[Federal Register Volume 73, Number 143 (Thursday, July 24, 2008)]
[Pages 43230-43235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-16964]



[Report No. AUC-08-85-D (Auction 85); AU Docket No. 08-22; DA 08-460]

Auction of LPTV and TV Translator Digital Companion Channels 
Scheduled for November 5, 2008; Announcement of Settlement Period 
Ending July 31, 2008; Comment Sought on Competitive Bidding Procedures 
for Auction 85

AGENCY: Federal Communications Commission.

ACTION: Notice.


SUMMARY: This document announces the auction of LPTV and TV Translator 
Digital Companion Channel construction permits, with bidding scheduled 
to commence on November 5, 2008 (Auction 85). This document also seeks 
comments on competitive bidding procedures for Auction 85, and 
announces a settlement period that ends on July 31, 2008.

DATES: Comments are due on or before July 31, 2008, and reply comments 
are due on or before August 7, 2008.

ADDRESSES: Comments and reply comments must be identified by AU Docket 
No. 08-22. Comments may be filed electronically using the Internet by 
accessing the Federal Communications Commission's (Commission's) 
Electronic Comment Filing System (ECFS) at http://www.fcc.gov/cgb/ecfs. 
Filers should follow the instructions provided on the Web site for 
submitting comments. The Media and Wireless Telecommunications Bureaus 
(Bureaus) request that a copy of all comments and reply comments be 
submitted electronically to the following address: [email protected]. 
In addition, comments and reply comments may be submitted by any of the 
following methods:
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail (although the Bureaus 
continue to experience delays in receiving U.S. Postal Service mail). 
All filings must be addressed to the Commission's Secretary, Attn: WTB/
ASAD, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. Eastern Time (ET). All hand 
deliveries must be held together with rubber bands or fasteners.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or telephone: 202-
418-0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 

[[Page 43231]]

Milne at 202-418-0660. For general auction questions: Debbie Smith or 
Linda Sanderson at 717-338-2868. Media Bureau, Video Division: For 
service rule questions: Shaun Maher at 202-418-2324 or Hossein 
Hashemzadeh at 202-418-1600.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 85 Comment 
Public Notice released on July 17, 2008. The complete text of the 
Auction 85 Comment Public Notice, including attachments, and related 
Commission documents, are available for public inspection and copying 
from 8 a.m. to 4:30 p.m. ET Monday through Thursday or from 8 a.m. to 
11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 
12th Street, SW., Room CY-A257, Washington, DC 20554. The Auction 85 
Comment Public Notice and related Commission documents also may be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc. (BCPI), 445 12th Street, SW., Room CY-B402, Washington, 
DC 20554, telephone 202-488-5300, facsimile 202-488-5563, or you may 
contact BCPI at its Web site: http://www/BCPIWEB.com. When ordering 
documents from BCPI, please provide the appropriate FCC document 
number, for example, DA 08-460. The Auction 85 Comment Public Notice 
and related documents also are available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/85/, or by 
using the search function on the ECFS Web page at http://www/fcc.gov/cgb/ecfs/.

I. Introduction

    1. The Wireless Telecommunications Bureau and the Media Bureau 
(collectively, the Bureaus) announce an auction of construction permits 
for Low Power Television (LPTV), including Class A Television (TV), and 
TV Translator digital companion channels. This auction, which is 
designated Auction 85, is scheduled to commence on November 5, 2008. 
The Bureaus also seek comment on a variety of auction-specific 
procedures for Auction 85. The Bureaus also announce additional 
settlement period for applicants to use engineering solutions or 
settlements to resolve conflicts among their proposed stations.

