[Federal Register Volume 78, Number 231 (Monday, December 2, 2013)]
[Notices]
[Pages 72081-72086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-28821]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 13-268; DA 13-2168]


Closed Auction of AM Broadcast Construction Permits Scheduled for 
May 6, 2014; Comment Sought on Competitive Bidding Procedures for 
Auction 84

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This document announces the auction of certain AM broadcast 
construction permits. Auction 84 will be a ``closed'' auction; only 
those entities listed in Attachment A to the Auction 84 Comment Public 
Notice will be eligible to participate in this auction. This document 
also seeks comment on competitive bidding procedures for Auction 84.

DATES: Comments are due on or before December 6, 2013, and reply 
comments are due on or before December 20, 2013.

ADDRESSES: All filings in response to this notice must refer to AU 
Docket No. 13-268. The Wireless Telecommunications and Media Bureaus 
strongly encourage interested parties to file comments electronically, 
and request that an additional copy of all comments and reply comments 
be submitted electronically to the following address: 
[email protected]. Comments may be submitted by any of the following 
methods:
    [ssquf] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    [ssquf] Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and four copies of each filing. Filings can be sent by hand 
or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the 
Secretary, Federal Communications Commission.
    [ssquf] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th Street SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    [ssquf] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 
Lynne Milne at (202) 418-0660; for general auction questions: Jeff 
Crooks at (202) 418-0660 or Linda Sanderson at (717) 338-2868. Media 
Bureau, Audio Division: For AM service rule questions: Lisa Scanlan or 
Tom Nessinger (202) 418-2700.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 84 Comment 
Public Notice released on November 18, 2013. The complete text of the 
Auction 84 Comment Public Notice, including all attachments and 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 84 Comment Public Notice and its attachments, as 
well as 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 13-2168. The Auction 84 Comment Public Notice and related documents 
also are available on the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/84/, or by using the search function for AU 
Docket No. 13-268 on the Commission's Electronic Comment Filing System 
(ECFS) Web page at http://www.fcc.gov/cgb/ecfs/.

I. Background

    1. On November 6, 2003, the Bureaus announced an auction filing 
window for applications for new AM stations and major modifications to 
authorized AM stations. By Public Notice dated June 15, 2005, the 
Bureaus provided a list of all applications received during that filing 
window that were mutually exclusive with other applications submitted 
in the filing window from January 26 through January 30, 2004. In the 
AM Auction 84 MX Public Notice, applicants in several of the listed 
groups of mutually exclusive applications (``MX groups'') were given 
the opportunity to eliminate their mutual exclusivity with other

[[Page 72082]]

applicants by means of settlement or technical modification to their 
proposals. In addition, for each MX group in which applicants proposed 
to serve different communities, an analysis under Section 307(b) of the 
Communications Act of 1934, as amended, was required. Any MX group 
consisting of only new commercial AM station applications for the same 
community did not require a section 307(b) analysis and was deemed 
ready to proceed to auction. On August 30, 2007, the Bureaus announced 
a limited, supplemental auction filing window to permit the filing of 
applications for a new AM station on 1700 kHz in a community located in 
Rockland County, New York.

II. Construction Permits In Auction 84

    2. The Bureaus will proceed to auction for 22 new commercial AM 
stations for the pending groups of mutually exclusive applications 
identified in Attachment A of the Auction 84 Comment Public Notice. A 
list of the locations and frequencies of these stations is included as 
Attachment A of the Auction 84 Comment Public Notice. Attachment A also 
lists proposed minimum opening bids and upfront payments for permits 
being offered in this auction.
    3. An applicant listed in Attachment A may become qualified to bid 
only if it meets the additional filing, qualification and payment 
requirements. Each qualified bidder will be eligible to bid on only 
those construction permits specified for that qualified bidder in 
Attachment A to the Auction 84 Comment Public Notice. All applicants 
within each MX group are directly mutually exclusive with one another; 
therefore, no more than one construction permit will be awarded for 
each MX group identified in Attachment A.

