[Federal Register Volume 83, Number 61 (Thursday, March 29, 2018)]
[Rules and Regulations]
[Pages 13590-13620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05142]



[[Page 13589]]

Vol. 83

Thursday,

No. 61

March 29, 2018

Part II





Federal Communications Commission





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47 CFR Part 54





Connect America Fund Phase II Auction; Notice and Filing Requirements 
and Other Procedures for Auction 903; Final Rule

  Federal Register / Vol. 83 , No. 61 / Thursday, March 29, 2018 / 
Rules and Regulations  

[[Page 13590]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[AU Docket No. 17-182; WC Docket No. 10-90; FCC 18-6]


Connect America Fund Phase II Auction; Notice and Filing 
Requirements and Other Procedures for Auction 903

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: In the document, the Federal Communications Commission 
(Commission) establishes the procedures for the Connect America Fund 
Phase II auction (Phase II auction, auction, or Auction 903). The 
auction will award up to $1.98 billion over 10 years to providers that 
commit to offer voice and broadband services to fixed locations in 
unserved high-cost areas. The auction is scheduled to begin on July 24, 
2018.

DATES: Auction 903 short-form applications must be filed prior to 6 
p.m. Eastern Time (ET) on March 30, 2018. Bidding in Auction 903 is 
scheduled to begin on July 24, 2018.

FOR FURTHER INFORMATION CONTACT: Heidi Lankau or Katie King, 
Telecommunications Access Policy Division, Wireline Competition Bureau, 
(202) 418-7400 or TTY (202) 418-0484; Mark Montano or Angela Kung, 
Auctions and Spectrum Access Division, Wireless Telecommunications 
Bureau, (202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
document in AU Docket No. 17-182; WC Docket No. 10-90; FCC 18-6, 
released on February 1, 2018 (CAF II Auction Procedures Public Notice). 
The full text of this document is available for public inspection 
during regular business hours in the FCC Reference Center, Room CY-
A257, 445 12th St. SW, Washington, DC 20554 or at the following 
internet address: https://transition.fcc.gov/Daily_Releases/Daily_Business/2018/db0201/FCC-18-6A1.pdf.

I. Introduction

    1. The Commission establishes procedures for the Connect America 
Fund Phase II auction (Phase II auction, auction, or Auction 903), thus 
furthering its progress toward closing the digital divide for all 
Americans, including those in rural areas of the country. The Phase II 
auction will award up to $198 million annually for 10 years to service 
providers that commit to offer voice and broadband services to fixed 
locations in unserved high-cost areas. The auction is scheduled to 
begin on July 24, 2018.
    2. Auction 903 will be the first auction to award ongoing high-cost 
universal service support using a multiple-round, reverse auction. 
Through this auction, the Commission intends to maximize the value the 
American people receive for the universal service dollars it spends, 
balancing higher-quality services with cost efficiencies. Therefore, 
the auction is designed to select bids from providers that would deploy 
high-speed broadband and voice services in unserved communities for 
lower relative levels of support. The bidding procedures will be 
implemented through the Auction 903 bidding system, which will enable a 
bidder to express in a simple and orderly way the amount of support it 
needs to provide a specified level of service to a specified set of 
eligible areas.

II. Auction Specifics

    3. Auction Title and Start Date. The auction is referred to as 
``Auction 903--Connect America Fund Phase II.'' Bidding in Auction 903 
will begin on July 24, 2018. The initial schedule for bidding rounds 
will be announced by public notice approximately one week before the 
start of the auction.
    4. Auction 903 Dates and Deadlines. The Auction Application 
Tutorial will be available via the internet by March 13, 2018. The 
Short-Form Application (FCC Form 183) filing window opens March 19, 
2018 at 12:00 noon ET. The Short-Form Application (FCC Form 183) filing 
window deadline is March 30, 2018 at 6:00 p.m. ET. The Auction Bidding 
Tutorial will be available via the internet by June 28, 2018. The mock 
auction begins during the week of July 16, 2018. The auction begins on 
July 24, 2018.
    5. Requirements for Participation. Those wishing to participate in 
this auction must submit a short-form application (FCC Form 183) 
electronically prior to 6:00 p.m. ET, March 30, 2018, following the 
electronic filing procedures that will be provided in a public notice 
to be released in advance of the opening of the short-form application 
filing window and comply with all provisions outlined in the document 
and applicable Commission rules.

III. Public Interest Obligations

    6. Each winning bidder that is authorized to receive Phase II 
support after the close of the auction will be required to offer voice 
and broadband services meeting the relevant performance requirements to 
fixed locations. It must make these services available to the required 
number of locations associated with the eligible census blocks for 
which it is the winning bidder. The number of locations that a support 
recipient is required to serve in the eligible census blocks is 
aggregated to the census block group (CBG) level, which is the 
geographic area that will be used for bidding in the auction. In the 
auction, the Commission will accept bids for service at one of four 
performance tiers, each with its own minimum download and upload speed 
and usage allowance, and for either high or low latency service, as 
shown in the tables below. Winning bidders that become authorized to 
receive Phase II support must deploy broadband service that meets the 
performance tier and latency requirements associated with their winning 
bids. Each Connect America Fund support recipient must offer voice as a 
standalone service, but may separately bundle its broadband offerings 
with a voice service.

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            Performance tier                         Speed              Monthly usage allowance       Weight
----------------------------------------------------------------------------------------------------------------
Minimum.................................  >=10/1 Mbps...............  >=150 gigabytes (GB)......              65
Baseline................................  >=25/3 Mbps...............  >=150 GB or U.S. median,                45
                                                                       whichever is higher.
Above Baseline..........................  >=100/20 Mbps.............  >=2 terabytes (TB)........              15
Gigabit.................................  >=1 Gbps/500 Mbps.........  >=2 TB....................               0
----------------------------------------------------------------------------------------------------------------


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              Latency                    Requirement          Weight
------------------------------------------------------------------------
Low Latency.......................  <=100 ms............               0
High Latency......................  <=750 ms & MOS >=4..              25
------------------------------------------------------------------------


[[Page 13591]]

