[Federal Register Volume 77, Number 105 (Thursday, May 31, 2012)]
[Notices]
[Pages 32092-32111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13223]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 12-25; DA 12-641 and DA 12-721]


Mobility Fund Phase I Auction Scheduled for September 27, 2012; 
Notice and Filing Requirements and Other Procedures for Auction 901

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Wireless Telecommunications Bureau (WTB) 
and the Wireline Competition Bureau (WCB) (collectively, the Bureaus) 
announce the procedures and filing requirements for a reverse auction 
to award $300 million in one-time Mobility Fund Phase I support 
scheduled to commence on September 27, 2012. The Bureaus also announce 
the availability of eligible area data in various formats.

DATES: Short-form applications are due prior to 6 p.m. on July 11, 
2012.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: for Mobility Fund Phase I 
questions: Sayuri Rajapakse or Stephen Johnson at (202) 418-0660; for 
auction process questions: Lisa Stover at (717) 338-2868. Wireline 
Competition Bureau, Telecommunications Access Policy Division: for 
general universal service

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questions: Alex Minard at (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of two public notices 
related to the auction for Mobility Fund Phase I support (Auction 901): 
(1) The Auction 901 Procedures Public Notice released on May 2, 2012, 
and (2) a public notice released on May 8, 2012, announcing the 
availability of additional formats for data regarding the areas 
eligible for support in Auction 901. Both public notices and other 
related Commission documents 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, 
fax 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 12-641 or DA 12-721. 
Both public notices and other related documents also are available on 
the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/901/ or by using the search function for AU Docket No. 12-25 
on the Commission's Electronic Comment Filing System (ECFS) Web page at 
http://www.fcc.gov/cgb/ecfs/.

I. General Information

A. Introduction and Summary

    1. The Bureaus establish the procedures that will be used for the 
reverse auction that will award $300 million in one-time Mobility Fund 
Phase I support. This auction, designated as Auction 901, is scheduled 
to be held on September 27, 2012. The Auction 901 Procedures Public 
Notice establishes the procedures, terms, and conditions governing 
Auction 901 and the post-auction application process, and provides 
other important information for parties that wish to seek Mobility Fund 
Phase I support.
    2. Auction 901 will award one-time support to carriers that commit 
to provide third-generation (3G) or better mobile voice and broadband 
services in census blocks where such services are unavailable. Mobility 
Fund Phase I support will be allocated to maximize the road miles 
covered by new mobile services without exceeding the budget of $300 
million. Winning bidders will be obligated to choose whether to deploy 
3G service within two years or fourth-generation (4G) service within 
three years of the award of support. The term 3G refers to mobile 
wireless services that provide voice telephony service on networks that 
also provide services such as Internet access and email. 4G services 
are those capable of meeting or exceeding certain data rates, as 
discussed below.
    3. Auction 901 will be the first auction to award high-cost 
universal service support through competitive bidding. The USF/ICC 
Transformation Order, 76 FR 73830, November 29, 2011 and 76 FR 81562, 
December 28, 2011, established the Mobility Fund as a universal service 
support mechanism dedicated expressly to mobile services and adopted 
rules for distribution of the $300 million initial budget through 
Mobility Fund Phase I. In the USF/ICC Transformation Order, the 
Commission delegated authority to the Bureaus to implement Mobility 
Fund Phase I, including the authority to prepare for and conduct an 
auction and administer program details. On February 2, 2012, the 
Bureaus released the Auction 901 Comment Public Notice, 77 FR 7152, 
February 10, 2012, which identified a preliminary list of census blocks 
potentially eligible for Mobility Fund Phase I support and sought 
comment on whether census blocks should be added or removed from the 
list of potentially eligible census blocks, on the details of auction 
procedures, and on certain related program requirements for Auction 
901. The Bureaus considered 69 separate filings in response to the 
Auction 901 Comment Public Notice.
    4. In the Auction 901 Procedures Public Notice, The Bureaus, among 
other things: (1) Provide the final list of census blocks eligible for 
Mobility Fund Phase I support in Auction 901; (2) conclude that, to 
establish the number of qualifying road miles associated with each 
eligible census block, three additional Census road categories will be 
added to the three categories of roads proposed in the Auction 901 
Comment Public Notice; (3) conclude that Auction 901 will be conducted 
as a single round, sealed bid auction; (4) provide for bidding on 
predefined aggregations of eligible census blocks by census tracts, 
except in Alaska, where bidding will be permitted on individual 
eligible census blocks; (5) require that each winning bidder provide 
coverage, consistent with the performance requirements of the rules 
adopted in the USF/ICC Transformation Order, to a minimum of 75 percent 
of the road miles in each census tract for which it wins support, 
calculated as the total of the road miles in the eligible census blocks 
in the tract; and (6) permit winning bidders to demonstrate that they 
offer supported services at rates comparable to those in urban areas by 
offering one stand-alone voice and one data plan in supported area(s) 
that match plans in urban areas, i.e., in top 100 Cellular Market Areas 
(CMAs), and cost no more than the matching plans.
    5. Moreover, the Auction 901 Procedures Public Notice reviews 
important Mobility Fund Phase I program requirements, including 
eligibility requirements for participation and the public interest 
obligations of winning bidders; describes in detail pre-auction 
procedures and deadlines, including auction application requirements; 
explains requirements and details related to the structure and 
procedures for bidding as outlined above; and provides an overview of 
the post-auction procedures, requirements, and deadlines, including 
information on the post-auction application and on payment requirements 
that will be used to enforce carriers' obligations.

B. Overview of Mobility Fund Phase I

i. Background
    6. In the USF/ICC Transformation Order, the Commission 
comprehensively reformed and modernized the high-cost component of the 
Universal Service Fund (USF) to help ensure the universal availability 
of fixed and mobile communication networks capable of providing voice 
and broadband services, and established a universal service support 
mechanism dedicated expressly to mobile services--the Mobility Fund.
    7. Phase I of the Mobility Fund will provide up to $300 million in 
one-time support to address gaps in mobile services availability by 
supporting the build-out of current- and next-generation mobile 
networks in areas where these networks are unavailable. The support 
offered under Phase I of the Mobility Fund is in addition to any 
ongoing support provided under existing high-cost universal service 
program mechanisms. Phase II of the Mobility Fund will provide $500 
million annually for ongoing support of mobile services. The Commission 
sought comment on the details for Mobility Fund Phase II in the Further 
Notice of Proposed Rulemaking adopted in the USF/ICC Transformation 
Order.
    8. The goal for Mobility Fund Phase I is to extend the availability 
of mobile voice and broadband service on networks that provide 3G or 
better performance and to accelerate the deployment of 4G wireless 
networks in areas where it is cost effective to do so with one-time 
support. To maximize coverage in eligible unserved areas within the 
established budget of $300 million, the USF/ICC Transformation Order 
established general rules for a reverse auction to identify those areas 
where additional investment can make

[[Page 32094]]

as large a difference as possible, in a transparent, simple, speedy, 
and effective way. In this reverse auction, bidders will indicate the 
amount of one-time support they require to deploy service meeting the 
defined performance standard in given unserved areas. Because the 
auction will generally award support based on the lowest per-unit bid 
amount irrespective of geographic area, bidders will compete not only 
against other carriers that may be seeking support in the same areas, 
but also against carriers bidding for support in other areas 
nationwide. Support will be awarded based on the lowest bid amounts 
submitted, but will not be awarded to more than one provider per area. 
Successful bidders will be awarded support for an area at the price 
they bid.
ii. Identification of Unserved Census Blocks Eligible for Mobility Fund 
Support
    9. In the USF/ICC Transformation Order, the Commission decided to 
target Mobility Fund Phase I support to census blocks without 3G or 
better service at the geometric center of the block, referred to as the 
centroid, and concluded that American Roamer data is the best available 
data source for determining where such service is unavailable. (The 
Auction 901 Procedures Public Notice continues to refer to the data as 
American Roamer data, even though the company has since changed its 
name to Mosaik Solutions.) In the USF/ICC Transformation Order, the 
Commission concluded that it would consider any census block in the 
2010 Census as unserved--and thus eligible for support--if an analysis 
of the American Roamer data indicated that the centroid is not covered 
by networks using EV-DO, EV-DO Rev A, or UMTS/HSPA or better.
    10. In the Auction 901 Comment Public Notice, the Bureaus concluded 
that January 2012 American Roamer data was the most recently available 
for the purpose of doing an analysis to identify eligible census blocks 
and described the methodology for identifying potentially eligible 
blocks. The Bureaus used geographic information system (GIS) software 
to determine whether the American Roamer data show 3G or better 
wireless coverage at the centroid of each block. If the American Roamer 
data did not show such coverage, the block was determined to be 
unserved. In the Auction 901 Updated Blocks Public Notice, 77 FR 9655, 
February 17, 2012, the Bureaus identified potentially eligible unserved 
blocks based on their analysis of 2010 Census data and January 2012 
American Roamer data. Because Mobility Fund Phase I support will be 
awarded based on bid amounts and the number of road miles in each 
unserved census block, the list of potentially eligible census blocks 
did not include any unserved census blocks without road miles. The 
updated list consisted of 467,604 census blocks that lacked 3G or 
better service at the centroid of the block.
    11. Pursuant to the USF/ICC Transformation Order, the Bureaus will 
also make ineligible for support census blocks for which, 
notwithstanding the absence of 3G service, any provider has made a 
regulatory commitment to provide 3G or better wireless service, or has 
received a funding commitment from a federal executive department or 
agency in response to the carrier's commitment to provide 3G or better 
wireless service. Such federal funding commitments include, but are not 
limited to, those made under the Broadband Technology Opportunities 
Program (BTOP) and Broadband Initiatives Program (BIP) authorized by 
the American Recovery and Reinvestment Act of 2009 (ARRA).
    12. The Commission established certain bidder-specific 
restrictions. Specifically, each applicant for Mobility Fund Phase I 
support is required to certify that it will not seek support for any 
areas for which it has made a public commitment to deploy, by December 
31, 2012, 3G or better wireless service. In determining whether an 
applicant has made such a public commitment, the Bureaus anticipated 
that they would consider any public statement made with some 
specificity as to both geographic area and time period. This 
restriction will not prevent a bidder from seeking and receiving 
support for an unserved area for which another provider has made such a 
public commitment.
    13. In the USF/ICC Transformation Order, the Commission, responding 
to concerns about potential errors in determining coverage of a 
particular area, provided for a limited timeframe for challenges to 
those initial determinations. The Commission explained that it would 
make public a list of unserved areas as part of the pre-auction process 
and afford parties a reasonable opportunity to respond by demonstrating 
that specific areas identified as unserved are actually served and/or 
that additional unserved areas should be included. In the Auction 901 
Comment Public Notice, the Bureaus therefore asked commenters to 
indicate which blocks included in the revised list should not be 
eligible for Mobility Fund Phase I support and provide supporting 
evidence. Similarly, the Bureaus asked commenters to indicate which 
blocks not included in the revised list should be eligible for support 
and provide supporting evidence.
    14. The Bureaus received numerous comments, reply comments, ex 
parte and other submissions relating to census block eligibility. Three 
states requested that the Bureaus add census blocks to the revised list 
based on State Broadband Initiative data. Five BIP and/or BTOP awardees 
submitted comments requesting that the Bureaus remove census blocks. 
Twenty-two other providers also requested that the Bureaus either add 
or remove census blocks from their updated list of potentially eligible 
blocks.
    15. Three state agencies requested that the Bureaus include census 
blocks that the states identify as unserved based on the State 
Broadband Initiative data gathered by the individual states for the 
National Broadband Map. In the USF/ICC Transformation Order, the 
Commission rejected the use of the National Broadband Map generally 
because of inconsistencies in the initial phase relating to wireless 
services data. While the Bureaus appreciate that data submitted for and 
displayed in the National Broadband Map may have improved, the Bureaus 
conclude that the states did not provide enough information to justify 
a conclusion that the states' data is more reliable than the Bureaus' 
analysis of American Roamer and other data, which the Commission 
determined to use as a consistent basis for determining eligible census 
blocks across all states. The Bureaus therefore decline to add as 
eligible census blocks those listed by the three state agencies in 
their filings.
    16. In light of the Commission's determination to make ineligible 
for support census blocks where a carrier had made a commitment to 
provide 3G or better mobile service in return for a federal funding 
commitment (such as those made under BIP and BTOP), the Bureaus 
requested information on awards proposing mobile wireless projects 
using 3G or better technology. In response, the U.S. Department of 
Agriculture's Rural Utilities Service (USDA RUS) and the U.S. 
Department of Commerce's National Telecommunications and Information 
Administration (NTIA) submitted information on the location of their 
BIP and BTOP awards. Five carriers also submitted comments listing 
census blocks to be removed from the Bureaus' list of potentially 
eligible blocks based

