[Federal Register Volume 78, Number 213 (Monday, November 4, 2013)]
[Notices]
[Pages 65982-66002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26264]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 13-178; DA 13-1885; DA 13-2033]


Auction of H Block Licenses in the 1915-1920 MHz and 1995-2000 
MHz Bands Rescheduled for January 22 2014; Notice of Filing 
Requirements, Reserve Price, Minimum Opening Bids, Upfront Payments, 
and Other Procedures for Auction 96; Notice of Changes to Auction 96 
Schedule Following Resumption of Normal Commission Operations

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the procedures, reserve price, and 
minimum opening bids for the upcoming auction of H Block licenses 
(Auction 96) and provides the revised schedule for Auction 96. This 
document is intended to familiarize prospective applicants with the 
procedures and other requirements for participation in the auction.

[[Page 65983]]


DATES: Applications to participate in Auction 96 must be filed prior to 
6:00 p.m. Eastern Time (ET) on November 15, 2013. Bidding for H Block 
licenses in Auction 96 is scheduled to begin on January 22, 2014.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For legal and general auction 
questions: Valerie Barrish (attorney) at (202) 418-0660; Broadband 
Division: For licensing and service rule questions: Matthew Pearl 
(attorney) or Janet Young (engineer) at (202) 418-2487. To request 
materials in accessible formats (Braille, large print, electronic 
files, or audio format) for people with disabilities, send an email to 
[email protected] or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530 or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 96 
Procedures Public Notice released on September 13, 2013, and the 
Auction 96 Rescheduling Public Notice released on October 21, 2013. The 
complete text of the Auction 96 Procedures Public Notice and its 
attachments and the Auction 96 Rescheduling Public Notice, as well as 
related Commission documents, is available for public inspection and 
copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through 
Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street SW., Room CY-A257, 
Washington, DC 20554. The Auction 96 Procedures Public Notice, the 
Auction 96 Rescheduling Public Notice, and related Commission documents 
also may be purchased from the Commission's duplicating contractor, 
Best Copy and Printing, Inc. (BCPI), 445 12th Street SW., Room CY-B402, 
Washington, DC 20554, telephone 202-488-5300, 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 13-1885 or DA-2033. The Auction 96 Procedures 
Public Notice, the Auction 96 Rescheduling Public Notice, and related 
documents also are available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/96/, or by using the search 
function for AU Docket No. 13-178 on the Commission's Electronic 
Comment Filing System (ECFS) Web page at http://www.fcc.gov/cgb/ecfs/.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau (Bureau) establishes the 
procedures, reserve price, and minimum opening bid amounts for the 
upcoming auction of licenses in the 1915-1920 MHz (Lower H Block) and 
1995-2000 MHz (Upper H Block) bands (collectively, the H Block). This 
auction, which is designated as Auction 96, is scheduled to start on 
January 22, 2014. The Auction 96 Procedures Public Notice provides an 
overview of the procedures, terms, and conditions governing Auction 96 
and the post-auction application and payment processes. The Auction 96 
Rescheduling Public Notice announces the rescheduled date for the start 
of Auction 96, and revises the schedule of pre-auction deadlines for 
Auction 96 announced in the Auction 96 Procedures Public Notice. All 
other procedures, terms and requirements as set out in the Auction 96 
Procedures Public Notice remain unchanged.
    2. The Federal Communications Commission (Commission or FCC) is 
offering the licenses in Auction 96 pursuant to the Middle Class Tax 
Relief and Job Creation Act of 2012 (Spectrum Act). The Spectrum Act 
requires, among other things, that the Commission allocate for 
commercial use and license spectrum in the H Block using a system of 
competitive bidding no later than February 23, 2015.
    3. On July 15, 2013, the Bureau released a public notice seeking 
comment on competitive bidding procedures to be used in Auction 96. 
Twelve comments and ten reply comments were submitted in response to 
the Auction 96 Comment Public Notice, 78 FR 45524, July 29, 2013.

B. Description of Licenses To Be Offered in Auction 96

    4. In the H Block Report and Order, 78 FR 50213, August 16, 2013, 
the Commission concluded that licenses for H Block spectrum should be 
awarded on an Economic Areas (EA) basis in all areas, including the 
Gulf of Mexico. Auction 96 will offer one license for each of the 176 
EAs. The H Block frequencies will be licensed as paired 5 megahertz 
blocks, with each license having a total bandwidth of 10 megahertz; 
1915-1920 MHz for mobile and low power fixed (i.e., uplink) operations 
and 1995-2000 MHz for base station and fixed (i.e., downlink) 
operations. A complete list of the licenses offered in Auction 96 is 
available in Attachment A to the Auction 96 Procedures Public Notice.

C. Rules and Disclaimers

i. Relevant Authority
    5. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules, including 
Commission decisions in proceedings regarding competitive bidding 
procedures, application requirements, and obligations of Commission 
licensees. Prospective bidders should also familiarize themselves with 
the Commission's rules relating to the H Block frequencies, including 
cost-sharing obligations for H Block licensees, and rules relating to 
applications, environment, practice and procedure. All bidders must 
also be thoroughly familiar with the procedures, terms and conditions 
contained in the Auction 96 Procedures Public Notice, the revised 
schedule for Auction 96 as announced in the Auction 96 Rescheduling 
Public Notice, and any future public notices that may be issued in this 
proceeding.
    6. 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. Copies of most auctions-related Commission 
documents, including public notices, can be retrieved from the FCC 
Auctions Internet site at http://wireless.fcc.gov/auctions.
ii. Prohibited Communications and Compliance With Antitrust Laws
    7. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) prohibits auction applicants for licenses in any of the same 
or overlapping geographic license areas from communicating with each 
other about bids, bidding strategies, or settlements unless such 
applicants have identified each other on their short-form applications 
(FCC Form 175) as parties with whom they have entered into agreements 
pursuant to 47 CFR 1.2105(a)(2)(viii).
a. Entities Subject to Section 1.2105
    8. 47 CFR 1.2105(c)'s prohibition on certain communications will 
apply to any applicants that submit short-form applications seeking to 
participate in a Commission auction for licenses in the same or 
overlapping geographic license area. Thus, unless they have identified

[[Page 65984]]

each other on their short-form applications as parties with whom they 
have entered into agreements under 47 CFR 1.2105(a)(2)(viii), 
applicants for any of the same or overlapping geographic license areas 
must affirmatively avoid all communications with or disclosures to each 
other that affect or have the potential to affect bids or bidding 
strategy. In some instances, this prohibition extends to communications 
regarding the post-auction market structure. This prohibition applies 
to all applicants that submit short-form applications regardless of 
whether such applicants ultimately become qualified bidders or actually 
bid.
    9. Applicants are also reminded that, for purposes of this 
prohibition on certain communications, 47 CFR 1.2105(c)(7)(i) defines 
``applicant'' as including all officers and directors of the entity 
submitting a short-form application to participate in the auction, all 
controlling interests of that entity, as well as all holders of 
partnership and other ownership interests and any stock interest 
amounting to 10 percent or more of the entity, or outstanding stock, or 
outstanding voting stock of the entity submitting a short-form 
application. For example, where an individual served as an officer for 
two or more applicants, the Bureau has found that the bids and bidding 
strategies of one applicant are conveyed to the other applicant, and, 
absent a disclosed bidding agreement, an apparent violation of 47 CFR 
1.2105(c) occurs.
    10. Individuals and entities subject to 47 CFR 1.2105(c) should 
take special care in circumstances where their employees may receive 
information directly or indirectly relating to any competing 
applicant's bids or bidding strategies. The Bureau has not addressed a 
situation where non-principals (i.e., those who are not officers or 
directors, and thus not considered to be the applicant) receive 
information regarding a competing applicant's bids or bidding 
strategies and whether that information should be presumed to be 
communicated to the applicant.
    11. An exception to the prohibition on certain communications 
allows non-controlling interest holders to obtain interests in more 
than one competing applicant without violating 47 CFR 1.2105(c) 
provided specified conditions are met (including a certification that 
no prohibited communications have occurred or will occur), but that 
exception does not extend to controlling interest holders.
    12. Auction 96 applicants selecting licenses for any of the same or 
overlapping geographic license areas are encouraged not to use the same 
individual as an authorized bidder. A violation of 47 CFR 1.2105(c) 
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. 
Similarly, if the authorized bidders are different individuals employed 
by the same organization (e.g., law firm, engineering firm or 
consulting firm), a violation likewise 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 1.2105(c).
b. Prohibition Applies Until Down Payment Deadline
    13. 47 CFR 1.2105(c)'s prohibition on certain communications begins 
at the short-form application filing deadline and ends at the down 
payment deadline after the auction closes, which will be announced in a 
future public notice.
c. Prohibited Communications
    14. Applicants must not communicate directly or indirectly about 
bids or bidding strategy to other applicants in auction 96. 47 CFR 
1.2105(c) 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 47 CFR 1.2105(c) 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.
    15. Applicants are cautioned that the Commission remains vigilant 
about prohibited communications taking place in other situations. For 
example, the Commission has warned that prohibited ``communications 
concerning bids and bidding strategies may include communications 
regarding capital calls or requests for additional funds in support of 
bids or bidding strategies to the extent such communications convey 
information concerning the bids and bidding strategies directly or 
indirectly.'' Moreover, the Commission has found a violation of 47 CFR 
1.2105(c) 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, where limited information disclosure 
procedures are in place, as is the case for Auction 96, an applicant's 
statement to the press that it has lost bidding eligibility and intends 
to stop bidding in the auction could give rise to a finding of a 47 CFR 
1.2105(c) violation. Similarly, an applicant's public statement of 
intent not to participate in Auction 96 bidding could also violate the 
rule.
    16. Applicants are also hereby placed on notice that public 
disclosure of information relating to bidder interests and bidder 
identities that has not yet been made public by the Commission at the 
time of disclosure may violate the provisions of 47 CFR 1.2105(c) that 
prohibit certain communications. This is so even though similar types 
of information were revealed prior to and during other Commission 
auctions subject to different information procedures.
    17. In addition, when completing short-form applications, 
applicants should avoid any statements or disclosures that may violate 
47 CFR 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 96. Specifically, applicants should 
avoid including any information in their short-form applications that 
might convey information regarding their license selection, such as 
using applicant names that refer to licenses being offered, referring 
to certain licenses or markets in describing bidding agreements, or 
including any information in attachments that may otherwise disclose 
applicants' license selections.
d. Disclosure of Bidding Agreements and Arrangements
    18. 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 licenses being

[[Page 65985]]

auctioned, including any agreements relating to post-auction market 
structure.
    19. 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 1.2105(c), even if the agreement has not 
been reduced to writing. If the parties have not agreed in principle by 
the short-form filing deadline, they should not include the names of 
parties to discussions on their applications, and they may not continue 
negotiation, discussion or communication with any other applicants 
after the short-form application filing deadline.
    20. 47 CFR 1.2105(c) 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. 47 CFR 1.2105(c) Certification
    21. By electronically submitting a short-form application, each 
applicant in Auction 96 certifies its compliance with 47 CFR 1.2105(c). 
In particular, an applicant must certify under penalty of perjury it 
has not entered and will not enter into any explicit or implicit 
agreements, arrangements or understandings of any kind with any 
parties, other than those identified in the application, regarding the 
amount of the applicant's bids, bidding strategies, or the particular 
licenses on which it will or will not bid. However, the Bureau cautions 
that merely filing a certifying statement as part of an application 
will not 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 ``intend[s] to scrutinize 
carefully any instances in which bidding patterns suggest that 
collusion may be occurring.'' Any applicant found to have violated 47 
CFR 1.2105(c) may be subject to sanctions.
f. Duty To Report Prohibited Communications
    22. 47 CFR 1.2105(c)(6) provides that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. The Commission has clarified that each applicant's obligation 
to report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five-day period.
    23. 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, 47 CFR 
1.65 requires an auction applicant to notify the Commission of any 
substantial change to the information or certifications included in its 
pending short-form application. 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 
1.2105(a)(2)(viii).
    24. 47 CFR 1.65(a) and 1.2105(c) requires 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 Bureau to act 
expeditiously on those changes when such action is necessary.
g. Procedure for Reporting Prohibited Communications
    25. A party reporting any communication pursuant to 47 CFR 1.65, 
1.2105(a)(2), or 1.2105(c)(6) must take care to ensure that any report 
of a prohibited communication does not itself give rise to a violation 
of 47 CFR 1.2105(c). 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.
    26. 47 CFR 1.2105(c) requires parties to file only a single report 
concerning a prohibited communication and to 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 1.2105(c) must be filed consistent with the 
instructions set forth in the Auction 96 Procedures Public Notice. For 
Auction 96, such reports must be filed with Margaret W. Wiener, 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 Ms. Wiener at 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.
    27. 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. Such parties also 
are encouraged to coordinate with the Auctions and Spectrum Access 
Division staff about the procedures for submitting such reports. The 
Auction 96 Procedures Public Notice provides additional guidance on 
procedures for submitting application-related information.
h. Winning Bidders Must Disclose Terms of Agreements
    28. Each applicant that is a winning bidder will be required to 
disclose in its long-form applications the specific terms, conditions, 
and parties involved in any agreement it has entered into. This applies 
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. Additional Information Concerning Rule Prohibiting Certain 
Communications
    29. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of 47 CFR 1.2105(c) may be found in 
Attachment F to the Auction 96 Procedures Public Notice. These 
documents are available on the Commission's auction Web page at http://wireless.fcc.gov/auctions/prohibited_communications.