II. Construction Permits in Auction 85

    2. The construction permits to be auctioned are the subject of 
pending, mutually exclusive applications for the referenced broadcast 
services for which the Commission has not approved settlement 
agreements or engineering amendments. Participation in this auction 
will be limited to those applicants for construction permits identified 
in Attachment A of the Auction 85 Comment Public Notice. Applicants 
will be eligible to bid only on the corresponding construction permits 
listed in Attachment A.
    3. Attachment A specifies the MX Groups accompanied by their 
respective minimum opening bids and upfront payments. In the event that 
the Commission approves any settlements pursuant to the settlement 
period announced in the Auction 85 Comment Public Notice, certain MX 
Groups may be modified or deleted. Any such MX Group changes will be 
announced in a future public notice.
    4. Attachment A also lists the names of the applicants for 
construction permits in each MX Group. For each MX Group identified in 
Attachment A, competing applications were filed during the relevant 
filing period. All applications within an identified MX Group are 
directly mutually exclusive with one another. When two or more short-
form applications (FCC Forms 175) are accepted for filing for a 
construction permit within the same MX Group in Auction 85, mutual 
exclusivity exists for auction purposes. Therefore, a single 
construction permit will be auctioned for each MX Group identified in 
Attachment A. Moreover, once mutual exclusivity exists for auction 
purposes, then, even if only one application for a particular 
construction permit in Auction 85 submits an upfront payment, that 
applicant is required to submit a bid in order to obtain the 
construction permit. Any applicant that submits a short-form 
application that is accepted for filing but fails to timely submit an 
upfront payment will retain its status as an applicant in Auction 85 
and will remain subject to the Commission's anti-collusion rules, but, 
having purchased no bidding eligibility, will not be eligible to bid.

III. Settlement Period

    5. The Bureaus announce a settlement window beginning with the 
release of the Auction 85 Comment Public Notice and ending at 6 p.m. 
Eastern Time (ET) on Thursday, July 31, 2008, for parties with 
proposals in the mutually exclusive (MX) groups listed in Attachment A 
to dismiss their proposals, enter into settlement agreements or 
otherwise resolve their mutual exclusivities by means of engineering 
solutions. The parties must submit their requests for dismissal or 
settlement agreements and/or engineering submissions by the deadline on 
July 31, 2008. After approval of the settlement or engineering 
submission, the proposed permittee(s) must submit an accurate and 
complete FCC Form 346 by the deadline subsequently specified by staff.
    6. Applicants must ensure that their settlement agreements comply 
with the provisions of 47 U.S.C. 311(c), and the pertinent requirements 
of 47 CFR 73.3525, including the reimbursement restrictions. Parties 
must submit a copy of their settlement agreement and any ancillary 
agreement(s). Parties must submit a joint request for approval of such 
agreement. Parties must submit an affidavit of each party to the 
agreement setting forth: (a) The reasons why it is considered that such 
agreement is in the public interest; (b) A statement that its 
application was not filed for the purpose of reaching or carrying out 
such agreement; (c) A certification that neither the applicant nor its 
principals has received any money or other consideration in excess of 
the legitimate and prudent expenses of the applicant; (d) The exact 
nature and amount of any consideration paid or promised; (e) An 
itemized accounting of the expenses for which it seeks reimbursement; 
and (f) The terms of any oral agreement relating to the dismissal or 
withdrawal of its application.
    7. Applicants that request dismissal of their proposal or file an 
engineering amendment that removes the mutual exclusivity to their 
proposal without having entered a settlement agreement with another 
applicant must nevertheless submit an affidavit as to whether or not 
consideration has been promised to or received by such applicant in 
connection with their dismissal or engineering amendment. Applicants 
may make minor amendments to engineering proposals in order to resolve 
mutual exclusivity, but, according to 47 CFR 1.2105(b) and 
73.3572(a)(1), applicants are not permitted to propose technical 
changes that would be considered a major change.
    8. Anti-Collusion Rule. The prohibition of collusion set forth in 
47 CFR 1.2105(c) became effective upon the short-form application 
filing deadline on June 30, 2006. However, the Commission's rules 
provide for a limited opportunity to settle, or otherwise resolve 
mutual exclusivities by means of engineering solutions, following the 
filing of the short-form applications. Specifically, parties in MX 
groups listed in Attachment A may discuss possible settlement 
agreements or technical solutions with other parties in their group 
during the limited period which commences with the release of the 
Auction 85 Comment Public Notice