[[Page 32095]]

on their receipt of BIP and/or BTOP awards to provide 3G or better 
service.
    17. USDA RUS provided the Bureaus with a list of Census 2000 census 
blocks associated with BIP awards for mobile wireless projects. After 
converting the data to 2010 census blocks and comparing the results to 
the 2010 census blocks submitted by the three carriers claiming BIP 
awards, the Bureaus find that the blocks submitted by the carriers were 
also reported on the list. This consistency leads the Bureaus to 
conclude that the full list of census blocks receiving BIP awards 
should be removed from the list of eligible census blocks to comply 
with the USF/ICC Transformation Order. As a result, the Census 2000 
census blocks which relate to seven awards made to six parties, 
including three that commented in this proceeding, will be converted to 
2010 census blocks as described and removed.
    18. NTIA provided the Bureaus with a list of Census 2000 census 
tracts associated with BTOP awards potentially for mobile wireless 
projects. The BTOP list may be over inclusive because the list 
describes areas at the census tract rather than the census block level, 
and it may include middle mile infrastructure projects rather than 
projects expressly expanding mobile services. The Bureaus compared this 
list with the 2010 equivalents of the census tracts associated with the 
2010 census blocks submitted by the three commenters claiming BTOP 
awards. The census block data submitted by two of the three commenters 
corresponded closely to areas identified on the list. Based on that 
correspondence, the Bureaus remove the census blocks submitted by the 
two commenters from the list of eligible census blocks. However, 
because the likely over inclusiveness of the submitted data reduces the 
Bureaus' ability to ensure that they would be targeting areas with 
planned expansion of 3G or better coverage, the Bureaus did not remove 
all of the areas on the list from consideration for Mobility Fund Phase 
I support. Further, the Bureaus decline to remove the blocks that a 
third commenter identified as associated with a BTOP award, because the 
award and areas referenced by the commenter are not included in the 
list.
    19. The Bureaus also received comments from 22 carriers requesting 
changes to their list of potentially eligible blocks--either removals 
based on assertions that census blocks listed as potentially eligible 
currently have 3G or better service (or would in the relatively near 
future) or additions based on assertions that census blocks not listed 
as potentially eligible actually lack 3G or better service. First, the 
Bureaus note that three parties filed comments listing census blocks 
for removal from the potentially eligible list based on assertions, at 
least in part, that they would be covered in the future, i.e., after 
the close of the record on March 26, 2012. The Bureaus conclude that 
they will not make census blocks ineligible based on these assertions. 
Pursuant to the USF/ICC Transformation Order, the Bureaus provided 
parties with an opportunity to demonstrate that specific areas 
identified as unserved are actually served or that parties had made a 
regulatory commitment to serve particular areas. The Bureaus finds that 
these assertions of coverage after the close of the record do not 
demonstrate actual service or a regulatory commitment that should be 
reflected in the Bureaus final list of eligible census blocks. Although 
two carriers also claimed that they currently provide service with 
respect to some of their listed census blocks, the Bureaus reject their 
requested exclusions because they do not differentiate between current 
and future coverage in their submissions.
    20. The Bureaus received comments from 15 carriers identifying 
census blocks for removal and/or addition to the list of potentially 
eligible census blocks based on demonstrations of current coverage at 
the centroid, or the lack thereof, in the form of maps, discussions of 
drive tests, explanation of methodologies for determining coverage and 
in numerous cases, certifications by one or more individuals as to the 
veracity of the material provided. The Bureaus find these 
demonstrations to be sufficiently credible and convincing to meet the 
requirements of the USF/ICC Transformation Order and incorporate the 
requested changes in the final list of eligible census blocks, to the 
extent that they contain road miles in any of the six categories 
identified by the Bureaus in the Auction 901 Procedures Public Notice.
    21. Finally, the Bureaus received comments from five carriers 
listing census blocks for removal from the potentially eligible list 
based on bare assertions that their own coverage maps show they serve 
census blocks on the Bureaus potentially eligible list. In contrast to 
the submissions of the 15 carriers, these five did not provide any 
information regarding the basis for their assertions. Reply commenters 
challenged several such submissions as inadequate. The Bureaus conclude 
that these assertions without supporting evidence do not demonstrate 
actual service, as envisioned by the USF/ICC Transformation Order, that 
provides a basis for the Bureaus to depart from their determination of 
potentially eligible census blocks.
    22. The list of census blocks released with the Auction 901 
Procedures Public Notice is the Bureaus' final list of eligible census 
blocks that were identified by analyzing U.S. Census data, January 2012 
American Roamer data, and information submitted by third parties. The 
difference between this list and the list provided with the Auction 901 
Updated Blocks Public Notice is that the Bureaus have removed and added 
blocks based on the comments of the 15 carriers that provided 
sufficiently credible and convincing demonstrations, the Bureaus 
removed blocks based on BTOP and BIP awards, and the Bureaus removed 
blocks that did not have road miles in any of the six road categories. 
Accordingly, the list of census blocks the Bureaus released in the 
Auction 901 Procedures Public Notice contains the final determinations 
with respect to the areas eligible for Mobility Fund Phase I support. 
These census blocks will, in most cases, be aggregated into their 
associated census tracts for bidding purposes. Concurrent with the 
release of the Auction 901 Procedures Public Notice, the Bureaus 
released an interactive map of the eligible census blocks. The map is a 
visual representation of data from the Attachment A files, which 
contain more information and generally more detail than is displayed on 
the map. The map is available at http://wireless.fcc.gov/auctions/901/ 
and at http://www.fcc.gov/maps/. The Bureaus have also announced the 
availability of a spreadsheet of biddable geographic areas for Auction 
901 and geographic information system (GIS) data for the census blocks 
eligible for Mobility Fund Phase I support to be offered in Auction 
901. These data in additional formats are available at http://wireless.fcc.gov/auctions/901/.
    23. The Bureaus remind those interested in seeking Mobility Fund 
Phase I support that applicants for Auction 901 are required to certify 
that they will not seek support for any areas in which they have made a 
public commitment to deploy 3G or better service by December 31, 2012.
iii. Establishing Unserved Road Mile Units
    24. In the Auction 901 Comment Public Notice, the Bureaus proposed 
to establish road mile units based on three road categories defined and 
reported by the U.S. Census Bureau: S1100, primary roads; S1200, 
secondary roads; and

[[Page 32096]]

S1400, local and rural roads and city streets. The Bureaus sought 
comment on this proposal and provided data on nine categories--the 
proposed three categories and six more categories. Several commenters 
asked us to include additional road categories. Specifically, parties 
requested the addition of road categories S1500, 4WD vehicular trails; 
S1640, service drives; and S1740, private roads for service vehicles. 
Based on these comments and an analysis of 2010 census blocks and TIGER 
road mile data, the Bureaus decide to include these additional road 
categories. These categories will add three types of roads that are 
particularly important in some rural areas: unpaved dirt trails where a 
four-wheel drive vehicle is required, service drives that typically 
connect to highways and other types of roads, and private roads that 
are used in areas with logging, mining, oil fields, and ranches. Adding 
these categories provides a better representation of roads where people 
live, work, and travel since it means that, in every state and 
territory, the Bureaus are making support possible for 98 percent or 
more of the total road miles in eligible blocks. Furthermore, adding 
these three categories includes more unserved road miles in almost all 
states and, comparing the road miles in the selected categories to the 
road miles for all nine categories, increases the parity among the 
states of the proportion of unserved road miles that are included.
    25. The list of census blocks released with the Auction 901 
Procedures Public Notice includes, for each block, the number of road 
miles in each of the six selected road categories.
iv. Public Interest Obligations
    26. Voice and Broadband Service. All Mobility Fund Phase I 
recipients must satisfy specified public interest obligations in 
exchange for the support they receive, as must all recipients of any 
Connect America Fund (CAF) support for fixed locations. Specifically, 
all CAF recipients, including Mobility Fund Phase I recipients, must 
offer stand-alone voice service to the public. Mobility Fund Phase I 
recipients must offer voice service with coverage of at least 75 
percent or more of the designated road miles within the area for which 
support is provided. Furthermore, receipt of Mobility Fund Phase I 
support is conditioned upon the recipient providing service over a 
network that achieves particular data rates under particular 
conditions, which the Commission, for this purpose, refers to as third 
generation (3G) networks or better.
    27. Data Rates. To provide specificity, and solely for purposes of 
Mobility Fund Phase I, the Commission refers to a network as a 3G 
network if it achieves outdoor minimum data transmission rates of 50 
kilobits per second (kbps) uplink and 200 kbps downlink at vehicle 
speeds appropriate for the roads covered. Also solely for purposes of 
Mobility Fund Phase I, the Commission refers to a network as a fourth 
generation (4G) network if it achieves outdoor minimum data 
transmissions rates of 200 kbps uplink and 768 kbps downlink at vehicle 
speeds appropriate for the roads covered. With respect to both 3G and 
4G networks, transmission latency must be low enough to enable the use 
of real-time applications, such as Voice over Internet Protocol (VoIP).
    28. Performance Deadlines. Winning bidders in Auction 901 will 
commit to provide service over either a 3G or a 4G network, as those 
terms are used with respect to Mobility Fund Phase I, in their post-
auction long-form applications for support. Those parties committing to 
provide service over a 3G network must do so for at least 75 percent or 
more of the designated road miles within the relevant area within two 
(2) years of being authorized to receive support. Winning bidders 
committing to provide service over a 4G network must do so for at least 
75 percent or more of the designated road miles within the relevant 
area within three (3) years of being authorized to receive support. To 
the extent that a recipient covers road miles in excess of the minimum, 
support will be available for up to 100 percent of the designated road 
miles for which the recipient demonstrates coverage within the required 
timeframe associated with the technology deployed.
    29. Reasonably Comparable Rates. Recipients of Mobility Fund Phase 
I support must certify annually that they offer service in areas with 
support at rates that are within a reasonable range of rates for 
similar service plans offered by mobile wireless providers in urban 
areas. This requirement extends for a period ending five years after 
the date of award of support.
    30. Collocation. In exchange for the support provided, Mobility 
Fund Phase I recipients shall allow for reasonable collocation by other 
providers of services that would meet the voice and data requirements 
of Mobility Fund Phase I on newly constructed towers that the recipient 
owns or manages in the area for which it receives support. Consistent 
with this requirement, a recipient may not enter into facilities access 
arrangements regarding relevant facilities that restrict any party to 
the arrangement from allowing others to collocate on the facilities.
    31. Voice and Data Roaming. Recipients of Mobility Fund Phase I 
support must provide voice and data roaming on networks built with the 
support, consistent with the requirements of 47 CFR 20.12 as those 
rules were in effect on the date the Commission adopted the USF/ICC 
Transformation Order. This condition of support is independent of 
subsequent changes to the Commission's rules on voice and data roaming, 
though to the extent any new rules are generally applicable, recipients 
of Mobility Fund Phase I support may be subject to those as well. As 
these requirements, as well as all the public interest obligations, are 
a condition of Mobility Fund Phase I support, violations may result in 
the withholding or clawing back of universal service support in 
addition to any other applicable sanctions.
v. Mobility Fund Phase I Eligibility Requirements
    32. In order to participate in Auction 901 and receive Mobility 
Fund Phase I support, an applicant must demonstrate, for the areas on 
which it wishes to bid, that it has been designated as an eligible 
telecommunications carrier (ETC) and has access to the spectrum 
necessary to satisfy the applicable performance requirements. In 
addition, an applicant must certify that it is financially and 
technically capable of providing 3G or better service.
    33. One commenter advocates restricting eligibility to participate 
in the auction based on additional factors, primarily related to the 
size of the applicant. The Commission previously considered and 
rejected similar proposals in the USF/ICC Transformation Order. The 
Commission concluded that the competitive bidding rules and the 
procedures to be developed by the Bureaus would promote its objectives 
for the Mobility Fund and provide a fair opportunity for serious, 
interested parties to participate. The Bureaus cannot modify the 
eligibility requirements because the changes the commenter advocates 
are beyond the scope of the Bureaus' delegated authority and the scope 
of this proceeding and would require action by the Commission to 
reconsider its determination in the USF/ICC Transformation Order.
    34. On a related note, in connection with the USF/ICC 
Transformation Order, the Commission prepared a Final Regulatory 
Flexibility Analysis concerning the possible impact on small entities 
of, among other things, the Mobility Fund Phase I rules, as

[[Page 32097]]

implemented by the Bureaus in the Auction 901 Procedures Public Notice.
vi. Annual Reporting and Record Retention Requirements
    35. Winning bidders that are authorized to receive Mobility Fund 
Phase I support are required to submit to the Commission an annual 
report each year for the five years after being so authorized. The 
information and certifications required to be included in the annual 
report are described in 47 CFR 54.1009. In addition, authorized winning 
bidders are required to submit certain reports before receiving 
disbursements of support. Mobility Fund Phase I support will be 
available for disbursement to authorized winning bidders in three 
stages, with the first disbursement made when the winning bidder is 
authorized to receive support. A recipient will be eligible to receive 
the second disbursement when it submits a report demonstrating coverage 
of 50 percent of the applicable coverage requirements of 47 CFR 
54.1006. A recipient will be eligible to receive the final disbursement 
when it submits a report demonstrating coverage meeting the applicable 
requirements of 47 CFR 54.1006.
    36. A winning bidder authorized to receive Mobility Fund Phase I 
support and all of its agents are required to retain any documentation 
prepared for, or in connection with, the award of Mobility Fund Phase I 
support for a period of not less than ten years after the date on which 
the winning bidder receives its final disbursement of Mobility Fund 
Phase I support.

