complex. In fact, the Bureau will use HPB in 
part because the mechanism for calculating CPEs is significantly 
simpler than other package bidding pricing mechanisms that adequately 
address coordination issues.
    215. Activity-Based Formula. Under the Bureau's proposal, once CPEs 
are calculated, minimum acceptable bids are then determined for each 
license as the amount of the CPE plus a percentage of the CPE. The 
percentage is calculated using the activity-based formula. In general, 
the percentage will be higher when many bidders are bidding on a 
license, or on a package containing a license, than when few bidders 
are bidding on a license.
    216. The percentage of the provisionally winning bid used to 
establish the minimum acceptable bid amount (the additional percentage) 
is calculated at the end of each round, based on an activity index 
which is a weighted average of (a) the number of distinct bidders 
placing a bid on the license, including package bids, in that round, 
and (b) the activity index from the prior round. Specifically, the 
activity index is equal to a weighting factor times the number of 
bidders placing a bid covering the license in the most recent bidding 
round plus one minus the weighting factor times the activity index from 
the prior round. The additional percentage is determined as one plus 
the activity index times a minimum percentage amount, with the result 
not to exceed a given maximum. The additional percentage is then 
multiplied by the CPE amount to obtain the minimum acceptable bid for 
the next round.
    217. The Bureau proposed initially to set the weighting factor at 
0.5, the minimum percentage (floor) at 0.1 (10%), and the maximum 
percentage (ceiling) at 0.2 (20%). At these initial settings, the 
minimum acceptable bid for a license will be between ten percent and 
twenty percent higher than the CPE (which for non-C Block licenses will 
equal the provisionally winning bid), depending upon the bidding 
activity covering the license. Equations and examples are shown in 
Attachment G of the Auctions 73 and 76 Procedures Public Notice.
    218. A number of commenters addressed the activity-based formula to 
calculate minimum acceptable bids. One advocates increasing the 
activity weight factor from 0.5 to, for example, 0.75, so that the 
current round's activity has more weight in determining the next rounds 
minimum acceptable bid and further advocates modifying the minimum 
acceptable bid formula by decreasing the floor from the proposed 10 
percent to 5 percent, and decreasing the ceiling from the proposed 20 
percent to 10 percent. Other commenters express support for the change 
in floor and ceiling percentages.
    219. In the 700 MHz Auction Public Notice, the Bureau notes that it 
retains discretion to limit the absolute amount by which a minimum 
acceptable bid for a license may increase over the previous 
provisionally winning bid--for example, the Bureau could set a $10 
million cap on increases in minimum acceptable bid amounts over 
provisionally winning bids--and the Bureau sought comment on the 
circumstances under which the Bureau should employ such a limit. A 
commenter suggested a cap on bid increments of $150 million per license 
per round would help avoid problems associated with bids rising more 
quickly than bidders, especially new entrants, can obtain approval for 
the additional funds, and would not delay the auction significantly.
    220. The Bureau recognize bidder concerns that very rapid increases 
in minimum acceptable bids may potentially discourage bidder 
participation, inhibit price discovery, and create bid approval issues, 
especially since the minimum opening bids in Auction 73 are higher than 
were the Bureau's starting bids, for example, in Auction 66. At the 
same time, since the licenses initially offered in Auction 73 will not 
be sold unless reserve prices are met, it will be useful for the 
auction to move at a reasonably fast pace at least until reserve prices 
are satisfied. The Bureau reiterates that it has the discretion to 
modify minimum acceptable bid amounts--by changing the activity-based 
formula parameters or by imposing or modifying a cap on the dollar 
amount of bid increments--as it sees fit during the auction. Taking 
commenter concerns into account, the Bureau determined that it will 
retain initial floor and ceiling parameters at 10 and 20 percent, 
respectively, as proposed, but the Bureau will begin the auction with a 
$100 million cap on the amount of the bid increment. That is, minimum 
acceptable bids for the next round generally will be between 10 and 20 
percent higher than provisionally winning bids, but they will not 
exceed provisionally winning bids by more than $100 million dollars.
    221. Additional Bid Amounts. Any 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 bid increment percentage is 
ten percent, the calculation is (minimum acceptable bid amount) * (1 + 
0. 1), rounded, or (minimum acceptable bid amount) * 1. 1, rounded;

[[Page 62384]]

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) * 1.2, rounded; 
etc. The Bureau will round the results of these calculations and the 
minimum acceptable bid calculations using the Bureau's standard 
rounding procedures.
    222. For Auction 73, the Bureau proposed to set the bid increment 
percentage at 0. 1, so that any additional bid amounts above the 
minimum acceptable bid would each be 10 percent 85 higher. For non-C 
Block licenses, the Bureau proposed to begin the auction with one 
acceptable bid amount per license (the minimum acceptable bid amount). 
For C Block licenses subject to HPB, the Bureau proposed to begin the 
auction with three acceptable bid amounts per license (the minimum 
acceptable bid amount and two additional bid amounts) and one 
acceptable bid amount per package (the minimum acceptable bid amount 
and no additional bid amounts).
    223. The Bureau received no comments on its proposal to set the bid 
increment percentage at 0.1. The Bureaus adopts the proposal to begin 
the auction with a bid increment percentage of 0.1.
    224. Several commenters, however, advocate providing more than one 
acceptable bid amount per license for the non-C Block licenses. The 
Bureau is not persuaded that additional bid amounts provide bidders 
with significantly more flexibility to express their valuations. The 
Bureau experience with past auctions indicates that bidders rarely use 
multiple increment bids as the commenters suggest--to express their 
final valuations more precisely--but more frequently use jump bids as a 
means of signaling other bidders. As noted in the 700 MHz Auction 
Public Notice, the Bureau proposed that bidders on licenses in the C 
Block be able to make multiple increment bids to ensure that bidders on 
individual licenses can effectively compete with package bids, even 
when there are not individual bids on one or more of the licenses in 
the package. Absent that need for multiple increment bids in the non-
package bidding blocks, the Bureau will not modify its proposal. 
Therefore, the Bureau will begin the auction with one acceptable bid 
amount for each non-C Block license and C Block packages and three 
acceptable bid amounts for each C Block license.
    225. The Bureau retains the discretion to change the minimum 
acceptable bid amounts, the additional bid amounts, the dollar cap on 
bid increments, the number of acceptable bid amounts, and the 
parameters of the formulas used to calculate minimum acceptable bid 86 
amounts and additional bid amounts if it determines that circumstances 
so dictate. Further, the Bureau retains the discretion to do so on a 
license-by-license and package-by-package basis.
iv. Provisionally Winning Bids
    226. At the end of each bidding round, a provisionally winning bid 
will be determined based on which combination of bids together provides 
the greatest aggregate gross amount. Provisionally winning bids at the 
end of the auction become the winning bids, provided that applicable 
reserve prices are met. For the 1,087 licenses not subject to package 
bidding, the FCC Auction System determines a provisionally winning bid 
for each license based on the highest bid amount received for the 
license, taking into account the bids placed in the round and the 
provisionally winning bids from the previous round. For licenses in the 
C Block subject to HPB, the FCC Auction System will determine which 
combination of individual and package bids yields the highest aggregate 
gross bid amount, taking into consideration each bidder's highest bid 
on each license or package submitted up to that point in the auction. 
These bids become the provisionally winning bids for the round. Bidders 
are reminded that provisionally winning bids count toward activity for 
purposes of the activity rule.
    227. In order to determine which combination of bids on licenses 
and/or packages yields the highest aggregate bid amount in a HPB 
auction, the FCC Auction System compares aggregate bid amounts across 
the various levels in a recursive process. It first compares, for each 
package in the second level, the sum of the highest individual license 
bids from the first level with the highest bids on packages in the 
second level containing those licenses. Those bids that generate the 
maximum total bid amounts become provisionally winning. Attachment H of 
the Auctions 73 and 76 Procedures Public Notice provides additional 
detail on this procedure.
    228. In the 700 MHz Auction Public Notice, the Bureau proposed to 
break ties randomly. A commenter suggests that because there will be at 
most a single acceptable bid amount for all but the individual C Block 
licenses, there will be multiple ties, and that therefore, 87 the 
Bureau should consider alternate means of breaking ties. Another 
commenter opposes this proposal, arguing that adopting such a procedure 
for breaking ties would result in bidders feeling pressure to submit 
their bids hastily which would raise bidding costs, increase the 
potential for bidding errors, and discourage proper analysis and review 
before submitting bids.
    229. In previous FCC auctions, even though up to nine acceptable 
bid amounts were permitted, multiple increment bids accounted for only 
a small fraction of the total number of bids placed. The Bureau does 
not expect that the frequency of tied bids will be significantly 
different than in past auctions, and the Bureau does not adopt any 
changes to its tie-breaking procedures. Hence, the Bureau adopts the 
proposal. The FCC Auction System will assign a random number to each 
license in each bid upon submission. In the event of ties among bids 
that generate the highest aggregate gross bid amount, the set of bids 
with the highest sum of random numbers becomes provisionally winning. 
Bidders, regardless of whether they hold a provisionally winning bid, 
can submit higher bids in subsequent rounds. However, if the auction 
were to end with no other bids being placed, the winning bidder would 
be the one that placed the provisionally winning bid.
    230. 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 73. 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. The 
length of a call to place a telephonic bid may vary; please allow a 
minimum of ten minutes.
    231. A bidder's ability to bid on specific licenses or packages of 
licenses is determined by two factors: (1) The licenses 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 
licenses the bidder selected on its FCC Form 175.
    232. 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] token 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.
    233. In each round, eligible bidders will be able to place bids on 
a given license or package in one or more pre-defined bid amounts. For 
each license