    7. Phase II support recipients are permitted to offer a variety of 
broadband service offerings as long as they offer at least one 
standalone voice plan and one service plan that provides broadband at 
the relevant performance tier and latency requirements, and these plans 
must be offered at rates that are reasonably comparable to rates 
offered in urban areas. For voice service, a support recipient will be 
required to certify that the pricing of its service is no more than the 
applicable reasonably comparable rate benchmark that the Commission's 
Wireline Competition Bureau (WCB) releases each year. For broadband 
services, a support recipient will be required to certify that the 
pricing of a service that meets the required performance tier and 
latency performance requirements is no more than the applicable 
reasonably comparable rate benchmark, or that it is no more than the 
non-promotional price charged for a comparable fixed wireline broadband 
service in the state or U.S. territory where the eligible 
telecommunication carrier (ETC) receives support.
    8. The Commission has adopted specific service milestones that 
require each winning bidder authorized to receive Phase II support to 
offer service to a portion of the number of locations associated with 
the eligible census blocks included in its authorized winning bids in a 
state. Specifically, each support recipient must complete construction 
and begin commercially offering service to 40 percent of the requisite 
number of locations in a state by the end of the third year of funding 
and to an additional 20 percent in each subsequent year, with 100 
percent by the end of the sixth year. A support recipient is deemed to 
be commercially offering voice and/or broadband service to a location 
if it provides service to the location or could provide it within 10 
business days upon request.
    9. Compliance will be determined at the state-level. The Commission 
will verify that the support recipient offers the required service to 
the total number of locations across all the eligible census blocks 
included in all of the support recipient's authorized bid areas (i.e., 
CBGs) in a state. If a support recipient is authorized to receive 
support in a state for different performance tier and latency 
combinations, it will be required to demonstrate that it is offering 
service meeting the relevant performance requirements to the required 
number of locations for each performance tier and latency combination 
within that state.
    10. The required number of locations for each performance tier and 
latency combination will be determined by adding up the locations in 
all the eligible census blocks in the state covered by authorized 
winning bids specifying the particular performance tier and latency 
combination.
    11. The Commission also decided that a support recipient that faces 
unforeseen challenges may take advantage of the flexibility to serve, 
at a minimum, 95 percent of the required number of locations in a 
state. Support recipients that offer service to at least 95 percent of 
locations but fewer than 100 percent of locations must refund support 
based on the number of locations left unserved in the state.
    12. In the event a support recipient cannot identify enough 
locations in the eligible census blocks in its winning bids to meet its 
statewide obligation, it will have one year after release of the Phase 
II auction closing public notice to file evidence of the total number 
of locations in those blocks, including geolocation data of all the 
locations it was able to identify. The support recipient's filing will 
be subject to review and comment by relevant stakeholders and an audit. 
If the support recipient demonstrates that the number of actual, on-
the-ground locations is lower than the number estimated by the CAM, its 
state location total will be adjusted, and its support will be reduced 
on a pro rata basis. If a support recipient finds that the number of 
actual locations has increased, its location total and support will not 
be increased.
    13. To monitor each support recipient's compliance with the Phase 
II auction public interest obligations, the Commission has adopted 
reporting requirements described in detail in the Phase II Auction 
Order, 81 FR 44413, July 7, 2016. These include reporting a list of 
geocoded locations each year to which the support recipient is offering 
the required voice and broadband services, making a certification when 
the support recipient has met service milestones, and submitting the 
annual FCC Form 481 report. A support recipient that fails to offer 
service to the required number of locations by a service milestone will 
be subject to non-compliance measures. A support recipient will also be 
subject to any non-compliance measures that are adopted in conjunction 
with a methodology for high-cost support recipients to measure and 
report network performance.

IV. Eligible Areas

    14. The Commission will use CBGs containing one or more eligible 
census blocks as the minimum geographic area for bidding in the 
auction. WCB released a list of the eligible census blocks for Auction 
903 in December 2017 based on December 31, 2016 FCC Form 477 data. The 
list contains two tables. The first table identifies the CBGs eligible 
for bidding in the Phase II auction and lists the CBG identification 
number (the 12-digit Census code), the relevant state abbreviation, the 
county name, the number of locations that are eligible for Phase II 
support, and the reserve price (on an annual basis) rounded to the 
nearest dollar. The second table identifies the eligible census blocks 
within the CBGs that are eligible for bidding in the Phase II auction. 
This table lists the census block identification number (the 15-digit 
Census code), the relevant state abbreviation, the county name, and the 
CBG identification number. All the eligible census blocks within a CBG 
will be aggregated for bidding purposes. The table includes 
approximately 214,000 census blocks that are within approximately 
30,300 CBGs, located in 50 states and territories. The Commission 
directs WCB to release a revised map and list of eligible areas that 
removes census block groups with a $0 reserve price and census blocks 
that overlap certain rate-of-return carrier study area boundaries.

V. Applying To Participate in Auction 903

    15. General Information Regarding Short-Form Applications. An 
application to participate in Auction 903, referred to as a short-form 
application or FCC Form 183, provides information used to determine 
whether the applicant has the legal, technical, and financial 
qualifications to participate in a Commission auction for universal 
service support. The short-form application is the first part of the 
Commission's two-phased auction application process. In the first 
phase, an entity seeking to participate in the auction must file a 
short-form application in which it certifies, under penalty of perjury, 
its qualifications. Eligibility to participate in the Phase II auction 
is based on an applicant's short-form application and certifications. A 
potential applicant must take seriously its duties and responsibilities 
and carefully determine before filing a short-form application that it 
is able to meet the public interest obligations associated with Phase 
II support if it ultimately becomes a winning bidder in the auction. 
The Commission's determination that an applicant is qualified to 
participate in Auction 903 does not guarantee that the applicant will 
also be deemed qualified to receive Phase II support if it becomes a 
winning bidder. In the second phase of the