[[Page 43232]]

and ends at 6 p.m. on July 31, 2008. Once the settlement period ends, 
the anti-collusion restrictions once again take effect. The Commission 
will proceed to auction with any competing mutually exclusive proposals 
that are not resolved by the parties during this settlement period.
    9. Settlement agreements that are entered into in connection with 
this settlement period must be filed prior to 6 p.m. ET on July 31, 
2008, as an attachment to the respective parties' FCC Forms 175 via the 
FCC Auction System. All parties to a settlement agreement must attach 
the requisite documents to their respective FCC Forms 175. Similarly, 
applicants proposing engineering amendments in connection with this 
settlement period must do so by amending the technical portion of their 
FCC Forms 175 via the FCC Auction System. Engineering amendments also 
must be submitted prior to 6 p.m. on July 31, 2008. Late-filed 
settlement agreements and engineering amendments will not be accepted. 
Applicants are strongly encouraged to file their settlement agreements 
and engineering amendments early and are responsible for allowing 
adequate time for filing. Information about accessing, viewing, 
completing amendments to, and filing settlement agreements for the FCC 
Form 175 is included in Attachment B of the Auction 85 Comment Public 

IV. Bureaus Seek Comment on Auction Procedures

A. Auction Structure

i. Simultaneous Multiple-Round Auction Design
    10. The Bureaus propose to auction all construction permits 
included in Auction 85 using the Commission's standard simultaneous 
multiple-round auction format. Auction 85 offers every construction 
permit for bid at the same time and consists of successive bidding 
rounds in which eligible bidders may place bids on individual 
construction permits. Typically, bidding remains open on all 
construction permits until bidding stops on every construction permit. 
The Bureaus seek comment on this proposal.
ii. Round Structure
    11. The Commission will conduct Auction 85 over the Internet, and 
telephonic bidding will be available as well. The toll-free telephone 
number for the Auction Bidder Line will be provided to qualified 
    12. The auction will consist of sequential bidding rounds, each 
followed by the release of round results. The Bureaus propose to retain 
the discretion to change the bidding schedule in order to foster an 
auction pace that reasonably balances speed with the bidders' need to 
study round results and adjust their bidding strategies. Under this 
proposal, the Bureaus 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. The 
Bureaus seek comment on this proposal. Commenters may wish to address 
the role of the bidding schedule in managing the pace of the auction 
and the tradeoffs in managing auction pace by bidding schedule changes, 
by changing the activity requirements or bid amount parameters, or by 
using other means.
iii. Stopping Rule
    13. For Auction 85, the Bureaus propose to employ a simultaneous 
stopping rule approach. A simultaneous stopping rule means that all 
construction permits remain available for bidding until bidding closes 
simultaneously on all construction permits. More specifically, bidding 
will close simultaneously on all construction permits after the first 
round in which no bidder submits any new bids, applies a proactive 
waiver, or withdraws any provisionally winning bids (if permitted).
    14. Further, the Bureaus propose to retain the discretion to 
exercise any of the following options during Auction 85. (a) Use a 
modified version of the simultaneous stopping rule. The modified 
stopping rule would close the auction for all construction permits 
after the first round in which no bidder applies a waiver, withdraws a 
provisionally winning bid (if permitted), or places any new bids on any 
construction permit for which it is not the provisionally winning 
bidder. Thus, absent any other bidding activity, a bidder placing a new 
bid on a construction permit for which it is the provisionally winning 
bidder would not keep the auction open under this modified stopping 
rule. (b) Declare that the auction will end after a specified number of 
additional rounds. If the Bureaus invoke this special stopping rule, 
they will accept bids in the specified final round(s) after which the 
auction will close. (c) Keep the auction open even if no bidder places 
any new bids, applies a waiver, or withdraws any provisionally winning 
bids (if permitted). In this event, the effect will be the same as if a 
bidder had applied a waiver. The activity rule will apply as usual, and 
a bidder with insufficient activity will either lose bidding 
eligibility or use a waiver.
    15. The Bureaus propose to exercise these options only in certain 
circumstances. The Bureaus propose to retain the discretion to exercise 
any of these options with or without prior announcement during the 
auction. The Bureaus seek comment on these proposals.
iv. Information Relating to Auction Delay, Suspension, or Cancellation
    16. For Auction 85, the Bureaus propose that, by public notice or 
by announcement during the auction, the Bureaus may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, 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 Bureaus, in their sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureaus to delay or 
suspend the auction. The Bureaus emphasize that exercise of this 
authority is solely within the discretion of the Bureaus, and its use 
is not intended to be a substitute for situations in which bidders may 
wish to apply their activity rule waivers. The Bureaus seek comment on 
this proposal.