[[Page 62385]]

and package, the FCC Auction System will list the 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.
    234. Until a bid has been placed on a license or a package that 
includes the license, the minimum acceptable bid amount for that 
license will be equal to its minimum opening bid amount. Once there are 
bids on a license or a package that includes the license, minimum 
acceptable bids for a license.
    235. During a round, an eligible bidder may submit bids for as many 
licenses as it wishes, remove bids placed in the current bidding round, 
withdraw provisionally winning bids from previous rounds (in blocks 
without package bidding), drop non-provisionally winning bids (C-Block 
licenses or packages), or permanently reduce eligibility. If a bidder 
submits multiple bids for the same license or package in the same 
round--multiple bids on the exact same license or package, not one bid 
on a package and one bid on a license in that package--the system takes 
the last bid entered as that bidder's bid for the round. Bidders should 
note that the bidding units associated with licenses for which the 
bidder has removed, dropped, or withdrawn its bid do not count towards 
the bidder's current activity.
    236. For licenses subject to package bidding in HPB, the FCC 
Auction System considers each bidder's highest bid on each license or 
package when determining the 89 provisionally winning bids. 
Consequently, for licenses in the C Block, an individual license or 
package bid that does not become a provisionally winning bid at the 
conclusion of the round in which it was placed may become a 
provisionally winning bid at the conclusion of a subsequent round. This 
may occur even if the bidder does not have the bidding eligibility to 
cover the newly-provisionally winning bid. This contrasts with the SMR 
procedure used for licenses not subject to package bidding, in which 
only provisionally winning bids from the previous round and bids placed 
during the round are considered when determining provisionally winning 
bids.
    237. A commenter requests that the Bureau clarify that a bidder can 
win a license or package that becomes provisionally winning, after not 
having been part of the winning set in the previous rounds; the Bureau 
clarifies that point here. Another commenter opposes allowing a bidder 
to win licenses with bidding units exceeding its eligibility at the 
auction's end. The commenters argue that winning reactivated bids may 
force bidders to win more licenses than they can afford. The Bureau 
does not accept the proposal that it not allow bidders to win licenses 
with bidding units that exceed its eligibility. The Bureau recognizes 
that occasionally bidders may need to change bid strategies as prices 
rise. Accordingly, the Bureau provide limited opportunities for bidders 
to withdraw and drop bids, which if used carefully, allow bidders to 
avoid winning licenses they no longer wish to win. Thus, the Bureau 
finds that the requested restriction on winning bids that exceed 
eligibility is unnecessary to protect bidders from winning more than 
they wish to win.
    238. The Bureau encourages bidders on licenses and packages in the 
C Block to bear in mind that their highest bid on each package or 
license will be considered every time the FCC Auction System determines 
a new set of provisionally winning bids. This feature allows bidders on 
individual licenses to compete more effectively with package bids, 
since their individual license bid can combine with bids on other 
individual licenses placed in previous rounds, and stabilizes CPEs. 
Bidders will be able to evaluate the extent to which a bid placed in a 
previous 90 round is likely to become winning by comparing the bid to 
the other considered bids for the license or package.
    239. Finally, bidders are cautioned to select their bid amounts 
carefully because bidders that withdraw a provisionally winning bid 
from a previous round, even if the bid was mistakenly or erroneously 
made, are subject to bid withdrawal payments.
v. Bid Removal, Bid Withdrawal, and Dropped Bids
    240. In the 700 MHz Auction Public Notice, the Commission proposed 
bid removal, bid withdrawal, and dropped bids procedures. The Bureau 
sought comment on permitting a bidder to remove a bid before the close 
of the round in which the bid was placed. With respect to bid 
withdrawals, the Commission proposed limiting each bidder to 
withdrawals of provisionally winning bids on licenses not subject to 
package bidding (i.e., all licenses except in the C Block) in no more 
than two rounds during the course of the auction. The Bureau further 
proposed that bidders be able to drop non-provisionally winning bids on 
packages and on licenses subject to package bidding in no more than one 
round of the auction.
    241. Bid Removal. Before the close of a bidding round, a bidder has 
the option of removing any bids placed in that round. By using the 
remove bids function in the FCC Auction System, a bidder may 
effectively unsubmit any bid placed within that round. A bidder 
removing a bid placed in the same round is not subject to withdrawal 
payments. Removing a bid will affect a bidder's activity for the round 
in which it is removed, i.e., a bid that is removed does not count 
toward bidding activity. These procedures will enhance bidder 
flexibility during the auction, and therefore the Bureau adopts them 
for Auction 73.
    242. Bid Withdrawal. Once a round closes, a bidder may no longer 
remove a bid. However, in a later round, a bidder may withdraw 
provisionally winning bids from previous rounds for non-C Block 
licenses using the withdraw bids function in the FCC Auction System. A 
91 provisionally winning bidder that withdraws its provisionally 
winning bid from a previous round during the auction is subject to the 
bid withdrawal payments specified in 47 CFR 1.2104(g). Once a 
withdrawal is submitted during a round, that withdrawal cannot be 
unsubmitted even if the round has not yet ended.
    243. If a provisionally winning bid is withdrawn, the minimum 
acceptable bid amount will equal the amount of the second highest bid 
received for the license, which may be less than, or in the case of 
tied bids, equal to, the amount of the withdrawn bid. The Commission 
will serve as a place holder provisionally winning bidder on the 
license until a new bid is submitted on that license.
    244. The 700 MHz Auction Public Notice proposed limiting each 
bidder to withdrawals in no more than two rounds during the course of 
the auction. The round in which withdrawals are used would be at each 
bidder's discretion. The Bureau received no comments on the number of 
proposed withdrawal rounds.
    245. The Bureau has decided, in contrast to the proposal in the 700 
MHz Auction Public Notice, to limit each bidder to withdrawing bids in 
only one round of the auction. In recent auctions, the Bureau has 
detected bidder conduct that, arguably, may have constituted 
anticompetitive behavior through the use of bid withdrawals. While 
continuing to recognize that bid withdrawals may reduce risk associated 
with efforts to secure various licenses in combination, analysis of 
previous auctions indicates that bidders rarely