C. Auction Specifics

i. Auction Start Date
    37. Bidding in Auction 901 will be held on Thursday, September 27, 
2012. Two commenters contend that the auction should be delayed in 
light of pending litigation regarding the source of funds to be 
disbursed based on the auction and in light of pending petitions for 
reconsideration of various aspects of the USF/ICC Transformation Order. 
Neither pending litigation nor the pending petitions are a sufficient 
basis for the Bureaus to delay the scheduled auction start date. The 
Commission already has considered the issues in the pending litigation 
at length in proceedings before it, and no action taken in the Auction 
901 Procedures Public Notice would prejudge the Commission's review of 
the petitions seeking reconsideration of the USF/ICC Transformation 
Order.
    38. The start and finish time of bidding in Auction 901 will be 
announced by public notice approximately one week before the start of 
the auction. Unless otherwise announced, bidding for all census blocks 
will be offered at the same time.
ii. Bidding Methodology
    39. The bidding methodology for Auction 901 will be single-round 
reverse format. The Commission will conduct this auction over the 
Internet using the FCC Auction System. Qualified bidders are permitted 
to bid electronically via the Internet. Telephonic bidding will not be 
available for Auction 901 because it will not be feasible given the 
number of eligible geographic areas and the manner in which bids will 
be uploaded.
iii. Pre-Auction Dates and Deadlines
    40. The following dates and deadlines apply to Auction 901: (1) An 
auction tutorial will available (via Internet) by June 27, 2012; (2) 
short-form application (FCC Form 180) filing window opens on June 27, 
2012, at 12 noon ET; (3) short-form application (FCC Form 180) filing 
window closes on July 11, 2012, at 6:00 p.m. ET; (4) a mock auction 
will be held on September 25, 2012; and (5) Auction 901 will be held on 
September 27, 2012.
iv. Requirements for Participation
    41. Those wishing to participate in this auction must: (1) submit a 
short-form application (FCC Form 180) electronically prior to 6 p.m. ET 
on July 11, 2012, following the electronic filing procedures that will 
be provided in a future public notice; and (2) comply with all 
provisions outlined in the Auction 901 Procedures Public Notice and 
applicable Commission rules.

D. Rules and Disclaimers

i. Relevant Authority
    42. Prospective applicants in Auction 901 must familiarize 
themselves with the Commission's general universal service rules, 
contained in 47 CFR part 54, and the Mobility Fund specifically, 47 CFR 
54.1001- 54.1010. They should also familiarize themselves with the 
Commission's decision in the USF/ICC Transformation Order to implement 
the Mobility Fund Phase I. Prospective bidders in Auction 901 must be 
familiar with the specific competitive bidding rules for universal 
service support contained in 47 CFR 1.21000--1.21004, as well as the 
procedures, terms and conditions contained in the Auction 901 
Procedures Public Notice, the Auction 901 Comment Public Notice, and 
all other public notices related to Auction 901 (AU Docket No. 12-25). 
Additionally, prospective Auction 901 bidders will find it helpful to 
familiarize themselves with the Commission's general competitive 
bidding rules, including recent amendments and clarifications, as well 
as Commission decisions in proceedings regarding competitive bidding 
procedures, application requirements, and obligations of Commission 
licensees.
    43. 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 this auction.
ii. Prohibited Communications and Compliance With Antitrust Laws
    44. To ensure the competitiveness of the auction process, 47 CFR 
1.21002 prohibits an applicant in a Mobility Fund auction from 
cooperating or collaborating with any other applicant with respect to 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies, and from communicating with any other applicant in 
any manner the substance of its own, or one another's, or any other 
competing applicant's bids or bidding strategies, until after the post-
auction deadline for winning bidders to submit applications for 
support, unless such applicants are members of a joint bidding 
arrangement identified on the short form application(s) pursuant to 47 
CFR 1.21001(b)(3)-(4).
    45. 47 CFR 1.21002 is based on a similar rule used by the 
Commission in competitive bidding for spectrum licenses, 47 CFR 
1.2105(c). Potential bidders should familiarize themselves with 47 CFR 
1.2105(c) and 1.21002, as well as the judicial, Commission and Wireless 
Bureau decisions addressing application of the rule prohibiting certain 
communications listed in Attachment E of the Auctions 901 Procedures 
Public Notice. The Bureaus encourage applicants to review information 
regarding the Commission's interpretation of 47 CFR 1.2105(c) to gain 
insight into its views on prohibited communications during competitive 
bidding for Mobility Fund support.
a. Entities Subject to Section 1.21002, the Rule on Prohibited 
Communications
    46. The prohibition on certain communications contained in 47 CFR 
1.21002 will apply to any applicant that submits a short-form 
application to participate in Auction 901. Thus, unless they have 
identified each other on their

[[Page 32098]]

short-form applications as parties with whom they have entered into 
agreements under 47 CFR 1.21001(b)(3), applicants in Auction 901 must 
affirmatively avoid all communications with or disclosures to each 
other that affect or have the potential to affect bids or bidding 
strategy. In some instances, this prohibition extends to communications 
regarding the post-auction market structure. This prohibition applies 
to all applicants regardless of whether such applicants become 
qualified bidders or actually bid.
    47. For the Mobility Fund Phase I auction, all bidders will compete 
for support with all other bidders in Auction 901, regardless of the 
geographic areas they seek to serve with Mobility Fund support. 
Therefore, applicants will be prohibited from making certain 
communications with all other applicants in Auction 901 regardless of 
the geographic areas they select, unless the parties disclose 
agreements reached between the parties on their short-form 
applications.
    48. For purposes of the prohibition on certain communications, 47 
CFR 1.21002 defines applicant broadly to include the applicant, each 
party capable of controlling the applicant, including all officers and 
directors, and each party that may be controlled by the applicant or by 
a party capable of controlling the applicant.
    49. Individuals and entities subject to 47 CFR 1.21002 should take 
special care in circumstances where their officers, directors and 
employees may receive information directly or indirectly relating to 
any competing applicant's bids or bidding strategies.
    50. Moreover, Auction 901 applicants are encouraged not to use the 
same individual as an authorized bidder. A violation of 47 CFR 1.21002 
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., a 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 the applicant and its bidders will comply with 47 CFR 
1.21002.
b. Prohibition Applies Until Long Form Application Deadline
    51. 47 CFR 1.21002 prohibition on certain communications begins at 
the short-form application filing deadline and ends at the long form 
application deadline after the auction closes, which will be announced 
in a future public notice.
c. Prohibited Communications
    52. Applicants must not communicate directly or indirectly about 
bids or bidding strategy to other applicants. 47 CFR 1.21002 prohibits 
not only communication about an applicant's own bids or bidding 
strategy, it also prohibits communication of another applicant's bids 
or bidding strategy. While the rule does not prohibit non-auction-
related business negotiations among auction applicants, each applicant 
must remain vigilant so as not to directly or indirectly communicate 
information that affects, or could affect, bids, bidding strategy, or 
the negotiation of settlement agreements.
    53. Applicants are cautioned that the Commission remains vigilant 
about prohibited communications taking place outside of the auction 
itself. 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. Moreover, the Commission has found a violation of the rule 
against prohibited communications where an applicant 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. Applicants also should use caution in 
their dealings with other parties, such as members of the press, 
financial analysts, or others who might become conduits for the 
communication of prohibited bidding information. For example, an 
applicant's statement to the press that it intends to stop bidding in 
the auction could give rise to a finding of 47 CFR 1.21002 violation. 
Similarly, an applicant's public statement of intent not to participate 
in Auction 901 bidding could also violate the rule. Applicants are 
hereby placed on notice that public disclosure of information relating 
to bids, or bidding strategies, or to post auction market structures 
may violate 47 CFR 1.21002.
d. Disclosure of Bidding Agreements and Arrangements
    54. 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 applications. Applicants must identify 
in their short-form applications all parties with whom they have 
entered into any agreements, arrangements, or understandings of any 
kind relating to the Mobility Fund Phase I support they seek, including 
any agreements relating to post-auction market structure.
    55. If parties agree in principle on all material terms prior to 
the short-form application filing deadline, each party to the agreement 
must identify the other party or parties to the agreement on its short-
form application under 47 CFR 1.21001(b)(3), 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 negotiation, discussion or communication with any other 
applicants after the short-form application filing deadline.
    56. 47 CFR 1.21002 does not prohibit non-auction-related business 
negotiations among auction applicants. However, certain discussions or 
exchanges could touch upon impermissible subject matters because they 
may convey pricing information and bidding strategies. Such subject 
areas include, but are not limited to, issues such as management, 
sales, local marketing agreements, and other transactional agreements.
e. Section 1.21001(b)(4)-(5) Applicant Certifications
    57. By electronically submitting a short-form application, each 
applicant in Auction 901 certifies its compliance with 47 CFR 
1.21001(b)(3) and 1.21002. In particular, an applicant must certify 
under penalty of perjury that the application discloses all real 
parties in interest to any agreements involving the applicant's 
participation in the competitive bidding for Mobility Fund support. 
Also, the applicant must certify that it and all applicable parties 
have complied with and will continue to comply with 47 CFR 1.21002.
    58. The Bureaus caution, however, that merely filing a certifying 
statement as part of an application will not

[[Page 32099]]

outweigh specific evidence that a prohibited communication 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 47 CFR 
1.21001(b)(4) and (5) may be subject to sanctions.
f. Duty To Report Prohibited Communications
    59. 47 CFR 1.21002(c) provides that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.21002 must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. An applicant's obligation to make such a report continues until 
the report has been made.
    60. 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 of any substantial change that 
may be of decisional significance to that application. Thus, the rule 
requires an Auction 901 applicant to notify the Commission of any 
substantial change to the information or certifications included in its 
pending short-form application. An applicant is therefore required by 
47 CFR 1.65 to report to the Commission any communication the applicant 
has made to or received from another applicant after the short-form 
application filing deadline that affects or has the potential to affect 
bids or bidding strategy, unless such communication is made to or 
received from a party to an agreement identified under 47 CFR 
1.21001(b)(4).
    61. 47 CFR 1.65(a) and 1.21002 require each applicant in 
competitive bidding proceedings to furnish additional or corrected 
information within five days of a significant occurrence, or to amend 
its short-form application no more than five days after the applicant 
becomes aware of the need for amendment. These rules are intended to 
facilitate the auction process by making the information available 
promptly to all participants and to enable the Bureaus to act 
expeditiously on those changes when such action is necessary.
g. Procedure for Reporting Prohibited Communications
    62. A party reporting any prohibited communication pursuant to 47 
CFR 1.65, 1.21001(b), or 1.21002(c) must take care to ensure that any 
report of the prohibited communication does not itself give rise to a 
violation of 47 CFR 1.21002. 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.
    63. Parties must file only a single report concerning a prohibited 
communication and must file that report with Commission personnel 
expressly charged with administering the Commission's auctions. This 
rule is designed to minimize the risk of inadvertent dissemination of 
information in such reports. Any reports required by 47 CFR 1.21002(c) 
must be filed consistent with the instructions set forth in the Auction 
901 Procedures Public Notice. For Auction 901, such reports must be 
filed with the Chief of the Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau, by the most expeditious means 
available. Any such report should be submitted by email to the 
following email address: [email protected]. If you choose instead to 
submit a report in hard copy, any such report must be delivered only 
to: Margaret W. Wiener, Chief, Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau, Federal Communications Commission, 
445 12th Street SW., Room 6423, Washington, DC 20554.
    64. A party seeking to report such a prohibited communication 
should consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection by 
following the procedures specified in 47 CFR 0.459. The Bureaus 
encourage such parties to coordinate with the Auctions and Spectrum 
Access Division staff about the procedures for submitting such reports.
h. Winning Bidders May Need To Disclose Terms of Agreements
    65. Each applicant that is a winning bidder may be required to 
disclose in its long-form application the specific terms, conditions, 
and parties involved in any agreement it has entered into. This may 
apply to any bidding consortia, joint venture, partnership, or 
agreement, understanding, or other arrangement entered into relating to 
the competitive bidding process, including any agreement relating to 
the post-auction market structure. Failure to comply with the 
Commission's rules can result in enforcement action.
i. Antitrust Laws
    66. The Bureaus also remind applicants 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 47 
CFR 1.21002 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 submitted a short-form 
application. Similarly, the Wireless Bureau previously 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.
    67. 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 a forfeiture and may be prohibited from 
participating in future auctions, among other sanctions.
iii. Due Diligence
    68. The Bureaus remind each potential bidder that it has sole 
responsibility for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the level of Mobility 
Fund Phase I support it submits as a bid in Auction 901. Each bidder is 
responsible for assuring that, if it wins the support, it will be able 
to build and operate facilities in accordance with the Mobility Fund 
obligations and the Commission's rules generally.
    69. Applicants should be aware that Auction 901 represents an 
opportunity to apply for Mobility Fund support, subject to certain 
conditions and regulations. Auction 901 does not constitute an 
endorsement by the FCC of any particular service, technology, or 
product, nor does Mobility Fund support constitute a guarantee of 
business success.
    70. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, the Bureaus strongly encourage each