III. Due Diligence

    4. Each potential bidder is solely responsible for investigating 
and evaluating all technical and marketplace factors that may have a 
bearing on the value of the construction permits for AM broadcast 
facilities that it is seeking in this auction. Each bidder is 
responsible for assuring that, if it wins a construction permit, it 
will be able to build and operate facilities in accordance with the 
Commission's rules. The FCC makes no representations or warranties 
about the use of this spectrum for particular services. Each applicant 
should be aware that an FCC auction represents an opportunity to become 
an FCC permittee in the broadcast service, subject to certain 
conditions and regulations. An FCC auction does not constitute an 
endorsement by the FCC of any particular service, technology, or 
product, nor does an FCC construction permit or license constitute a 
guarantee of business success.
    5. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
Each potential bidder should perform technical analyses and/or refresh 
any previous analyses to assure itself that, should it become a winning 
bidder for any Auction 84 construction permit, it will be able to build 
and operate facilities that will fully comply with all applicable 
technical and legal requirements. The Bureaus strongly encourage each 
applicant to inspect any prospective transmitter sites located in, or 
near, the service area for which it plans to bid; confirm the 
availability of such sites; and familiarize itself with the 
Commission's rules regarding the National Environmental Policy Act.
    6. The Bureaus also strongly encourage each applicant to conduct 
its own research prior to Auction 84 in order to determine the 
existence of pending administrative or judicial proceedings that might 
affect its decisions regarding participation in the auction.
    7. The Bureaus strongly encourage participants in Auction 84 to 
continue such research throughout the auction. The due diligence 
considerations mentioned in the Auction 84 Comment Public Notice does 
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 the specific facts and circumstances related to its interests.

IV. Short-Form Application Requirements

    8. After evaluating any comments received in response to the 
Auction 84 Comment Public Notice, the Bureaus will release a public 
notice that will specify procedures pursuant to which the listed 
applicants may qualify to participate and bid in Auction 84. Those 
procedures will include instructions on how an applicant can submit any 
new or updated information in the Commission's Integrated Spectrum 
Auction System (ISAS) to comply with current short-form application 
(FCC Form 175) requirements, including any changes to be reported 
pursuant to 47 CFR 1.65. Each applicant is reminded that certain 
changes may be considered a ``major modification'' and could result in 
dismissal of its application and its disqualification from 
participation in Auction 84.

V. Bureaus Seek Comment On Auction 84 Procedures

A. Auction Structure

    9. Simultaneous Multiple-Round Auction Design. The Bureaus propose 
to auction all construction permits included in Auction 84 using the 
Commission's standard simultaneous multiple-round auction format. This 
type of auction offers every construction permit for bid at the same 
time and consists of successive bidding rounds in which eligible 
bidders may place bids on individual construction permits. Typically, 
bidding remains open on all construction permits until bidding stops on 
every construction permit. The Bureaus seek comment on this proposal.
    10. Bidding Rounds. Auction 84 will consist of sequential bidding 
rounds, each followed by the release of round results. The initial 
bidding schedule will be announced in a public notice to be released at 
least one week before the start of the auction. Details on viewing 
round results, including the location and format of downloadable round 
results files, will be included in the same public notice.
    11. The Commission will conduct Auction 84 over the Internet using 
the FCC Auction System. Bidders will also have the option of placing 
bids by telephone through a dedicated Auction Bidder Line. The toll-
free telephone number for the Auction Bidder Line will be provided to 
qualified bidders prior to the start of the auction.
    12. The Bureaus propose to retain the discretion to change the 
bidding schedule in order to foster an auction pace that reasonably 
balances speed with the bidders' need to study round results and adjust 
their bidding strategies. Under this proposal, the Bureaus may 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. The Bureaus seek comment on this proposal. 
Commenters on this issue should address the role of the bidding 
schedule in managing the pace of the auction, specifically discussing 
the tradeoffs in managing auction pace by bidding schedule changes, by 
changing the activity requirements or bid amount parameters, or by 
using other means.
    13. Stopping Rule. The Bureaus have discretion to establish 
stopping rules before or during multiple round auctions in order to 
complete the auction within a reasonable time. The