[[Page 62386]]

need two withdrawal rounds to avoid aggregation risk. Therefore, the 
Bureau concluded that, for Auction 73, adoption of a limit on the use 
of withdrawals to one round per bidder will better balance the need for 
bidding flexibility with the goal of discouraging anti-competitive 
bidding behavior. The Bureau will therefore limit the number of rounds 
in which bidders may place withdrawals to one round.
    246. The Bureau received a number of comments and replies 
addressing the proposal not to allow withdrawals on provisionally 
winning bids for licenses in the C Block. One commenter urges that 
bidders on C Block licenses should have the same withdrawal options as 
other bidders. It asserts that this would reduce the exposure risk 
concerns for C Block bidders. Another commenter asserts that the 
Bureau's proposal to not allow withdrawals on C Block licenses creates 
major financial risks for bidders. A third commenter contends that the 
proposed bid withdrawal rules should be modified, because they could 
discourage bidding in the C Block and restrict bidders from seeking 
alternative licenses in later rounds of the auction. A commenter 
maintains that the highest bids on individual C Block REAG licenses 
should be subject to standard bid withdrawal rules, rather than those 
for dropped bids.
    247. The Bureau proposed not to permit withdrawals of provisionally 
winning bids in the C Block because, with package bidding, a withdrawn 
bid can affect the composition of the provisionally winning set of 
bids, thus affecting the status of the bids of other bidders. In 
addition, under the mechanism used to determine CPEs in HPB, a 
withdrawn bid can affect the prices of other licenses. In SMR, in 
contrast, license-by-license bidding ensures that a withdrawn bid 
affects only the status of the bidder placing the withdrawal. Since 
bidders would be able to use withdrawals in the C Block to affect other 
bidders, permitting withdrawals would facilitate undesirable strategic 
bidding behavior. Therefore, to avoid the potential for gaming, the 
Bureau maintains its position not to permit withdrawals of 
provisionally winning bids in the C Block.
    248. A commenter suggests that withdrawals not be permitted in the 
D Block. Because the D Block license is nationwide, bidders do not face 
the risk of winning an incomplete aggregation of licenses in the block. 
The Bureau will permit that each bidder have only one round in which to 
withdraw bids, but it does not impose a special prohibition on 
withdrawals in the D Block, recognizing that D Block bidders may also 
need to consider their financial commitment to bids in the C Block, 
where they are unable to withdraw provisionally winning bids.
    249. Dropped Bids. A bid for a package or a license in the C Block 
can become provisionally winning many rounds after it was placed, since 
HPB considers bids made in previous rounds when determining 
provisionally winning bids. These non-provisionally winning bids are 
useful to the auction since they enhance the ability of bidders 
interested in single licenses or smaller packages to combine their bids 
with the bids of others to compete with a large package bid, and they 
provide stability to the process for determining current price 
estimates. It may be the case, however, that a bidder wishes to focus 
on alternative licenses instead, and no longer wishes to win one of its 
previous bids. In order to allow bidders to opt out of non-
provisionally winning bids that they no longer wish to win, the Bureau 
proposed that under HPB, for licenses subject to package bidding, 
bidders be allowed a limited number of opportunities to drop non-
provisionally winning bids from further consideration in the auction.
    250. Eliminating non-provisionally winning bids from consideration 
may affect the current price estimates of other licenses, thereby 
affecting other bidders. This ability to affect the bids of other 
bidders may lead to undesirable strategic use of dropped bids. 
Therefore, the 700 MHz Auction Public Notice proposed to permit bidders 
to drop non-provisionally winning bids on packages and on licenses 
subject to package bidding in no more than one round of the auction. To 
discourage bidders from dropping bids in order to disadvantage their 
competitors, the 700 MHz Auction Public Notice also proposed the 
following restrictions on the circumstances under which bids may be 
dropped and on the bidder's subsequent bidding activity: (1) A bidder 
that is a provisionally winning bidder on a package will not be 
permitted to drop bids on licenses that are included in the package; 
(2) a bidder that drops its bids on a license or package will not be 
permitted to submit further bids on that particular license or package 
during the auction; and (3) a bidder that drops its bids on a license 
will not be permitted to submit any bids on packages containing that 
license for the duration of the auction.
    251. Under these proposals, if a bidder drops a bid on a package, 
it will be permitted to bid individually on the licenses in the 
package. When a bid is dropped, all of the bidder's previous bids on 
that license or package are removed from consideration.
    252. No payments are associated with dropped bids. The round in 
which a bidder may drop non-provisionally winning bids from 
consideration will be at the bidder's discretion. The Bureau sought 
comment on these proposals, and on the possibilities of not allowing 
dropped bids, of allowing dropped bids not subject to all the 
restrictions proposed, and of imposing other restrictions than 
proposed.
    253. The Bureau received a number of comments and reply comments 
addressing dropped bids. Several entities favor permitting bidders to 
re-bid on licenses they previously dropped, some also suggested that 
dropped bids should be subject to withdrawal payments that the Bureau 
should consider disallowing dropped bids, and that dropped bids should 
be announced in advance. A commenter argues that permitting dropped 
bids in only one round favors package bidders, and may discourage 
bidders interested in individual licenses from competing in the C 
Block.
    254. Another commenter maintains that the individual C Block REAG 
licenses should be subject to standard bid withdrawal rules, rather 
than those for dropped bids. It also proposes that bidders that are 
outbid on individual REAG C Block licenses should not be committed to 
their bids if the higher bidder withdraws or drops its bid. Instead, 
the commenter recommends that the individual license should revert to 
the Commission with a minimum acceptable bid equal to the second 
highest bid price.
    255. The Bureau also received several requests for clarification of 
its intended procedures with respect to dropped bids. A commenter 
suggests that the Bureau allow bidders who drop a package bid to be 
able to bid on the individual licenses in the dropped package. The 
Bureau clarifies that this is its intention. The Bureau is not 
persuaded that it should modify the 95 proposed procedures on dropped 
bids. Dropped bid procedures in a package bidding environment must be 
designed to avoid creating disadvantages for other bidders--
intentionally or unintentionally--when bids are pulled out of 
consideration, and the Bureau's rules are designed with that goal in 
mind. For example, since withdrawn provisionally winning bids can 
affect the winning bids of other bidders, the Bureau permit drops on 
non-provisionally winning bids only. Because it is more difficult for 
bidders on individual licenses to compete against a package bid when 
only current