[[Page 65986]]

j. Antitrust Laws
    30. Regardless of compliance with the Commission's rules, 
applicants remain subject to the antitrust laws, which are designed to 
prevent anticompetitive behavior in the marketplace. Compliance with 
the disclosure requirements of 47 CFR 1.2105(c) 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. The Commission has 
cited a number of examples of potentially anticompetitive actions that 
would be prohibited under antitrust laws: for example, actual or 
potential competitors may not agree to divide territories in order to 
minimize competition, regardless of whether they split a market in 
which they both do business, or whether they merely reserve one market 
for one and another market for the other. Similarly, the Bureau 
previously reminded potential applicants and others that ``[e]ven 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.''
    31. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. If an applicant 
is found to have violated the antitrust laws or the Commission's rules 
in connection with its participation in the competitive bidding 
process, it may be subject to forfeiture of its upfront payment, down 
payment, or full bid amount and may be prohibited from participating in 
future auctions, among other sanctions.
iii. Cost-Sharing Obligations
    32. As noted in the H Block Report and Order, the spectrum in the 
Lower H Block and the Upper H Block is subject to cost-sharing 
requirements related to the past clearing and relocation of incumbent 
users from these bands. Consistent with its long-standing policy that 
cost-sharing obligations for both the Lower H Block and the Upper H 
Block be apportioned on a pro rata basis against the relocation costs 
attributable to the particular band, the Commission adopted cost-
sharing rules in the H Block Report and Order that require H Block 
licensees to pay a pro rata share of expenses previously incurred by 
UTAM, Inc. (UTAM) and by Sprint Nextel, Inc. (Sprint) in clearing 
incumbents from the Lower H Block and the Upper H Block, respectively.
    33. Under the cost sharing formula adopted in the H Block Report 
and Order, the reimbursement amount owed (RN) to UTAM with respect to 
the 1915-1920 MHz band will be determined by dividing the gross winning 
bid (GWB) for an H Block license by the sum of the gross winning bids 
for all H Block licenses won in Auction 96 and then multiplying that 
result by $12,629,857--the total amount owed to UTAM for clearing the 
Lower H Block. The cost-sharing formula for the Lower H Block is as 
follows: RN = (EA GWB/Sum of GWBs) x $12,629,857.
    34. The H Block Report and Order adopted the same cost-sharing 
formula for the Upper H Block (1995-2000 MHz band) related to Sprint's 
clearing costs of $94,875,516: RN = (EA GWB/Sum of GWBs) x $94,875,516.
    35. Winning bidders are required to pay UTAM and Sprint, as 
applicable, the reimbursement amounts owed within thirty days after the 
grant of the winning bidders' long-form license applications.
    36. The Commission also adopted a contingency plan in the H Block 
Report and Order that will be triggered in the unlikely event that 
licenses won in this auction cover less than forty percent of the U.S. 
population. If such an event occurs, winning bidders--in this auction 
and in subsequent H Block auctions--will be required to timely pay UTAM 
and Sprint, respectively, their pro rata share calculated by dividing 
the population of the individual EA by the total U.S. population and 
then multiplying this quotient by $12,629,857 for UTAM and by 
$94,875,516 for Sprint.
    37. The cost-sharing rules and contingency plan adopted in the H 
Block Report and Order are designed to ensure the UTAM and Sprint 
receive full reimbursement after this auction even if some of the 
licenses are not sold. The rules accomplish this by apportioning the 
reimbursement costs associated with any unsold H Block licenses among 
the winning bidders, except in cases where the contingency plan is 
triggered or a successful bidder's long-form application is not filed 
or granted. If any of the licenses won in this auction are not awarded, 
the license at issue will be deemed to have triggered a reimbursement 
obligation that will be paid by the licensee acquiring the license in a 
subsequent auction.
iv. International Coordination
    38. Potential bidders seeking licenses for geographic areas 
adjacent to the Canadian and Mexican border should be aware that the 
use of some or all of the H Block frequencies they acquire in the 
auction is subject to international agreements with Canada and Mexico. 
As the Commission noted in the H Block Report and Order, because of its 
shared borders with Canada and Mexico, the Commission routinely works 
in conjunction with the United States Department of State and Canadian 
and Mexican government officials to ensure the efficient use of the 
spectrum as well as interference-free operations in the border areas. 
Until such time as any adjusted agreements, as needed, between the 
United States, Mexico and/or Canada can be agreed to, operations in the 
H Block frequency bands must not cause harmful interference across the 
border, consistent with the terms of the agreements currently in force.
v. Quiet Zones
    39. H Block licensees must individually apply for and receive a 
separate license for each transmitter if the proposed operation would 
affect the radio quiet zones set forth in the Commission's rules.
vi. Due Diligence
    40. The Bureau reminds each potential bidder that it is solely 
responsible for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the value of the 
licenses that it is seeking in this auction. Each bidder is responsible 
for assuring that, if it wins a license, it will be able to build and 
operate facilities in accordance with the Commission's rules. The 
Commission makes no representations or warranties about the use of this 
spectrum for particular services. Applicants should be aware that a 
Commission auction represents an opportunity to become a Commission 
licensee, subject to certain conditions and regulations, and that the 
Commission's statutory authority, under the Communications Act, to add, 
modify and eliminate rules governing spectrum use, as the public 
interest warrants, applies equally to all licenses, whether acquired 
through the competitive bidding process or otherwise. In addition, a 
Commission auction does not constitute an endorsement by the Commission 
of any particular service, technology, or product, nor does a 
Commission license constitute a guarantee of business success.

[[Page 65987]]

    41. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, the Bureau strongly encourages each potential bidder to 
review all Commission orders establishing rules and policies for the H 
Block bands, including cost-sharing obligations for H Block licensees. 
Additionally, each potential bidder should perform technical analyses 
or refresh their previous analyses to assure itself that, should it 
become a winning bidder for any Auction 96 license, it will be able to 
build and operate facilities that will fully comply with all applicable 
technical and regulatory requirements. The Bureau strongly encourages 
each applicant to inspect any prospective transmitter sites located in, 
or near, the service area for which it plans to bid, confirm the 
availability of such sites, and to familiarize itself with the 
Commission's rules regarding the National Environmental Policy Act.
    42. The Bureau strongly encourages each applicant to conduct its 
own research prior to Auction 96 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 Bureau strongly encourages each 
participant in Auction 96 to continue such research throughout the 
auction. The due diligence considerations mentioned in the Auction 96 
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.
    43. The Bureau also reminds each applicant that pending and future 
judicial proceedings, as well as pending and future proceedings before 
the Commission--including applications, applications for modification, 
rulemaking proceedings, requests for special temporary authority, 
waiver requests, petitions to deny, petitions for reconsideration, 
informal objections, and applications for review--may relate to 
particular applicants or the licenses available in Auction 96 (or the 
terms and conditions thereof, including all applicable Commission rules 
and regulations). Each prospective applicant is responsible for 
assessing the likelihood of the various possible outcomes and for 
considering the potential impact on licenses available in this auction.
    44. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the licenses available in Auction 96. Each potential bidder is 
responsible for undertaking research to ensure that any licenses 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.
vii. Use of Integrated Spectrum Auction System
    45. Bidders will be able to participate in Auction 96 over the 
Internet using the Commission's web-based Integrated Spectrum Auction 
System (ISAS or FCC Auction System). The Commission makes no warranty 
whatsoever with respect to the FCC Auction System. In no event shall 
the Commission, or any of its officers, employees, or agents, be liable 
for any damages whatsoever (including, but not limited to, loss of 
business profits, business interruption, loss of business information, 
or any other loss) arising out of or relating to the existence, 
furnishing, functioning, or use of the FCC Auction System that is 
accessible to qualified bidders in connection with this auction. 
Moreover, no obligation or liability will arise out of the Commission's 
technical, programming, or other advice or service provided in 
connection with the FCC Auction System.
viii. Environmental Review Requirements
    46. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act and other 
federal environmental statutes. The construction of a wireless antenna 
facility is a federal action, and the licensee must comply with the 
Commission's environmental rules for each such facility. These 
environmental rules require, among other things, that the licensee 
consult with expert agencies having environmental responsibilities, 
including the U.S. Fish and Wildlife Service, the State Historic 
Preservation Office, the U.S. Army Corps of Engineers, and the Federal 
Emergency Management Agency (through the local authority with 
jurisdiction over floodplains). In assessing the effect of facility 
construction on historic properties, the licensee must follow the 
provisions of the FCC's Nationwide Programmatic Agreement Regarding the 
Section 106 National Historic Preservation Act Review Process. The 
licensee must prepare environmental assessments for any facility 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, Native American religious 
sites, floodplains, and surface features. In addition, the licensee 
must prepare environmental assessments for facilities that include high 
intensity white lights in residential neighborhoods or excessive radio 
frequency emission.

D. Auction Specifics

i. Bidding Methodology
    47. The bidding methodology for Auction 96 will be a simultaneous 
multiple round 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 or by telephone using 
the telephonic bidding option. All telephone calls are recorded.
ii. Pre-Auction Dates and Deadlines
    48. The following dates and deadlines, as announced in the Auction 
96 Rescheduling Public Notice, apply: (1) Auction tutorial available 
(via Internet) by November 4, 2013; (2) short-form application (FCC 
Form 175) filing window opens on November 4, 2013, at 12:00 noon ET; 
(3) short-form application (FCC Form 175) filing window closes on 
November 15, 2013, at 6:00 p.m. ET; (4) upfront payments (via wire 
transfer) due on December 18, 2013 at 6:00 p.m. ET; (5) a mock auction 
will be held on January 17, 2014; and (6) Auction 96 will begin on 
January 22, 2014.
iii. Requirements for Participation
    49. Those wishing to participate in this auction must: (1) Submit a 
short-form application (FCC Form 175) electronically prior to 6:00 p.m. 
ET, on November 15, 2013, following the electronic filing procedures 
set forth in Attachment D to the Auction 96 Procedures Public Notice; 
(2) submit a sufficient upfront payment and an FCC Remittance Advice 
Form (FCC Form 159) by 6:00 p.m. ET, on December 18, 2013, following 
the procedures and instructions set forth in Attachment E to the 
Auction 96 Procedures Public Notice; and (3) comply with all provisions 
outlined in the Auction 96 Procedures Public Notice and applicable 
Commission rules.

[[Page 65988]]

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

A. General Information Regarding Short-Form Applications

    50. An application to participate in an FCC auction, referred to as 
a short-form application or FCC Form 175, provides information used to 
determine whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. The short-form application is the first part of 
the Commission's two-phased auction application process. In the first 
phase, parties desiring to participate in the auction must file a 
streamlined, short-form application in which they certify under penalty 
of perjury as to their qualifications. Eligibility to participate in 
bidding is based on the applicant's short-form application and 
certifications, and on its upfront payment, as explained below. In the 
second phase of the process, each winning bidder must file a more 
comprehensive long-form application (FCC Form 601) and have a complete 
and accurate ownership disclosure information report (FCC Form 602) on 
file with the Commission.
    51. Every entity and individual seeking a license available in 
Auction 96 must file a short-form application electronically via the 
FCC Auction System prior to 6:00 p.m. ET on November 15, 2013, 
following the procedures prescribed in Attachment D to the Auction 96 
Procedures Public Notice. If an applicant claims eligibility for a 
bidding credit, the information provided in its FCC Form 175 will be 
used to determine whether the applicant is eligible for the claimed 
bidding credit. Applicants filing a short-form application are subject 
to the Commission's anti-collusion rules beginning at the deadline for 
filing.
    52. Applicants bear full responsibility for submitting accurate, 
complete and timely short-form applications. All applicants must 
certify on their short-form applications under penalty of perjury that 
they are legally, technically, financially and otherwise qualified to 
hold a license. Each applicant should read carefully the instructions 
set forth in Attachment D and should consult the Commission's rules to 
ensure that, in addition to the materials described in the Auction 96 
Procedures Public Notice, all the information required is included 
within its short-form application.
    53. An individual or entity may not submit more than one short-form 
application for a single auction. If a party submits multiple short-
form applications, only one application may be accepted for filing.
    54. Applicants should note that submission of a short-form 
application (and any amendments thereto) constitutes a representation 
by the person certifying the application that he or she is an 
authorized representative of the applicant with authority to bind the 
applicant, that he or she has read the form's instructions and 
certifications, and that the contents of the application, its 
certifications, and any attachments are true and correct. Applicants 
are not permitted to make major modifications to their applications; 
such impermissible changes include a change of the certifying official 
to the application. Submission of a false certification to the 
Commission may result in penalties, including monetary forfeitures, 
license forfeitures, ineligibility to participate in future auctions, 
and/or criminal prosecution.