[[Page 72083]]

Bureaus propose to employ a simultaneous stopping rule approach, which 
means all construction permits remain available for bidding until 
bidding stops on every construction permit. More specifically, bidding 
will close on all construction permits after the first round in which 
no bidder submits any new bids, applies a proactive waiver, or 
withdraws any provisionally winning bids (if bid withdrawals are 
permitted in this auction). Thus, unless the Bureaus announce 
alternative procedures, the simultaneous stopping rule will be used in 
this auction, and bidding will remain open on all construction permits 
until bidding stops on every construction permit. Consequently, it is 
not possible to determine in advance how long the bidding in this 
auction will last.
    14. The Bureaus propose to retain the discretion to exercise any of 
the following options during Auction 84: (1) Use a modified version of 
the simultaneous stopping rule that would close the auction for all 
construction permits after the first round in which no bidder applies a 
waiver, withdraws a provisionally winning bid (if withdrawals are 
permitted in this auction), or places any new bids on a construction 
permit for which it is not the provisionally winning bidder. Thus, 
absent any other bidding activity, a bidder placing a new bid on a 
construction permit for which it is the provisionally winning bidder 
would not keep the auction open under this modified stopping rule; (2) 
Use a modified version of the simultaneous stopping rule that would 
close the auction for all construction permits after the first round in 
which no bidder applies a waiver, withdraws a provisionally winning bid 
(if withdrawals are permitted in this auction), or places any new bids 
on a construction permit that is not FCC held. Thus, absent any other 
bidding activity, a bidder placing a new bid on a construction permit 
that does not already have a provisionally winning bid (an FCC-held 
construction permit) would not keep the auction open under this 
modified stopping rule; (3) Use a modified version of the simultaneous 
stopping rule that combines (1) and (2); (4) Declare that the auction 
will end after a specified number of additional rounds (special 
stopping rule). If the Bureaus invoke this special stopping rule, they 
will accept bids in the specified final round(s), after which the 
auction will close; and (5) Keep the auction open even if no bidder 
places any new bids, applies a waiver, or withdraws any provisionally 
winning bids (if withdrawals are permitted in this auction). In this 
event, the effect will be the same as if a bidder had applied a waiver. 
The activity rule will apply as usual, and a bidder with insufficient 
activity will either lose bidding eligibility or use a waiver.
    15. The Bureaus propose to exercise these options only in certain 
circumstances, 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 Bureaus are likely to attempt to change the pace of the 
auction. For example, the Bureaus may adjust the pace of bidding by 
changing the number of bidding rounds per day and/or the minimum 
acceptable bids. The Bureaus propose to retain the discretion to 
exercise any of these options with or without prior announcement during 
the auction. The Bureaus seek comment on these proposals.
    16. Information Relating to Auction Delay, Suspension, or 
Cancellation. For Auction 84, the Bureaus may delay, suspend, or cancel 
the auction in the event of a natural disaster, technical obstacle, 
administrative or weather necessity, evidence of an auction security 
breach or unlawful bidding activity, or for any other reason that 
affects the fair and efficient conduct of competitive bidding. The 
Bureaus will notify participants of any such delay, suspension or 
cancellation by public notice and/or through the FCC Auction System's 
announcement function. If the auction is delayed or suspended they may, 
in their sole discretion, 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 Bureaus 
to delay or suspend the auction. The Bureaus emphasize that they will 
exercise this authority solely at their discretion, and not as a 
substitute for situations in which bidders may wish to apply their 
activity rule waivers. The Bureaus seek comment on this proposal.