[[Page 62387]]

round bids are considered, the Bureau considers bids placed in all 
rounds, including after a bid is dropped, in order not to give an undue 
advantage to package bidders.
    256. In addition, the Bureau finds that these dropped bids 
procedures, and HPB procedures in general, strike a careful balance 
between permitting bidders adequate bidding flexibility and 
discouraging insincere and anti-competitive bidding behavior. For 
example, the prohibition against rebidding on a license that has been 
dropped will keep bidders from strategically shifting off of a license 
so that its price will fall relative to the other licenses competing 
against a package bid, and then rebidding at a lower relative price. 
The Bureau adopts the proposal to permit bidders on licenses and 
packages in the C Block to drop non-provisionally winning bids during 
any one round of the auction.
    257. Calculation of Bid Withdrawal Payment. Generally, the 
Commission imposes payments on bidders that withdraw high bids during 
the course of an auction. If a bidder withdraws its bid and there is no 
higher bid in the same or subsequent auction(s), the bidder that 
withdrew its bid is responsible for the difference between its 
withdrawn bid and the provisionally winning bid in the same or 
subsequent auction(s). In Auction 73, if a bid is withdrawn on a 
license in a block that does not meet the reserve price in the initial 
auction, withdrawal payments will be based on the provisionally winning 
bid or bids for the license in Auction 76, or in any subsequent 
auction, consistent with the Bureau's usual withdrawal payment rule. In 
the case of multiple bid withdrawals on a single license, within the 
same or subsequent auctions(s), the 96 payment for each bid withdrawal 
will be calculated based on the sequence of bid withdrawals and the 
amounts withdrawn. No withdrawal payment will be assessed for a 
withdrawn bid if either the subsequent winning bid or any subsequent 
intervening withdrawn bid, in either the same or subsequent 
auctions(s), equals or exceeds that withdrawn bid. Thus, a bidder that 
withdraws a bid will not be responsible for any final withdrawal 
payment if there is a subsequent higher bid in the same or subsequent 
auction(s).
    258. Section 1.2104(g)(1) of the rules sets forth the payment 
obligations of a bidder that withdraws a high bid on a license during 
the course of an auction, and provides for the assessment of interim 
bid withdrawal payments. No interim bid withdrawal payments will be 
assessed until the conclusion of Auction 76. In the 700 MHz Auction 
Public Notice, the Bureau proposed to establish the percentage at ten 
percent (10%) for the 700 MHz Band auction and sought comment on the 
proposal.
    259. The Bureau received no comments on this issue and adopts its 
proposal. The Commission will assess an interim withdrawal payment 
equal to ten percent (10%) of the amount of the withdrawn bids. The ten 
percent (10%) interim payment will be applied toward any final bid 
withdrawal payment that will be assessed after subsequent auction of 
the license. Assessing an interim bid withdrawal payment ensures that 
the Commission receives a minimal withdrawal payment pending assessment 
of any final withdrawal payment.
vi. Round Results
    260. Limited information about the results of a round will be made 
public after the conclusion of the round. Specifically, after a round 
closes, the Bureau will make available for each license, its current 
provisionally winning bid amount, the minimum acceptable bid amount for 
the following round, the amounts of all bids placed on the license 
during the round, and whether the license is FCC held. If the license 
is provisionally winning and part of a larger package additional 
details regarding the package that contains the specific license will 
be 97 available. The system will also provide an entire license history 
detailing all activity that has taken place on a license with the 
ability to sort by round number. The reports will be publicly 
accessible. Moreover, after the auction, the Bureau will make available 
complete reports of all bids placed during each round of the auction, 
including bidder identities.
vii. Auction Announcements
    261. 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. Auction 76

    262. In the 700 MHz Second Report and Order, the Commission noted 
the strong public interest in promptly assigning all 700 MHz Band 
licenses for recovered analog spectrum. Accordingly, the Commission 
concluded that if licenses for the A, B, C or E Blocks are not assigned 
because the auction results do not satisfy the applicable aggregate 
reserve price(s) in Auction 73, the public interest will be served by 
offering alternative licenses for the relevant blocks in a subsequent 
auction, as soon as possible after the initial auction. Similarly, if 
the license for the D Block is not assigned because the reserve price 
for that license is not met, the license for the D Block may be offered 
again. For administrative purposes, the Bureau designates any such 
subsequent bidding as Auction 76.
    263. As detailed in the 700 MHz Second Report and Order, any 
alternative A, B and E Block licenses will be subject to alternative 
performance requirements. Alternative C Block licenses will be based on 
different geographic areas and spectrum bandwidth. In addition, the 
alternative C Block licenses will not be subject to the open platform 
conditions applicable to the licenses initially offered for the C 
Block.
    264. The Commission concluded that the public interest in prompt 
licensing of 700 MHz spectrum and the related nature of licenses in 
Auctions 73 and 76 made it appropriate to adopt auction procedures 
treating Auctions 73 and 76 as a single auction for purposes of 
assessing bidders' qualifications and applying the Commission's anti-
collusion rule. The Commission directed the Bureau to permit only 
qualified bidders in Auction 73, to participate in Auction 76, and to 
use the same auction design, including the applicable aggregate reserve 
price(s), insofar as possible. The Commission also required the Bureau 
to establish procedures that give applicants an opportunity to obtain 
bidding eligibility specifically for licenses offered in a contingent 
subsequent auction. Accordingly, the Bureau sought comment on specific 
procedures for contingent subsequent bidding. Generally, the Bureau 
will apply the Commission's competitive bidding rules with a 
presumption that Auctions 73 and 76 should be considered to be a single 
auction, subject to explicit exceptions when necessary. With the 
following detailed exceptions, the Bureau will apply all of the 
previously discussed procedures for Auction 73 to Auction 76.

A. Announcement of Auction 76

    265. If, at the close of bidding in Auction 73, the aggregate 
reserve price for any block has not been met, the Bureau will issue an 
announcement that bidding in Auction 73 has closed and that Auction 76 
will commence on a date not later than three weeks following the 
announcement. The announcement of Auction 76 will establish the 
deadline by which Auction 73 qualified bidders that selected licenses 
to be offered in Auction 76 may

[[Page 62388]]

obtain additional bidding eligibility for Auction 76 by supplementing 
their upfront payments, if necessary. In the event that the reserve 
price for the D Block license is met during Auction 73, a Closing 
Public Notice will be released with respect to the D Block. In the 
event that Auction 73 results meet the reserve prices in all blocks, 
the Bureau will proceed to issue a Closing Public Notice and Auction 76 
will not be held.