B. Auction Procedures

i. Upfront Payments and Bidding Eligibility
    17. A bidder's upfront payment is a refundable deposit to establish 
eligibility to bid on construction permits. The Bureaus propose the 
schedule of upfront payments for each construction permit as set forth 
in Attachment A of the Auction 85 Comment Public Notice. The Bureaus 
further propose that the amount of the upfront payment submitted by an 
applicant will determine the applicant's initial bidding eligibility in 
bidding units. The Bureaus seek comment on these proposals.
ii. Activity Rule
    18. The Bureaus propose for Auction 85 the following activity 
requirement: In each round of the auction, a bidder desiring to 
maintain its eligibility to participate in the auction is required to 
be active on 100 percent of its bidding eligibility. Failure to 
maintain the required activity level will result in the

[[Page 43233]]

use of an activity rule waiver or a reduction in the bidder's bidding 
eligibility for the next round of bidding. A bidder's reduced 
eligibility for the next round will be equal to the bidder's activity 
in the current round. The Bureaus seek comment on this proposal.
    19. Commenters that believe that this activity rule should be 
modified should explain their reasoning and comment on the desirability 
of an alternative approach. Commenters are advised to support their 
claims with analyses and suggest alternative activity rules. Comments 
may wish to address the alternative of having more than one stage in 
the auction, with subsequent stages characterized by increasing 
activity requirements, for example, an 80 percent activity requirement 
in Stage One and a 95 percent activity requirement in Stage Two.
iii. Activity Rule Waivers and Reducing Eligibility
    20. The FCC Auction System assumes that a bidder that does not meet 
the activity requirement would prefer to use an activity rule waiver 
(if available) rather than lose bidding eligibility. Therefore, the 
system will automatically apply a waiver at the end of any bidding 
round in which a bidder's activity level is below the minimum required 
unless: (1) The bidder has no activity rule waivers remaining; or (2) 
the bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the activity requirement. If a bidder has 
no waivers remaining and does not satisfy the required activity level, 
its eligibility will be permanently reduced, possibly curtailing or 
eliminating the bidder's ability to place additional bids in the 
    21. The Bureaus propose that each bidder in Auction 85 be provided 
with three activity rule waivers that may be used at the bidder's 
discretion during the course of the auction. The Bureaus seek comment 
on this proposal.
iv. Reserve Price or Minimum Opening Bids
    22. For Auction 85, the Bureaus propose minimum opening bid amounts 
determined by taking into account the type of service and class of 
facility offered, and the number of potential over-the-air viewers 
covered by the proposed LPTV or TV translator broadcast facility. This 
proposed minimum opening bid amount for each construction permit 
available in Auction 85 is set forth in Attachment A of the Auction 85 
Comment Public Notice. The Bureaus do not propose to establish a 
separate reserve price for the construction permits to be offered in 
Auction 85. The Bureaus seek comment on these proposals.
v. Bid Amounts
    23. The Bureaus propose that, in each round, eligible bidders be 
able to place a bid on a given construction permit in any of up to nine 
different amounts (if the bidder has sufficient eligibility to place a 
bid on the particular construction permit). Under this proposal, the 
FCC Auction System interface will list the acceptable bid amounts for 
each construction permit.
    24. For Auction 85, the Bureaus propose to use a minimum acceptable 
bid percentage of 10 percent. This means that the minimum acceptable 
bid amount for a construction permit will be approximately 10 percent 
greater than the provisionally winning bid amount for the construction 
permit. To calculate the additional acceptable bid amounts, the Bureaus 
propose to use a bid increment percentage of 5 percent.
    25. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, the bid 
increment percentage, and the number of acceptable bid amounts if the 
Bureaus determine that circumstances so dictate. Further, the Bureaus 
retain the discretion to do so on a construction permit-by-construction 
permit basis. The Bureaus also retain the discretion to limit: (a) The 
amount by which a minimum acceptable bid for a construction permit may 
increase compared with the corresponding provisionally winning bid, and 
(b) the amount by which an additional bid amount may increase compared 
with the immediately preceding acceptable bid amount. The Bureaus seek 
comment on the circumstances under which the Bureaus should employ such 
a limit, factors to be considered when determining the dollar amount of 
the limit, and the tradeoffs in setting such a limit or changing other 
parameters, such as changing the minimum acceptable bid percentage, and 
the bid increment percentage, and the number of acceptable bid amounts. 
If the Bureaus exercise this discretion, they will alert bidders by 
announcement in the FCC Auction System during the auction. The Bureaus 
seek comment on these proposals.
vi. Provisionally Winning Bids
    26. At the end of a bidding round, a provisionally winning bid for 
each construction permit will be determined based on the highest bid 
amount received for the construction permit.
    In the event of identical high bid amounts being submitted on a 
construction permit in a given round (i.e., tied bids), the Bureaus 
will use a random number generator to select a single provisionally 
winning bid from among the tied bids. (Each bid is assigned a random 
number, and the tied bid with the highest random number wins the 
tiebreaker.) The remaining bidders, as well as the provisionally 
winning bidder, can submit higher bids in subsequent rounds. However, 
if the auction were to end with no other bids being placed, the winning 
bidder would be the one that placed the provisionally winning bid. If 
any bids are received on the construction permit in a subsequent round, 
the provisionally winning bid again will be determined by the highest 
bid amount received for the construction permit.
vii. Bid Removal and Bid Withdrawal
    27. For Auction 85, the Bureaus propose the following bid removal 
procedures. Before the close of a bidding round, a bidder has the 
option of removing any bid placed in that round. By removing selected 
bids in the FCC Auction System, a bidder may effectively unsubmit any 
bid placed within that round. In contrast to the bid withdrawal 
provisions, a bidder removing a bid placed in the same round is not 
subject to a withdrawal payment. Once a round closes, a bidder may no 
longer remove a bid. The Bureaus seek comment on this bid removal 
    28. Where permitted in an auction, bid withdrawals provide a bidder 
with the option of removing bids placed in prior rounds that have 
become provisionally winning bids. If permitted, a bidder that 
withdraws its provisionally winning bid(s) is subject to the bid 
withdrawal payment provisions of the Commission rules. For Auction 85, 
the Bureaus propose to prohibit bidders from withdrawing any bids after 
the round in which bids were placed has closed. The Bureaus seek 
comment on this proposal.

