[Federal Register Volume 72, Number 222 (Monday, November 19, 2007)]
[Notices]
[Pages 65022-65023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22501]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 07-157; Report No. AUC-07-73-D (Auctions 73 and 76); DA 
07-4514]


Auction of 700 MHz Band Licenses Revised Procedure for Auctions 
73 and 76; Additional Default Payment for D Block Set at Ten Percent of 
Winning Bid Amount

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces a revised procedure for the upcoming 
auction(s) of 700 MHz Band licenses scheduled to begin on January 24, 
2008 (Auctions 73 and 76), specifically setting the additional default 
payment percentage at ten percent for the D Block license, and provides 
further guidance regarding negotiation of the Network Sharing Agreement 
between the winning bidder of D Block license and the new national 
Public Safety Broadband Licensee.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions Spectrum and Access Division: For legal questions: William 
Huber or Scott Mackoul at (202) 418-0660. To request materials in 
accessible formats (Braille, large print, electronic files, audio 
format) for people with disabilities, send an e-mail to [email protected] 
or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 
or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auctions 73 and 76 
Revised Procedure Public Notice released on November 2, 2007. The 
complete text of the Auctions 73 and 76 Revised Procedure Public 
Notice, as well as related Commission documents, are available for 
public inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time 
(ET) Monday through Thursday or from 8 a.m. to 11:30 a.m. on Friday at 
the FCC Reference Information Center, Portals II, 445 12th Street, SW., 
Room CY-A257, Washington, DC 20554. The Auctions 73 and 76 Revised 
Procedure 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-
4514 for the Auctions 73 and 76 Revised Procedure Public Notice. The 
Auctions 73 and 76 Revised Procedure Public Notice and related 
documents are also available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/73/.
    1. The Wireless Telecommunications Bureau (Bureau) announces a 
revised procedure for the upcoming auction(s) of licenses for services 
in the 700 MHz Band scheduled to begin on January 24, 2008 (Auctions 73 
and 76). Specifically, the Bureau sets the additional default payment 
percentage at ten percent for the D Block license. The additional 
default payment percentage amount for licenses in the A, B, and E 
Blocks remains at fifteen percent, as previously announced. The Chiefs 
of the Public Safety and Homeland Security Bureau and the Wireless 
Telecommunications Bureau also provide further guidance as to how they 
intend to exercise their delegated authority in the event that disputes 
arise during the negotiation of the terms of the Network Sharing 
Agreement between the winning bidder for the D Block license and the 
new national Public Safety Broadband Licensee.
    2. Any winning bidder that defaults or is disqualified after the 
close of an auction 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. In the 700 MHz Auction 
Procedures Public Notice, 72 FR 62360, November 2, 2007, the Bureau set 
the additional default payment percentage at fifteen percent of the 
defaulted bid for all licenses in blocks that are not subject to 
package bidding, including the D Block.
    3. In establishing the percentage used to calculate the additional 
default payment, the Bureau seeks to deter defaults and thereby promote 
the public interest in rapid deployment of new wireless services. As 
the Bureau noted in the 700 MHz Auction Procedures Public Notice, the 
public interest costs of a default on the D Block are likely to be high 
given the role of the D Block in the establishment of a public/private 
partnership for the provision of public safety broadband services. At 
the same time, the Bureau recognizes that factors that may contribute 
to a default by a winning bidder for the D Block may be different in 
nature from those affecting winning bidders in other blocks. For 
example, the D Block winning bidder must negotiate and enter into a 
Commission-approved Network Sharing Agreement with the new national 
Public Safety Broadband Licensee consistent with terms and procedures 
set forth in the 700 MHz Second Report and Order, 72 FR 48814, August 
24, 2007.
    4. In the 700 MHz Auction Comment Public Notice, 72 FR 48272, 
August 23, 2007, the Bureau proposed adopting a fifteen percent 
additional default payment for the A, B, D and E Blocks. The Bureau 
made this proposal with respect to the A, B, and E Blocks because the 
possibility that no licenses in those blocks will be assigned if the 
reserve price is not met may give bidders 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. In 
contrast, the Bureau made its proposal with respect to the D Block, for 
which there is a single nationwide license which will not be assigned 
unless the D Block reserve price is met, because 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 broadband services. As noted in the 700 MHz Auction Procedures 
Public Notice, none of the parties responding to the 700 MHz Auction 
Comment Public Notice addressed the specific percentage for the 
additional default payment for licenses in any of the blocks.
    5. On further review, the Bureau concludes that a slightly lower 
percentage should be used for the additional default payment in the 
case of the D Block license. The Commission must balance the public 
interest in avoiding defaults on winning bids against the risk of 
deterring otherwise qualified bidders from participating in the 
auction. A winning bidder of the D Block license may be presented with 
unique issues that may result in the bidder defaulting on its bid. The 
potential impact of those issues is difficult to quantify, and may vary 
from bidder to bidder. On further review, the Bureau concludes that the 
additional default percentage on the D Block

[[Page 65023]]

should be lower than it is with respect to the A, B, and E Blocks, 
where the structure of the auction actually may provide an incentive 
for bidders to default. Accordingly, for the D Block license the Bureau 
sets the additional default payment percentage at ten percent of the 
defaulted bid or of the subsequent winning bid, whichever is less. 
While the Bureau remains mindful that a default could harm the public 
interest by delaying the deployment of service to the public safety 
community as well as to consumers, the Bureau concludes that the ten 
percent additional payment used in several recent auctions serves as a 
sufficient deterrent to defaults for the D Block.
    6. In the 700 MHz Second Report and Order, the Commission delegated 
to the Chiefs of the Public Safety and Homeland Security Bureau and the 
Wireless Telecommunications Bureau (Bureaus) the authority to take 
certain actions jointly in the public interest in the event of a 
dispute between the winning bidder for the D Block license and the 
Public Safety Broadband Licensee at the end of the six-month 
negotiation period for the Network Sharing Agreement (NSA), or on their 
own motion at any time. In particular, the Commission indicated that 
these actions may include but are not limited to one or more of the 
following: (1) Granting additional time for negotiation; (2) issuing a 
decision on the disputed issues and requiring the submission of a draft 
agreement consistent with that decision; (3) directing the parties to 
further brief the remaining issues in full for immediate Commission 
decision; and/or (4) immediate denial of the long-form application 
filed by the winning bidder for the D Block license.
    7. The Bureaus believe that it is in the public interest to provide 
potential bidders for the D Block license, as well as the public safety 
community, with further guidance as to how the Bureaus intend to 
exercise their delegated authority in the event that disputes arise 
with respect to the negotiation of the terms of the NSA. As a result, 
the Bureaus announce that they will not exercise their authority for 
immediate denial of the long-form application filed by the winning 
bidder for the D Block license, as a result of any dispute over the 
negotiation of the terms of the NSA, until the Bureaus take one of two 
steps: (1) Issuing a decision on the disputed issues and requiring the 
submission of a draft agreement consistent with their decision; or (2) 
referring the issues to the Commission for an immediate decision and 
the Commission issues such a decision.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E7-22501 Filed 11-16-07; 8:45 am]
BILLING CODE 6712-01-P