[[Page 13592]]

process, each winning bidder must file a more comprehensive long-form 
application (FCC Form 683), which the Commission will review to 
determine if a winning bidder should be authorized to receive support 
for its winning bids.
    16. An entity seeking to participate in Auction 903 must file a 
short-form application electronically via the FCC's Auction Application 
System prior to 6:00 p.m. ET on March 30, 2018. Among other things, an 
applicant must submit operational and financial information 
demonstrating that it can meet the service requirements associated with 
the performance tier and latency combination(s) for which it intends to 
bid. Below the Commission describes more fully the information 
disclosures and certifications required in the short-form application. 
An applicant that files a short-form application is subject to the 
Commission's rule prohibiting certain communications. An applicant is 
subject to the prohibition beginning at the deadline for filing short-
form applications.
    17. An applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. An applicant 
should consult the Commission's rules to ensure that, in addition to 
the materials described below, all required information is included in 
its short-form application. To the extent the information in the 
document does not address a potential applicant's specific operating 
structure, or if the applicant needs additional information or guidance 
concerning the following disclosure requirements, the applicant should 
review the educational materials for Auction 903 and/or use the contact 
information provided in the document to consult with Commission staff 
to better understand the information it must submit in its short-form 
application.
    18. The same entity may not bid based on more than one auction 
application, i.e., as more than one applicant. Therefore, an entity may 
not submit more than one short-form application for Auction 903. If an 
entity submits multiple short-form applications, only one application 
may be the basis for that entity to become qualified to bid.
    19. An applicant should note that submitting a short-form 
application (and any amendments thereto) constitutes a representation 
by the certifying official that he or she is an authorized 
representative of the applicant, that he or she has read the form's 
instructions and certifications, and that the contents of the 
application, its certifications, and any attachments are true and 
correct. As more fully explained below, an applicant is not permitted 
to make major modifications to its application after the short-form 
application filing deadline. Submitting a false certification to the 
Commission may result in penalties, including monetary forfeitures, the 
forfeiture of universal service support, license forfeitures, 
ineligibility to participate in future auctions, and/or criminal 
prosecution.
    20. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications to 
determine whether each application complies with the application 
requirements and has provided all required information concerning the 
applicant's qualifications for bidding. After this review is completed, 
a public notice will be released announcing the status of applications 
and identifying the applications that are complete and those that are 
incomplete because of minor defects that may be corrected. This public 
notice also will establish an application resubmission filing window, 
during which an applicant may make permissible minor modifications to 
its application to address identified deficiencies. The public notice 
will include the deadline for resubmitting modified applications. After 
the review of resubmitted applications is complete, a public notice 
will be released identifying the applicants that are qualified to bid.
    21. Disclosure of Agreements and Bidding Arrangements. An applicant 
must identify in its short-form application all real parties in 
interest to any agreements relating to the participation of the 
applicant in the competitive bidding for Phase II support. This 
disclosure requirement applies to any arrangements with parties that 
are applying to participate in Auction 903 as well as parties that are 
not. An applicant that discloses any such agreement(s) must provide in 
its short-form application a brief description of each agreement.
    22. An applicant must certify under penalty of perjury in its 
short-form application that it has disclosed all real parties in 
interest to any agreements involving the applicant's participation in 
the competitive bidding for Phase II support. An applicant must also 
certify under penalty of perjury that it has not entered into any 
explicit or implicit agreements, arrangements, or understandings of any 
kind related to the support to be sought through the Phase II auction, 
other than those disclosed in its application. For purposes of making 
the required agreement disclosures, if parties agree in principle on 
all material terms prior to the application filing deadline, each 
applicant should provide a brief description of, and identify the other 
party or parties to, the agreement on its respective FCC Form 183, even 
if the agreement has not been reduced to writing. If an applicant has 
had discussions, but has not reached an agreement by the close of the 
initial filing window, 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 close of the initial filing 
window until after the auction closes.
    23. Ownership Disclosure Requirements. Each applicant must comply 
with the ownership disclosure requirements in Sec. Sec.  1.2112(a) and 
54.315(a)(1) of the Commission's rules. Specifically, in completing the 
short-form application, an applicant must fully disclose information 
regarding the real party- or parties-in-interest in the applicant or 
application and the ownership structure of the applicant, including 
both direct and indirect ownership interests of 10 percent or more, as 
prescribed in Sec.  1.2112(a) of the Commission's rules. Each applicant 
is responsible for ensuring that information submitted in its short-
form application is complete and accurate.
    24. In certain circumstances, an applicant may have previously 
filed an FCC Form 602 ownership disclosure information report or filed 
an auction application for a previous auction in which ownership 
information was disclosed. The most current ownership information 
contained in any FCC Form 602 or previous auction application on file 
with the Commission that used the same FRN the applicant is using to 
submit its FCC Form 183 will automatically be pre-filled into certain 
ownership sections on the applicant's FCC Form 183, if such information 
is in an electronic format compatible with FCC Form 183. Each applicant 
must carefully review any ownership information automatically entered 
into its FCC Form 183, including any ownership attachments, to confirm 
that all information supplied on FCC Form 183 is complete and accurate 
as of the application filing deadline for Auction 903. Any information 
that needs to be corrected or updated must be changed directly in FCC 
Form 183.
    25. Specific Universal Service Certifications. An applicant must 
certify that it is in compliance with all statutory and regulatory 
requirements for receiving the universal service support it seeks. 
Alternatively, if expressly allowed by the rules specific to a high-
cost support mechanism, an applicant may certify that it