B. Auction Procedures

    17. Upfront Payments and Bidding Eligibility. The Bureaus have 
delegated authority and discretion to determine an appropriate upfront 
payment for each construction permit being auctioned, taking into 
account such factors as the efficiency of the auction process and the 
potential value of similar construction permits. The upfront payment is 
a refundable deposit made by each bidder to establish eligibility to 
bid on construction permits. Upfront payments that are related to the 
specific construction permits being auctioned protect against frivolous 
or insincere bidding and provide the Commission with a source of funds 
from which to collect payments owed at the close of the auction. With 
these considerations in mind, the Bureaus propose the upfront payments 
set forth in Attachment A of the Auction 84 Comment Public Notice. The 
Bureaus seek comment on the upfront payments specified in Attachment A.
    18. The Bureaus further propose that the amount of the upfront 
payment submitted by a bidder will determine its initial bidding 
eligibility in bidding units. The Bureaus propose to assign each 
construction permit a specific number of bidding units, equal to one 
bidding unit per dollar of the upfront payment listed in Attachment A. 
The number of bidding units for a given construction permit is fixed 
and does not change during the auction as prices change. A bidder may 
place bids on multiple construction permits, provided that (1) each 
such construction permit is designated for that bidder in Attachment A 
to the Auction 84 Comment Public Notice, and (2) the total number of 
bidding units associated with those construction permits does not 
exceed its current eligibility. A bidder cannot increase its 
eligibility during the auction; it can only maintain its eligibility or 
decrease its eligibility. Thus, in calculating its upfront payment 
amount and hence its initial bidding eligibility, an applicant must 
determine the maximum number of bidding units on which it may wish to 
bid (or hold provisionally winning bids) in any single round, and 
submit an upfront payment amount covering that total number of bidding 
units. The Bureaus request comment on these proposals.
    19. Activity Rule. In order to ensure that the 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. The Bureaus propose a single stage 
auction with the following activity requirement: In each round of the 
auction, a bidder desiring to maintain its current bidding eligibility 
is required to be active on 100 percent of its bidding eligibility. A 
bidder's activity in a round will be the sum of the bidding units 
associated with any construction permits upon which it places bids 
during the current round and the bidding units associated with any 
construction permits for which it holds provisionally winning bids.

[[Page 72084]]