B. License Selection

    55. An applicant must select the licenses on which it wants to bid 
from the ``Eligible Licenses'' list on its short-form application. 
Applicants must review and verify their license selections before the 
deadline for submitting short-form applications. License selections 
cannot be changed after the short-form application filing deadline. The 
FCC Auction System will not accept bids on licenses that were not 
selected on the applicant's short-form application.

C. Disclosure of Bidding Arrangements

    56. An applicant will be required to identify in its short-form 
application all real parties in interest with whom it has entered into 
any agreements, arrangements, or understandings of any kind relating to 
the licenses being auctioned, including any agreements relating to 
post-auction market structure.
    57. Each applicant will also be required to certify under penalty 
of perjury in its short-form application that it has not entered and 
will not enter into any explicit or implicit agreements, arrangements 
or understandings of any kind with any parties, other than those 
identified in the application, regarding the amount of its bids, 
bidding strategies, or the particular licenses on which it will or will 
not bid. If an applicant has had discussions, but has not reached an 
agreement by the short-form application filing deadline, it 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.
    58. After the filing of short-form applications, the Commission's 
rules do not prohibit a party holding a non-controlling, attributable 
interest in one applicant from acquiring an ownership interest in or 
entering into a joint bidding arrangement with other applicants, 
provided that: (i) The attributable interest holder certifies that it 
has not and will not communicate with any party concerning the bids or 
bidding strategies of more than one of the applicants in which it holds 
an attributable interest, or with which it has entered into a joint 
bidding arrangement; and (ii) the arrangements do not result in a 
change in control of any of the applicants. While 47 CFR 1.2105(c) of 
the rules does not prohibit non-auction-related business negotiations 
among auction applicants, the Bureau reminds applicants that certain 
discussions or exchanges could touch upon impermissible subject matters 
because they may convey pricing information and bidding strategies. 
Further, compliance with the disclosure requirements of 47 CFR 
1.2105(c) will not insulate a party from enforcement of the antitrust 
laws.

D. Ownership Disclosure Requirements

    59. Each applicant must comply with the uniform Part 1 ownership 
disclosure standards and provide information required by 47 CFR 1.2105 
and 1.2112. Specifically, in completing the short-form application, 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 1.2105 and 1.2112. Each 
applicant is responsible for ensuring that information submitted in its 
short-form application is complete and accurate.
    60. In certain circumstances, an applicant's most current ownership 
information on file with the Commission, if in an electronic format 
compatible with the short-form application (FCC Form 175) (such as 
information submitted in an FCC Form 602 or in an FCC Form 175 filed 
for a previous auction using ISAS) will automatically be entered into 
the applicant's short-form application. 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.

[[Page 65989]]

E. Foreign Ownership Disclosure Requirements

    61. Section 310 of the Communications Act requires the Commission 
to review foreign investment in radio station licenses and imposes 
specific restrictions on who may hold certain types of radio licenses. 
The provisions of section 310 apply to applications for initial radio 
licenses, applications for assignments and transfers of control of 
radio licenses, and spectrum leasing arrangements under the 
Commission's secondary market rules. In completing the short-form 
application (FCC Form 175), an applicant will be required to disclose 
information concerning any foreign ownership of the applicant. An 
applicant must certify in its short-form application that, as of the 
deadline for filing a short-form application to participate in Auction 
96, the applicant either is in compliance with the foreign ownership 
provisions of section 310 or has filed a petition for declaratory 
ruling requesting Commission approval to exceed the applicable foreign 
ownership limit or benchmark in section 310(b) that is pending before, 
or has been granted by, the Commission.

F. National Security Certification Requirement for Auction 96 
Applicants

    62. Section 6004 of the Spectrum Act prohibits a person who has 
been, for reasons of national security, barred by any agency of the 
Federal Government from bidding on a contract, participating in an 
auction, or receiving a grant from participating in any auction that is 
required or authorized to be conducted pursuant to the Spectrum Act. In 
the H Block Report and Order, the Commission implemented the national 
security restriction in Section 6004 by adding a certification to the 
various other certifications that a party must make in any short-form 
application. This newly-adopted national security certification 
requires any applicant seeking to participate in Auction 96 to certify 
in its short-form application, under penalty of perjury, that the 
applicant and all of the related individuals and entities required to 
be disclosed on its application are not person(s) who have been, for 
reasons of national security, barred by any agency of the Federal 
Government from bidding on a contract, participating in an auction, or 
receiving a grant, and who are thus statutorily prohibited from 
participating in such a Commission auction. As with other required 
certifications, an auction applicant's failure to include the required 
certification in its short-form application by the applicable filing 
deadline would render its application unacceptable for filing, and its 
application would be dismissed with prejudice.

G. Designated Entity Provisions

    63. Eligible applicants in Auction 96 may claim small business 
bidding credits. In addition to the information provided in the Auction 
96 Procedures Public Notice, Applicants should review carefully the 
Commission's decisions regarding the designated entity provisions.
i. Bidding Credits for Small Businesses
    64. A bidding credit represents an amount by which a bidder's 
winning bid will be discounted. For Auction 96, bidding credits will be 
available to small businesses and consortia thereof.
a. Bidding Credit Eligibility Criteria
    65. In the H Block Report and Order, the Commission adopted small 
business bidding credits to promote and facilitate the participation of 
small businesses in competitive bidding for licenses in the H Block.
    66. The level of bidding credit is determined as follows: (1) A 
bidder with attributed average annual gross revenues that do not exceed 
$40 million for the preceding three years will receive a 15 percent 
discount on its winning bid; and (2) A bidder with attributed average 
annual gross revenues that do not exceed $15 million for the preceding 
three years will receive a 25 percent discount on its winning bid.
    67. Bidding credits are not cumulative; qualifying applicants 
receive either the 15 percent or the 25 percent bidding credit on its 
winning bid, but not both. Applicants should note that unjust 
enrichment provisions apply to a winning bidder that utilizes a bidding 
credit and subsequently seeks to assign or transfer control of its 
license to an entity not qualifying for the same level of bidding 
credit.
b. Revenue Disclosure on Short-Form Application
    68. An entity applying as a small business must provide gross 
revenues for the preceding three years of each of the following: (1) 
The applicant, (2) its affiliates, (3) its controlling interests, (4) 
the affiliates of its controlling interests, and (5) the entities with 
which it has an attributable material relationship. Certification that 
the average annual gross revenues of such entities and individuals for 
the preceding three years do not exceed the applicable limit is not 
sufficient. Additionally, if an applicant is applying as a consortium 
of small businesses, this information must be provided for each 
consortium member.
ii. Attributable Interests
a. Controlling Interests
    69. Controlling interests of an applicant include individuals and 
entities with either de facto or de jure control of the applicant. 
Typically, ownership of greater than 50 percent of an entity's voting 
stock evidences de jure control. De facto control is determined on a 
case-by-case basis. The following are some common indicia of de facto 
control: (1) The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee; (2) the entity has 
authority to appoint, promote, demote, and fire senior executives that 
control the day-to-day activities of the licensee; and (3) the entity 
plays an integral role in management decisions.
    70. Applicants should refer to 47 CFR 1.2110(c)(2) and Attachment D 
to the Auction 96 Procedures Public Notice to understand how certain 
interests are calculated in determining control. For example, pursuant 
to 47 CFR 1.2110(c)(2)(ii)(F), officers and directors of an applicant 
are considered to have controlling interest in the applicant.
b. Affiliates
    71. Affiliates of an applicant or controlling interest include an 
individual or entity that: (1) Directly or indirectly controls or has 
the power to control the applicant; (2) is directly or indirectly 
controlled by the applicant; (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant; or (4) has an ``identity of interest'' with the applicant. 
The Commission's definition of an affiliate of the applicant 
encompasses both controlling interests of the applicant and affiliates 
of controlling interests of the applicant. For more information 
regarding affiliates, applicants should refer to 47 CFR 1.2110(c)(5) 
and Attachment D to the Auction 96 Procedures Public Notice.
c. Material Relationships
    72. The Commission requires the consideration of certain leasing 
and resale (including wholesale) relationships--referred to as 
``attributable material relationships''--in determining designated 
entity eligibility for bidding credits. An applicant or licensee has an 
``attributable material relationship'' when it has one or more 
agreements with any individual entity for the lease or resale 
(including under a wholesale agreement) of, on a cumulative basis, more 
than 25 percent

[[Page 65990]]

of the spectrum capacity of any individual license held by the 
applicant or licensee. The attributable material relationship will 
cause the gross revenues of that entity and its attributable interest 
holders to be attributed to the applicant or licensee for the purposes 
of determining the applicant's or licensee's (i) eligibility for 
designated entity benefits and (ii) liability for ``unjust enrichment'' 
on a license-by-license basis.
    73. The Commission grandfathered material relationships in 
existence before the release of the Designated Entity Second Report and 
Order, meaning that those preexisting relationships alone would not 
cause the Commission to examine a designated entity's ongoing 
eligibility for existing benefits or its liability for unjust 
enrichment. The Commission did not, however, grandfather preexisting 
material relationships for determinations of an applicant's or 
licensee's designated entity eligibility for future auctions or in the 
context of future assignments, transfers of control, spectrum leases, 
or other reportable eligibility events. Rather, in such circumstances, 
the Commission reexamines the applicant's or licensee's designated 
entity eligibility, taking into account all existing material 
relationships, including those previously grandfathered.
d. Gross Revenue Exceptions
    74. The Commission has also made other modifications to its rules 
governing the attribution of gross revenues for purposes of determining 
designated entity eligibility. For example, the Commission has 
clarified that, in calculating an applicant's gross revenues under the 
controlling interest standard, it will not attribute to the applicant 
the personal net worth, including personal income, of its officers and 
directors.
    75. The Commission has also exempted from attribution to the 
applicant the gross revenues of the affiliates of a rural telephone 
cooperative's officers and directors, if certain conditions specified 
in 47 CFR 1.2110(b)(3)(iii) are met. An applicant claiming this 
exemption must provide, in an attachment, an affirmative statement that 
the applicant, affiliate and/or controlling interest is an eligible 
rural telephone cooperative within the meaning of 47 CFR 
1.2110(b)(3)(iii), and the applicant must supply any additional 
information as may be required to demonstrate eligibility for the 
exemption from the attribution rule. Applicants seeking to claim this 
exemption must meet all of the conditions. Additional guidance on 
claiming this exemption may be found in Attachment D.
e. Bidding Consortia
    76. A consortium of small businesses is a conglomerate organization 
composed of two or more entities, each of which individually satisfies 
the definition of a small business. Thus, each member of a consortium 
of small businesses that applies to participate in Auction 96 must 
individually meet the criteria for small businesses. Each consortium 
member must disclose its gross revenues along with those of its 
affiliates, its controlling interests, the affiliates of its 
controlling interests, and any entities having an attributable material 
relationship with the member. Although the gross revenues of the 
consortium members will not be aggregated for purposes of determining 
the consortium's eligibility as a small business, this information must 
be provided to ensure that each individual consortium member qualifies 
for any bidding credit awarded to the consortium.

H. Tribal Lands Bidding Credit

    77. To encourage the growth of wireless services in federally 
recognized tribal lands, the Commission has implemented a tribal lands 
bidding credit. Applicants do not provide information regarding tribal 
lands bidding credits on their short-form applications. Instead, 
winning bidders may apply for the tribal lands bidding credit after the 
auction when they file their more detailed, long-form applications.