[[Page 32100]]

potential bidder to review all underlying Commission orders, including 
the USF/ICC Transformation Order. Each potential bidder should perform 
technical analyses or refresh its previous analyses to assure itself 
that, should it become a winning bidder for Mobility Fund Phase I 
support, it will be able to build and operate facilities that will 
fully comply with all applicable technical and legal requirements. The 
Bureaus strongly encourage each applicant to inspect any prospective 
transmitter sites located in, or near, the service area for which it 
plans to construct transmitters with Mobility Fund support, to confirm 
the availability of such sites, and to familiarize itself with the 
Commission's rules regarding environmental compliance.
    71. The Bureaus strongly encourage each applicant to conduct its 
own research prior to Auction 901 in order to determine the existence 
of pending administrative or judicial proceedings, including pending 
allocation rulemaking proceedings that might affect its decision to 
participate in the auction. The due diligence considerations mentioned 
in the Auction 901 Procedures Public Notice do not comprise an 
exhaustive list of steps that should be undertaken prior to 
participating in this auction. As always, the burden is on the 
potential bidder to determine how much research to undertake, depending 
upon specific facts and circumstances related to its interests.
    72. The Bureaus also remind each applicant that pending and future 
judicial proceedings, as well as certain pending and future proceedings 
before the Commission--including applications, applications for 
modification, petitions for rulemaking, requests for special temporary 
authority, waiver requests, petitions to deny, petitions for 
reconsideration, informal objections, and applications for review--may 
relate to particular licensees or applicants for support in Auction 
901. Each prospective applicant is responsible for assessing the 
likelihood of the various possible outcomes and for considering the 
potential impact on Mobility Fund Phase I support available through 
this auction.
    73. Each applicant is solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect its ability to bid on or otherwise receive Mobility 
Fund Phase I support. Each potential bidder is responsible for 
undertaking research to ensure that any support won in this auction 
will be suitable for its business plans and needs. Each potential 
bidder must undertake its own assessment of the relevance and 
importance of information gathered as part of its due diligence 
efforts.
    74. 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, it must 
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.
iv. Use of FCC Auction System
    75. Bidders will be able to participate in Auction 901 over the 
Internet using the FCC Auction System. The Commission makes no warranty 
whatsoever with respect to the FCC Auction System. In no event shall 
the Commission, or any of its officers, employees, or agents, be liable 
for any damages whatsoever (including, but not limited to, loss of 
business profits, business interruption, loss of business information, 
or any other loss) arising out of or relating to the existence, 
furnishing, functioning, or use of the FCC Auction System that is 
accessible to qualified bidders in connection with this auction. 
Moreover, no obligation or liability will arise out of the Commission's 
technical, programming, or other advice or service provided in 
connection with the FCC Auction System.
v. Environmental Review Requirements
    76. Recipients of Mobility Fund support, like all 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 any entity constructing a wireless antenna facility must 
comply with the Commission's environmental rules for each such 
facility. The Commission's environmental rules require, among other 
things, that the entity constructing the facility 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 
entity constructing the facility must follow the provisions of the 
Nationwide Programmatic Agreement Regarding the Section 106 National 
Historic Preservation Act Review Process. The entity 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 entity also must prepare environmental assessments for 
facilities that include high intensity white lights in residential 
neighborhoods or excessive radio frequency emission, or that are over 
450 feet in height. Facilities that require antenna registration will 
also be required to complete an environmental notification process.

II. Short-Form Application Requirements

A. General Information Regarding Short-Form Applications

    77. An application to participate in Auction 901, referred to as a 
short-form application or FCC Form 180, provides information used to 
determine whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
universal service funding support. The short-form application is the 
first part of the Commission's two-phased auction application process. 
In the first phase, each party desiring to participate in the auction 
must file a streamlined, short-form application in which it certifies 
under penalty of perjury as to its qualifications. Each applicant must 
take seriously its duties and responsibilities and carefully determine 
before filing an application that it has the legal, technical and 
financial resources to participate in the auction and be able to meet 
the public interest obligations associated with Mobility Fund Phase I 
support. Eligibility to participate in bidding is based on the 
applicant's short-form application and certifications. In the second 
phase of the process, each winning bidder must file a more 
comprehensive long-form application (FCC Form 680).
    78. Every entity seeking support available in Auction 901 must file 
a short-form application electronically via the FCC Auction System 
prior to 6 p.m.

[[Page 32101]]

ET on July 11, 2012. The short-form application requires each applicant 
to establish its eligibility for bidding for Mobility Fund Phase I 
support. Among other things, to establish eligibility at the short-form 
stage, an applicant must certify that it is a designated ETC in any 
geographic area for which it will seek support, or that it is a 
Tribally-owned or controlled entity with a pending application for ETC 
designation, and provide the Study Area Code(s) (SAC(s)) associated 
with its ETC designation and/or provide the name(s) of its 
corresponding Tribal land(s) in lieu of a SAC. Each applicant will also 
be required to provide a general narrative description of its access to 
the spectrum it plans to use to meet Mobility Fund obligations in the 
particular area(s) for which it plans to bid and certify that it will 
retain its access to the spectrum for at least five years from the date 
of award of support. If an applicant claims eligibility for a Tribal 
land bidding credit as a Tribally-owned or controlled entity, the 
information provided in its FCC Form 180 will be used in determining 
whether the applicant is eligible for the claimed bidding credit. Each 
applicant filing a short-form application is subject to the 
Commission's rule prohibiting certain communications beginning on the 
deadline for filing.
    79. Each applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. Each applicant 
must certify on its short-form application under penalty of perjury 
that it is legally, technically, financially and otherwise qualified to 
receive universal service support funding. Each applicant should 
consult the Commission's rules to ensure that all the information 
required is included in its short-form application.
    80. A party may not submit more than one short-form application for 
Auction 901. If a party submits multiple short-form applications, only 
one application may be accepted for filing.
    81. Each applicant 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. An applicant is not permitted to make major modifications to 
its application; 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, the forfeiture of universal service support, 
license forfeitures, ineligibility to participate in future auctions, 
and/or criminal prosecution.

B. SAC Identification

    82. An applicant will not be required to select the specific census 
blocks on which it wishes to bid when submitting its short-form 
application. Based on the SAC(s) or Tribal land(s) information entered 
by an applicant, the FCC Auction System will identify eligible tracts 
and blocks in the associated state(s) or Tribal land(s) for each 
applicant during the application process.

C. Disclosure of Bidding Arrangements

    83. An applicant will be required to identify in its short-form 
application all real parties-in-interest to any agreements relating to 
the participation of the applicant in the competitive bidding for 
Mobility Fund support.
    84. Each applicant will also be required to certify under penalty 
of perjury in its short-form application that it has disclosed all real 
parties-in-interest to any agreements involving the applicant's 
participation in the competitive bidding for Mobility Fund support. If 
an applicant has had discussions, but has not reached an agreement by 
the short-form application filing deadline, it should not include the 
names of parties to the discussions on its application and may not 
continue such discussions with any applicants after the deadline.
    85. Moreover, each applicant will also be required to certify under 
penalty of perjury in its short-form application that it and all 
applicable parties have complied with and will continue to comply with 
47 CFR 1.21002. While 47 CFR 1.21002 does not prohibit non-auction-
related business negotiations among auction applicants, the Bureaus 
remind applicants 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 47 CFR 1.21002 will not insulate a party from 
enforcement of the antitrust laws.

D. Ownership Disclosure Requirements

    86. Each applicant must comply with the uniform Part 1 ownership 
disclosure standards and provide information required by 47 CFR 
54.1005(a)(1) and 1.2112(a). Specifically, in completing the short-form 
application, an applicant will be required to fully disclose 
information on the real party- or parties-in-interest and the ownership 
structure of the applicant, including both direct and indirect 
ownership interests of 10 percent or more, as prescribed in 47 CFR 
1.2112(a). Each applicant is responsible for ensuring that information 
submitted in its short-form application is complete and accurate.
    87. In certain circumstances, an applicant's most current ownership 
information on file with the Commission, if in an electronic format 
compatible with the short-form application (FCC Form 180) (such as 
information submitted in an FCC Form 602 or in an FCC Form 175 filed 
for a previous Commission spectrum license auction using the FCC 
Auction System), will automatically be entered into the applicant's 
short-form application. Each applicant must carefully review any 
information automatically entered to confirm that it is complete and 
accurate as of the deadline for filing the short-form application. Any 
information that needs to be corrected or updated must be changed 
directly in the short-form application.

E. Specific Mobility Fund Phase I Eligibility Requirements and 
Certifications

i. ETC Designation Certification
    88. In the USF/ICC Transformation Order, the Commission concluded 
that, in order to apply to participate in an auction offering Mobility 
Fund support, any entity first had to be designated as an ETC pursuant 
to section 214 of the Communications Act in any geographic area for 
which it seeks support, with one narrow exception for Tribally-owned or 
controlled entities. An applicant must be the entity designated by a 
State or the Commission as an ETC in that geographic area. For example, 
if a designated ETC is a subsidiary of a parent holding company, only 
the subsidiary that is designated an ETC, and not the holding company, 
would be eligible to participate in the auction. For purposes of 
participation in the Mobility Fund, a party's ETC designation may not 
be limited in any way. Accordingly, a party designated as an ETC solely 
for purposes of the Low Income Program cannot satisfy the ETC 
eligibility requirement for the Mobility Fund on that basis. Of course, 
nothing prohibits such a party from seeking a general designation as an 
ETC and then, if it receives such a designation, participating in the 
Mobility Fund.
    89. ETC status carries with it certain obligations. So that a party 
might obtain the required ETC designation but not be subject to those 
obligations unless and