B. Licenses To Be Offered

    266. Any licenses in the A, B, D and E Blocks available in Auction 
76 will cover the same geographic areas and frequencies as such 
licenses offered in Auction 73. However, the alternative C Block will 
include C1 Block licenses offered in each of the 176 EAs and C2 Block 
licenses offered in each of the 12 REAGs. A complete list of licenses 
that may be available in Auction 76 is included as Attachment B of the 
Auctions 73 and 76 Procedures Public Notice.

C. Auction Structure

i. Licenses for Blocks A, B, D and/or E
    267. If Auction 76 offers licenses in blocks not subject to package 
bidding in Auction 73--Blocks A, B, D, and/or E--those block will not 
be subject to package bidding in Auction 76, and will be offered using 
the Commission's standard SMR auction design. The procedures applicable 
to the auction will be the same with respect to licenses for Blocks A, 
B, D and E in Auction 73.
ii. Alternative Licenses for C Block--Available Packages
    268. In the 700 MHz Auction Comment Public Notice, the Bureau 
sought comment on whether to accept package bids for alternative 
licenses for the C Block using the HPB auction design for the initial C 
Block licenses. One commenter proposed that package bids be accepted on 
three potential packages, one package of all C1 Block licenses, one 
package of all C2 Block licenses, and one package of all C 1 and C2 
Block licenses. Two other commenters argue against accepting any 
package bids for alternative C Block licenses, contending that the 
complexity that they believe should preclude package bidding with 
respect to the original 12 C Block licenses will be further exacerbated 
should the Commission offer 188 alternative C1 and C2 Block licenses in 
subsequent bidding.
    269. The Bureau concluded that it will use non-package bidding SMR 
procedures for licenses in the C1 Block and HPB package bidding 
procedures for C2 Block licenses. This approach balances the 
Commission's interest in providing opportunities for new entrants 
competing on a nationwide basis with its goal of offering alternative 
licenses that may be of greater interest to a different mix of bidders, 
including smaller entities.
    270. Accordingly, if there is subsequent bidding on alternative 
licenses in the C Block, the Bureau will employ the HPB auction design 
for the C2 Block only, with package bids accepted on the packages. The 
procedures applicable to the HPB auction of C2 Block licenses will be 
the same as those with respect to C Block licenses in Auction 73, 
subject to the differences.
    271. Licenses in the C1 Block will be auctioned using the SMR 
auction procedures for licenses in Blocks A, B, D and E in auctions 73 
and 76. Bids for alternative C1 Block licenses will be accepted on 
individual EA Block licenses only.
    272. With respect to C2 Block licenses, bids will be accepted on 
individual REAG licenses, and on three packages, consisting of a 
package of REAGs 1-8 (the 50 States), REAGs 10 & 12 (the Atlantic 
territories), and REAGs 9 & 11 (the Pacific territories). The 
hierarchical package structure for the C2 licenses is the same as was 
adopted for the C Block licenses in auction 73.

D. Bidder Qualification

    273. As directed by the Commission, only applicants found qualified 
to bid in Auction 73 may be eligible to bid in Auction 76. To be 
eligible to bid in Auction 76, an Auction 73 qualified bidder also must 
have selected a license offered in Auction 76 on the abbreviated 
Auction 76 application filed together with its application to 
participate in Auction 73. The announcement that Auction 73 bidding has 
ended without one or more aggregate reserve prices 101 being met also 
will announce the deadline by which such bidders may submit 
supplemental upfront payments to purchase bidding eligibility in the 
subsequent auction.
    274. In response to the 700 MHz Auction Public Notice, a commenter 
contends that the Commission's treatment of Auction 73 and any 
contingent subsequent auction as a single auction for purposes of the 
Commission's anti-collusion rule requires that applicants select all 
licenses in which they may be interested, including potential 
alternative licenses, prior to bidding in Auction 73. The commenter 
contends that this result is compelled by the Sec.  1.2105(b)(2) of the 
Commission's competitive bidding rules, which prohibits changes in 
license selection after the initial application filing deadline. 
Moreover, the commenter contends that requiring applicants to select 
potential alternative licenses prior to Auction 73 will limit the 
amount of time required between Auction 73 and any contingent 
subsequent auction.
    275. Given the presumption that Auction 73 and any contingent 
subsequent bidding on licenses should be treated as a single auction, 
the Bureau has concluded that applicants should select both licenses 
offered in Auction 73 and licenses that may be offered in Auction 76 by 
the initial deadline for filing an application to participate in 
Auction 73. The Bureau concluded that bidders will be able to make 
informed selections prior to Auction 73 of licenses, including 
alternative licenses that may be offered in contingent subsequent 
bidding. Bidders will have the opportunity to obtain additional bidding 
eligibility for licenses to be offered subsequently. These procedures 
will enable contingent subsequent bidding, if necessary, to proceed 
with minimal delay.
i. Bidder Status
    276. To participate in Auction 76, a potential bidder must: (1) 
Have become qualified to bid for at least one license offered in 
Auction 73 by selecting license(s) offered in Auction 73 and making an 
upfront payment sufficient to establish eligibility to bid for at least 
one of those license(s), and (2) file an abbreviated Auction 76 
application and selected at least one license offered in Auction 76. 
Qualified bidders in Auction 73 need not bid on the licenses offered in 
Auction 73 in order to be able to become qualified to participate in 
Auction 76.
ii. Auction 76 Initial Bidding Eligibility
    277. For Auction 76, qualified bidders will have their initial 
bidding eligibility based on their initial bidding eligibility in 
Auction 73 and will also have an opportunity to purchase additional 
bidding eligibility. However, qualified bidders'' initial bidding 
eligibility for Auction 73 will be reduced for Auction 76 if they hold 
winning bids for any licenses offered in Auction 73 in blocks for which 
the reserve price was met in Auction 73. For winning bidders of 
licenses in the A, B, C, or E Blocks, the amount of the reduction will 
be equal to the number of bidding units associated with the licenses 
won. For the winning bidder of the D Block license, the amount of the 
reduction will be equal to the amount of any withdrawal payment owed 
for withdrawn bid(s) on the D

[[Page 62389]]

Block license plus the amount of the net winning bid for the D Block 
license, up to the amount of the winning bidder's initial Auction 73 
bidding eligibility.
iii. Supplementing Upfront Payments To Obtain Additional Eligibility
    278. All bidders qualified to participate in Auction 76 will have 
an opportunity to purchase additional bidding eligibility. Bidders will 
be able to purchase additional bidding eligibility for licenses to be 
offered in Auction 76 by supplementing their upfront payments pursuant 
to the procedures for making upfront payments by wire transfer set 
forth in the Auction 73 and 76 Procedures Public Notice, subject to a 
schedule to be announced following the close of bidding in Auction 73.
iv. Continuing Applicability of the Anti-Collusion Rule
    279. In the 700 MHz Second Report and Order, the Commission 
directed the Bureau to adopt any procedures that may enhance the 
effectiveness of an auction of licenses in Auction 73 or any contingent 
subsequent auction. In part, the Commission found that the Commission's 
anti-collusion rule should treat Auction 73 and any such subsequent 
auction as a single auction, given the related nature of the auctions. 
Accordingly, the applicable down payment deadline marking the end of 
the anti-collusion period for Auction 73 and any subsequent auction 
shall be the down payment deadline established following the close of 
the subsequent auction.