I. Provisions Regarding Former and Current Defaulters

    78. Current defaulters or delinquents are not eligible to 
participate in Auction 96, but former defaulters or delinquents can 
participate so long as they are otherwise qualified and make upfront 
payments that are fifty percent more than would otherwise be necessary. 
An applicant is considered a ``current defaulter'' or a ``current 
delinquent'' when it, any of its affiliates, any of its controlling 
interests, or any of the affiliates of its controlling interests, is in 
default on any payment for any Commission construction permit or 
license (including a down payment) or is delinquent on any non-tax debt 
owed to any Federal agency as of the filing deadline for short-form 
applications. An applicant is considered a ``former defaulter'' or a 
``former delinquent'' when it, any of its affiliates, any of its 
controlling interests, or any of the affiliates of its controlling 
interests, have defaulted on any Commission construction permit or 
license or been delinquent on any non-tax debt owed to any Federal 
agency, but have since remedied all such defaults and cured all of the 
outstanding non-tax delinquencies.
    79. On the short-form application, an applicant must certify under 
penalty of perjury that it, its affiliates, its controlling interests, 
and the affiliates of its controlling interests, as defined by 47 CFR 
1.2110 are not in default on any payment for a Commission construction 
permit or license (including down payments) and that it is not 
delinquent on any non-tax debt owed to any Federal agency. Each 
applicant must also state under penalty of perjury whether it, its 
affiliates, its controlling interests, and the affiliates of its 
controlling interests, have ever been in default on any Commission 
construction permit or license or have ever been delinquent on any non-
tax debt owed to any Federal agency. Prospective applicants are 
reminded that submission of a false certification to the Commission is 
a serious matter that may result in severe penalties, including 
monetary forfeitures, license revocations, exclusion from participation 
in future auctions, and/or criminal prosecution.
    80. Applicants are encouraged to review the Bureau's previous 
guidance on default and delinquency disclosure requirements in the 
context of the short-form application process. For example, it has been 
determined that, to the extent that Commission rules permit late 
payment of regulatory or application fees accompanied by late fees, 
such debts will become delinquent for purposes of 47 CFR 1.2105(a) and 
1.2106(a) only after the expiration of a final payment deadline. 
Therefore, with respect to regulatory or application fees, the 
provisions of 47 CFR 1.2105(a) and 1.2106(a) regarding default and 
delinquency in connection with competitive bidding are limited to 
circumstances in which the relevant party has not complied with a final 
Commission payment deadline. Parties are also encouraged to consult 
with the Wireless Telecommunications Bureau's Auctions and Spectrum 
Access Division staff if they have any questions about default and 
delinquency disclosure requirements.
    81. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the 
``red light rule,'' that implement its obligations under the Debt 
Collection Improvement Act of

[[Page 65991]]

1996, which governs the collection of debts owed to the United States. 
Under the red light rule, applications and other requests for benefits 
filed by parties that have outstanding debts owed to the Commission 
will not be processed. In the same rulemaking order, the Commission 
explicitly declared, however, that its competitive bidding rules ``are 
not affected'' by the red light rule. As a consequence, the 
Commission's adoption of the red light rule does not alter the 
applicability of any of its competitive bidding rules, including the 
provisions and certifications of 47 CFR 1.2105 and 1.2106, with regard 
to current and former defaults or delinquencies.
    82. Applicants are reminded, however, that the Commission's Red 
Light Display System, which provides information regarding debts 
currently owed to the Commission, may not be determinative of an 
auction applicant's ability to comply with the default and delinquency 
disclosure requirements of 47 CFR 1.2105. Thus, while the red light 
rule ultimately may prevent the processing of long-form applications by 
auction winners, an auction applicant's lack of current ``red light'' 
status is not necessarily determinative of its eligibility to 
participate in an auction or of its upfront payment obligation.
    83. Moreover, prospective applicants in Auction 96 should note that 
any long-form applications filed after the close of bidding will be 
reviewed for compliance with the Commission's red light rule, and such 
review may result in the dismissal of a winning bidder's long-form 
application.

J. Optional Applicant Status Identification

    84. Applicants owned by members of minority groups and/or women, as 
defined in 47 CFR 1.2110(c)(3), and rural telephone companies, as 
defined in 47 CFR 1.2110(c)(4), may identify themselves regarding this 
status in filling out their short-form applications. This applicant 
status information is collected for statistical purposes only and 
assists the Commission in monitoring the participation of ``designated 
entities'' in its auctions.

K. Minor Modifications to Short-Form Applications

    85. After the deadline for filing initial applications, an Auction 
96 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 addresses and telephone numbers of the applicants and their 
contact persons. An applicant is not permitted to make a major 
modification to its application (e.g., change of license selection, 
change control of the applicant, change the certifying official, or 
claim eligibility for a higher percentage of bidding credit) 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.
    86. 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 
stating the submission time, submission date, and a unique file number.
    87. An applicant cannot use the FCC Auction System outside of the 
initial and resubmission filing windows to make changes to its short-
form application for 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 and 
license selections.
    88. 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 96 and the name of the applicant, for example, ``Re: Changes to 
Auction 96 Short-Form Application of ABC Corp.'' The Bureau requests 
that parties format any attachments to email as Adobe[supreg] 
Acrobat[supreg] (pdf) or Microsoft[supreg] Word documents. Questions 
about short-form application amendments should be directed to the 
Auctions and Spectrum Access Division at (202) 418-0660.
    89. As with the short-form application, any application amendment 
and related statements of fact must be certified by an authorized 
representative of the applicant with authority to bind the applicant. 
Applicants should note that submission of any such amendment or related 
statement of fact constitutes a representation by the person certifying 
that he or she is an authorized representative with such authority, and 
that the contents of the amendment or statement of fact are true and 
correct.
    90. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System, which was 
used for submitting comments regarding Auction 96. Further, 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 
1.2105(c) or the limited information procedures adopted for Auction 96. 
A party seeking to submit information that might reflect non-public 
information, such as an applicant's license selections, upfront payment 
amount, or bidding eligibility, 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 1.2105(c).

L. Maintaining Current Information in Short-Form Applications

    91. 47 CFR 1.65 and 1.2105(b) requires an applicant to maintain the 
accuracy and completeness of information furnished in its pending 
application and in competitive bidding proceedings to furnish 
additional or corrected information to the Commission within five days 
of a significant occurrence, or to amend a short form application no 
more than five days after the applicant becomes aware of the need for 
the amendment. Changes that cause a loss of or reduction in the 
percentage of bidding credit specified on the originally-submitted 
application must be reported immediately, and no later than five 
business days after the change occurs. If an amendment reporting 
changes is a ``major amendment,'' as defined by 47 CFR 1.2105, the 
major amendment will not be accepted and may result in the dismissal of 
the application. After the short-form 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

[[Page 65992]]

summarizing the changes must be submitted by email to 
[email protected]. This email must include a subject or caption 
referring to Auction 96 and the name of the applicant. The Bureau 
requests that parties format any attachments to email as Adobe[supreg] 
Acrobat[supreg] (pdf) or Microsoft[supreg] Word documents. A party 
seeking to submit information that might reflect non-public 
information, such as an applicant's license selections, upfront payment 
amount, or bidding eligibility, 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 1.2105(c).

III. Pre-Auction Procedures

A. Online Auction Tutorial--Available November 4, 2013

    92. No later than Monday, November 4, 2013, an auction tutorial 
will be available on the Auction 96 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 Bidding 
System, auction rules, and H Block service rules. The tutorial will 
also provide an avenue to ask Commission staff questions about the 
auction, auction procedures, filing requirements, and other matters 
related to this auction.
    93. The auction tutorial will be accessible from the Commission's 
Auction 96 Web page at http://wireless.fcc.gov/auctions/96/ through an 
``Auction Tutorial'' link. Once posted, this tutorial will remain 
available and accessible anytime for reference in connection with the 
procedures outlined in the Auction 96 Procedures Public Notice.

B. Short-Form Applications--Due Prior to 6:00 p.m. ET on November 15, 
2013

    94. In order to be eligible to bid in this auction, applicants must 
first follow the procedures set forth in Attachment D to submit a 
short-form application (FCC Form 175) electronically via the FCC 
Auction System. This short-form application must be submitted prior to 
6:00 p.m. ET on November 15, 2013. Late applications will not be 
accepted. No application fee is required, but an applicant must submit 
a timely upfront payment to be eligible to bid.
    95. Applications may generally be filed at any time beginning at 
noon ET on November 4, 2013, until the filing window closes at 6:00 
p.m. ET on November 15, 2013. 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 November 15, 2013.
    96. An applicant must always click on the SUBMIT button on the 
``Certify & Submit'' screen to successfully submit its FCC Form 175 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 175 is included in Attachment D. 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

    97. After the deadline for filing short-form applications, the 
Commission 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.
    98. After the application filing deadline on November 15, 2013, 
applicants can make only minor corrections to their applications. They 
will not be permitted to make major modifications (e.g., change license 
selection, change control of the applicant, change the certifying 
official, or claim eligibility for a higher percentage of bidding 
credit).
    99. 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. Upfront Payments--Due December 18, 2013

    100. In order to be eligible to bid in this auction, an upfront 
payment must be submitted and accompanied by an FCC Remittance Advice 
Form (FCC Form 159). After completing its short-form application, an 
applicant will have access to an electronic version of the FCC Form 159 
that can be printed and sent by fax to U.S. Bank in St. Louis, 
Missouri. All upfront payments must be made as instructed in the 
Auction 96 Procedures Public Notice and must be received in the proper 
account at U.S. Bank before 6:00 p.m. ET on December 18, 2013.
i. Making Upfront Payments by Wire Transfer
    101. Wire transfer payments must be received before 6:00 p.m. ET on 
December 18, 2013. No other payment method is acceptable. To avoid 
untimely payments, applicants should discuss arrangements (including 
bank closing schedules) with their bankers several days before they 
plan to make the wire transfer, and allow sufficient time for the 
transfer to be initiated and completed before the deadline. The 
specific information needed to make upfront payments by wire transfer 
is outlined in the Auction 96 Procedures Public Notice.
    102. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must fax a 
completed FCC Form 159 (Revised 2/03) to U.S. Bank at (314) 418-4232. 
On the fax cover sheet, write ``Wire Transfer--Auction Payment for 
Auction 96.'' In order to meet the upfront payment deadline, an 
applicant's payment must be credited to the Commission's account for 
Auction 96 before the deadline.
    103. Each applicant is responsible for ensuring timely submission 
of its upfront payment and for timely filing of an accurate and 
complete FCC Remittance Advice Form (FCC Form 159). An applicant should 
coordinate with its financial institution well ahead of the due date 
regarding its wire transfer and allow sufficient time for the transfer 
to be initiated and completed prior to the deadline. The Commission 
repeatedly has cautioned auction participants about the importance of 
planning ahead to prepare for unforeseen last-minute difficulties in 
making payments by wire transfer. Each applicant also is responsible 
for obtaining confirmation from its financial institution that its wire 
transfer to U.S. Bank was successful and from Commission staff that its 
upfront payment was timely received and that it was deposited into the 
proper account. To receive confirmation from Commission staff, contact 
Gail Glasser of the Office of Managing Director's Auctions Accounting 
Group at (202)

[[Page 65993]]

418-0578, or alternatively, Theresa Meeks at (202) 418-2945.
    104. Please note the following information regarding upfront 
payments: (1) all payments must be made in U.S. dollars; (2) all 
payments must be made by wire transfer; (3) upfront payments for 
Auction 96 go to a lockbox number different from the lockboxes used in 
previous Commission auctions; and (4) failure to deliver a sufficient 
upfront payment as instructed by the December 18, 2013, deadline will 
result in dismissal of the short-form application and disqualification 
from participation in the auction.
ii. FCC Form 159
    105. An accurate and complete FCC Remittance Advice Form (FCC Form 
159, Revised 2/03) must be faxed to U.S. Bank to accompany each upfront 
payment. Proper completion of this form is critical to ensuring correct 
crediting of upfront payments. Detailed instructions for completion of 
FCC Form 159 are included in Attachment E to the Auction 96 Procedures 
Public Notice. An electronic pre-filled version of the FCC Form 159 is 
available after submitting the FCC Form 175. Payers using the pre-
filled FCC Form 159 are responsible for ensuring that all of the 
information on the form, including payment amounts, is accurate. The 
FCC Form 159 can be completed electronically, but it must be filed with 
U.S. Bank by fax.
iii. Upfront Payments and Bidding Eligibility
    106. The Commission has delegated to the Bureau the authority and 
discretion to determine appropriate upfront payments for each auction. 
An upfront payment is a refundable deposit made by each bidder to 
establish its eligibility to bid on licenses. Upfront payments help 
deter frivolous or insincere bidding, and provide the Commission with a 
source of funds in the event that the bidder incurs liability during 
the auction.
    107. Applicants that are former defaulters must make upfront 
payments that are fifty percent greater than non-former defaulters. For 
purposes of this calculation, the ``applicant'' includes the applicant 
itself, its affiliates, its controlling interests, and affiliates of 
its controlling interests, as defined by 47 CFR 1.2110.
    108. Applicants must make upfront payments sufficient to obtain 
bidding eligibility on the licenses on which they will bid. The Bureau 
proposed in the Auction 96 Comment Public Notice that the amount of the 
upfront payment would determine a bidder's initial bidding eligibility, 
i.e., the maximum number of bidding units on which a bidder may place 
bids. Under the Bureau's proposal, in order to bid on a particular 
license, a qualified bidder must have selected the license on its FCC 
Form 175 and must have a current eligibility level that meets or 
exceeds the number of bidding units assigned to that license. At a 
minimum, therefore, an applicant's total upfront payment must be enough 
to establish eligibility to bid on at least one of the licenses 
selected on its FCC Form 175 for Auction 96, or else the applicant will 
not be eligible to participate in the auction. An applicant does not 
have to make an upfront payment to cover all licenses the applicant 
selected on its FCC Form 175, but only enough to cover the maximum 
number of bidding units that are associated with licenses on which it 
wishes to place bids and hold provisionally winning bids in any given 
round. The total upfront payment does not affect the total dollar 
amount the bidder may bid on any given license.
    109. In the Auction 96 Comment Public Notice, the Bureau proposed 
to make the upfront payments equal to the minimum opening bids. The 
Bureau further proposed that each license be assigned a specific number 
of bidding units equal to the upfront payment listed for the license, 
on a bidding unit for dollar basis. The bidding unit level for each 
license will remain constant throughout the auction. The Bureau 
received no specific comments on the proposal, and thus adopts its 
proposed upfront payments. The complete list of licenses for Auction 96 
and the specific upfront payments and bidding units for each license 
are available as separate ``Attachment A'' files at http://wireless.fcc.gov/auctions/96/.
    110. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the bidding units for all licenses on which it seeks to be 
active in any given round. Applicants should check their calculations 
carefully, as there is no provision for increasing a bidder's 
eligibility after the upfront payment deadline.
    111. If an applicant is a former defaulter, it must calculate its 
upfront payment for all of its identified licenses by multiplying the 
number of bidding units on which it wishes to be active by 1.5. In 
order to calculate the number of bidding units to assign to former 
defaulters, the Commission will divide the upfront payment received by 
1.5 and round the result up to the nearest bidding unit.

E. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments

    112. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information delineated in the Auction 96 Procedures Public Notice be 
supplied. Applicants can provide the information electronically during 
the initial short-form application filing window after the form has 
been submitted. (Applicants are reminded that information submitted as 
part of an FCC Form 175 will be available to the public; for that 
reason, wire transfer information should not be included in an FCC Form 
175.) Wire transfer instructions can also be faxed to the Commission 
using the instructions provided in the Auction 96 Procedures Public 
Notice.

F. Auction Registration

    113. Approximately ten days before the auction, the Bureau will 
issue a public notice announcing all qualified bidders for the auction. 
Qualified bidders are those applicants with submitted short-form 
applications that are deemed timely-filed, accurate, and complete, 
provided that such applicants have timely submitted an upfront payment 
that is sufficient to qualify them to bid.
    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 175 and will 
include the SecurID[supreg] tokens that will be required to place bids, 
the ``Integrated Spectrum Auction System (ISAS) Bidder's Guide,'' and 
the Auction Bidder Line phone number.
    115. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, if this mailing is 
not received by noon on Wednesday, January 15, 2014, 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

[[Page 65994]]

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).

G. Remote Electronic Bidding

    117. The Commission will conduct this auction over the Internet, 
and telephonic bidding will be available as well. Only qualified 
bidders are permitted to bid. Each applicant should indicate its 
bidding preference--electronic or telephonic--on its FCC Form 175. In 
either case, 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. For security purposes, the SecurID[supreg] tokens, the 
telephonic bidding telephone number, and the ``Integrated Spectrum 
Auction System (ISAS) Bidder's Guide'' are only mailed to the contact 
person at the contact address listed on the FCC Form 175. 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 96.
    118. Please note that the SecurID[supreg] tokens can be recycled, 
and the Bureau encourages bidders to return the tokens to the FCC. Pre-
addressed envelopes will be provided to return the tokens once bidding 
has closed.

H. Mock Auction--January 17, 2014

    119. All qualified bidders will be eligible to participate in a 
mock auction on Friday, January 17, 2014. The mock auction will enable 
bidders to become familiar with the FCC Auction System prior to the 
auction. The Bureau strongly recommends that all bidders participate in 
the mock auction. Details will be announced by public notice.

IV. Auction

    120. The first round of bidding for Auction 96 will begin on 
Wednesday, January 22, 2014. The initial bidding schedule will be 
announced in a public notice listing the qualified bidders, which is 
released approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction Without Package Bidding
    121. In the Auction 96 Comment Public Notice, the Bureau proposed 
to auction all licenses in Auction 96 in a single auction using a 
simultaneous multiple-round (SMR) auction format. This type of auction 
offers every license for bid at the same time and consists of 
successive bidding rounds in which eligible bidders may place bids on 
individual licenses. A bidder may bid on, and potentially win, any 
number of licenses.
    122. The Bureau also proposed to incorporate provisions for a 
simple form of package bidding called hierarchical package bidding 
(HPB) into the SMR auction under which, in addition to being able to 
bid on individual licenses, bidders would be able to bid on certain 
tiered, non-overlapping packages of licenses. The Bureau proposed that 
the basic bidding tier under HPB would be EA licenses, with possible 
predefined packages of EAs corresponding to Major Economic Areas 
(MEAs), Regional Economic Area Groupings (REAGs), and/or all markets in 
the contiguous 48 states. The Bureau sought comment generally on the 
proposed SMR format with HPB, including what predefined packages should 
be available for various tiers.
    123. The Bureau received significant comment on its proposals. 
While all parties that commented on this topic generally support the 
Bureau's proposal to use the SMR format, most oppose implementing any 
form of package bidding in Auction 96. The Bureau concludes based on 
the record, that it will use a standard SMR auction format in Auction 
96, without HPB.
    124. Commenters that oppose implementing any form of package 
bidding, including HPB, claim that it creates competitive issues by (1) 
adding unnecessary complexity to the auction, which would be most felt 
by smaller bidders, (2) tilting the playing field in favor of larger/
incumbent carriers to the detriment of small, rural, and new entrant 
carriers, (3) potentially allowing certain licenses to be acquired at a 
discount, and (4) adding uncertainty for bidders that bid on any 
collection of licenses smaller than the largest package being bid. 
Because the Bureau is not implementing package bidding for Auction 96, 
it need not address each of these comments in detail. The commenters 
that favor incorporating HPB into an SMR auction with package bidding, 
AT&T, Holt and Goeree, and T-Mobile, maintain that an SMR-HPB auction 
provides flexibility by allowing smaller companies to bid on ``bite 
size'' licenses, while offering major providers the chance to establish 
a regional or national footprint with a winning package bid. Holt and 
Goeree explain that the SMR-HPB format is simple and transparent, and 
that a structure with one or more middle tiers of regional packages 
offers flexibility advantages without significant increases in 
complexity or reductions in transparency or computational complexity. 
Both AT&T and Holt and Goeree observe that the proposed multi-round HPB 
auction format goes a long way towards solving an exposure problem, 
especially if more than two tiers are used. AT&T further notes that the 
Bureau's proposal to offer pre-defined, non-overlapping packages would 
greatly simplify the process of determining the provisionally winning 
bid in an EA (as compared to other package bidding formats) and that 
this reduced computational complexity should provide for transparency.
    125. The Bureau concludes based on the record and in light of its 
experience with previous spectrum auctions, including auctions of 
Advanced Wireless Service (``AWS'') and Personal Communications Service 
(``PCS'') licenses, that a standard SMR auction format will offer 
adequate opportunity for bidders to aggregate licenses in order to 
obtain the level of coverage they desire consistent with their business 
plans. Accordingly, the Bureau declines to implement HPB, and will use 
a standard SMR auction format for Auction 96. Bids will be accepted on 
all licenses in each round of the auction until bidding stops on every 
license unless otherwise announced.
    126. In the Auction 96 Comment Public Notice, the Bureau 
alternatively proposed to conduct Auction 96 as a single round sealed 
bid (``SRSB'') auction, given that Auction 96 offers only a single 
spectrum block and that a single round auction might simplify the 
process for bidders and reduce auction participation costs. The Bureau 
sought comment on this alternative format and on any others it should 
consider. The four parties that took a position on the Bureau's 
alternative SRSB auction format proposal all oppose it. Given both the 
lack of support in the record for the Bureau's alternative SRSB auction 
proposal and the overwhelming record support for the SMR auction 
format, the Bureau will not conduct Auction 96 as a SRSB auction, and 
will conduct the auction using a standard SMR format.
ii. Limited Information Disclosure Procedures: Information Available to 
Bidders Before and During the Auction
    127. Consistent with its practice in several prior wireless 
spectrum auctions, the Bureau proposed in the Auction 96 Comment Public 
Notice to withhold, until after the close of bidding, public release of 
(1) bidders' license selections on their short-form applications (FCC 
Form 175), (2) the amounts of bidders' upfront payments

[[Page 65995]]

and bidding eligibility, and (3) information that may reveal the 
identities of bidders placing bids and taking other bidding-related 
actions. The Bureau sought comment on the proposal to implement 
anonymous bidding and on any alternatives for Auction 96.
    128. The Bureau received several comments on its proposal to use 
anonymous bidding procedures for Auction 96, both in support and in 
opposition. After carefully considering the record on this issue, the 
Bureau concludes that it will employ its standard anonymous bidding 
procedures in Auction 96. The Bureau agrees with commenters that assert 
that the anonymous bidding procedures used in past auctions help 
protect against potential anticompetitive behavior such as retaliatory 
bidding and collusion. The Bureau finds that the competitive benefits 
associated with anonymous bidding outweigh the potential benefits of 
full information disclosure, particularly in this case where the Bureau 
offers one block of spectrum licenses, and therefore rejects the 
assertions of opponents of anonymous bidding, who argue that anonymous 
bidding procedures are unnecessary or harmful to smaller bidders.
    129. The Bureau therefore adopts the limited information procedures 
proposed in the Auction 96 Comment Public Notice. Nothing in the record 
persuades the Bureau that it should depart from the now-established 
Commission practice of implementing anonymous bidding procedures in 
wireless spectrum auctions. Thus, after the conclusion of each round, 
the Bureau will disclose all relevant information about the bids placed 
and/or withdrawn except the identities of the bidders performing the 
actions and the net amounts of the bids placed or withdrawn. As in past 
auctions conducted with limited information procedures, the Bureau will 
indicate, for each license, the minimum acceptable bid amount for the 
next round and whether the license has a provisionally winning bid. 
After each round, the Bureau will also release, for each license, the 
number of bidders that placed a bid on the license. Furthermore, the 
Bureau will indicate whether any proactive waivers were submitted in 
each round, and the Bureau will release the stage transition 
percentage--the percentages of licenses (as measured in bidding units) 
on which there were new bids--for the round. In addition, bidders can 
log in to the FCC Auction System to see, after each round, whether 
their own bids are provisionally winning. The Bureau will provide 
descriptions and/or samples of publicly-available and bidder-specific 
(non-public) results files prior to the start of the auction.
    130. The Bureau, however, retains the discretion not to use limited 
information procedures if the Bureau, after examining the level of 
potential competition based on the short-form applications filed for 
Auction 96, determines that the circumstances indicate that limited 
information procedures would not be an effective tool for deterring 
anti-competitive behavior. For example, if only two applicants become 
qualified to participate in the bidding, limited information procedures 
would be ineffective in preventing bidders from knowing the identity of 
the competing bidder and, therefore, limited information procedures 
would not serve to deter attempts at signaling and retaliatory bidding 
behavior.
    131. Other Issues. Information disclosure procedures established 
for this auction will not interfere with the administration of, or 
compliance with, the Commission's prohibition of certain 
communications. 47 CFR 1.2105(c)(1) provides that, after the short-form 
application filing deadline, all applicants for licenses in any of the 
same or overlapping geographic license areas are prohibited from 
disclosing to each other in any manner the substance of bids or bidding 
strategies until after the down payment deadline, subject to specified 
exceptions.
    132. In Auction 96, the Commission will not disclose information 
regarding license selection or the amounts of bidders' upfront payments 
and bidding eligibility. The Commission will disclose the other 
portions of applicants' short-form applications through its online 
database, and certain application-based information through public 
notices.
    133. To assist applicants in identifying other parties subject to 
47 CFR 1.2105(c), the Bureau will notify separately each applicant in 
Auction 96 whether applicants with short-form applications to 
participate in pending auctions, including but not limited to Auction 
96, have applied for licenses in any of the same or overlapping 
geographic areas as that applicant. Specifically, after the Bureau 
conducts its initial review of applications to participate in Auction 
96, it will send to each applicant in Auction 96 a letter that lists 
the other applicants that have pending short-form applications for 
licenses in any of the same or overlapping geographic areas as the 
licenses it has selected in its application. The list will identify the 
other applicants by name but will not list their license selections. As 
in past auctions, additional information regarding other applicants 
that is needed to comply with 47 CFR 1.2105(c)--such as the identities 
of other applicants' controlling interests and entities with a greater 
than ten percent ownership interest--will be available through the 
publicly-accessible online short-form application database.
    134. When completing short-form applications, applicants should 
avoid any statements or disclosures that may violate the Commission's 
prohibition of certain communications, pursuant to 47 CFR 1.2105(c), 
particularly in light of the Commission's procedures regarding the 
availability of certain information in Auction 96. While applicants' 
license selections will not be disclosed until after Auction 96 closes, 
the Commission will disclose other portions of short-form applications 
through its online database and public notices. Accordingly, applicants 
should avoid including any information in their short-form applications 
that might convey information regarding license selections. For 
example, applicants should avoid using applicant names that refer to 
licenses being offered, referring to certain licenses or markets in 
describing bidding agreements, or including any information in 
attachments that may otherwise disclose applicants' license selections.
    135. If an applicant is found to have violated the Commission's 
rules or the antitrust laws in connection with its participation in the 
competitive bidding process, the applicant may be subject to various 
sanctions, including forfeiture of its upfront payment, down payment, 
or full bid amount and prohibition from participating in future 
auctions.
    136. The Bureau hereby warns applicants that the direct or indirect 
communication to other applicants or the public disclosure of non-
public information (e.g., bid withdrawals, proactive waivers submitted, 
reductions in eligibility) could violate the Commission's anonymous 
bidding procedures and 47 CFR 1.2105(c). To the extent an applicant 
believes that such a disclosure is required by law or regulation, 
including regulations issued by the SEC, the Bureau strongly urges that 
the applicant consult with the Commission staff in the Auctions and 
Spectrum Access Division before making such disclosure.
    137. In opposing the use of anonymous bidding procedures for 
Auction 96, US Cellular claims that smaller bidders face greater legal 
risks