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acknowledges that it must be in compliance with such requirements 
before being authorized to receive Phase II support.
    26. In addition, an applicant must certify that it will make any 
default payment that may be required pursuant to Sec.  1.21004, and 
that it is aware that if its application is shown to be defective, the 
application may be dismissed without further consideration and 
penalties may apply.
    27. Specific Phase II Eligibility Requirements and Certifications. 
State Selections and Impermissible State Overlaps. An applicant must 
select the specific state(s) in which it wishes to bid when submitting 
its short-form application. For purposes of the short-form application, 
the term ``state'' shall also include the District of Columbia and U.S. 
territories to the extent they contain eligible areas. An applicant 
will be able to place bids for eligible areas only in the state(s) 
identified in its short-form application and for which it is deemed 
eligible to bid. An applicant should take appropriate steps to ensure 
that the state(s) it selects fully reflect its bidding intentions 
because an applicant may not select any additional states in which to 
bid after the initial short-form application filing window closes. 
However, an applicant will be permitted to remove any state(s) it 
selected on its short-form application during the application 
resubmission filing window.
    28. In addition, to discourage coordinated bidding that may 
disadvantage other bidders, separate applicants that are commonly 
controlled or are parties to a joint bidding arrangement are prohibited 
from bidding in any of the same states. Knowing the specific state(s) 
for which an applicant intends to bid, as well as its ownership and 
bidding arrangement information, all of which is collected on the 
short-form application, will help the Commission ensure that applicants 
comply with this prohibition.
    29. Commonly controlled applicants are those in which the same 
individual or entity either directly or indirectly holds a controlling 
interest. To identify commonly controlled applicants, the Commission 
defines a ``controlling interest'' for purposes of the Phase II auction 
as an individual or entity with positive or negative de jure or de 
facto control of the applicant. In addition, the Commission defines 
``joint bidding arrangements'' as those that (i) relate to any eligible 
area in the Phase II auction and (ii) address or communicate bids or 
bidding strategies, including arrangements regarding Phase II support 
levels (i.e., bidding percentages) and specific areas on which to bid, 
as well as any arrangements relating to the post-auction market 
structure in an eligible area.
    30. Entities that are commonly controlled or are parties to a joint 
bidding arrangement have two options for submitting short-form 
applications to avoid the restriction on state overlaps. It is 
important that such entities carefully consider these options prior to 
the short-form application filing deadline. At the deadline, the 
prohibition of certain communications begins, and after that time, only 
minor amendments or modifications to applications will be permitted.
    31. First, such entities may submit a single short-form application 
and qualify to bid as one applicant in a state. To facilitate the 
identification of such applications, an applicant will indicate whether 
it is submitting the application on behalf of itself and one or more 
existing operating companies, and if so, to identify such companies. 
Similarly, parties to a joint bidding arrangement may form a consortium 
or a joint venture and submit a single short-form application that 
identifies each party to the consortium or joint venture. At least one 
related entity, affiliate, or member of the holding or parent company, 
consortium, or joint venture identified in the short-form application 
must demonstrate that it meets the operational and financial 
requirements of Sec.  54.315(a)(7).
    32. If a holding/parent company or a consortium/joint venture is 
announced as a winning bidder in Auction 903, the entity may designate 
at least one operating company controlled by the holding/parent company 
or by a member of (or an entity controlled by a member of) the 
consortium/joint venture that will be authorized to receive Phase II 
support for the winning bids in a state. While more than one operating 
company may be designated in a state, an operating company must be 
identified for each winning bid, whether the bid covers one CBG or a 
package of CBGs. Thus, a winning bidder cannot apportion either 
eligible census blocks within a winning bid for a CBG or separate CBGs 
within a winning package bid among multiple operating companies. The 
operating company that seeks authorization for Phase II support must 
file the long-form application in its own name. Because the operating 
company is the entity that will be required to meet the associated 
Phase II public interest obligations, the operating company should be 
the entity that will make the required certifications in the long-form 
application about its technical and financial qualifications and that 
will meet the public interest obligations. A holding/parent company or 
a consortium/joint venture short-form applicant that intends to form a 
new operating company if it is named as a winning bidder is expected to 
take whatever steps are necessary to form the operating company in 
advance of the long-form application filing deadline. The identified 
operating company must also be the entity that is designated as the ETC 
by the relevant state(s) in the areas covered by the winning bid(s) and 
is named in the letter of credit applicable to the specific winning 
bids for which it becomes authorized for support.
    33. The second way commonly controlled entities or parties to a 
joint bidding arrangement can participate is by submitting short-form 
applications and qualifying to bid independently, though not in the 
same state. Such applicants must exercise due diligence to confirm 
prior to submitting their respective short-form applications that no 
other commonly controlled entity or party to a joint bidding 
arrangement, or an entity that controls any party to such an 
arrangement, has indicated its intent to bid in any of the same 
state(s) that each of the applicants has selected. To that end, an 
applicant must certify in its short-form application that it 
acknowledges that it cannot place any bids in the same state as (i) 
another commonly controlled entity, (ii) another party to a joint 
bidding arrangement related to Phase II support that it is a party to, 
or (iii) any entity that controls a party to such an arrangement. And, 
as noted above, to help identify any impermissible state overlaps, an 
applicant must provide in its short-form application a brief 
description of any bidding arrangements that are required to be 
disclosed.
    34. If, during short-form application review, applicants that are 
commonly controlled and/or parties to a joint bidding arrangement are 
found to have selected the same state(s) in their respective 
applications, all such applications will be deemed to be incomplete on 
initial review. The WCB and the Wireless Telecommunications Bureau 
(WTB) (collectively, the Bureaus) will inform each affected applicant 
of the identity of each of the other applicant(s) with which it has an 
impermissible state overlap and the specific overlapping state(s). To 
the extent that an affected applicant has disclosed a joint bidding 
arrangement with one or more of the other affected applicants, these 
applicants must decide amongst themselves which applicant (if any) will 
bid in each overlapping state. Then, the applicants must revise their

[[Page 13594]]