E. Bidding Procedures

i. Aggregate Reserve Prices
    280. As required by the Commission, the licenses in subsequent 
bidding will be subject to the same aggregate reserve price(s) 
applicable in the initial auction. A commenter argues in its comments 
that the licenses in the second auction should not be subject to any 
reserve prices because using a reserve price in the contingent 
subsequent auction runs the risk that the licenses will not be awarded 
prior to the June 30, 2008, statutory deadline for filing auction 
proceeds. As a commenter acknowledges in its comments, the Commission 
decision in the 700 MHz Second Report and Order is binding, absent 
reconsideration of that Order by the Commission as a whole. 
Consequently, the commenters proposal is beyond the scope of the 
present non-rulemaking auctions procedures process.
    281. In the 700 MHz Second Report and Order, the Commission noted 
that the Bureau has delegated authority to determine how to allocate 
the C Block reserve price upon auction of alternative licenses. 
Accordingly, in the 700 MHz Auction Comment Public Notice, the Bureau 
proposed to apply the C Block aggregate reserve price of $4.637854 
billion to all of the alternative C Block licenses. That is, the sum of 
the gross bid amounts on the C1 and C2 Block licenses must equal or 
exceed $4.637854 billion in order to meet the reserve price. No 
commenters addressed this proposal.
    282. The Bureau adopts its proposal, with one additional feature. 
In the event that the sum of the gross bid amounts on the C1 and C2 
Block licenses does not meet the reserve price 104 covering both 
blocks, the Bureau then will apportion the aggregate reserve price 
between the two blocks based on their respective bandwidth and apply 
those aggregate reserve prices to the respective blocks separately. 
More specifically, if the aggregate reserve price of $4.637854 billion 
covering both Blocks C1 and C2 is not met, the Commission nevertheless 
will assign licenses for the respective block based on the auction 
results if the gross bid amounts on the C 1 Block licenses exceed 
$2.529739 billion or the gross bid amounts on the C2 Block licenses 
exceed $2.108115 billion. Applying these separate aggregate reserve 
prices will increase the likelihood that licenses will be assigned for 
the respective blocks in the contingent subsequent auction, while 
continuing to apply the aggregate reserve price from the initial 
auction to each block in proportion to the megahertz in each block.
ii. Minimum Opening Bids
    283. For Auction 76, the Bureau will calculate minimum opening bid 
amounts on a license-by-license basis using the same approach as in 
Auction 73, drawing on the Auction 66 prices that were bid on licenses 
for the exact same geographic areas. For any licenses that may be 
offered in Auction 76, including alternative C1 and C2 Block licenses, 
minimum opening bids are set forth in Attachment B of the Auction 73 
and 76 Procedures Public Notice.

F. Additional Procedures

    284. In the 700 MHz Auction Comment Public Notice, pursuant to 
Commission direction, the Bureau sought comment on the possibility of 
denying bidding eligibility in a contingent subsequent auction based on 
bidder behavior in Auction 73, if that behavior appeared designed to 
thwart the assignment of licenses. Specifically, the Bureau proposed 
that bidders defaulting on winning bids in Auction 73 should be denied 
eligibility in any subsequent auction. The Bureau declines to restrict 
the circumstances under which it might deny bidding eligibility in a 
contingent subsequent auction to an otherwise qualified bidder. The 
Commission retains the authority to sanction bidders that are found to 
have violated the antitrust laws or the 105 Commission's rules in 
connection with competitive bidding by requiring forfeiture of any 
upfront payments, down payment or full bid amounts, and by prohibiting 
the bidders participation in future auctions. The Commission intends to 
make full use of this authority, including banning participation in a 
contingent subsequent auction, with respect to bidders that seek to 
thwart the assignment of licenses in Auction 73.

VI. Post-Auction Procedures

A. Considerations Relating to Certain Post-Auction Payment Rules

i. Apportioning Package Bids
    285. In package bidding, when a bidder places an all-or-nothing bid 
on a package of licenses, there will be no identifiable bid amounts on 
the individual licenses that comprise the package. However, the 
Commission's competitive bidding rules and procedures assume that the 
amount of each bid on an individual license always is known. For 
example, rules for calculating the amount of small business, new 
entrant, or tribal land bidding credits presume that the winning bid on 
the license is known. Similarly, in determining the amount of a default 
or withdrawal payment, which involves a comparison between the 
withdrawing or defaulting bidder's bid and a subsequent bid, the rules 
assume that there are bid amounts for individual licenses. Accordingly, 
the Commission recently adopted a rule providing that, in advance of 
each auction with package bidding, the Commission shall establish a 
methodology for determining how to estimate the price or bid on an 
individual license included in a package of licenses.
    286. The Bureau proposed to apportion package bids when regulatory 
calculations require individual license bid amounts by dividing the 
package bid amount among the licenses comprising the package in 
proportion to the number of bidding units for each license. 
Alternatively, the Bureau proposed to use the final round CPEs for each 
license to apportion package bids.

[[Page 62390]]