[[Page 65996]]

and potential consequences because of the inherent conflict between 
anonymous bidding and the public disclosure requirements of the SEC 
concerning financially-material information. The Bureau is not 
persuaded by US Cellular's suggestion that SEC rules requiring bidders 
to disclose financially-material information may force bidders to 
disclose bidding information during the auction. US Cellular has raised 
this issue in the past, but has failed to cite any specific SEC rule 
that explicitly requires disclosure of bidding information. Until the 
SEC addresses the issue, the Bureau will not presume that SEC rules 
require public disclosure of information about bidding while an auction 
is still underway.
iii. Eligibility and Activity Rules
    138. The Bureau will use upfront payments to determine initial 
(maximum) eligibility (as measured in bidding units) for Auction 96. 
The amount of the upfront payment submitted by a bidder determines 
initial bidding eligibility, the maximum number of bidding units on 
which a bidder may be active. Each license is assigned a specific 
number of bidding units as listed in the complete list of licenses 
available as separate ``Attachment A'' files at http://wireless.fcc.gov/auctions/96/. Bidding units assigned to each license 
do not change as prices change during the auction. Upfront payments are 
not attributed to specific licenses. Rather, a bidder may place bids on 
any of the licenses selected on its FCC Form 175 as long as the total 
number of bidding units associated with those licenses does not exceed 
its current eligibility. Eligibility cannot be increased during the 
auction; it can only remain the same or decrease. Thus, in calculating 
its upfront payment amount, an applicant must determine the maximum 
number of bidding units it may wish to bid on or hold provisionally 
winning bids on in any single round, and submit an upfront payment 
amount covering that total number of bidding units. At a minimum, an 
applicant's upfront payment must cover the bidding units for at least 
one of the licenses it selected on its FCC Form 175. The total upfront 
payment does not affect the total dollar amount a bidder may bid on any 
given license.
    139. In order to ensure that an auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction. A bidder's activity level in a round is the sum of the 
bidding units associated with licenses covered by the bidder's new and 
provisionally winning bids.
    140. A bidder is considered active on a license in the current 
round if it is either the provisionally winning bidder at the end of 
the previous bidding round and does not withdraw the provisionally 
winning bid in the current round, or if it submits a bid in the current 
round.
    141. The minimum required activity is expressed as a percentage of 
the bidder's current eligibility, and increases by stage as the auction 
progresses. Because these procedures have proven successful in 
maintaining the pace of previous auctions, the Bureau adopts them for 
Auction 96. Failure to maintain the requisite activity level will 
result in the use of an activity rule waiver, if any remain, or a 
reduction in the bidder's eligibility, possibly curtailing or 
eliminating the bidder's ability to place additional bids in the 
auction.
iv. Auction Stages
    142. In the Auction 96 Comment Public Notice, the Bureau proposed 
to conduct the auction in two stages and employ an activity rule. Under 
the Bureau's proposal, a bidder desiring to maintain its current 
bidding eligibility would be required to be active on licenses 
representing at least 80 percent of its current bidding eligibility, 
during each round of Stage One, and at least 95 percent of its current 
bidding eligibility in Stage Two. The Commission received no specific 
comments on this proposal.
    143. The Bureau finds that, for now, a two-stage activity 
requirement adequately balances the desire to conclude the auction 
quickly with giving sufficient time for bidders to consider the status 
of the bidding and to place bids. Therefore, the Bureau adopts the two 
stages as described in the Auction 96 Procedures Public Notice.
    144. When the Bureau moves the auction from Stage One to Stage Two, 
the Bureau will first alert bidders by announcement in the bidding 
system. The Bureau has the discretion to further alter the activity 
requirements before and/or during the auction as circumstances warrant.
v. Stage Transitions
    145. In the Auction 96 Comment Public Notice, the Bureau proposed 
that it would advance the auction to the next stage (i.e., from Stage 
One to Stage Two) after considering a variety of measures of auction 
activity, including, but not limited to, the percentages of licenses 
(as measured in bidding units) on which there are new bids, the number 
of new bids, and the increase in revenue. The Bureau further proposed 
that it would retain the discretion to change the activity requirements 
during the auction. For example, the Bureau could decide not to 
transition to Stage Two if it believes the auction is progressing 
satisfactorily under the Stage One activity requirement, or to 
transition to Stage Two with an activity requirement that is higher or 
lower than 95 percent. The Bureau proposed to alert bidders of stage 
advancements by announcement during the auction. The Bureau received no 
specific comments on this issue.
    146. The Bureau adopts its proposal for stage transitions. Thus, 
the auction will start in Stage One, and the Bureau will regulate the 
pace of the auction by announcement. The Bureau retains the discretion 
to transition the auction to Stage Two, to add an additional stage with 
a higher activity requirement, not to transition to Stage Two, and to 
transition to Stage Two with an activity requirement that is higher or 
lower than 95 percent. This determination will be based on a variety of 
measures of auction activity, including, but not limited to, the number 
of new bids and the percentages of licenses (as measured in bidding 
units) on which there are new bids.
vi. Activity Rule Waivers
    147. The Bureau proposed in the Auction 96 Comment Public Notice 
that each bidder in the auction be provided with three activity rule 
waivers. The Bureau received no specific comments on this issue. 
Therefore, the Bureau adopts its proposal to provide bidders with three 
activity rule waivers. Bidders may use an activity rule waiver in any 
round during the course of the auction. Use of an activity rule waiver 
preserves the bidder's eligibility despite its activity in the current 
round being below the required minimum activity level. An activity rule 
waiver applies to an entire round of bidding and not to a particular 
license. Waivers can be either proactive or automatic and are 
principally a mechanism for auction participants to avoid the loss of 
bidding eligibility in the event that exigent circumstances prevent 
them from placing a bid in a particular round.
    148. The FCC Auction System assumes that a bidder with insufficient 
activity would prefer to apply an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver at the end of any bidding round

[[Page 65997]]

in which a bidder's activity level is below the minimum required unless 
(1) the bidder has no activity rule waivers remaining or (2) the bidder 
overrides the automatic application of a waiver by reducing 
eligibility. If no waivers remain and the activity requirement is not 
satisfied, the FCC Auction System will permanently reduce the bidder's 
eligibility, possibly curtailing or eliminating the ability to place 
additional bids in the auction.
    149. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the ``reduce eligibility'' function 
in the FCC Auction System. In this case, the bidder's eligibility is 
permanently reduced to bring it into compliance with the activity rule. 
Reducing eligibility is an irreversible action; once eligibility has 
been reduced, a bidder will not be permitted to regain its lost bidding 
eligibility, even if the round has not yet closed.
    150. Finally, a bidder may apply an activity rule waiver 
proactively as a means to keep the auction open without placing a bid. 
If a proactive waiver is applied (using the ``apply waiver'' function 
in the FCC Auction System) during a bidding round in which no bids are 
placed or withdrawn, the auction will remain open and the bidder's 
eligibility will be preserved. However, an automatic waiver applied by 
the FCC Auction System in a round in which there are no new bids, 
withdrawals, or proactive waivers will not keep the auction open. A 
bidder cannot submit a proactive waiver after bidding in a round, and 
applying a proactive waiver will preclude it from placing any bids in 
that round. Applying a waiver is irreversible; once a bidder submits a 
proactive waiver, the bidder cannot unsubmit the waiver even if the 
round has not yet ended.
vii. Auction Stopping Rules
    151. In the Auction 96 Comment Public Notice, the Bureau proposed 
to employ a simultaneous stopping rule under its SMR proposal. Under 
this rule, all licenses remain available for bidding until bidding 
stops simultaneously on every license. More specifically, bidding will 
close on all licenses after the first round in which no bidder submits 
any new bids, applies a proactive waiver, or withdraws any 
provisionally winning bids. Thus, under the Bureau's SMR proposal, 
unless it announces alternative stopping procedures, the simultaneous 
stopping rule will be used in this auction, and bidding will remain 
open on all licenses until bidding stops on every license, regardless 
of whether bids are placed on individual licenses or packages of 
licenses.
    152. The Bureau also proposed that it retain discretion to exercise 
any of the alternative versions of the simultaneous stopping rule for 
Auction 96 described in the Auction 96 Procedures Public Notice. The 
Bureau proposed to exercise these alternative versions of the 
simultaneous stopping rule only in certain circumstances, for example, 
where the auction is proceeding unusually slowly or quickly, there is 
minimal overall bidding activity, or it appears likely that the auction 
will not close within a reasonable period of time or will close 
prematurely. Before exercising these options, the Bureau is likely to 
attempt to change the pace of the auction by, for example, changing the 
number of bidding rounds per day and/or the minimum acceptable bids. 
The Bureau also proposed to retain the discretion to exercise any of 
these options with or without prior announcement during the auction. 
Sprint, the only party that commented on the stopping rules, supports 
them. The Bureau adopts its proposals for Auction 96.
viii. Auction Delay, Suspension, or Cancellation
    153. In the Auction 96 Comment Public Notice, the Bureau proposed 
that, by public notice or by announcement during the auction, it may 
delay, suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. The Bureau received no specific comment on this issue.
    154. Because this approach has proven effective in resolving 
exigent circumstances in previous auctions, the Bureau adopts these 
proposals regarding auction delay, suspension, or cancellation. By 
public notice or by announcement during the auction, the Bureau may 
delay, suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. In such cases, the Bureau, in its sole discretion, may elect 
to resume the auction starting from the beginning of the current round 
or from some previous round, or cancel the auction in its entirety. 
Network interruption may cause the Bureau to delay or suspend the 
auction. The Bureau emphasizes that it will exercise this authority 
solely at its discretion, and not as a substitute for situations in 
which bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

i. Round Structure
    155. The initial schedule of bidding rounds will be announced in 
the public notice listing the qualified bidders, which is released 
approximately ten days before the start of the auction. Each bidding 
round is followed by the release of round results. Details regarding 
formats and locations of round results will also be included in the 
qualified bidders public notice. Multiple bidding rounds may be 
conducted each day.
    156. The Bureau has the discretion to change the bidding schedule 
in order to foster an auction pace that reasonably balances speed with 
the bidders' needs to study round results and adjust their bidding 
strategies. The Bureau may change the amount of time for the bidding 
rounds, the amount of time between rounds, or the number of rounds per 
day, depending upon bidding activity and other factors.
ii. Reserve Price and Minimum Opening Bids
    157. Section 309(j) of the Communications Act calls upon the 
Commission to prescribe methods by which a reasonable reserve price 
will be required or a minimum opening bid established when applications 
for Commission licenses are subject to auction (i.e., because they are 
mutually exclusive), unless the Commission determines that a reserve 
price or minimum opening bid is not in the public interest.
a. Reserve Price
    158. The Commission is statutorily obliged to consider and balance 
a variety of public interests and objectives when establishing service 
rules and licensing procedures with respect to the public spectrum 
resource. These objectives include promoting recovery for the public a 
portion of the value of that resource. With respect to the H Block 
licenses being offered in Auction 96, the Spectrum Act specifically 
directs that proceeds from an auction of H Block spectrum be deposited 
into the Public Safety Trust Fund and be used for, among other things, 
funding (or reimbursement to the U.S. Treasury for the funding) of the 
nationwide, interoperable public safety broadband