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. The Bureaus seek 
comment on this proposal.
    20. Activity Rule Waivers and Reducing Eligibility. When a bidder's 
eligibility in the current round is below the required minimum level, 
it may preserve its current level of eligibility through an activity 
rule waiver. An activity rule waiver applies to an entire round of 
bidding, not to a particular construction permit. Activity rule waivers 
can be either proactive or automatic. Activity rule waivers are 
principally a mechanism for a bidder to avoid the loss of bidding 
eligibility in the event that exigent circumstances prevent it from 
bidding in a particular round.
    21. The FCC Auction System assumes that a bidder that does not meet 
the activity requirement would prefer to use an activity rule waiver 
(if available) rather than lose bidding eligibility. Therefore, the 
system will automatically apply a waiver at the end of any bidding 
round in which a bidder's activity level is below the minimum required 
unless (1) the bidder has no activity rule waivers remaining; or (2) 
the bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the activity requirement. If a bidder has 
no waivers remaining and does not satisfy the required activity level, 
the bidder's current eligibility will be permanently reduced, possibly 
curtailing or eliminating the ability to place additional bids in the 
auction.
    22. 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.
    23. Under the proposed simultaneous stopping rule, a bidder may 
apply an activity rule waiver proactively as a means to keep the 
auction open without placing a bid. If a bidder proactively applies an 
activity rule waiver (using the ``apply waiver'' function in the FCC 
Auction System) during a bidding round in which no bids are placed or 
withdrawn (if bid withdrawals are permitted in this auction), the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver applied by the FCC Auction System in a 
round in which there are no new bids, withdrawals (if bid withdrawals 
are permitted in this auction), or proactive waivers will not keep the 
auction open. A bidder cannot apply 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 
proactive waiver is submitted, it cannot be unsubmitted, even if the 
round has not yet closed.
    24. Consistent with recent FCC spectrum auctions, the Bureaus 
propose that each bidder in Auction 84 be provided with three activity 
rule waivers that may be used at the bidder's discretion during the 
course of the auction. The Bureaus seek comment on this proposal.
    25. Reserve Price or Minimum Opening Bids. The Bureaus seek comment 
on the use of a minimum opening bid amount and/or reserve price for 
Auction 84. Normally, a reserve price is an absolute minimum price 
below which an item will not be sold in a given auction. A minimum 
opening bid, on the other hand, is the minimum bid price set at the 
beginning of the auction below which no bids are accepted. It is 
generally used to accelerate the competitive bidding process.
    26. The Bureaus propose to establish minimum opening bid amounts 
for Auction 84. The Bureaus believe that a minimum opening bid amount, 
which has been used in other broadcast auctions, is an effective 
bidding tool for accelerating the competitive bidding process. The 
Bureaus do not propose to establish separate reserve prices for the 
construction permits to be offered in Auction 84.
    27. For Auction 84, the Bureaus propose minimum opening bid amounts 
determined by taking into account the type of service and class of 
facility offered, market size, population covered by the proposed 
broadcast facility, and recent broadcast transaction data. Attachment A 
of the Auction 84 Comment Public Notice lists a proposed minimum 
opening bid amount for each construction permit available in Auction 
84. The Bureaus seek comment on the minimum opening bid amounts 
specified in Attachment A.
    28. If commenters believe that these minimum opening bid amounts 
will result in unsold construction permits, are not reasonable amounts, 
or should instead operate as reserve prices, they should explain why 
this is so and comment on the desirability of an alternative approach. 
The Bureaus ask commenters to support their claims with valuation 
analyses and suggested amounts or formulas for reserve prices or 
minimum opening bids. In establishing the minimum opening bid amounts, 
the Bureaus particularly seek comment on factors that could reasonably 
have an impact on valuation of the broadcast spectrum, including the 
type of service and class of facility offered, market size, population 
covered by the proposed AM broadcast facility and any other relevant 
factors.
    29. Bid Amounts. The Bureaus propose that, if the bidder has 
sufficient eligibility, an eligible bidder will be able to place a bid 
on a given construction permit in each round in any of up to nine 
different amounts. Under this proposal, the FCC Auction System 
interface will list the acceptable bid amounts for each construction 
permit. In the event of duplicate bid amounts due to rounding, however, 
the FCC Auction System will omit the duplicates and will list fewer 
than nine acceptable bid amounts for the construction permit.
    30. The first of the acceptable bid amounts is called the minimum 
acceptable bid amount. The minimum acceptable bid amount for a 
construction permit will be equal to its minimum opening bid amount 
until there is a provisionally winning bid for the construction permit. 
After there is a provisionally winning bid for a construction permit, 
the minimum acceptable bid amount will be a certain percentage higher. 
That is, the FCC will calculate the minimum acceptable bid amount by 
multiplying the provisionally winning bid amount times one plus the 
minimum acceptable bid percentage. If, for example, the minimum 
acceptable bid percentage is 10 percent, the minimum acceptable bid 
amount will equal (provisionally winning bid amount) * (1.10), rounded. 
If bid withdrawals are permitted in this auction, in the case of a 
construction permit for which the provisionally winning bid has been 
withdrawn, the minimum acceptable bid amount will equal the second 
highest bid received for the construction permit.
    31. The FCC will calculate the eight additional bid amounts using 
the minimum acceptable bid amount and a bid increment percentage, which 
need not be the same as the percentage used to calculate the minimum 
acceptable bid amount. The first additional acceptable bid amount 
equals the minimum acceptable bid amount times one plus the bid 
increment percentage, rounded. If, for example, the bid

[[Page 72085]]