The Bureau sought comment on these proposals.
    287. A commenter suggests that the Bureau use a measure more 
closely related to relative license values, such as minimum opening bid 
amounts, to apportion package bid amounts among the licenses in the 
package. The Bureau accepts the commenter's recommendation that 
relative license values be used to apportion package bids, but rather 
than use a pre-auction estimate of value such as minimum opening bids, 
the Bureau will use the final CPEs of the licenses in the package, as 
in its alternative proposal. Final CPEs will reflect relative prices as 
determined in Auction 73. Therefore, when regulatory calculations 
require individual license bid amounts, the Bureau will divide the 
package bid amount among the licenses comprising the package in 
proportion to the final round CPEs for the licenses.
ii. Interim Withdrawal Payment Percentage
    288. In general, the Commission's rules provide that a bidder that 
withdraws a bid during an auction is subject to a withdrawal payment 
equal to the difference between the amount of the withdrawn bid and the 
amount of the winning bid in the same or a subsequent auction. However, 
if a license for which a bid has been withdrawn does not receive a 
subsequent higher bid or winning bid in the same auction, the final 
withdrawal payment cannot be calculated until a corresponding license 
receives a higher bid or winning bid in a subsequent auction. When that 
final payment cannot yet be calculated, the bidder responsible for the 
withdrawn bid is assessed an interim bid withdrawal payment, which will 
be applied toward any final bid withdrawal payment that is ultimately 
assessed.
    289. The Commission recently amended its rules to provide that in 
advance of the auction, the Commission shall establish a percentage 
between three percent and twenty percent of the withdrawn bid to be 
assessed as an interim bid withdrawal payment. When it adopted the new 
rule, the Commission indicated that it would consider the nature of the 
service and the inventory of the licenses being offered when 
determining the level of the interim withdrawal payment in a particular 
auction.
    290. In the 700 MHz Auction Public Notice, the Bureau noted that 
the 700 MHz auction will offer licenses under several different 
geographic licensing schemes and bandwidth sizes, and it found that 
bidders may have a legitimate interest in using withdrawals to 
facilitate their efforts to aggregate licenses across potentially 
substitutable blocks of licenses not subject to package bidding. The 
Bureau also observed that the likely significant bid amounts for 
licenses in this auction (and resulting absolute value of withdrawal 
payments) will in themselves serve as a deterrent to unnecessary 
withdrawals. Therefore, the Bureau did not propose to set the interim 
bid withdrawal payment at the maximum rate of twenty percent. At the 
same time, the Bureau noted that a rate above the minimum three percent 
will help deter undesirable strategic use of withdrawals. Specifically, 
the Bureau proposed to establish an interim bid withdrawal payment of 
ten percent of the withdrawn bid in the 700 MHz auction and sought 
comment on this issue.
    291. No commenters suggested any alternative to the Bureau's 
proposed percentage for interim withdrawal payments. For the reasons 
set forth above and in the 700 MHz Auction Public Notice, the Bureau 
adopts its proposal. The Commission will assess an interim withdrawal 
payment equal to ten percent (10%) of the amount of the withdrawn bids. 
The ten percent (10%) interim payment will be applied toward any final 
bid withdrawal payment that will be assessed after subsequent auction 
of the license. Assessing an interim bid withdrawal payment ensures 
that the Commission receives a minimal withdrawal payment pending 
assessment of any final withdrawal payment. Section 1.2104(g) provides 
specific examples showing application of the bid withdrawal payment 
rule.
iii. Additional Default Payment Percentage
    292. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) is liable for a default payment under Sec.  1.2104(g)(2) 
of the Commission's rules. This payment consists of a deficiency 
payment, equal to the difference between the amount of the bidder's bid 
and the amount of the winning bid the next time a license covering the 
same spectrum is won in an auction, plus an additional payment equal to 
a percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less. Until recently this additional payment for non-
combinatorial auctions has been set at three percent of the defaulter's 
bid or of the subsequent winning bid, whichever is less.
    293. The percentage of the bid that a defaulting bidder must pay in 
addition to the deficiency will depend on the auction format ultimately 
chosen for a particular auction. In non-package auctions, the amount 
can range from three percent up to a maximum of twenty percent, 
established in advance of the auction and based on the nature of the 
service and the inventory of the licenses being offered. In auctions 
with package bidding, the additional payment is set, pursuant to Sec.  
1.2104(g)(2)(ii), at 25 percent of the applicable bid. This higher 
level reflects the fact that a defaulted winning bid in an auction with 
package bidding may have affected which other bids were winning other 
licenses.
    294. The Bureau proposed to establish an additional default payment 
of fifteen percent with respect to bids on licenses in Blocks A, B, D, 
and E, which are not subject to package bidding. As previously noted by 
the Commission, defaults weaken the integrity of the auction process 
and impede the deployment of service to the public, and an additional 
default payment of more than three percent will be more effective in 
deterring defaults. Moreover, the Bureau concluded an additional 
default payment greater than ten percent, which the Commission has 
established in several recent auctions, is appropriate for the 700 MHz 
auction. Because no licenses in Blocks A, B, or E will be sold unless 
the aggregate reserve price for that block is met, bidders may have an 
additional incentive to bid on a license and later default (after 
determination that the reserve price has been met), in order to help 
ensure that the reserve price is met and other initial licenses in the 
block are assigned. The Bureau concluded that a higher additional 
default 109 payment will help deter such behavior. With respect to the 
D Block, for which there is a single nationwide license that will not 
be assigned unless the D Block reserve price is met, a default by the 
winning bidder will delay the especially time-sensitive process of 
establishing a public-private partnership for the provision of public 
safety services. Given the unusually large public interest benefits of 
timely licensing the D Block, the Bureau proposed to deter defaults by 
imposing a higher additional default payment in that block as well. 
Accordingly, it proposed an additional default payment of fifteen 
percent on licenses in the A, B, D, and E Blocks. The Bureau sought 
comment on this proposal. The Bureau stated that for licenses in the C 
Block, because they are subject to package bidding, the

[[Page 62391]]

additional default payment will be twenty-five percent as set forth in 
Sec.  1.2104(g)(2)(ii). This additional default payment will apply to 
all bids for packages and for licenses that are subject to package 
bidding.
    295. While no comments were filed in response to the 700 MHz 
Auction Public Notice focused on the appropriate percentage for the 
additional default payments, a commenter proposed in its comments that 
the Commission impose no default penalty in connection with any 
defaults on a winning bid for the D Block license. The commenter's 
argument focused particularly on a scenario where the winning bidder is 
unable to negotiate a Network Sharing Agreement with the Public Safety 
Licensee, even while negotiating in good faith. Another commenter 
opposed this proposal in its reply because it runs counter to the 
Commission's decision in the 700 MHz Second Report and Order, which 
held that [i]n the event that the long-form application filed by the 
winning bidder for the D Block license is denied, the winning bidder of 
the D Block licenses will be deemed to have defaulted * * * [and] it 
will be liable for the default payment set forth in the Commission's 
competitive bidding rules. Accordingly, the commenter's proposal is 
beyond the scope of the current non-rulemaking auction procedures 
process.
    296. The Bureau adopts its proposal and sets the additional default 
payment percentage at fifteen percent of the defaulted bid for licenses 
in the A, B, D and E Blocks. Pursuant to existing Commission rules 
regarding licenses subject to package bidding, the additional default 
payment percentage will be twenty-five percent of the defaulted bid for 
licenses in the C Block. These percentages are appropriate to reduce 
the risk that bidders may default on their winning bids.

B. Down Payments

    297. After bidding has ended in Auction 73 and Auction 76, the 
Commission will issue a public notice declaring the auction(s) closed 
and identifying winning bidders, down payments and final payments due. 
In addition, if the D Block bidding satisfies the reserve price and 
there is a winning bidder for the D Block license in Auction 73, the 
Commission will issue a public notice identifying the winning bidder, 
down payments and final payments due after bidding ends in Auction 73, 
even if Auction 76 will be held for licenses in any other block(s).
    298. 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 licenses offered in Auction 73 and Auction 76 
to 20 percent of the net amount of its winning bids (gross bids less 
any applicable small business or very small business bidding credits).

C. Final Payments

    299. Each winning bidder will be required to submit the balance of 
the net amount of its winning bids within 10 business days after the 
applicable deadline for submitting down payments.

D. Long-Form Application (FCC Form 601)

    300. Within ten business days after release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
long-form application (FCC Form 601) for each license won through 
Auction 73 and/or Auction 76. Winning bidders that are small 111 
businesses or very small businesses must demonstrate their eligibility 
for a small business or very small business bidding credit. Further 
filing instructions will be provided to auction winners at the close of 
the auction.
    301. The CSEA/Part 1 Report and Order, 71 FR 6214, February 7, 
2006, modified the procedure by which a consortium that is a winning 
bidder in Auction 73 and/or Auction 76 will apply for a license. In 
particular, (a) each member or group of members of a winning consortium 
seeking separate licenses will be required to file a separate long-form 
application for its respective license(s) and, in the case of a license 
to be partitioned or disaggregated, the member or group filing the 
applicable long-form application shall provide the parties' 
partitioning or disaggregation agreement in its long-form application; 
(b) two or more consortium members seeking to be licensed together 
shall first form a legal business entity; and (c) any such entity must 
meet the applicable eligibility requirements for small business status. 
Applicants applying as consortia should review the CSEA/Part 1 Report 
and Order in detail and monitor any relevant future proceedings to 
understand how the members of the consortia will apply for a license in 
the event they are winning bidders.