[[Page 32102]]

until it wins any Mobility Fund support, the Commission further 
determined that a party might participate with an ETC designation 
conditioned upon the party winning support in the auction. At the 
short-form application stage, an applicant will be required to state 
that it is designated as an ETC in any area for which it will seek 
support, or is a Tribal entity with a pending application to become an 
ETC in any such area, and certify that the disclosure is accurate. A 
winning bidder will be required to provide proof of its ETC designation 
in all of the areas in which it will receive support before it may 
receive support.
    90. Pending ETC Designations. The Commission further decided to 
permit participation by a Tribally-owned or controlled entity that at 
the short-form application deadline has an application for ETC 
designation pending for the provision of service within the boundaries 
of the associated Tribal land. The Commission did so to afford Tribes 
an increased opportunity to participate at auction, in recognition of 
their interest in self-government and self-provisioning on their own 
lands. A Tribally-owned or controlled entity whose application for ETC 
designation remains pending at the short-form application deadline is 
requested to provide the date the application was filed, with whom 
(i.e. the Commission or relevant state regulatory agency), any file or 
case number associated with the application, and its current status.
ii. Access to Spectrum Description and Certification
    91. Pursuant to the USF/ICC Transformation Order, any applicant for 
Auction 901 must have access to the necessary spectrum to fulfill any 
obligations related to support. In an application to participate in 
Auction 901, each applicant must describe its required spectrum access 
and certify that the description is accurate and the applicant will 
retain such access for at least five (5) years from the date on which 
it is authorized to receive support. Specifically, an applicant will be 
required to disclose whether it currently holds or leases the spectrum 
and whether such spectrum access is contingent on obtaining support in 
Auction 901. For the described spectrum access to be sufficient as of 
the date of the short-form application, the applicant must obtain any 
necessary approvals from the Commission for the spectrum access prior 
to filing the application. A pending request for such an approval is 
not sufficient to satisfy this requirement. Furthermore, only assured 
access is sufficient, which means that the access must be to licensed 
spectrum subject to limited access. Accordingly, the applicant should 
identify the license applicable to the spectrum to be accessed, the 
licensee, and, if the licensee is a different party than the applicant, 
the relationship between the applicant and the licensee that provides 
the applicant with the required access. With the exception of the 
certification, the terms of which are set forth in FCC Form 180, an 
applicant must provide all required information relating to spectrum 
access in an attachment to FCC Form 180.
iii. Financial and Technical Capability Certification
    92. The Commission requires that an applicant certify in the pre-
auction short-form application that it is financially and technically 
capable of providing 3G or better service within the specified 
timeframe in the geographic areas for which it seeks support. This 
certification indicates that an applicant for Mobility Fund Phase I 
funds can provide the requisite service without any assurance of 
ongoing support for the areas in question after Mobility Fund Phase I 
support has been exhausted. An applicant should be aware that in making 
a certification to the Commission it exposes itself to liability for a 
false certification. An applicant should take care to review its 
resources and its plans before making the required certification and be 
prepared to document its review, if necessary.
iv. Certification That Applicant Will Not Seek Support for Areas in 
Which It Has Made a Public Commitment To Deploy 3G or Better Service by 
December 31, 2012
    93. The Commission requires each applicant for Mobility Fund Phase 
I support to certify that the applicant will not seek support for any 
areas in which it has made a public commitment to deploy 3G or better 
wireless service by December 31, 2012. In determining whether an 
applicant has made such a public commitment, the Bureaus would consider 
any public statement made with some specificity as to both geographic 
area and time period as well as level of service. For example, in the 
public record generated in response to the Auction 901 Comment Public 
Notice, which sought comment on a list of census blocks potentially 
eligible for Mobility Fund Phase I support, more than one party 
publicly identified areas that they intend to cover with 3G or better 
service no later than December 31, 2012. This requirement helps to 
assure that Mobility Fund Phase I support will not go to finance 
coverage that carriers would have provided in the near term without any 
subsidy. Furthermore, the requirement may conserve funds and avoid 
displacing private investment by making a carrier that made such a 
commitment ineligible for Mobility Fund Phase I support with respect to 
the identified geographic area(s). Because circumstances are more 
likely to change over a longer term, the Bureaus do not hold providers 
to any statements for any time period beyond December 31, 2012. 
Applicants should note that this restriction does not prevent a party 
from seeking and receiving support for an eligible geographic area 
where another provider has announced such a commitment to deploy 3G or 
better.

F. Tribally-Owned or Controlled Providers--25 Percent Reverse Bidding 
Credit

    94. The Commission adopted a 25 percent reverse bidding credit for 
Tribally-owned or controlled providers seeking either general or Tribal 
Mobility Fund Phase I support. In order to be eligible for the bidding 
credit, a qualifying Tribally-owned or controlled provider must certify 
in its short-form application that it is qualified and identify the 
applicable Tribe and Tribal lands.
    95. The bidding credit will effectively reduce the Tribal entity's 
bid amount by 25 percent for the purpose of comparing it to other bids, 
thus increasing the likelihood that Tribally-owned and controlled 
entities will receive funding. If the Tribally-owned or controlled 
entity were to win, support would be calculated at the full, 
undiscounted bid amount. The preference is available with respect to 
the eligible census blocks located within the geographic area defined 
by the boundaries of the Tribal land associated with the Tribally-owned 
or controlled provider seeking support.

G. Commission Red Light Rules

    96. Applications to participate in Auction 901 are subject to the 
Commission's rules regarding an applicant with delinquent debts, often 
referred to as the Commission Red Light Rules. Pursuant to these rules, 
unless otherwise expressly provided for, the Commission will withhold 
action on an application by any entity found to be delinquent in its 
debt to the Commission for purposes of the Red Light Rules. 
Accordingly, parties interested in filing applications to participate 
in Auction 901 should review the status of any debts that they owe the 
Commission before submitting their application and resolve any

[[Page 32103]]

delinquent debts. The Commission maintains a Red Light Display System 
(RLD) to enable entities doing business with the FCC to determine if 
they have any outstanding delinquent debt. The RLD enables a party to 
check the status of its account by individual FCC Registration Numbers 
(FRNs), and links other FRNs sharing the same Tax Identification Number 
(TIN) when determining whether there are outstanding delinquent debts. 
The RLD is available at http://www.fcc.gov/redlight/. Additional 
information is available at http://transition.fcc.gov/debt_collection/.

H. USF Debarment

    97. The Commission's rules provide for the debarment of those 
convicted of or found civilly liable for defrauding the high-cost 
support program. Applicants are reminded that those rules apply with 
equal force to the Mobility Fund Phase I.

I. Minor Modifications to Short-Form Applications

    98. After the deadline for filing initial applications, an Auction 
901 applicant is permitted to make only minor changes to its 
application. Permissible minor changes include, among other things, 
deletion and addition of authorized bidders (to a maximum of three) and 
revision of the addresses and telephone numbers of the applicant and 
its contact person. An applicant is not permitted to make a major 
modification to its application (e.g., change in control of the 
applicant or change of the certifying official) after the initial 
application filing deadline. Thus, any change in control of an 
applicant, resulting from a merger, for example, will be considered a 
major modification, and the application will consequently be dismissed.
    99. If an applicant wishes to make permissible minor changes to its 
short-form application, such changes should be made electronically to 
its short-form application using the FCC Auction System whenever 
possible. For the change to be submitted and considered by the 
Commission, be sure to click on the SUBMIT button. After the revised 
application has been submitted, a confirmation page will be displayed 
that states the submission time, submission date and a unique file 
number.
    100. An applicant cannot use the FCC Auction System outside of the 
initial and resubmission filing windows to make changes to its short-
form application other than administrative changes (e.g., changing 
certain contact information or the name of an authorized bidder). If 
these or other permissible minor changes need to be made outside of 
these windows, the applicant must submit a letter briefly summarizing 
the changes and subsequently update its short-form application in the 
FCC Auction System once it is available. Moreover, after the filing 
window has closed, the system will not permit applicants to make 
certain changes, such as the applicant's legal classification.
    101. Any letter describing changes to an applicant's short-form 
application must be submitted by email to [email protected]. The email 
summarizing the changes must include a subject or caption referring to 
Auction 901 and the name of the applicant, for example, ``RE: Changes 
to Auction 901 Short-Form Application of ABC Corp.'' Questions about 
short-form application amendments should be directed to the Auctions 
and Spectrum Access Division at (202) 418-0660.
    102. Any application amendment and related statements of fact must 
be certified by an appropriate party. For example, one of the partners 
if the applicant is a partnership; or an officer, director, or duly 
authorized employee, if the applicant is a corporation; or a member who 
is an officer, if the applicant is an unincorporated association.
    103. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System (ECFS), which 
was used for submitting comments regarding Auction 901. Parties 
submitting information related to their applications should use caution 
to ensure that their submissions do not contain confidential 
information or communicate information that would violate 47 CFR 
1.21002 or the limited information procedures adopted for Auction 901. 
A party seeking to submit information that might reflect non-public 
information should consider submitting any such information along with 
a request that the filing or portions of the filing be withheld from 
public inspection until the end of the prohibition of certain 
communications pursuant to 47 CFR 1.21002.

J. Maintaining Current Information in Short-Form Applications

    104. 47 CFR 1.65 requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application. If an 
amendment reporting changes is a major amendment, as defined by 47 CFR 
1.21001(d)(4), the major amendment will not be accepted and may result 
in the dismissal of the application. After the application filing 
deadline, applicants may make only minor changes to their applications. 
For changes to be submitted and considered by the Commission, be sure 
to click on the SUBMIT button in the FCC Auction System. In addition, 
an applicant cannot update its short-form application using the FCC 
Auction System after the initial and resubmission filing windows close. 
If information needs to be submitted pursuant to 47 CFR 1.65 after 
these windows close, a letter briefly summarizing the changes must be 
submitted by email to [email protected]. This email must include a 
subject or caption referring to Auction 901 and the name of the 
applicant. Applicants must not submit application-specific material 
through ECFS. A party seeking to submit information that might reflect 
non-public information should consider submitting any such information 
along with a request that the filing or portions of the filing be 
withheld from public inspection until the end of the prohibition of 
certain communications pursuant to 47 CFR 1.21002.

III. Pre-Auction Procedures

A. Online Auction Tutorial--Available June 27, 2012

    105. No later than Wednesday, June 27, 2012, the Commission will 
post an educational auction tutorial on the Auction 901 web page for 
prospective bidders to familiarize themselves with the auction process. 
This online tutorial will provide information about pre-auction 
procedures, completing short-form applications, auction conduct, the 
FCC Auction System, auction rules, and Mobility Fund rules. The 
tutorial will also provide an avenue to ask FCC staff questions about 
the auction, auction procedures, filing requirements, and other matters 
related to this auction.
    106. This interactive, online tutorial should provide an efficient 
and effective way for interested parties to further their understanding 
of the auction process. The Auction 901 online tutorial will allow 
viewers to navigate the presentation outline, review written notes, 
listen to audio of the notes, and search for topics using a text search 
function. Additional features of this web-based tool include links to 
auction-specific Commission releases, email links for contacting 
Commission licensing and auction staff, and a timeline with deadlines 
for auction preparation. The online tutorial will be accessible through 
a web browser with Adobe Flash Player. As always, Commission staff will 
be available to promptly answer questions posed by telephone and email 
throughout the

[[Page 32104]]

auction process. The auction tutorial will be accessible from the FCC's 
Auction 901 Web page at http://wireless.fcc.gov/auctions/901/ through 
an Auction Tutorial link.

B. Short-Form Applications--Due Prior to 6 p.m. ET on July 11, 2012

    107. In order to be eligible to bid in this auction, applicants 
must first follow the procedures to submit a short-form application 
(FCC Form 180) electronically via the FCC Auction System. This short-
form application must be submitted prior to 6 p.m. ET on July 11, 2012. 
Late applications will not be accepted. No application fee is required.
    108. Applications may generally be filed at any time beginning at 
noon ET on June 27, 2012, until the filing window closes at 6 p.m. ET 
on July 11, 2012. Applicants are strongly encouraged to file early and 
are responsible for allowing adequate time for filing their 
applications. Applications can be updated or amended multiple times 
until the filing deadline on July 11, 2012.
    109. An applicant must always click on the SUBMIT button on the 
Certify & Submit screen to successfully submit its FCC Form 180 and any 
modifications; otherwise the application or changes to the application 
will not be received or reviewed by Commission staff. Additional 
information about accessing, completing, and viewing the FCC Form 180 
will be provided in a future public notice. FCC Auctions Technical 
Support is available at (877) 480-3201, option nine; (202) 414-1250; or 
(202) 414-1255 (text telephone (TTY)); hours of service are Monday 
through Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to provide 
better service to the public, all calls to Technical Support are 
recorded.

C. Application Processing and Minor Corrections

    110. After the deadline for filing FCC Form 180 applications, 
Commission staff will process all timely submitted applications to 
determine which are complete, and subsequently will issue a public 
notice identifying (1) those that are complete; (2) those that are 
rejected; and (3) those that are incomplete or deficient because of 
minor defects that may be corrected. The public notice will include the 
deadline for resubmitting corrected applications.
    111. After the application filing deadline on July 11, 2012, 
applicants can make only minor corrections to their applications. They 
will not be permitted to make major modifications (e.g., change control 
of the applicant or change of the certifying official).
    112. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the short-form 
application, 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. 
Authorizations may be sent by email to [email protected].

D. Auction Registration

    113. Approximately ten days before the auction, the Bureaus will 
issue a public notice announcing all qualified bidders for the auction. 
Qualified bidders are those applicants with submitted FCC Form 180 
applications that are deemed timely-filed, accurate, and complete.
    114. 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 180 and will 
include the SecurID[supreg] tokens that will be required to place bids, 
the FCC Auction System Bidder's Guide, and the Auction Bidder Line 
phone number.
    115. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder that has not received this mailing by noon on Thursday, 
September 20, 2012, should call the Auctions Hotline at (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.
    116. 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 replacements. To request replacement of 
these items, call Technical Support at (877) 480-3201, option nine; 
(202) 414-1250; or (202) 414-1255 (TTY).