increment percentage is 5 percent, the calculation is (minimum 
acceptable bid amount) * (1 + 0.05), rounded, or (minimum acceptable 
bid amount) * 1.05, rounded; the second additional acceptable bid 
amount equals the minimum acceptable bid amount times one plus two 
times the bid increment percentage, rounded, or (minimum acceptable bid 
amount) * 1.10, rounded; etc. The Bureaus will round the results using 
the Commission's standard rounding procedures for auctions.
    32. For Auction 84, the Bureaus propose to use a minimum acceptable 
bid percentage of 10 percent. This means that the minimum acceptable 
bid amount for a construction permit will be approximately 10 percent 
greater than the provisionally winning bid amount for the construction 
permit. To calculate the additional acceptable bid amounts, the Bureaus 
propose to use a bid increment percentage of 5 percent. The Bureaus 
seek comment on these proposals.
    33. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, the bid 
increment percentage, and the number of acceptable bid amounts if the 
Bureaus determine that circumstances so dictate. Further, the Bureaus 
retain the discretion to do so on a construction permit-by-construction 
permit basis. The Bureaus also retain the discretion to limit (a) the 
amount by which a minimum acceptable bid for a construction permit may 
increase compared with the corresponding provisionally winning bid, and 
(b) the amount by which an additional bid amount may increase compared 
with the immediately preceding acceptable bid amount. For example, the 
Bureaus could set a $10,000 limit on increases in minimum acceptable 
bid amounts over provisionally winning bids. Thus, if calculating a 
minimum acceptable bid using the minimum acceptable bid percentage 
results in a minimum acceptable bid amount that is $12,000 higher than 
the provisionally winning bid on a construction permit, the minimum 
acceptable bid amount would instead be capped at $10,000 above the 
provisionally winning bid. The Bureaus seek comment on the 
circumstances under which to employ such a limit, factors to 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. If the Bureaus exercise this 
discretion, they will alert bidders by announcement in the FCC Auction 
System during the auction.
    34. Provisionally Winning Bids. Provisionally winning bids are bids 
that would become final winning bids if the auction were to close in 
that given round. At the end of a bidding round, the FCC Auction System 
determines a provisionally winning bid for each construction permit 
based on the highest bid amount received. If identical high bid amounts 
are submitted on a construction permit in any given round (i.e., tied 
bids), the FCC Auction System will use a random number generator to 
select a single provisionally winning bid from among the tied bids. 
(The Auction System assigns a random number to each bid when the bid is 
entered. The tied bid with the highest random number wins the 
tiebreaker.) The remaining bidders, as well as the provisionally 
winning bidder, can submit higher bids in subsequent rounds. However, 
if the auction were to end with no other bids being placed, the winning 
bidder would be the one that placed the provisionally winning bid. If 
the construction permit receives any bids in a subsequent round, the 
provisionally winning bid again will be determined by the highest bid 
amount received for the construction permit.
    35. A provisionally winning bid will be retained until there is a 
higher bid on the construction permit at the close of a subsequent 
round, unless the provisionally winning bid is withdrawn (if bid 
withdrawals are permitted in this auction). The Bureaus remind bidders 
that provisionally winning bids count toward activity for purposes of 
the activity rule.
    36. Bid Removal and Bid Withdrawal. For Auction 84, the Bureaus 
propose the following bid removal procedures. Before the close of a 
bidding round, a bidder has the option of removing any bid placed in 
that round. By removing a selected bid in the FCC Auction System, a 
bidder may effectively ``unsubmit'' any bid placed within that round. 
In contrast to the bid withdrawal provisions, a bidder removing a bid 
placed in the same round is not subject to a withdrawal payment. Once a 
round closes, a bidder may no longer remove a bid. The Bureaus seek 
comment on this bid removal proposal.
    37. The Bureaus also seek comment on whether bid withdrawals should 
be permitted in Auction 84. When permitted in an auction, bid 
withdrawals provide a bidder with the option of withdrawing bids placed 
in prior rounds that have become provisionally winning bids. If 
permitted, a bidder may withdraw its provisionally winning bids using 
the ``withdraw bids'' function in the FCC Auction System. A bidder that 
withdraws its provisionally winning bid(s), if permitted, is subject to 
the bid withdrawal payment provisions of the Commission rules.
    38. The Commission has recognized that bid withdrawals may be a 
helpful tool for bidders seeking to efficiently aggregate licenses or 
implement backup strategies in certain auctions. The stand-alone nature 
of AM facilities, however, suggests that it is not necessary for 
bidders to aggregate facilities being offered in the same auction in 
order to realize full value from those facilities, or to put the 
spectrum to effective and efficient use.
    39. Based on the nature of the permits being offered and on 
experience with past auctions of broadcast construction permits, the 
Bureaus propose to prohibit bidders from withdrawing any bids after the 
close of the round in which bids were placed. The Bureaus make this 
proposal in light of the site- and applicant-specific nature and wide 
geographic dispersion of the permits available in this closed auction, 
which suggests that potential applicants for this auction will have 
limited opportunity to aggregate construction permits through the 
auction process (as compared with bidders in many auctions of wireless 
licenses) because of the pre-established closed MX groups. Thus, the 
Bureaus believe that it is unlikely that bidders will have a need to 
withdraw bids in this auction. The Bureaus also remain mindful that bid 
withdrawals, particularly those made late in this auction, could result 
in delays in licensing new AM stations and attendant delays in the 
offering of new broadcast service to the public. The Bureaus seek 
comment on their proposal to prohibit bid withdrawals.