[[Page 65998]]

network by the First Responder Network Authority. In view of the 
various public interest objectives the Bureau must consider, the Bureau 
proposed to establish a reserve price for the H Block licenses offered 
in Auction 96. The Bureau further proposed to utilize an aggregate 
reserve price based on the total of the bids for the H Block licenses, 
rather than license-by-license reserve prices. The Bureau sought 
comment on its proposals, and on factors the Bureau should consider in 
determining a reserve price. The Bureau also sought comment on whether, 
if the Bureau adopts a reserve price for the H Block licenses in 
Auction 96, it should disclose the reserve price publicly prior to the 
auction.
    159. The limited comment the Bureau received on this issue is 
generally supportive of its reserve price proposals, and the Bureau 
received no opposition to the use of a reserve.
    160. In light of the support in the record, the Bureau adopts its 
proposal to establish a reserve price for the H Block licenses in 
Auction 96 that is higher than the sum of minimum opening bids, and 
here the Bureau publicly discloses it. For the H Block licenses in 
Auction 96, there will be an aggregate reserve price of $1.564 billion. 
This reserve price was calculated by using a minimum spectrum value of 
$0.50/MHz-pop, as suggested by a commenter, and rounding the result to 
the nearest million. The Bureau believes this amount will appropriately 
recover for the public a portion of the value of the spectrum, 
especially in light of the Spectrum Act's requirement to deposit 
proceeds from this auction into the Public Safety Trust Fund to be used 
for a nationwide, interoperable public safety broadband network by the 
First Responder Network Authority.
    161. When determining whether the reserve price has been met, the 
Bureau will use the gross bid amounts rather than net bid amounts that 
take into account bidding credits. The Bureau will also count the gross 
amount of any withdrawn bids for licenses toward meeting the reserve 
price. Thus, the Bureau will count the gross amount of either the 
provisionally winning bid on a license or, if higher, the highest 
withdrawn provisionally winning bid on a license when determining 
whether the reserve price has been met. The Bureau will not count more 
than one bid per license, be it a provisionally winning or withdrawn 
bid, toward meeting the relevant reserve price. In the case of licenses 
with multiple withdrawn bids or a withdrawn bid and a provisionally 
winning bid, the Bureau will count the highest of the gross bid amounts 
toward the reserve price. Other than the gross amounts of withdrawn 
bids licenses without provisionally winning bids will not count toward 
meeting a reserve price.
    162. The Bureau will issue an announcement in the FCC Auction 
System stating that the reserve price has been met immediately 
following the first round in which that occurs, which will be viewable 
through the Commission's Web site. The current total of the relevant 
provisionally winning bids may not determine whether the reserve has 
been met, given that the Bureau also will count withdrawn bids toward 
meeting the reserve. By making an announcement when the reserve is met, 
the Bureau will free auction observers and participants from a need to 
monitor withdrawn bids over the course of the auction in order to 
determine whether the reserve has been met and avoid any uncertainty.
b. Minimum Opening Bids
    163. In addition to proposing an aggregate reserve price, the 
Bureau proposed in the Auction 96 Comment Public Notice to establish 
minimum opening bid amounts for each license in Auction 96. The Bureau 
believes a minimum opening bid amount, which has been used in other 
auctions, is an effective bidding tool for accelerating the competitive 
bidding process.
    164. In the Auction 96 Comment Public Notice, the Bureau proposed 
to calculate minimum opening bid amounts on a license-by-license basis 
using a formula based on bandwidth and license area population, similar 
to its approach in many previous spectrum auctions. The Bureau proposed 
to use a calculation based on $0.07 per MHz-pop. Additionally, the 
Bureau proposed to incorporate pricing information from previous 
auctions to tailor the results of its calculation to the relative 
prices for each EA. For this, the Bureau proposed to create an index of 
the relative price of each EA using the winning bid amounts for the EA 
licenses of paired spectrum from Auctions 66 and 73. This modification 
to the use of $0.07 per MHz-pop results in amounts ranging from less 
than $0.01 per MHz-pop to $0.16 per MHz-pop. The Bureau further 
proposed a minimum of $1000 per license. For the license covering the 
Gulf of Mexico, the Bureau proposed to set the minimum opening bid at 
$20,000.
    165. Broadband Properties, the only party that commented on the 
Bureau's proposed minimum opening bids, maintains that indexing minimum 
opening bids and reserve prices to prior auctions takes the market 
forces out of the auction process. Broadband Properties requests that 
the Bureau instead set the minimum opening bid at $.01 per MHz-pop and 
let the market decide the values. The Bureau disagrees with Broadband 
Properties that indexing minimum opening bids amounts takes market 
forces out of the auction process. Minimum opening bids are not meant 
to set market values. Rather, they ensure that a portion of the value 
of the spectrum is recovered for the public. Additionally, minimum 
opening bids help the efficiency of the auction process by avoiding 
numerous additional rounds that may otherwise be required to reach the 
winning bid amount. Accordingly, the Bureau declines to modify opening 
bids proposed in the in Auction 96 Comment Public Notice. The minimum 
opening bid amount for each H Block license available in Auction 96, 
calculated pursuant to the above-described procedures, is set forth in 
Attachment A to the Auction 96 Procedures Public Notice.
iii. Bid Amounts
    166. In the Auction 96 Comment Public Notice, the Bureau proposed 
that in each round, eligible bidders be able to place a bid on a given 
license using one or more pre-defined bid amounts. Under the proposal, 
the FCC Auction System interface will list the acceptable bid amounts 
for each license. No specific comments were received on this issue. 
Based on the Commission's experience in prior auctions, the Bureau 
adopts this proposal for Auction 96.
a. Minimum Acceptable Bids
    167. The Bureau proposed in the Auction 96 Comment Public Notice to 
calculate minimum acceptable bids based on ``current price estimates'' 
(CPEs) and an activity-based formula. In light of the Bureau's decision 
not to use package bidding, and consistent with its usual procedures, 
it will calculate minimum acceptable bids based on provisionally 
winning bids instead of CPEs, which serve as proxies for provisionally 
winning bids under HPB procedures. The Bureau will use the activity-
based formula, as proposed.
    168. The first of the acceptable bid amounts is called the minimum 
acceptable bid amount. The minimum acceptable bid amount for a license 
will be equal to its minimum opening bid amount until there is a 
provisionally winning bid on the license. After there is a 
provisionally winning bid for a license, the minimum acceptable bid 
amount for that license will be equal to the amount of the 
provisionally winning bid plus a percentage of that bid amount

[[Page 65999]]

calculated using the formula described below. In general, the 
percentage will be higher for a license receiving many bids than for a 
license receiving few bids. In the case of a license for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the second highest bid received for the license.
    169. The percentage of the provisionally winning bid used to 
establish the minimum acceptable bid amount (``the additional 
percentage'') is calculated at the end of each round based on an 
activity index. The activity index is a weighted average of (a) the 
number of distinct bidders placing a bid on the license, and (b) the 
activity index from the prior round. Specifically, the activity index 
is equal to a weighting factor times the number of bidders placing a 
bid covering the license in the most recent bidding round plus one 
minus the weighting factor times the activity index from the prior 
round. The additional percentage is determined as one plus the activity 
index times a minimum percentage amount, with the result not to exceed 
a given maximum. The additional percentage is then multiplied by the 
provisionally winning bid amount to obtain the minimum acceptable bid 
for the next round. The Bureau will round the results using the 
Commission's standard rounding procedures for auctions. The Bureau 
proposed to initially set the weighting factor at 0.5, the minimum 
percentage at 0.1 (10%), and the maximum percentage at 0.25 (25%). 
Hence, at these initial settings, the minimum acceptable bid for a 
license will be between ten percent and twenty-five percent higher than 
the provisionally winning bid, depending upon the bidding activity 
covering the license. Equations and examples are shown in Attachment B 
to the Auction 96 Procedures Public Notice.
    170. The Bureau did not receive any specific comments on 
calculating minimum acceptable bids. The Bureau adopts its proposal to 
begin the auction with the weighting factor set at 0.5, the minimum 
percentage at 0.1 (10%) and the maximum percentage at 0.25 (25%).
b. Additional Bid Amounts
    171. Consistent with the Bureau's practice in past wireless 
spectrum auctions, the Bureau proposed in the Auction 96 Comment Public 
Notice to calculate any additional bid amounts using the minimum 
acceptable bid amount and a bid increment percentage -- more 
specifically, by multiplying the minimum acceptable bid by one plus 
successively higher multiples of the bid increment percentage. If, for 
example, the bid increment percentage is five percent, the calculation 
of the first additional acceptable bid amount is (minimum acceptable 
bid amount) * (1 + 0.05), or (minimum acceptable bid amount) * 1.05; 
the second additional acceptable bid amount equals the minimum 
acceptable bid amount times one plus two times the bid increment 
percentage, or (minimum acceptable bid amount) * 1.10; etc. The Bureau 
will round the results using the Commission's standard rounding 
procedures for auctions. The Bureau proposed in the Auction 96 Comment 
Public Notice initially to set the bid increment percentage at five 
percent.
    172. The Bureau also proposed in the Auction 96 Comment Public 
Notice to begin the auction with three acceptable bid amounts per 
license (the minimum acceptable bid amount and two additional bid 
amounts). The Bureau received no specific comments on these proposals, 
but it did receive comments supporting the use of its standard range of 
auction procedures if the Bureau adopts a simultaneous multiple-round 
auction without package bidding. The Bureau notes that proposing three 
bid amounts per license was consistent with its past experience using a 
simultaneous multiple-round auction format with HPB. Because the Bureau 
is not using package bidding for Auction 96, it instead adopts nine 
acceptable bid amounts per license, which is consistent with its past 
practice for most spectrum auctions.
c. Bid Amount Changes
    173. The Bureau retains the discretion to change the minimum 
acceptable bid amounts, the additional bid amounts, the number of 
acceptable bid amounts, and the parameters of the formulas used to 
calculate minimum acceptable bid amounts and additional bid amounts if 
the Bureau determines that circumstances so dictate. Further, the 
Bureau retains the discretion to do so on a license-by-license basis. 
The Bureau also retains the discretion to limit (a) the amount by which 
a minimum acceptable bid for a license may increase compared with the 
corresponding provisionally winning bid, and (b) the amount by which an 
additional bid amount may increase compared with the immediately 
preceding acceptable bid amount. For example, the Bureau could set a 
$10 million limit on increases in minimum acceptable bid amounts over 
provisionally winning bids. Thus, if the activity-based formula 
calculates a minimum acceptable bid amount that is $20 million higher 
than the provisionally winning bid on a license, the minimum acceptable 
bid amount would instead be capped at $10 million above the 
provisionally winning bid. The Bureau sought comment in the Auction 96 
Comment Public Notice on the circumstances under which it should employ 
such a limit, factors it should consider when determining the dollar 
amount of the limit, and the tradeoffs in setting such a limit or 
changing other parameters--such as changing the minimum acceptable bid 
percentage, the bid increment percentage, or the number of acceptable 
bid amounts.
    174. The Bureau received no specific comments on this proposal. 
Therefore, the Bureau will start the auction without a limit on the 
dollar amount by which minimum acceptable bids and additional bid 
amounts may increase. The Bureau retains the discretion to change the 
minimum acceptable bid amounts, the minimum acceptable bid percentage, 
the bid increment percentage, and the number of acceptable bid amounts 
if it determine that circumstances so dictate. Further, the Bureau 
retains the discretion to do so on a license-by-license basis. If the 
Bureau exercises this discretion, it will alert bidders by announcement 
in the FCC Auction System during the auction.
iv. Provisionally Winning Bids
    175. At the end of each bidding round, a ``provisionally winning 
bid'' will be determined based on highest bid amount received for each 
license. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the license at the close of 
a subsequent round. Provisionally winning bids at the end of the 
auction become the winning bids. Bidders are reminded that 
provisionally winning bids count toward activity for purposes of the 
activity rule.
    176. In the Auction 96 Comment Public Notice, the Bureau proposed 
to use a random number generator to select a single provisionally 
winning bid in the event of identical high bid amounts being submitted 
on a license in a given round (i.e., tied bids). No specific comments 
were received on this proposal. Accordingly, the Bureau adopts the tied 
bids proposal. The FCC Auction System will assign a random number to 
each bid upon submission. The tied bid with the highest random number 
wins the tiebreaker, and becomes the provisionally winning bid. 
Bidders, regardless of whether they hold a provisionally winning bid, 
can submit higher bids in subsequent rounds. However, if the auction 
were to end with no other bids being placed, the winning bidder would 
be the one that placed the provisionally winning bid.

[[Page 66000]]