short-form applications during the application resubmission window, as 
appropriate, so that only one of the applications includes the 
overlapping state and thus only one of the applicants can be deemed 
eligible to bid on that particular state. However, if the overlapping 
state(s) remain listed in more than one of the affected applicants' 
applications after the close of the resubmission filing window, none of 
the affected applicants will be eligible to bid in the overlapping 
state(s). Any affected applicant that has not entered into a joint 
bidding arrangement with the other affected applicant(s) (including 
commonly controlled entities) and disclosed that arrangement on its 
short-form application will be barred by the Commission's prohibited 
communications rule from discussing the overlap with any of the other 
affected applicant(s). As a result, such applicants will be prohibited 
from bidding in any state(s) where there is an overlap after the close 
of the resubmission filing window. After the Auction 903 qualified 
bidders are announced, each applicant will be able to view its final 
eligibility determination for each state in the Auction Application 
System. The bidding system will be configured to permit a qualified 
bidder to bid only in the state(s) for which that qualified bidder has 
been deemed eligible to bid.
    35. Operational History and Submission of Financial Statements. The 
Commission has established two pathways for an applicant to demonstrate 
its operational experience and financial qualifications to participate 
in the Phase II auction. These pathways vary depending on whether the 
applicant has at least two years of operational experience. In 
addition, all applicants are required to provide financial and 
operational information, regardless of whether they have two years of 
operational experience.
    36. With the first pathway, an applicant can certify, if 
applicable, on its FCC Form 183 that it has provided voice, broadband, 
and/or electric distribution or transmission services for at least two 
years prior to the short-form application filing deadline (or that the 
applicant is the wholly owned subsidiary of an entity that has done 
so), specify the number of years it has been operating, and identify 
the services it has provided. An applicant will be deemed to have 
started providing a service on the date it began commercially offering 
that service to end users.
    37. If an applicant certifies that it has been providing voice and/
or broadband services for at least two years, it must certify that it 
(or its parent company, if it is a wholly owned subsidiary) has filed 
FCC Form 477s as required during that time period. It must also 
identify the FRNs it (or its parent company) used to file the FCC Form 
477s for the relevant filing periods. The relevant FCC Form 477 filing 
periods include data as of June 30, 2016; December 31, 2016; and June 
30, 2017. FCC Form 477 data for these periods that were on file as of 
February 5, 2018 will be used to validate an applicant's representation 
on the short-form application that it has been providing a voice and/or 
broadband service for at least two years. If the applicant certifies 
that it has been providing only electric distribution or transmission 
services for at least two years (i.e., it has not also been providing 
voice or broadband service for at least two years), it must submit with 
its short-form application qualified operating or financial reports 
that it (or its parent company, if it is a wholly owned subsidiary) 
filed with the relevant financial institution in 2016 and 2017 that 
demonstrate that the applicant (or its parent company) has been 
operating for at least two years. The applicant also must submit a 
certification that the submission is a true and accurate copy of the 
forms that were submitted to the relevant financial institution. The 
Commission will accept the Rural Utilities Service (RUS) Form 7, 
Financial and Operating Report Electric Distribution; the RUS Form 12, 
Financial and Operating Report Electric Power Supply; the National 
Rural Utilities Cooperative Finance Corporation (CFC) Form 7, Financial 
and Statistical Report; the CFC Form 12, Operating Report; the CoBank 
Form 7; or the functional replacement of one of these reports.
    38. If an applicant that meets the foregoing requirements and it 
(or its parent company) is audited in the ordinary course of business, 
the applicant must also submit its (or its parent company's) financial 
statements from the prior fiscal year, including balance sheets, net 
income, and cash flow, that were audited by an independent certified 
public accountant. If the applicant is a holding company, it must 
submit its own audited financial statements. If the applicant is a 
consortium or a joint venture, it must submit the audited financial 
statements of the entity that is the subject of the at least two-year 
operational certification. If the applicant is a wholly owned 
subsidiary and has certified that its parent company has provided 
service for at least two years, it must submit the audited financial 
statements of its parent company. Because the short-form application 
filing window opens in the first quarter of 2018, the Commission 
requires that an applicant submit its (or its parent company's) 2016 
audited financial statements. However, an applicant may, and is 
encouraged to, instead submit its fiscal year-end 2017 audited 
financial statements if they are finalized before the short-form 
application deadline.
    39. If an applicant (or its parent company) is not audited in the 
ordinary course of business and the applicant does not submit its 
audited financial statements with the short-form application, it must 
certify that the long-form applicant will submit its (or its parent 
company's) audited financial statements from the prior fiscal year 
within 180 days after being announced as a winning bidder. Such an 
applicant must also submit its (or its parent company's) fiscal year-
end 2016 unaudited financial statements with its short-form 
application, including balance sheet, net income, and cash flow. If an 
applicant certifies in its short-form application that it will submit 
audited financial statements during the long-form application process, 
but such statements are ultimately not submitted, the winning bidder or 
long-form applicant will be deemed to be in default and subject to a 
forfeiture.
    40. An applicant that does not have at least two years of 
operational experience must submit with its short-form application its 
(or its parent company's) financial statements that are audited by an 
independent certified public accountant from the three most recent 
fiscal years (i.e., 2014, 2015, and 2016), including balance sheets, 
net income, and cash flow. An applicant is encouraged to instead submit 
fiscal year-end 2015, 2016, and 2017 audited financial statements if 
the 2017 audited financial statements are finalized in time to submit 
them before the short-form application deadline. Such an applicant must 
also submit with its short-form application a letter of interest from a 
qualified bank stating that the bank would provide a letter of credit 
to the applicant if the applicant becomes a winning bidder and is 
selected for bids of a certain dollar magnitude. The letter should 
include the maximum dollar amount for which the bank would be willing 
to issue a letter of credit to the applicant and a statement that the 
bank would be willing to issue a letter of credit that is substantially 
in the same form as set forth in the model letter of credit provided in 
Appendix B of the

[[Page 13595]]

Phase II Auction Order, 81 FR 44413, July 7, 2016.
    41. Financial Qualifications. All applicants must report on their 
short-form application certain metrics from their financial statements 
(audited or unaudited) from the prior fiscal year being submitted with 
the applications. These metrics are meant to demonstrate that an 
applicant has sufficient financial qualifications to participate in the 
Phase II auction to minimize the number of winning bidders that default 
because they are unable to meet the long-form application requirements. 
Winning bidders will be required to provide additional, more specific 
evidence of their financial qualifications at the long-form application 
stage to demonstrate that they have the financial qualifications to 
meet the Phase II public interest obligations.
    42. These metrics must be reported in the short-form application 
and will be scored using a five-point scale described below. The five-
point scale will be used to score one yes/no question and four other 
common financial metrics. These metrics are based on information 
already contained in the financial statements that must be submitted 
with the short-form application. The five-point scale provides a 
streamlined process for assessing, efficiently and objectively, whether 
an applicant has sufficient financial qualifications or requires 
further financial review. An applicant that scores at least three 
points will be deemed to have sufficient financial qualifications to 
participate in the auction if it has submitted the required financial 
information with its short-form application.
    43. The objective financial metrics for this five-point scale will 
not necessarily provide a full picture of an applicant's financial 
qualifications. Therefore, a score of less than three points will 
warrant a review of the full set of financial statements submitted with 
the short-form application, as well as other information submitted with 
the application and/or information submitted to the Commission in other 
contexts (e.g., financials filed with a FCC Form 481, revenues reported 
in FCC Form 499, etc.). To the extent this information does not 
sufficiently demonstrate that an applicant is financially qualified, 
the application will be deemed incomplete and the Commission may 
request further information from the applicant during the application 
resubmission period.
    44. The first point on the five-point scale is based on a yes/no 
question. Specifically, an applicant that submits audited financial 
statements will be asked whether it received an unmodified, non-
qualified opinion from the auditor; an applicant will receive one point 
for a ``yes'' answer. An applicant must also enter the following 
metrics from the most recent financial statements submitted with the 
short-form application: (1) Latest operating margins (i.e., operating 
revenue less operating expenses excluding depreciation), where an 
operating margin greater than zero will receive one point; (2) Times 
Interest Earned Ratio (TIER), where a TIER ((net income plus interest 
expense) divided by interest expense) greater than or equal to 1.25 
will receive one point; (3) current ratio (current assets divided by 
current liabilities), where a ratio greater than or equal to 2 will 
receive one point; and (4) equity ratio (total equity divided by total 
capital), where a result greater than or equal to 0.4 will receive one 
point. This scoring methodology is summarized in the table below:

------------------------------------------------------------------------
                                            Response or
            Financial metric                 threshold         Score
------------------------------------------------------------------------
If the applicant has audited financial               Yes              +1
 statements, did it receive an
 unmodified (non-qualified) opinion?....
Operating margin........................              >0              +1
Times Interest Earned Ratio (TIER)......          >=1.25              +1
Current Ratio (Ratio current assets/                 >=2              +1
 current liabilities)...................
Equity Ratio (Total equity/total capital           >=0.4              +1
 (total equity plus total liabilities)).
------------------------------------------------------------------------

    45. The question regarding an applicant's audit opinion measures 
both the applicant's financial condition and operations. The metric for 
operating margin measures core profitability, and the metrics for 
current ratio and equity ratio measure the applicant's short- and long-
term financial condition, respectively. TIER measures the ability to 
pay interest on outstanding debt.
    46. The Commission will consider an applicant with a total score of 
three points or greater (i.e., a score of one for at least three of the 
metrics) to have sufficient financial qualifications to participate in 
Auction 903, regardless of the applicant's score for any specific 
metric. Failure to score at least three does not indicate that an 
applicant lacks the financial qualifications to participate in the 
auction. Rather, it indicates that further review is required. During 
this further review, an applicant's operating cash flow and EBITDA will 
be considered, as these metrics may provide a useful context for 
assessing an applicant's financial status. If an applicant is unable to 
demonstrate that it has sufficient financial qualifications based on 
the information submitted with the short-form application and 
information submitted to the Commission in other contexts, Commission 
staff will be able to ask the applicant questions and request 
additional information during the resubmission filing window.
    47. Eligibility to Bid for Performance Tier and Latency 
Combinations. The Commission requires an applicant to demonstrate its 
eligibility to bid for the performance tier and latency combination(s) 
it selects in its application in advance of the start of bidding in the 
auction. An applicant must submit high-level operational information in 
its short-form application to complete its operational showing. It is 
the Commission's objective to safeguard consumers from situations where 
bidders unable to meet the specified service requirements divert 
support from bidders that can meet the Phase II public interest 
obligations, and the short-form application can accomplish this 
purpose. However, a determination at the short-form stage that an 
applicant is eligible to bid for a given performance tier and latency 
combination and has sufficient access to spectrum, if applicable, does 
not preclude a determination at the long-form application stage that a 
long-form applicant lacks the requisite technical qualifications or 
access to spectrum, and thus should not be authorized to receive Phase 
II support for that eligible area.
    48. Selecting Performance Tier and Latency Combinations. As 
required by the Commission's rules, each applicant must select in its 
short-form application the performance tier and latency combination(s) 
for which it intends to bid in each state where it seeks support. For 
each tier and latency combination, an applicant must indicate the 
technology or technologies it intends to use to meet the associated 
requirements. If an applicant intends to use spectrum, it must also 
indicate the spectrum band(s) and total amount of uplink and

[[Page 13596]]