E. Ownership Disclosure Information Report (FCC Form 602)

    302. At the time it submits its long-form application (FCC Form 
601), each winning bidder also must comply with the ownership reporting 
requirements as set forth in 47 CFR 1.913, 1.919, and 1.2112. An 
ownership disclosure record is automatically created in ULS for any 
applicant that submits an FCC Form 175. However, winning bidders will 
be required to review and confirm that it is complete and accurate as 
of the date of filing Form 601. Further instructions will be provided 
to winning bidders at the close of the auction.

F. Tribal Lands Bidding Credit

    303. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
wireline penetration rate equal to or below 85 percent is eligible to 
receive a tribal lands bidding credit as set forth in 47 CFR 1.2107 and 
1.2110(f). A tribal lands bidding credit is in addition to, and 
separate from, any other bidding credit for which a winning bidder may 
qualify.
    304. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal lands bidding credit 
after winning the auction when it files its long-form application (FCC 
Form 601). When initially filing the long-form application, the winning 
bidder will be required to advise the Commission whether it intends to 
seek a tribal lands bidding credit, for each license won in the 
auction, by checking the designated box(es). After stating its intent 
to seek a tribal lands bidding credit, the applicant will have 180 days 
from the close of the long-form filing window to amend its application 
to select the specific tribal lands to be served and provide the 
required tribal government certifications. Licensees receiving a tribal 
lands bidding credit are subject to performance criteria as set forth 
in 47 CFR 1.2110(f)(3)(vi).
    305. For additional information on the tribal lands bidding credit, 
including how the amount of the credit is calculated, applicants should 
review the Commission's rule making proceeding regarding tribal lands 
bidding credits and related public notices. Relevant documents can be 
viewed on the Commission's Web site by going to http://wireless.fcc.gov/auctions and clicking on the Tribal Land Credits link.

G. Default and Disqualification

    306. 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

[[Page 62392]]

described 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 license 
covering the same spectrum is won in an auction, plus an additional 
payment equal to a percentage of the defaulter's bid or of the 
subsequent winning bid, whichever is less.
    307. 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 700 MHz Auction Public 
Notice, the Bureau proposed to set the additional default payment for 
the auction of 700 MHz Band licenses at fifteen percent of the 
applicable bid with respect to bids on licenses in Blocks A, B, D, and 
E, which are not subject to package bidding. For licenses in the C 
Block, because they are subject to package bidding, the additional 
default payment will be twenty-five percent as set forth in Sec.  
1.2104(g)(2)(ii).
    308. The Commission will apportion package bids when regulatory 
calculations require individual license bid amounts by dividing the 
package bid amount among the licenses comprising the package in 
proportion to the final round CPEs for the licenses. Accordingly, in 
the event that a winning bidder defaults on a package bid for C Block 
licenses and the licenses subsequently are won individually or in a 
different combination, the Bureau will apportion the defaulted package 
bid for the C Block licenses based on the ratio of the bidding units 
for the relevant licenses to the bidding units for the entire package.
    309. The Bureau adopted its proposal and sets the additional 
default payment for the auction of 700 MHz Band licenses at fifteen 
percent of the applicable bid for licenses in Blocks A, B, D, and E and 
at twenty-five percent of the applicable bid for Block C packages and 
licenses.
    310. Finally, the Bureau notes that in the event of a default, the 
Commission may re-auction the license 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 licenses 
held by the applicant.

H. Refund of Remaining Upfront Payment Balance

    311. The Commission received two sets of comments addressing the 
refund of upfront payments. One commenter urges that the Commission 
clarify that it will promptly refund upfront payments after the close 
of the initial auction, prior to Auction 76. It maintains that this 
would promote full participation in the auction. Another commenter 
advocates the adoption of procedures for the refund of upfront 
payments, and other deposits, after they are deposited in the Digital 
Television Transition and Public Safety Fund on June 30, 2008, pursuant 
to the DTV Act. The commenter argues that the lack of such procedures 
would discourage the participation of potential applicants.
    312. The Commission concluded that Auction 73 and Auction 76 are a 
single auction event for purposes of the Commission's anti-collusion 
rule. Applicants in Auction 73 are prohibited from communicating bids 
or bidding strategies prior to the conclusion of Auction 76. Disclosing 
the activity of applicants in Auction 73 or Auction 76 by providing for 
refunds of upfront payments prior to the conclusion of Auction 76 would 
conflict with this conclusion. As a practical matter, the Bureau notes 
that applicants in any Commission auction must take into account the 
fact that the Commission's auctions are of indefinite duration. Thus, 
even if Auction 76 should not prove necessary, applicants cannot 
reasonably expect the return of funds by any specific date and 
therefore cannot reasonably require that funds be refunded immediately 
after the Commission announces that it will make alternative licenses 
available for Auction 76. Moreover, bidders in Auction 73 subject to 
any liabilities arising from Auction 73 may not have the extent of 
their liability determined prior to the close of Auction 76. For 
example a bidder that withdrew a provisionally winning bid in Auction 
73 would be subject to a determination of the extent of its liability 
only after the conclusion of Auction 76. The Commission has never 
provided for refunds of upfront payments to such bidders. In the past, 
the Commission has provided for refunds of upfront payment to bidders 
that have no auction liabilities and no remaining bidding eligibility 
prior to the competition of an auction. Nevertheless, the Commission 
has not made any such refunds in auctions subject to anonymous bidding. 
For all of these reasons, the Bureau concluded that bidders reasonably 
should be required to maintain their upfront payments in Auction 73 and 
Auction 76 on deposit with the Commission until the conclusion of any 
contingent subsequent auction.
    313. All upfront payments submitted by applicants in Auction 73 and 
all upfront payments submitted by Auction 73 qualified bidders in 
connection with Auction 76 may be available to be refunded after the 
conclusion of any contingent subsequent auction; subject to any 
required payments (i.e. winning bid, deficiency, withdrawal, and/or 
default payments). 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.
    314. Bidders are encouraged to file their refund information 
electronically using the Refund Information icon found on the Auction 
Application Manager page or through the Wire Transfer for Refund 
Purposes link available in various locations throughout the FCC Auction 
System. If an applicant has completed the refund instructions 
electronically, the refund will be sent automatically. If an applicant 
has not completed the refund instructions electronically, the applicant 
may send a written request for the refund, including wire transfer 
instructions and FCC Registration Number (FRN) by facsimile to the 
Auctions Accounting Group at (202) 418-2843 or by mail to: Federal 
Communications Commission, Financial Operations Center, Auctions 
Accounting Group, Gail Glasser, 445 12th Street, SW., Room 1-C864, 
Washington, DC 20554.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
 [FR Doc. E7-21528 Filed 11-1-07; 8:45 am]
BILLING CODE 6712-01-P 117