E. Remote Electronic Bidding

    117. The Commission will conduct this auction over the Internet. 
Only qualified bidders are permitted to bid. Each authorized bidder 
must have its own SecurID[supreg] token, which the Commission 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. A bidder cannot bid 
without their SecurID[supreg] tokens. For security purposes, the 
SecurID[supreg] tokens, a telephone number for bidding questions, and 
the FCC Auction System Bidder's Guide are only mailed to the contact 
person at the contact address listed on the FCC Form 180. Each 
SecurID[supreg] token is tailored to a specific auction. 
SecurID[supreg] tokens issued for other auctions or obtained from a 
source other than the FCC will not work for Auction 901.
    118. Please note that the SecurID[supreg] tokens can be recycled 
and the Bureaus encourage bidders to return the tokens to the FCC. Pre-
addressed envelopes will be provided to return the tokens once the 
auction has ended.

F. Mock Auction--September 25, 2012

    119. All qualified bidders will be eligible to participate in a 
mock auction on Tuesday, September 25, 2012. The mock auction will 
enable qualified bidders to become familiar with the FCC Auction System 
and to practice submitting bids prior to the auction. The Bureaus 
strongly recommend that all qualified bidders participate to gain 
experience with the bidding procedures. Details will be announced in a 
future public notice.

IV. Auction Event

A. Auction Structure--Reverse Auction Mechanism

    120. Auction 901 will be held on Thursday, September 27, 2012. The 
start and finish time of the bidding round will be announced in a 
public notice listing the qualified bidders, which will be released 
approximately 10 days before the start of the auction. The Bureaus 
choice of auction design for Auction 901 is specific to the particular 
context of the Mobility Fund Phase I auction. The choices made in the 
Auction 901 Procedures Public Notice do not prejudge future auction 
design choices for other phases of the Mobility Fund or other 
competitive bidding mechanisms related to the USF.
i. Single Round Sealed Bid Reverse Auction Format
    121. The Bureaus will conduct Auction 901 using a single round of 
bidding. The Bureaus concluded in the Auction 901 Procedures Public 
Notice that a multiple round auction would not be appropriate in the 
context of the Mobility Fund Phase I, especially in light of the 
complications involved in conducting multiple rounds with many 
thousands of items. The Bureaus recognized that multiple round auctions 
can have important advantages, and in fact, the Commission generally 
uses a multiple round format for its spectrum license auctions. 
However, the Bureaus

[[Page 32105]]

did not believe that the circumstances favoring a multiple round 
auction--i.e., when there are strong interactions among items and when 
bidders are unsure as to the market value of the item--are significant 
enough here to outweigh concerns about the complexity it would add to 
the auction. As a result, the Bureaus will conduct Auction 901 using a 
single round of bidding.
ii. Aggregation Method--Predefined Aggregations
a. Census Blocks Aggregated to Census Tracts
    122. Consistent with the framework laid out by the Commission in 
the USF/ICC Transformation Order, the Bureaus discussed in the Auction 
901 Comment Public Notice several approaches to aggregating census 
blocks for bidding, noting that some aggregation of census blocks will 
be necessary because census blocks are on average far smaller than the 
average area covered by a single cell tower, which is likely to be the 
minimum incremental geographic area of expanded coverage. The Auction 
901 Comment Public Notice proposed an approach that would give bidders 
the ability to create a limited number of package bids of blocks within 
a CMA--the bidder-defined option--and also described a predefined 
aggregation option whereby bidders would bid to cover the eligible 
blocks within census tracts. The record the Bureaus received in 
response to the Auction 901 Comment Public Notice was mixed.
    123. Given the schedule for the Mobility Fund Phase I auction, the 
record received, and the amount of support being provided here, the 
Bureaus adopt a predefined aggregation approach, largely on 
considerations of speed and simplicity of implementation. Under that 
approach, all eligible census blocks will be grouped by the census 
tract in which they are located, and bidders will be able to bid for 
support for the eligible census blocks in a census tract, not on 
individual blocks. For each tract a bidder bids on, the bidder will 
indicate a per-unit price to cover the road miles in the eligible 
census blocks within that tract. The auction will assign support to 
awardees equal to the per-road mile rate of their bid multiplied by the 
number of road miles associated with the eligible census blocks within 
the tract as shown in the files provided by the Bureaus. Bidders may 
bid on multiple tracts and win support for any or all of them. Awardees 
will be required to cover a given percentage of the total eligible 
units in the tract--that is, a percentage of the total road miles that 
are in the eligible census blocks in the tract. Blocks in Alaska will 
not be aggregated for bidding, however, and bidders can place bids for 
support on individual census blocks in Alaska. The Bureaus also modify 
their tract aggregation approach for some tracts that include census 
blocks covering Tribal lands.
    124. The Bureaus conclude that aggregating census blocks into 
tracts for bidding, except in Alaska, will provide a manageable bidding 
process, both for participants and the Commission, particularly in 
light of the speed with which the Bureaus want to proceed in 
distributing this one-time support. As noted in the Auction 901 Updated 
Blocks Public Notice, the Bureaus' list of potentially eligible census 
blocks includes over 460,000 blocks; bundled into tracts for bidding, 
there are approximately 6,100 tracts.
    125. The predefined aggregation option that the Bureaus adopt does 
not permit package bidding--that is, it does not permit bidders to 
create their own groupings of census tracts on which to submit all-or-
nothing bids. It does allow bidders to bid on as many individual tracts 
as they wish, and to win support for any or all of those tracts. The 
absence of explicit package bidding simplifies the process of 
determining which bids will be awarded support, relative to the 
proposed bidder-defined option (that allows bidders to create packages 
of census blocks), and consequently, may simplify the bidding process.
b. Exception, for Alaska, to Aggregation by Census Tract
    126. The Bureaus will not aggregate eligible census blocks in 
Alaska into tracts for bidding, but will permit bidders to bid for 
support for individual census blocks. Bidders seeking support for 
eligible blocks in Alaska will indicate a per-unit price to cover the 
road miles in the eligible census block. The auction will assign 
support to awardees equal to the per-road mile rate of their bid 
multiplied by the number of road miles associated with the eligible 
census block, as shown in the files provided by the Bureaus. Bidders 
may bid on multiple blocks--including, if they wish, all the eligible 
census blocks in a tract, but they will have to bid on the blocks 
individually--and may win support for any or all of them.
    127. In the Auction 901 Comment Public Notice, the Bureaus sought 
comment on this alternative approach for areas in Alaska under the 
suggested predefined aggregation option, which the Bureaus adopt here. 
In the USF/ICC Transformation Order, the Commission noted the large 
size of census blocks in Alaska, and in the Auction 901 Comment Public 
Notice, the Bureaus further pointed out that the average area of the 
Alaska census blocks on the preliminary list of eligible areas is 
approximately 40 square miles compared to an average area of 
approximately 1.1 square miles for blocks in the rest of the country. 
Given the extreme difference in average size of census areas in Alaska 
relative to those in the rest of the country, and because census blocks 
in Alaska may be closer in size to a minimum scale of buildout than are 
most blocks elsewhere, the Bureaus believe it will be helpful to give 
bidders the flexibility to bid on individual census blocks in Alaska.
    128. The Bureaus do not make a more general size-based exception to 
the decision to conduct bidding on a census tract basis. Specifically, 
the Auction 901 Comment Public Notice asked whether, outside of Alaska, 
the Commission should use a geographic area other than tracts in areas 
where tracts exceed a certain size. The Bureaus received only limited 
response. An analysis of the census blocks in the list from the Auction 
901 Updated Blocks Public Notice demonstrates that the average size of 
the blocks in Alaska are much larger than the average size of the 
blocks in other states. Based on the record (including the absence of 
any input on an appropriate size cutoff point at which the Bureaus 
would switch from bidding on a tract basis to bidding on a block 
basis), the Bureaus decline to extend their provisions for block-by-
block bidding beyond Alaska.
c. Census Block Aggregation for Tracts With Tribal Lands
    129. Another exception to aggregation by census tract will exist 
for some tracts that include census blocks covering Tribal lands. For 
tracts that contain some eligible blocks that are in a Tribal land and 
other eligible blocks that are not in a Tribal land, there will be 
separate aggregations of the Tribal blocks and the non-Tribal blocks. 
If the Tribal blocks in a tract are located in more than one Tribal 
area, there will be separate aggregations for each Tribal area.
d. Coverage Requirement
    130. A winning bidder will be required to provide coverage to a 
minimum of 75 percent of the road miles associated with the eligible 
blocks in each tract for which it is awarded support within two years 
after its award of support is authorized for 3G deployments or three 
years for 4G deployments. If a winning bidder covers more than the 
minimum 75 percent of

[[Page 32106]]

qualifying road miles within the required timeframe, it may collect 
support for up to 100 percent of the qualifying road miles in each 
tract. This requirement is consistent with the coverage requirement 
associated with the predefined approach described in the Auction 901 
Comment Public Notice.
iii. Winner Selection Process
    131. Under the auction format that the Bureaus adopt, during the 
single bidding round, bidders will be able to submit bids that indicate 
a per-road mile support price at which they are willing to meet the 
Mobility Fund requirements to cover the qualifying road miles in a 
given tract. The qualifying road miles in a tract are the road miles in 
the selected road categories in the eligible census blocks in the 
tract.
    132. After the single bidding round closes, in order to select 
winning bidders, the FCC Auction System will rank bids from lowest to 
highest per-road mile bid amount and assign support first to the bidder 
making the lowest per-road mile bid. For bidders claiming eligibility 
for a Tribal land bidding credit, the auction system will reduce the 
Tribal entity's bid amount by 25 percent for the purpose of comparing 
it to other bids, thus increasing the likelihood that Tribally-owned 
and controlled entities will receive funding. For all selected bids, an 
amount equal to the per-mile bid times the number of qualifying road 
miles in the area will be deducted from the total available funds. The 
auction system will continue to assign support to the next lowest per-
unit bids in turn, as long as support has not already been assigned for 
that geographic area, deducting assigned support funds from the 
remaining available funds, and will continue until the sum of support 
funds of the winning bids is such that no further winning bids can be 
supported given the funds available. If there are any identical bids--
in the same per-unit amounts to cover the same tract, submitted by 
different bidders--only one such bid, chosen randomly, will be 
considered in the ranking. A bidder will be eligible to receive support 
for each of its winning bids equal to the per-unit rate of a winning 
bid multiplied by the number of road miles in the eligible census 
blocks covered by the bid, subject to meeting the obligations 
associated with receiving support.
    133. This method of identifying winning bidders will likely result 
in monies remaining in the fund after identifying the last lowest per-
unit bid that does not exceed the funds available. When the auction 
reaches this point, the FCC Auction System will continue to consider 
bids in order of per-unit bid amount while skipping bids that would 
require more support than is available. In the unlikely event that the 
winner selection procedure arrives at a situation where there are two 
or more bids for the same per-unit amount but for different areas and 
remaining funds are insufficient to satisfy all of the tied bids, the 
auction system will award support to that combination of tied bids that 
will most nearly exhaust the available funds.
    134. The Bureaus recognize that this approach may result in some 
unused funds when support awardees do not fully build out, but the 
Bureaus wish to encourage the extension of services as completely as 
possible within the tracts that are awarded support, and therefore the 
Bureaus must reserve funds sufficient to fully cover the supported 
tracts. The Bureaus anticipate that funds unused under Mobility Fund 
Phase I will be put to productive use under later stages of the 
Mobility Fund program or other USF reform efforts.
iv. Limited Information Disclosure Procedures: Information Available to 
Bidders Before and During the Auction
    135. The Bureaus will conduct Auction 901 using procedures for 
limited information disclosure. That is, for Auction 901, the Bureaus 
will withhold, until after the close of bidding and announcement of 
auction results, the public release of (1) information from applicants' 
short-form applications regarding their interests in eligible census 
tracts and/or blocks in particular states and/or Tribal lands and (2) 
information that may reveal the identities of bidders placing bids and 
taking other bidding-related actions. Because the Bureaus will conduct 
Auction 901 using a single round of bidding, the Bureaus do not 
anticipate a need to release bidding-related actions during the auction 
as they would in a multiple round auction. If such circumstances arise 
prior to the release of non-public information and auction results, 
however, the Bureaus will not indicate the identity of any bidders 
taking such actions. After the close of bidding, information regarding 
applicants' interests in eligible geographic areas in particular state 
and/or Tribal lands, their bids, and any other bidding-related actions 
and information will be made publicly available.
v. Auction Delay, Suspension, or Cancellation
    136. In the Auction 901 Comment Public Notice, the Bureaus proposed 
that, by public notice or by announcement during the auction, they 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 Bureaus received no comments on this issue.
    137. Because this approach has proven effective in resolving 
exigent circumstances in previous auctions, the Bureaus adopt these 
proposals regarding auction delay, suspension, or cancellation. 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 point at which the 
auction was suspended, or cancel the auction in its entirety. Network 
interruption may cause the Bureaus to delay or suspend the auction. The 
Bureaus emphasize that they will exercise this authority solely at 
their discretion.