C. Post-Auction Payments

i. Interim Withdrawal Payment Percentage
    29. If withdrawals are allowed in this auction, the Bureaus seek 
comment on the appropriate percentage of a withdrawn bid that should be 
assessed as an interim withdrawal payment, in the event that a final 
withdrawal payment cannot be determined at the close of the auction. 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

[[Page 43234]]

the amount of the withdrawn bid and the amount of the winning bid in 
the same or a subsequent auction. However, if a construction permit 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 construction permit 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. 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.
    30. The Commission has indicated that the level of the interim 
withdrawal payment in a particular auction will be based on the nature 
of the service and the inventory of the construction permits being 
offered. The Commission noted that it may impose a higher interim 
withdrawal payment percentage to deter the anti-competitive use of 
withdrawals when, for example, bidders likely will not need to 
aggregate construction permits offered, such as when few construction 
permits are offered, the construction permits offered are not on 
adjacent frequencies or in adjacent areas, or there are few synergies 
to be captured by combining construction permits.
    31. Applying the reasoning that a higher interim withdrawal payment 
percentage is appropriate when aggregation of construction permits is 
not expected, as with the construction permits subject to competitive 
bidding in Auction 85, if the Bureaus allow bid withdrawals in this 
auction, the Bureaus propose the maximum interim withdrawal payment 
allowed under the current rules. Specifically, the Bureaus propose to 
establish an interim bid withdrawal payment of twenty percent of the 
withdrawn bid for this auction. The Bureaus seek comment on this 
ii. Additional Default Payment Percentage
    32. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) is liable for a default payment under 47 CFR 
1.2104(g)(2). This payment consists of a deficiency payment, equal to 
the difference between the amount of the bidder's bid and the amount of 
the winning bid the next time a construction permit covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    33. For Auction 85, the Bureaus propose to establish an additional 
default payment of twenty percent of the relevant bid. The Bureaus seek 
comment on this proposal.