C. Post-Auction Payments

    40. Interim Withdrawal Payment Percentage. In the event the Bureaus 
allow bid withdrawals in Auction 84, they propose the interim bid 
withdrawal payment be 20 percent of the withdrawn bid. A bidder that 
withdraws a bid during an auction is subject to a withdrawal payment 
equal to the difference between the amount of the withdrawn bid and the 
amount of the winning bid in the same or a subsequent auction. However, 
if a construction permit for which a bid has been withdrawn does not 
receive a subsequent higher bid or winning bid in the same auction, the 
FCC cannot calculate the final withdrawal payment until that 
construction permit receives a higher bid or winning bid in a 
subsequent auction. In such cases, when

[[Page 72086]]

that final withdrawal payment cannot yet be calculated, the FCC imposes 
on the bidder responsible for the withdrawn bid an interim bid 
withdrawal payment, which will be applied toward any final bid 
withdrawal payment that is ultimately assessed.
    41. The amount of the interim bid withdrawal payment may range from 
three percent to twenty percent of the withdrawn bid amount, with the 
percentage generally being higher where there is greater risk of bid 
withdrawals being used for anti-competitive purposes, such as in 
Auction 84 when there is little need for bidders to aggregate permits. 
In light of these considerations, the Bureaus propose to use the 
maximum interim bid withdrawal payment percentage allowed by 47 CFR 
1.2104(g)(1) in the event bid withdrawals are allowed. The Bureaus 
request comment on using twenty percent for calculating an interim bid 
withdrawal payment amount in Auction 84. Commenters advocating the use 
of bid withdrawals should also address the percentage of the interim 
bid withdrawal payment.
    42. Additional Default Payment Percentage. Any winning bidder that 
defaults or is disqualified after the close of an auction (i.e., fails 
to remit the required down payment within the prescribed period of 
time, fails to submit a timely long-form application, fails to make 
full and timely final payment, or is otherwise disqualified) is liable 
for a default payment under 47 CFR 1.2104(g)(2). This payment consists 
of a deficiency payment, equal to the difference between the amount of 
the Auction 84 bidder's winning bid and the amount of the winning bid 
the next time a construction permit covering the same spectrum is won 
in an auction, plus an additional payment equal to a percentage of the 
defaulter's bid or of the subsequent winning bid, whichever is less.
    43. The Commission's rules provide that, in advance of each 
auction, it will establish a percentage between three percent and 
twenty percent of the applicable bid to be assessed as an additional 
default payment. As the Commission has indicated, the level of this 
additional payment in each auction will be based on the nature of the 
service and the construction permits being offered.
    44. For Auction 84, the Bureaus propose to establish an additional 
default payment of twenty percent. Defaults weaken the integrity of the 
auction process and may impede the deployment of service to the public, 
and an additional twenty percent default payment will be more effective 
in deterring defaults than the three percent used in some earlier 
auctions. In light of these considerations, the Bureaus propose for 
Auction 84 an additional default payment of twenty percent of the 
relevant bid. Moreover, a twenty percent additional default payment 
amount is consistent with the percentage used in recent auctions of FM 
permits. The Bureaus seek comment on this proposal.

    Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2013-28821 Filed 11-29-13; 8:45 am]
BILLING CODE 6712-01-P