B. Bidding Procedures

i. Bidding
    138. All bidding in Auction 901 will take place through the web-
based FCC Auction System. To place bids, a bidder will upload a text 
file that includes, for each tract in the bid file, the tract number 
and the bid for the tract, expressed in dollars per road mile. For 
areas in Alaska, bids will include block numbers instead of tract 
numbers. When a bidder uploads a bid file, the FCC Auction System will 
provide a verification that includes the tract and/or block numbers, 
the dollars per road mile bid for each tract and/or block, the number 
of road miles in each tract and/or block, the total bid amount for each 
tract and/or block, and the county and state for each tract and/or 
block. The bidder then submits the bids, or the bidder can cancel the 
bids if it wishes to make changes.
    139. Bidders must submit their bids before the finish time of the 
bidding round, which will be announced in a public notice listing the 
qualified bidders, which will be released approximately 10 days before 
the start of the auction.

[[Page 32107]]

ii. Reserve Prices
    140. Under the Commission's rules on competitive bidding for high-
cost universal service support adopted in the USF/ICC Transformation 
Order, the Bureaus have discretion to establish maximum acceptable per-
unit bid amounts and reserve amounts, separate and apart from any 
maximum opening bids. As proposed, the Bureaus choose not to establish 
any maximum acceptable per-unit bid amounts or reserve prices. Although 
two commenters suggest that the Bureaus may want to consider some sort 
of reserve price, the Bureaus continue to believe that cross-area 
competition for support from a budget that is not likely to cover 
support for all of the areas receiving bids will constrain the bid 
amounts, and that a reserve price is not needed to guard against any 
unreasonably high winning bids.
iii. Bid Removal
    141. For Auction 901, before the end of the single round of 
bidding, a bidder will have the option of removing any bid it has 
placed. By removing a selected bid(s), a bidder may effectively 
``undo'' any of its bids placed within the single round of bidding. 
Once the single round of bidding ends, a bidder may no longer remove 
any of its bids.
    142. To remove bids a bidder will upload a text file that includes 
the tract or block number for each bid it wants to remove. When a 
bidder uploads such a file, the FCC Auction System will provide a 
verification that includes the tract and/or block numbers, and the 
county and state for each tract and/or block.
iv. Auction Announcements
    143. The Bureaus will use auction announcements to report necessary 
information. All auction announcements will be available by clicking a 
link in the FCC Auction System.
v. Auction Results
    144. The Bureaus will determine the winning bids based on the 
lowest per-road mile bids. After the Bureaus announce the auction 
results, the Bureaus will provide downloadable files of the bidding and 
results data.

V. Post-Auction Procedures

A. General Information Regarding Long-Form Applications

    145. For the Mobility Fund Phase I auction, the Commission adopted 
a two-phased auction application process. Pursuant to 47 CFR 
54.1005(b), winning bidders for Mobility Fund Phase I support are 
required to file an application for support, referred to as a long-form 
application, no later than 10 business days after the public notice 
identifying them as winning bidders. Shortly after bidding has ended, 
the Commission will issue a public notice declaring the auction closed, 
identifying the winning bidders, and establishing the deadline for the 
long-form application. Winning bidders will use the new FCC Form 680 
and the FCC Auction System to submit the long-form application. Details 
regarding the submission and processing of the long-form application 
will be provided in the public notice issued after the close of the 
auction.
    146. In addition to the long-form application process, any bidder 
winning support for areas within Tribal lands must notify the relevant 
Tribal government no later than five business days after being 
identified by public notice as such a winning bidder. Information 
identifying the appropriate point of contact for the Tribal governments 
will be available through the Commission's Office of Native Affairs and 
Policy (ONAP), in coordination with the Wireless Bureau.

B. Long-Form Application: Disclosures and Certifications

    147. Unless otherwise provided by public notice, within ten 
business days after release of the public notice announcing the close 
of Auction 901, a winning bidder must electronically submit a properly 
completed long-form application (FCC Form 680) for the areas for which 
it submitted winning bids. A Tribally-owned or controlled provider 
claiming eligibility for a Tribal land bidding credit must certify as 
to its eligibility for the bidding credit. Further filing instructions 
will be provided to winning bidders in the auction closing public 
notice.
i. Ownership Disclosure
    148. In the USF/ICC Transformation Order, the Commission adopted 
for the Mobility Fund the existing Part 1 ownership disclosure 
requirements that already apply to short-form applicants to participate 
in spectrum license auctions and long-form applicants for licenses in 
wireless services. Under these requirements, an applicant for Mobility 
Fund support must fully disclose its ownership structure as well as 
information regarding the real party- or parties-in-interest of the 
applicant or application. To minimize the reporting burden on winning 
bidders, the Bureaus will allow them to use ownership information 
stored in existing Commission databases and update that information as 
necessary.
ii. Documentation of ETC Designation
    149. A winning bidder is required to submit with its long-form 
application appropriate documentation of its ETC designation in all of 
the areas for which it will receive support and certify that its proof 
is accurate. Appropriate documentation should include the original 
designation order, any relevant modifications, e.g., expansion of 
service area or inclusion of wireless, along with any name-change 
orders. Any relevant information provided as an attachment to the long-
form application must be designated as an Eligible Telecommunications 
Carrier attachment.
iii. Financial and Technical Capability Certification
    150. As in the pre-auction short-form application stage, a long-
form applicant must certify that it is financially and technically 
capable of providing 3G or better service within the specified 
timeframe in the geographic areas in which it seeks support. This 
certification indicates that an applicant for Mobility Fund Phase I 
funds can provide the requisite service without any assurance of 
ongoing support for the areas in question after Mobility Fund Phase I 
support has been exhausted. An applicant should be aware that in making 
a certification to the Commission it exposes itself to liability for a 
false certification. An applicant should take care to review its 
resources and its plans before making the required certification and be 
prepared to document its review, if necessary.
iv. Project Construction Schedule/Specifications
    151. Applicants are required to provide in their long-form 
application an attachment for each winning bid with a detailed project 
description which describes the network, identifies the proposed 
technology, demonstrates that the project is technically feasible, 
discloses the complete project budget and describes each specific phase 
of the project, e.g., network design, construction, deployment, and 
maintenance. A complete project schedule, including timelines, 
milestones and costs must be provided. Milestones should include the 
start and end date for network design; start and end date for drafting 
and posting requests for proposal (RFPs); start and end date for 
selecting vendors and negotiating contracts; start date for commencing 
construction and end date for completing construction; and the

[[Page 32108]]

dates by which it will meet applicable requirements to receive the 
installments of Mobility Fund support.
    152. Applicants will indicate for each winning bid whether the 
supported network will provide 3G mobile service within the period 
prescribed by 47 CFR 54.1006(a) or 4G mobile service within the period 
prescribed by 47 CFR 54.1006(b). The description of the proposed 
technology should include information on whether the network will 
qualify as either a 3G or 4G network.
v. Spectrum Access
    153. Applicants are required to provide a description of the 
spectrum access that the applicant will use to meet its obligations in 
areas for which it is the winning bidder, including whether the 
applicant currently holds a license for or leases the spectrum. The 
description should identify the license applicable to the spectrum to 
be accessed. The description of the license must include the type of 
service, e.g., AWS, 700 MHz, BRS, PCS, the particular frequency bands 
and the call sign. If the licensee is a different party than the 
applicant, the description should include the licensee name and the 
relationship between the applicant and the licensee that provides the 
applicant with the required access. If the applicant is leasing 
spectrum, the lease number should be provided along with the license 
information. An applicant must provide this required information 
relating to spectrum access in an attachment to the long-form 
application that is designated as a Spectrum Access attachment.
    154. Applicants must also certify that the description of the 
spectrum access is accurate and that the applicant will retain such 
access for at least five (5) years after the date on which it is 
authorized to receive support. Applications will be reviewed to assess 
the reasonableness of the certification.
vi. Letter of Credit Commitment Letter
    155. Within ten business days after release of the auction closing 
public notice, a winning bidder must submit with its long-form 
application either a Letter of Credit (LOC) for each winning bid or a 
written commitment letter from an acceptable bank to issue such an LOC. 
If the applicant submits a commitment letter, the letter will at a 
minimum provide the dollar amount of the LOC and the issuing bank's 
agreement to follow the terms and conditions of the Commission's model 
LOC, found in Appendix N of the USF/ICC Transformation Order. The 
commitment letter must be from an acceptable bank, as defined in 47 CFR 
54.1007(a)(1).
vii. Letter of Credit and Bankruptcy Code Opinion Letter
    156. After receipt and review of the long-form applications, the 
Commission will issue a public notice identifying each winning bidder 
that may be authorized to receive Mobility Fund Phase I support. Upon 
notice from the Commission, a winning bidder for Mobility Fund Phase I 
support must submit an irrevocable stand-by LOC, issued in 
substantially the same form as set forth in the model LOC provided in 
Appendix N of the USF/ICC Transformation Order by a bank that is 
acceptable to the Commission. An LOC must be submitted for each winning 
bid in an amount equal to one-third of the winning bid amount, plus an 
additional 10 percent of the winning bid amount which shall serve as a 
performance default payment. The Commission's rules provide specific 
requirements, as defined in 47 CFR 54.1007(a)(1), for a bank to be 
acceptable to the Commission to issue the LOC. Those requirements vary 
for United States banks and non-U.S. banks.
    157. In addition, a winning bidder will be required to provide with 
the LOC an opinion letter from legal counsel clearly stating, subject 
only to customary assumptions, limitations and qualifications, that, in 
a proceeding under the Bankruptcy Code, the bankruptcy court would not 
treat the LOC or proceeds of the LOC as property of winning bidder's 
bankruptcy estate, or the bankruptcy estate of any other bidder-related 
entity requesting issuance of the LOC, under section 541 of the 
Bankruptcy Code.
viii. Certification as to Program Requirements
    158. The long-form application contains certifications that the 
applicant has available funds for all project costs that exceed the 
amount of support to be received and will comply with all program 
requirements. The requirements include the public interest obligations 
contained in the Commission's rules. Applicants must certify that they 
will meet the applicable deadline for construction of a network meeting 
the coverage and performance requirements set forth in the rules, that 
they will comply with the Mobility Fund Phase I collocation obligations 
specified in the rules, and that they will comply with the voice and 
data roaming obligations the Commission has established with respect to 
Phase I of the Mobility Fund. With respect to demonstrating compliance 
with the coverage requirements, the Commission rules set forth the 
standards for applicable drive test data.
ix. Reasonably Comparable Rate Certification
    159. To satisfy one of the public interest obligations that an 
applicant will have if it receives support, the long-form application 
also must contain a certification that the applicant will offer service 
in supported areas at rates that are within a reasonable range of rates 
for similar service plans offered by mobile wireless providers in urban 
areas for a period extending until five (5) years after the date on 
which it is authorized to receive support. As noted in the Auction 901 
Comment Public Notice, the Commission delegated authority to the 
Bureaus to specify how support recipients could demonstrate compliance 
with this rate certification, in light of the fact that the voice and 
broadband rates survey data the Commission will collect pursuant to the 
USF/ICC Transformation Order will not be available prior to the 
Mobility Fund Phase I auction. The approach adopted for Phase I of the 
Mobility Fund in no way prejudges the approach to be taken with respect 
to Phase II of the Mobility Fund or the CAF generally. The appropriate 
approach for purposes of later phases of the Mobility Fund or other 
components of the CAF will be determined after review of the record 
developed in response to the Further Notice of Proposed Rulemaking 
portion of the USF/ICC Transformation Order.
    160. The Bureaus proposed in the Auction 901 Comment Public Notice 
that a Mobility Fund Phase I support recipient could demonstrate 
compliance with the required certification that its rates are 
reasonably comparable if each of its service plans in supported areas 
is substantially similar to a service plan offered by at least one 
mobile wireless service provider in an urban area and is offered for 
the same or a lower rate than the matching urban service plan. The 
Bureaus expressly noted that any provider that itself offers the same 
service plan for the same rate in a supported area and in an urban area 
would meet this requirement.
    161. The Bureaus crafted this proposal in order to provide 
recipients with flexibility to tailor their offerings to consumer 
demand while complying with the rule. Solely for purposes of Phase I of 
the Mobility Fund, the proposal would treat any rate equal to or less 
than the highest rate for a matching service charged in an urban area 
as reasonably comparable to, i.e., within a reasonable range of rates 
for similar service in urban areas. Urban