v. Bidding
    177. All bidding will take place remotely either through the FCC 
Auction System or by telephonic bidding. There will be no on-site 
bidding during Auction 96. Telephonic bid assistants are required to 
use a script when entering bids placed by telephone. Telephonic bidders 
are therefore reminded to allow sufficient time to bid by placing their 
calls well in advance of the close of a round. The length of a call to 
place a telephonic bid may vary; please allow a minimum of ten minutes.
    178. A bidder's ability to bid on specific licenses is determined 
by two factors: (1) the licenses selected on the bidder's FCC Form 175 
and (2) the bidder's eligibility. The bid submission screens will allow 
bidders to submit bids on only those licenses the bidder selected on 
its FCC Form 175.
    179. In order to access the bidding function of the FCC Auction 
System, bidders must be logged in during the bidding round using the 
passcode generated by the SecurID[supreg] token and a personal 
identification number (PIN) created by the bidder. Bidders are strongly 
encouraged to print a ``round summary'' for each round after they have 
completed all of their activity for that round.
    180. In each round, eligible bidders will be able to place bids on 
a given license in any of up to nine pre-defined bid amounts, provided 
they have sufficient eligibility to place bids on the particular 
license. For each license, the FCC Auction System will list the 
acceptable bid amounts in a drop-down box. Bidders use the drop-down 
box to select from among the acceptable bid amounts. The FCC Auction 
System also includes an ``upload'' function that allows text files 
containing bid information to be uploaded.
    181. Until a bid has been placed on a license, the minimum 
acceptable bid amount for that license will be equal to its minimum 
opening bid amount. Once there are bids on a license, minimum 
acceptable bids for the following round will be determined.
    182. During a round, an eligible bidder may submit bids for as many 
licenses as it wishes (providing that it is eligible to bid on the 
specific license), remove bids placed in the current bidding round, 
withdraw provisionally winning bids from previous rounds, or 
permanently reduce eligibility. If a bidder submits multiple bids for 
the same license in the same round, the system takes the last bid 
entered as that bidder's bid for the round. Bidding units associated 
with licenses for which the bidder has removed or withdrawn bids do not 
count towards current activity.
    183. Finally, bidders are cautioned to select their bid amounts 
carefully because, as explained below, bidders that withdraw a 
provisionally winning bid from a previous round, even if the bid was 
mistakenly or erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    184. In the Auction 96 Comment Public Notice, the Bureau proposed 
bid removal and bid withdrawal procedures. The Bureau sought comment on 
permitting a bidder to remove a bid before the close of the round in 
which the bid was placed. With respect to bid withdrawals, the Bureau 
proposed not to permit any bids, provisionally winning or otherwise, to 
be dropped or withdrawn from consideration in Auction 96 if the SMR 
with HPB format is used. The Bureau noted in the Auction 96 Comment 
Public Notice that the benefits that bidders may realize from 
withdrawing bids in a typical SMR auction are minimized under the 
proposed package bidding format. In addition, in an SMR auction with 
package bidding, there are significant risks associated with bid 
withdrawals that are not present in an SMR auction without package 
bidding. In the Part 1 Third Report and Order, the Commission explained 
that under its typical SMR auction format without package bidding, 
allowing bid withdrawals facilitates efficient aggregation of licenses 
and the pursuit of backup strategies as information becomes available 
during the course of an auction. The Commission noted, however, that in 
some instances bidders may seek to withdraw bids for improper reasons. 
The Bureau, therefore, has discretion in managing the auction to limit 
the number of withdrawals to prevent any bidding abuses.
    185. Bid Removal. The Bureau received no specific comment on its 
proposed bid removal procedures, and therefore adopts these procedures 
for Auction 96. Before the close of a bidding round, a bidder has the 
option of removing any bids placed in that round. By using the ``remove 
bids'' function in the FCC Auction System, a bidder may effectively 
``undo'' any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to withdrawal payments. If a 
bid is placed on a license during a round, it will count towards the 
activity for that round, but when that bid is then removed during the 
same round it was placed, the activity associated with it is also 
removed, i.e., a bid that is removed does not count toward bidding 
activity.
    186. Bid Withdrawal. RDL, the only party that commented on the 
Bureau's proposed bid withdrawal procedures, supports providing 
participants with unlimited bid withdrawal rights, particularly if the 
SMR-HPB format is used. In light of the Bureau's decision to use a 
standard SMR format without HPB for Auction 96, the Bureau will permit 
bid withdrawals consistent with the Bureau's practice in recent 
wireless spectrum auctions.
    187. Once a round closes, a bidder may no longer remove a bid. 
However, in a later round, a bidder may withdraw provisionally winning 
bids from previous rounds using the ``withdraw bids'' function in the 
FCC Auction System. Each bidder is limited to withdrawing provisionally 
winning bids in only one round during the course of the auction. The 
round in which a bidder may withdraw bids will be at the bidder's 
discretion, and there is no limit on the number of provisionally 
winning bids that may be withdrawn during that round. A provisionally 
winning bidder that withdraws its provisionally winning bid from a 
previous round during the auction is subject to the bid withdrawal 
payments specified in 47 CFR 1.2104(g). Once a bid withdrawal is 
submitted during a round, that withdrawal cannot be unsubmitted even if 
the round has not yet ended.
    188. If a provisionally winning bid is withdrawn, the minimum 
acceptable bid amount will equal the amount of the second highest bid 
received for the license, which may be less than, or in the case of 
tied bids, equal to, the amount of the withdrawn bid. The Commission 
will serve as a placeholder provisionally winning bidder on the license 
until a new bid is submitted on that license.
    189. Calculation of Bid Withdrawal Payment. Generally, the 
Commission imposes payments on bidders that withdraw provisionally 
winning bids during the course of an auction. If a bidder withdraws its 
bid and there is no higher bid in the same or subsequent auction(s), 
the bidder that withdrew its bid is responsible for the difference 
between its withdrawn bid and the winning bid in the same or subsequent 
auction(s). If there are multiple bid withdrawals on a single license 
and no subsequent higher bid is placed and/or the license is not won in 
the same auction, the payment for each bid withdrawal will be 
calculated based on the sequence of bid withdrawals and the amounts 
withdrawn. No withdrawal payment will be assessed for a withdrawn bid 
if either the subsequent

[[Page 66001]]

winning bid or any subsequent intervening withdrawn bid, in either the 
same or subsequent auction(s), equals or exceeds that withdrawn bid. 
Thus, a bidder that withdraws a bid will not be responsible for any 
final withdrawal payment if there is a subsequent higher bid in the 
same or subsequent auction(s).
    190. 47 CFR 1.2104(g)(1) sets forth the payment obligations of a 
bidder that withdraws a provisionally winning bid on a license during 
the course of an auction, and provides for the assessment of interim 
bid withdrawal payments. In the Auction 96 Comment Public Notice, the 
Bureau sought comment on the appropriate interim withdrawal payment 
percentage to apply if it were to permit withdrawals under procedures 
for an SMR auction without package bidding for Auction 96. The Bureau 
proposed to establish this percentage at fifteen percent if withdrawals 
are permitted in Auction 96 and sought comment on the proposal.
    191. The Bureau received no specific comment on this issue. The 
Bureau adopted a fifteen percent payment amount for prior AWS and PCS 
auctions, believes this to be an appropriate amount in this case, and 
therefore adopts its proposal for a fifteen percent payment amount for 
this auction. The Commission will assess an interim withdrawal payment 
equal to fifteen percent of the amount of the withdrawn bids. The 
fifteen percent interim payment will be applied toward any final bid 
withdrawal payment that will be assessed after subsequent auction of 
the license. Assessing an interim bid withdrawal payment ensures that 
the Commission receives a minimal withdrawal payment pending assessment 
of any final withdrawal payment. 47 CFR 1.2104(g) provides specific 
examples showing application of the bid withdrawal payment rule.
vii. Round Results
    192. Limited information about the results of a round will be made 
public after the conclusion of the round. Specifically, after a round 
closes, the Bureau will make available for each license its current 
provisionally winning bid amount, the minimum acceptable bid amount for 
the following round, the amounts of all bids placed on the license 
during the round, and whether the license is FCC-held. The system will 
also provide an entire license history detailing all activity that has 
taken place on a license with the ability to sort by round number. 
These reports will be publicly accessible. Moreover, after the auction 
closes, the Bureau will make available complete reports of all bids 
placed during each round of the auction, including bidder identities.
viii. Auction Announcements
    193. The Commission will use auction announcements to report 
necessary information such as schedule changes and stage transitions. 
All auction announcements will be available by clicking a link in the 
FCC Auction System.

V. Post-Auction Procedures

    194. Shortly after bidding has ended, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
final payments, long-form applications, and ownership disclosure 
information reports.

A. Down Payments

    195. Within ten business days after release of the auction closing 
public notice, each winning bidder must submit sufficient funds (in 
addition to its upfront payment) to bring its total amount of money on 
deposit with the Commission for Auction 96 to twenty percent of the net 
amount of its winning bids (gross bids less any applicable small 
business bidding credit).

B. Final Payments

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

C. Long-Form Application (FCC Form 601)

    197. Within ten business days after release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
long-form application (FCC Form 601) for the license(s) they won 
through Auction 96. Winning bidders claiming eligibility for a small 
business bidding credit must demonstrate their eligibility for the 
bidding credit. Further instructions on these and other filing 
requirements will be provided to winning bidders in the auction closing 
public notice.
    198. Winning bidders organized as bidding consortia must comply 
with the long-form application procedures established in the CSEA/Part 
1 Report and Order. Specifically, each member (or group of members) of 
a winning consortium seeking separate licenses will be required to file 
a separate long-form application for its respective license(s). If the 
license is to be partitioned or disaggregated, the member (or group) 
filing the long-form application must provide the relevant partitioning 
or disaggregation agreement in its long-form application. In addition, 
if two or more consortium members wish to be licensed together, they 
must first form a legal business entity, and any such entity must meet 
the applicable designated entity criteria.

D. Ownership Disclosure Information Report (FCC Form 602)

    199. Within ten business days after release of the auction closing 
public notice, each winning bidder must also comply with the ownership 
reporting requirements in 47 CFR 1.913, 1.919, and 1.2112 by submitting 
an ownership disclosure information report for wireless 
telecommunications services (FCC Form 602) with its long-form 
application.
    200. If an applicant already has a complete and accurate FCC Form 
602 on file in the Commission's Universal Licensing System (ULS), it is 
not necessary to file a new report, but applicants must verify that the 
information on file with the Commission is complete and accurate. If 
the applicant does not have an FCC Form 602 on file, or if it is not 
complete and accurate, the applicant must submit one.
    201. When an applicant submits a short-form application, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but may be used to pre-fill the FCC Form 602 with the 
ownership information submitted on the applicant's short-form 
application. Applicants must review the pre-filled information and 
confirm that it is complete and accurate as of the filing date of the 
long-form application before certifying and submitting the FCC Form 
602. Further instructions will be provided to winning bidders in the 
auction closing public notice.

E. Tribal Lands Bidding Credit

    202. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
wireline penetration rate equal to or below 85 percent is eligible to 
receive a tribal lands bidding credit as set forth in 47 CFR 1.2107 and 
1.2110(f). A tribal lands bidding credit is in addition to, and 
separate from, any other bidding credit for which a winning bidder may 
qualify.
    203. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal lands bidding credit 
after the auction

[[Page 66002]]

when it files its long-form application (FCC Form 601). When initially 
filing the long-form application, the winning bidder will be required 
to advise the Commission whether it intends to seek a tribal lands 
bidding credit, for each license won in the auction, by checking the 
designated box(es). After stating its intent to seek a tribal lands 
bidding credit, the applicant will have 180 days from the close of the 
long-form application filing window to amend its application to select 
the specific tribal lands to be served and provide the required tribal 
government certifications. Licensees receiving a tribal lands bidding 
credit are subject to performance criteria as set forth in 47 CFR 
1.2110(f)(3)(vii).
    204. For additional information on the tribal lands bidding credit, 
including how the amount of the credit is calculated, applicants should 
review the Commission's rulemaking proceeding regarding tribal lands 
bidding credits and related public notices. Relevant documents can be 
viewed on the Commission's Web site by going to http://wireless.fcc.gov/auctions/ and clicking on the Tribal Lands Credits 
link.

F. Default and Disqualification

    205. Any winning bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) will be subject to the payments described in 47 CFR 
1.2104(g)(2). This payment consists of a deficiency payment, equal to 
the difference between the amount of the Auction 96 bidder's winning 
bid and the amount of the winning bid the next time a license covering 
the same spectrum is won in an auction, plus an additional payment 
equal to a percentage of the defaulter's bid or of the subsequent 
winning bid, whichever is less.
    206. As noted in the Auction 96 Comment Public Notice, the 
percentage of the bid that a defaulting bidder must pay in addition to 
the deficiency will depend on the auction format ultimately chosen for 
a particular auction. The amount can range from three percent up to a 
maximum of twenty percent, established in advance of the auction and 
based on the nature of the service and the inventory of the licenses 
being offered. Accordingly, the Bureau sought comment in the Auction 96 
Comment Public Notice on an appropriate additional default payment 
percentage in the event it does not conduct Auction 96 with package 
bidding procedures. As the Bureau noted in the Auction 96 Comment 
Public Notice, the Commission explained in the CSEA/Part 1 Report and 
Order that defaults weaken the integrity of the auction process and may 
impede the deployment of service to the public, and that an additional 
default payment of up to twenty percent will be more effective in 
deterring defaults than the three percent used in some earlier 
auctions. However, as the Bureau further noted, it does not believe the 
detrimental effects of any defaults in Auction 96 are likely to be 
unusually great. Balancing these considerations, the Bureau proposed to 
establish an additional default payment for Auction 96 of fifteen 
percent of the applicable bid. The Bureau received no specific comments 
on this proposal, and therefore adopts it for Auction 96.
    207. Finally, in the event of a default, the Commission has the 
discretion to re-auction the license or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the Commission may 
declare the applicant and its principals ineligible to bid in future 
auctions, and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant.

G. Refund of Remaining Upfront Payment Balance

    208. After the auction, applicants that are not winning bidders or 
are winning bidders whose upfront payment exceeded the total net amount 
of their winning bids may be entitled to a refund of some or all of 
their upfront payment. All refunds will be returned to the payer of 
record, as identified on the FCC Form 159, unless the payer submits 
written authorization instructing otherwise. Bidders should not request 
a refund of their upfront payments before the Commission releases a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
long-form applications, and final payments.
    209. Bidders are encouraged to file their refund information 
electronically using the Refund Information icon found on the Auction 
Application Manager page or through the Wire Transfer for Refund 
Purposes link available on the Auction Application Submit Confirmation 
page in the FCC Auction System. If an applicant has completed the 
refund instructions electronically, the refund will be sent 
automatically. If an applicant has not completed the refund 
instructions electronically, the applicant must send a written request.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2013-26264 Filed 11-1-13; 8:45 am]
BILLING CODE 6712-01-P