downlink bandwidth (in megahertz) that it has access to for the last 
mile for each performance tier and latency combination it selected in 
each state.
    49. Operational Information. An applicant must submit in its short-
form application sufficient operational information regarding its 
experience providing voice, broadband, and/or electric distribution or 
transmission service and its plans for provisioning service if awarded 
support. Such information will demonstrate whether an applicant has the 
technical qualifications to bid for specific performance tier and 
latency combinations. Specifically, an applicant must submit high-level 
operational information to complete its operational showing and 
demonstrate that it can be expected to be reasonably capable of meeting 
the public interest obligations (e.g., speed, usage, latency, and 
service milestones) for each performance tier and latency combination 
selected.
    50. Eligibility to bid for specific tier and latency combinations 
will be determined on a state-by-state basis. Accordingly, for each 
selected performance tier and latency combination, an applicant will be 
required to demonstrate that it is reasonably capable of meeting the 
relevant public interest obligations for each state it selects and to 
explain how it intends to provision service if awarded support. Because 
compliance with the service obligations will be determined on a state-
level basis and some applicants may propose to deploy hybrid networks, 
it will be useful to understand how an applicant selecting multiple 
performance tier and latency combinations within a state intends to 
meet the requirements for each combination in the state. To reduce the 
risk of defaults, the combination(s) selected by an applicant will be 
evaluated to determine its eligibility to bid for any such 
combination(s).
    51. An applicant must answer the questions listed in Appendix A of 
the CAF II Auction Procedures Public Notice for each state it selects 
in its application. The questions are intended to elicit short, 
narrative responses from the applicant regarding its experience in 
providing voice, broadband, and/or electric distribution or 
transmission service, and the network(s) it intends to use to meet its 
Phase II public interest obligations. The questions are designed to 
confirm that the applicant has developed a preliminary design or 
business case for meeting the public interest obligations for its 
selected performance tier and latency combinations. They ask the 
applicant to identify the information it could make available to 
support the assertions in its application. The Commission does not 
anticipate that it will be unduly burdensome to respond to these 
questions because, at a minimum, each applicant will need to have 
started planning at a high-level how it intends to meet the relevant 
Phase II public interest obligations as part of its obligation to 
conduct due diligence prior to the auction. Because a short-form 
applicant will not know where it might be authorized to receive support 
and will have six years to build out or upgrade its network, the 
information submitted may be based on a preliminary network design, 
which may be modified once the winning bids are announced and as the 
network is built out.
    52. The Commission expects concise descriptions from applicants. 
The Commission will implement its usual procedures for reviewing 
auction applications to help ensure that eligibility determinations are 
made consistently across all applications by, among other things, 
leveraging the expertise of engineers and/or other subject matter 
experts.
    53. Until an applicant knows where it will be awarded support and 
how many locations it will be required to serve, it may not have made 
all its decisions regarding how it will meet its Phase II obligations. 
However, an applicant is required to certify that it has performed the 
necessary due diligence to participate in the Phase II auction. This 
includes making sure that the applicant will be able to build and 
operate facilities that will fully comply with all applicable 
requirements. Accordingly, it is reasonable to expect that an applicant 
will have developed a preliminary plan for how it will meet its Phase 
II obligations if awarded support. If an applicant has not demonstrated 
that it is reasonably capable of meeting the relevant public interest 
obligations based on the information submitted in the short-form 
application, the applicant will be asked to submit evidence during the 
resubmission filing window to demonstrate that it has developed a 
preliminary plan.
    54. Modifications to Proposed Operational Questions. The Commission 
has made some modifications to the originally proposed operational 
questions to provide greater clarity on how an applicant should respond 
to them.
    55. First, the Commission retains the question about the total 
number of subscribers an applicant has served with voice and broadband 
because the size of a service provider's current operations provides 
useful insight into how an applicant has scaled its network in the 
years it has been operating. However, an applicant can provide an 
estimate and should provide the current total number of subscribers (as 
of the short-form application filing deadline). If an applicant is no 
longer providing service in any state, the applicant must estimate the 
number of customers that were served at the beginning of the last full 
year that it did provide service.
    56. Second, the Commission retains the question asking an applicant 
to identify the relevant industry standards for the last-mile 
technologies it intends to use to meet its Phase II obligations if it 
becomes a winning bidder and is authorized to receive support. This 
question will give an applicant the opportunity to demonstrate that it 
has started planning how it will meet the Phase II obligations and that 
it intends to use technologies that are generally accepted as having 
the capabilities to meet the relevant performance standards. However, 
an applicant is not precluded from proposing to use non-standards-based 
technology. So that an applicant intending to use such technology can 
demonstrate that the technology has suitable capabilities for meeting 
the applicable performance requirements, such an applicant must 
identify the vendors and the products it is considering using and 
provide links to the vendors' websites and to publicly available 
technical specifications of the products. If the technical 
specifications are not publicly available, the applicant may submit 
them with its application.
    57. The Commission will treat the responses to the questions in 
Appendix A of the CAF II Auction Procedures Public Notice and any 
associated supporting documentation as confidential and will withhold 
them from routine public inspection. Accordingly, there is no need for 
an applicant to submit a Sec.  0.459 confidentiality request to seek 
protection of this information from public disclosure.
    58. Operational Assumptions. The Commission also adopts certain 
assumptions that an applicant will need to make about network usage and 
subscription rates when determining, for purposes of its short-form 
application, whether it can meet the public interest obligations for 
its selected performance tier and latency combination(s) if it becomes 
a winning bidder and is authorized to receive Phase II support.
    59. First, an applicant must assume it will offer service to at 
least 95 percent of the required number of locations across its bids in 
each state by the end of the six-year build-out period. This

[[Page 13597]]