[[Page 32109]]

areas are generally served by multiple and diverse providers offering a 
range of rates and service offerings in competition with one another. 
Consequently, even the highest rate might be considered as being within 
a reasonable range of rates for similar service in urban areas, because 
the rates for the matching urban services reflect the effects of 
competition in the urban area. For purposes of this requirement, the 
Bureaus proposed defining urban area as one of the 100 most populated 
CMAs in the United States. Multiple providers currently serve these 
areas--99.2 percent of the population in these markets is covered by 
between four to six operators--offering a range of different service 
plans at prices generally constrained by the numerous providers. 
Finally, the Bureaus further proposed that they would retain discretion 
to consider whether and how variable rate structures should be taken 
into account.
    162. The Bureaus sought comment on all aspects of the proposal, and 
specifically sought comment on whether a support recipient should be 
required to make this comparison for all of its service plans, or just 
its required stand-alone voice plan and one other plan offering 
broadband, or a set of its plans adopted by a specified percentage of 
its customers. With respect to the rates for services to which 
supported services are to be compared, the Bureaus asked whether 
additional information was required to validate the assumption that an 
urban service rate reflects the effects of competition in the urban 
area--for example, whether an urban service used for matching should be 
required to have a certain number of subscribers or percentage of the 
relevant market in order to demonstrate its market acceptance. The 
Bureaus noted that detailed information about the number of subscribers 
at a particular rate might be difficult to obtain. The Bureaus further 
sought comment on whether parties should be required to make 
comparisons only to a subset of the most populated CMAs that are 
geographically closest to the supported area, such as the 30 or 50 of 
the top 100 CMAs that are closest to the supported service area. This 
might protect against regional economic variations distorting the range 
of prices useable for comparison. For example, such a restriction might 
cause providers to compare supported rates in Oklahoma to rates in 
Houston or Chicago rather than in New York City.
    163. There was support among some commenters for the framework of 
the Bureaus' proposal. Most commenters that addressed this issue 
generally favored employing as simple a standard as possible for 
determining whether a supported provider offered rates reasonably 
comparable to those in urban areas. Some parties advocated allowing 
supported parties to satisfy the requirement based on their offering 
the same rate, either nationwide, statewide, or in non-supported areas. 
The Bureaus note that, to the extent a provider offers the same service 
at the same rate in an urban area, as the Bureaus define it for these 
purposes, these proposals are all consistent with the Bureaus' 
proposal. The commenters' proposals diverge from the Bureaus' in so far 
as a provider offers the same rate for the same service in an 
unsupported area but that unsupported area does not qualify as urban 
for purpose of this requirement. Two parties specifically object to the 
use of out-of-Alaska areas as points of comparison for service within 
Alaska. They both argue that, given the unique challenges of offering 
service anywhere in Alaska, parties offering service in supported areas 
in Alaska only should have to demonstrate that their rates are 
reasonably comparable with more urban areas of Alaska, even though 
those areas do not qualify as urban under the Bureaus' proposal.
    164. The Bureaus decline generally to alter the proposal to permit 
comparisons with rates for services in areas that are not within the 
definition of urban that the Bureaus proposed for this purpose in the 
Auction 901 Comment Public Notice. As the Bureaus explained in the 
Auction 901 Comment Public Notice, the areas proposed both meet a 
population-based definition of urban and have a degree of competition 
among wireless service providers that should help to assure that the 
rates offered are reasonable. None of the parties advocating intrastate 
comparisons, or reliance on comparisons between the rates a supported 
carrier offers in supported areas and other areas, provides a basis for 
concluding that the other areas proposed have a comparable level of 
competition. Nevertheless, in light of the distinct character of Alaska 
and the related costs of providing service, the Bureaus will make an 
exception for supported parties in Alaska and allow them to demonstrate 
comparability by comparison with rates offered in the CMA for 
Anchorage, Alaska. In this regard, the Bureaus note that the Anchorage 
CMA has a population of over 250,000 and four wireless providers, which 
indicates that, while reflecting the particular challenges of offering 
service in Alaska, competition for customers there could act to keep 
rates for offered services reasonable.
    165. One commenter expressly supported the proposed requirement 
that supported providers demonstrate that all of their service plans 
are offered at comparable rates while another argued that providing one 
such plan should be sufficient. On further review, the Bureaus conclude 
that it will be sufficient for a supported provider to demonstrate that 
its required stand-alone voice plan and one service plan that offers 
data services, presuming it offers such plans, satisfies the reasonably 
comparable rate requirement. The Bureaus conclude that customers should 
have available to them other rate plans should they so choose, so long 
as the provider satisfies the reasonably comparable rate requirement 
with respect to a stand-alone voice plan and one of any plans that 
offer data services. In addition, this will simplify the supported 
parties' compliance with the rule.
x. Tribal Engagement Requirements: Certification and Summary of 
Engagement Results
    166. Beginning at the long-form application stage, and continuing 
throughout the term of support, Mobility Fund Phase I winning bidders 
are required to comply with the Tribal engagement obligations 
applicable to all ETCs. As the Commission discussed in the USF/ICC 
Transformation Order, these obligations are designed to ensure that 
Tribal governments have been formally and effectively engaged in the 
planning process and that the services to be provided will advance the 
goals established by the Tribal government. At a minimum, such 
discussions must include: (1) A needs assessment and deployment 
planning with a focus on Tribal community anchor institutions; (2) 
feasibility and sustainability planning; (3) marketing services in a 
culturally sensitive manner; (4) rights of way processes, land use 
permitting, facilities siting, environmental and cultural review 
processes; and (5) compliance with Tribal business and licensing 
requirements.
    167. Specific procedures and further guidance regarding the Tribal 
engagement process are being developed by ONAP, in coordination with 
the Bureaus. Winning bidders are encouraged to initiate the engagement 
process as soon as possible. The Bureaus contemplate that, at a 
minimum, a long-form applicant would be required to include a 
certification and detailed description of its efforts to contact the 
relevant Tribal government(s) and initiate substantive discussions 
regarding the topics noted above. Any information provided as an

[[Page 32110]]

attachment to the long-form application must be designated as a Tribal 
Information attachment. Such certification and description must also be 
submitted to the appropriate Tribal government official concurrent with 
the filing of the long-form application. Thereafter, support recipients 
will be obligated to demonstrate their compliance with Tribal 
engagement requirements on an annual basis, and prior to any 
disbursement of support from the Universal Service Administrative 
Company (USAC). The Bureaus remind carriers that failure to satisfy the 
Tribal government engagement obligation could subject them to financial 
consequences, including potential reduction in support should they fail 
to fulfill their obligations.

C. Default Payment Requirements

    168. In the USF/ICC Transformation Order, the Commission determined 
that it would impose two types of default payment obligations on 
winning bidders: A default payment owed by Mobility Fund winning 
bidders that default on their winning bids prior to approval for 
receiving support and a default payment owed by Mobility Fund winning 
bidders that apply for and are approved to receive support but 
subsequently fail to meet their public interest obligations or other 
terms and conditions of Mobility Fund support. Under the competitive 
bidding rules adopted in the USF/ICC Transformation Order, bidders 
selected by the auction process to receive USF support have a binding 
obligation to file a post-auction long-form application--by the 
applicable deadline and consistent with other requirements of the long-
form application process--and failure to do so constitutes an auction 
default. In addition, a performance default occurs when a winning 
bidder that the Commission has authorized to receive support fails to 
meet its minimum coverage requirement or adequately comply with quality 
of service or any other requirements upon which support was granted.
i. Auction Default Payment
    169. Any winning bidder that fails to timely file a long-form 
application, is found ineligible or unqualified to receive Mobility 
Fund support, has its long-form application dismissed, or otherwise 
defaults on its bid or is disqualified for any reason after the close 
of the auction and prior to the authorization of support for each 
winning bid will be subject to an auction default payment. Agreeing to 
such payment in event of a default is a condition for participating in 
bidding. In the event of an auction default, the Bureaus will assess a 
default payment of five percent of the total defaulted bid.
    170. In the USF/ICC Transformation Order, the Commission determined 
that a default payment is appropriate to ensure the integrity of the 
auction process and safeguard against costs to the Commission and the 
USF. The Commission left it to the Bureaus to consider methodologies 
for determining such a payment, but specified that if the Bureaus 
established a default payment to be calculated as a percentage of the 
defaulted bid, that percentage was not to exceed 20 percent of the 
total amount of the defaulted bid. Accordingly, in the Auction 901 
Comment Public Notice, the Bureaus proposed an auction default payment 
of five percent of the total defaulted bid. The Bureaus also sought 
comment on alternative methodologies, such as basing the auction 
default payment on the difference between the defaulted bid and the 
next best bid to cover the same number of road miles as without the 
default. The Bureaus further sought comment on whether, prior to 
bidding, all applicants for Auction 901 should be required to furnish a 
bond or place funds on deposit with the Commission in the amount of the 
maximum anticipated auction default payment.
    171. Commenters supported the Bureaus' proposal for a rate of five 
percent of the total defaulted bid. A commenter urges the Bureaus to 
consider adopting a higher figure, such as ten percent, saying that if 
the penalty percentage is too low it will not serve as a sufficient 
deterrent. Other commenters suggest a less punitive approach or ask the 
Bureaus to refrain from enforcing default payments except in cases of 
egregious failure, such as the failure to submit any long-form 
application. The Bureaus received no comments on any alternative 
methodologies for determining an appropriate auction default penalty.
    172. The Bureaus are not persuaded that they should modify the 
proposal to establish an auction default payment at the rate of five 
percent of the total defaulted bid. Such a requirement should serve to 
deter failures to fulfill auction obligations that might undermine the 
stability and predictability of the auction process and impose costs on 
the Commission as well as higher support costs for USF, and is yet not 
unduly punitive. Liability for the auction default payment will be 
imposed without regard to the intentions or fault of any specific 
defaulting bidder. The Bureaus therefore adopt its proposal.
    173. The Bureaus received a single comment addressing whether 
auction applicants should be required to furnish a bond or place funds 
on deposit prior to bidding. The Bureaus think their adoption of an 
auction default payment will provide adequate protection against costs 
to the Commission and the USF, and therefore the Bureaus find that 
establishing a bond or deposit requirement is unnecessary.
ii. Performance Default Payment
    174. A winning bidder that has received notice from the Commission 
that it is authorized to receive Mobility Fund support will be subject 
to a performance default payment if it fails or is unable to meet its 
minimum coverage requirement, other service requirements, or fails to 
fulfill any other term or condition of Mobility Fund Phase I support. 
The Bureaus will assess a performance default penalty of ten percent on 
the total level of support for which a winning bidder is eligible.
    175. The Commission recognized in the USF/ICC Transformation Order 
that a Mobility Fund recipient's failure to fulfill its obligations may 
impose significant costs on the Commission and higher support costs for 
the USF and concluded that it was necessary to adopt a default payment 
obligation for performance defaults. In addition to being liable for a 
performance default payment, the recipient will be required to repay 
the Mobility Fund all of the support it has received, and depending on 
circumstances, could be disqualified from receiving any additional 
Mobility Fund or other USF support. In the Auction 901 Comment Public 
Notice, the Bureaus proposed to establish the performance default 
payment percentage at ten percent of the total level of support for 
which a winning bidder is eligible. Under this proposal, the 
irrevocable stand-by LOC that winning bidders will be required to 
provide would include an additional ten percent based on the total 
level of support for which a winning bidder is eligible. The Bureaus 
received support for this proposal. While both auction defaults and 
performance defaults may threaten the integrity of the auction process 
and impose costs on the Commission and the USF, an auction default 
occurs earlier in the process and may facilitate an earlier use of the 
funds that were assigned to the defaulted bid consistent with the 
purposes of the universal service program. The Bureaus therefore 
proposed that the performance default payment be set at a higher 
percentage than the auction default payment percentage. The Bureaus did 
not receive specific comments on their

[[Page 32111]]

proposal to establish the performance default payment percentage at ten 
percent. The Bureaus anticipate that a performance default payment of 
ten percent of the defaulted support level will be effective in 
encouraging those seeking support to make every effort to assure that 
they are capable of meeting their obligations and protecting against 
costs to the Commission and the USF without unduly discouraging auction 
participation. The Bureaus therefore adopt this proposal.

Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2012-13223 Filed 5-30-12; 8:45 am]
BILLING CODE 6712-01-P