V. Due Diligence

    34. 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 the broadcast facilities they 
are seeking in this auction. Applicants are strongly encouraged to 
conduct their own research prior to Auction 85 in order to determine 
the existence of pending administrative or judicial proceedings that 
might affect their decisions regarding participation in the auction. 
Prospective bidders should perform due diligence to identify and 
consider all proceedings that may affect the digital companion channel 
facilities they are seeking. Participants in Auction 85 are strongly 
encouraged to continue such research throughout the auction. In 
addition, applicants should perform technical analyses sufficient to 
assure themselves that, should they prevail in competitive bidding for 
a specific construction permit, they will be able to build and operate 
facilities that will fully comply with the Commission's technical and 
legal requirements.
    35. Potential bidders are reminded that digital companion channels 
are licensed on a secondary interference basis, and these channels may 
be displaced by full-power television stations. In addition, LPTV 
stations operating on Channels 52-69 may be displaced by new 700 MHz 
operations. Low power displacement applications (both analog and 
digital) have processing priority over all other low power 
applications, including digital companion channel applications. 
Displacement applications may be filed at any time. Therefore, the 
pending digital companion channel proposals in Auction 85 may be 
affected by newly-filed displacement applications. Bidders should 
continue to examine the effect that newly-filed displacement 
applications may have on their engineering proposals.
    36. Potential bidders for any new television facility in Auction 85 
are also reminded that full service television stations are in the 
process of converting from analog to digital operation and that 
stations may have pending applications to construct and operate digital 
television facilities, construction permits and/or licenses for such 
digital facilities.

VI. Prohibition of Collusion

    37. Applicants for Auction 85 are reminded that they remain subject 
to the Commission's anti-collusion rule until the down payment deadline 
after the auction, which will be announced in a future public notice. 
This prohibition applies to all applicants listed on Attachment A of 
the Auction 85 Comment Public Notice regardless of whether such 
applicants become qualified bidders or actually bid.
    38. Applicants also are reminded that, for purposes of this 
prohibition, an applicant is defined 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.
    39. Parties subject to the anti-collusion rule are prohibited from 
communicating with each other about bids, bidding strategies, or 
settlements unless such applicants have identified each other on their 
short-form applications (FCC Form 175) as parties with whom they have 
entered into agreements pursuant to 47 CFR 1.2105(a)(2)(viii). Thus, 
competing applicants must affirmatively avoid all communications with 
each other that affect or, in their reasonable assessment, have the 
potential to affect, bids or bidding strategy, which may include 
communications regarding the post-auction market structure.
    40. Applicants are hereby placed on notice that public disclosure 
of information relating to bids, bidding strategies, or post auction 
market structure may violate the anti-collusion rule. 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, a 
qualified bidder's statement to the press that it intends to stop 
bidding in the auction could give rise to a finding of an anti-
collusion rule violation. Similarly, a listed applicant's public

[[Page 43235]]

statement of intent not to participate in Auction 85 bidding, including 
a request to dismiss an application outside the settlement period, 
could also violate the rule.
    41. The Bureaus also remind applicants with engineering proposals 
filed in the digital companion channel window that are mutually 
exclusive that they must not communicate 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, a violation similarly could occur. 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.
    42. Applicants are reminded also 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.
    43. In addition, 47 CFR 1.65 requires an applicant to maintain the 
accuracy and completeness of information furnished in its pending 
application and to notify the Commission within 30 days of any 
substantial change that may be of decisional significance to that 
application. Thus, 47 CFR 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 47 CFR 1.65 to make such 
notification to the Commission immediately upon discovery.
    44. Moreover, 47 CFR 1.2105(c)(6) requires that any applicant that 
makes or receives a communication prohibited by Section 1.2105(c) must 
report such communication to the Commission in writing immediately, and 
in no case later than five business after the communication occurs. 
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.
    45. Any report of a communication pursuant to 47 CFR 1.65 or 
1.2105(c)(6) must be submitted by electronic mail to the following 
address: [email protected]. The electronic mail report must include a 
subject or caption referring to Auction 85 and the name of the 
    46. Parties reporting communications pursuant to 47 CFR 
1.2105(a)(2) or 1.2105(c)(6) must take care to ensure that any such 
reports of prohibited communications do not themselves give rise to a 
violation of the anti-collusion rule. For example, a party's report of 
a prohibited communication could violate the rule by communicating 
prohibited information to other applicants through the use of 
Commission filing procedures that would allow such materials to be made 
available for public inspection. A party seeking to report such 
prohibited communications should consider submitting its report with a 
request that the report or portions of the submission be withheld from 
public inspection pursuant to 47 CFR 0.459. Such parties are also 
encouraged to coordinate with the Auctions and Spectrum Access Division 
staff if they have any questions about the procedures for submitting 
such reports.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
 [FR Doc. E8-16964 Filed 7-23-08; 8:45 am]