assumption is consistent with the requirement that each winning bidder 
submit with its long-form application a network diagram with a 
certification by a professional engineer that the network would 
deliver, to at least 95 percent of the required number of locations in 
each relevant state, voice and broadband service that meets the 
relevant performance requirements. While Phase II support recipients 
should plan to offer service to 100 percent of the required number of 
locations and take advantage of the flexibility to offer service to 95 
percent of the required number of locations only in unforeseen 
circumstances, an assumption by an applicant that it will offer service 
to 95 percent of locations will provide reasonable assurance that the 
applicant will engineer its network so that it is reasonably capable of 
meeting the relevant public interest obligations for the required 
number of locations. While each winning bidder that is authorized to 
receive Phase II support will be required to offer service only in 
areas where it is authorized to receive support, after the close of a 
round, each bid represents an irrevocable offer to meet the terms of 
the bid if it becomes a winning bid. Accordingly, an applicant that 
becomes a qualified bidder should assume for each round of the auction 
that it could be required to offer service meeting the relevant 
requirements to the number of locations across all the bids that it 
places in each state.
    60. Second, consistent with assumptions made in the CAM, an 
applicant must assume that it will have at least a 70 percent 
subscription rate for its voice and broadband services by the time it 
will meet the final service milestone if it becomes authorized to 
receive support. Because it may take time for an applicant that becomes 
a winning bidder and is authorized to receive Phase II support to 
obtain customers as it builds out its network, applicants may factor 
this into their engineering and make reasonable assumptions about how 
the subscription rate will scale during the build-out term. Regardless 
of the assumptions an applicant makes about its subscription rate when 
engineering its network, the applicant must keep in mind that its 
network must be capable of scaling to meet demand. That is, if a Phase 
II support recipient reports in the High Cost Universal Service Portal 
that a location is served, it must be capable of providing service 
meeting the relevant performance requirements to that location within 
10 business days after receiving a request.
    61. An applicant, if it becomes a winning bidder and is authorized 
to receive Phase II support, will not be required to demonstrate that 
it has achieved at least a 70 percent subscription rate once it has 
deployed to the required number of locations. Instead, an applicant 
must assume for purposes of its short-form application that it will 
achieve at least a 70 percent subscription rate when engineering its 
network. Some Phase II support recipients will achieve at least a 70 
percent subscription rate in the areas where they are authorized to 
receive support and others will not. However, requiring an applicant to 
make a specific assumption will give the Commission reasonable 
assurance that an applicant is engineering a network that can be scaled 
to meet potential demand. Given that subscription rates are likely to 
vary from area to area and over the 10-year period, the most objective 
way to minimize defaults and verify that an applicant is making 
reasonable assumptions about its subscription rate is to require all 
applicants to make the same assumption about the minimum subscription 
rate at the end of the build-out period. By adopting a minimum 70 
percent subscription rate, applicants are provided some additional 
clarity for how they can demonstrate that they are technically 
qualified to participate in the Phase II auction. These benefits would 
not be achieved by simply presuming that an applicant will have the 
incentive to make reasonable subscription assumptions because the 
applicant will ultimately be subject to network testing requirements 
and non-compliance measures if it becomes a winning bidder and is 
authorized to receive Phase II support.
    62. By requiring an applicant to assume a minimum subscription rate 
of 70 percent, the Commission is balancing the reality that not all 
consumers in a given area may subscribe to the Phase II-funded service 
with the requirement that Phase II support recipients provide the 
required service to consumers living at a funded location within 10 
business days of a request. In the Commission's predictive judgment, a 
70 percent subscription rate is a reasonable assumption for engineering 
a network when taking into account (i) that existing subscription 
rates, which in some cases are lower than 70 percent, may not reflect 
actual demand over the 10-year support term, which would be expected to 
increase as data usage increases and higher speeds are made available, 
and (ii) in the high-cost areas where the Phase II support recipient 
will be deploying its network, it is more likely to be the only 
broadband provider, which may increase adoption rates. There is a risk 
that this requirement may result in an increase in costs and could 
potentially lead to an applicant engineering a network that is capable 
of serving more locations than actually request service. However, this 
potential harm is outweighed by the risk that a support recipient could 
engineer a network that is incapable of meeting demand and may leave 
consumers unserved if the Commission does not take proactive measures 
to ensure that a support recipient is making reasonable assumptions 
about its potential subscription rate.
    63. Finally, each winning bidder must provide high-level 
information regarding its peak period data usage assumptions during the 
short-form application stage and detailed information regarding its 
peak period data usage assumptions during the long-form application 
stage once the bidders know the number of locations they will be 
required to serve. The Commission intends to review each winning 
bidder's response on a case-by-case basis to ensure that it is making 
reasonable assumptions given the required data usage allowances for the 
performance tiers for which it has been named a winning bidder.
    64. Specific Information Required from Applicants Proposing to Use 
Spectrum to Provide Service. An applicant that intends to use 
radiofrequency spectrum to offer its voice and broadband services must 
submit information regarding whether the spectrum to which it has 
access will enable the applicant to meet the public interest 
obligations for each performance tier and latency combination that it 
selects in its application.
    65. The Commission's Phase II auction rules require an applicant 
that plans to use spectrum to demonstrate that it has (i) the proper 
spectrum use authorizations, if applicable; (ii) access to operate on 
the spectrum it intends to use; and (iii) sufficient spectrum resources 
to cover peak network usage and meet the minimum performance 
requirements to serve the fixed locations in eligible areas. Consistent 
with the Commission's approach in the Mobility Fund Phase I auction, 
for the described spectrum access to be sufficient, the applicant must 
have obtained any necessary approvals from the Commission for the 
spectrum, if applicable, by the short-form application filing deadline, 
subject to the exceptions described below. The Phase II auction short-
form application

[[Page 13598]]

rules also require an applicant to certify that it will retain such 
authorizations for at least 10 years.
    66. An applicant that intends to use licensed or unlicensed 
spectrum must in its short-form application (i) identify the spectrum 
band(s) it will use for the last mile, backhaul, and any other parts of 
the network; (ii) describe the total amount of uplink and downlink 
bandwidth (in megahertz) that it has access to in each spectrum band 
for the last mile; (iii) describe the authorizations (including leases) 
it has obtained to operate in the spectrum, if applicable; and (iv) 
list the call signs and/or application file numbers associated with its 
spectrum authorizations, if applicable. Any applicant that intends to 
provide service using satellite technology must describe in its short-
form application its expected timing for applying for earth station 
licenses if it has not already obtained these licenses. Moreover, 
because an applicant can apply to obtain a microwave license at any 
time, an applicant that intends to obtain microwave license(s) for 
backhaul to meet its Phase II public interest obligations may describe 
in its short-form application its expected timing for applying for such 
license(s), if it has not already obtained them.
    67. This spectrum information, combined with the operational and 
financial information submitted in the short-form application, will 
allow an applicant to demonstrate that it has sufficient spectrum 
resources and is reasonably capable of meeting the public interest 
obligations required by its selected performance tier and latency 
combination(s). If a license, lease, or other authorization is set to 
expire prior to the end of the 10-year support term, the Commission 
will infer that the authorization will be able to be renewed when 
determining at the short-form application stage whether an applicant 
has sufficient access to spectrum. However, this inference will in no 
way influence or prejudge the Commission's resolution of any future 
renewal application, and if the authorization is not renewed during the 
support term and the Phase II support recipient is unable to meet its 
Phase II obligations, that support recipient will be in default and 
subject to any applicable non-compliance measures.
    68. In Appendix B of the CAF II Auction Procedures Public Notice, 
the Commission identifies the spectrum bands that it anticipates could 
be used for the last mile to meet Phase II obligations and indicate 
whether the spectrum bands are licensed or unlicensed. The Commission 
would expect that a service provider operating in these bands could, at 
a minimum, offer service meeting the requirements for the Minimum 
performance tier provided that the service provider is using sufficient 
bandwidth in the spectrum band(s) and a technology that can operate on 
these spectrum bands consistent with applicable U.S. and international 
rules and regulations.
    69. Appendix B of the CAF II Auction Procedures Public Notice is a 
non-exhaustive list of spectrum bands that an applicant could 
potentially use to meet its performance obligations. An applicant is 
not precluded from proposing to use a spectrum band that is not 
included in Appendix B, provided that the applicant can demonstrate 
that it is reasonably capable of meeting the performance requirements 
over the 10-year support term for the selected performance tier and 
latency combination(s) using that spectrum. An applicant that selects a 
spectrum band listed in Appendix B for a particular performance tier 
and latency combination may not necessarily be deemed eligible to bid 
for that combination. Such a showing depends on the technology the 
applicant intends to use and whether such use is consistent with 
applicable U.S. and international rules and regulations, the 
performance tier and latency combination(s) selected, the bandwidth to 
which the applicant has access in the band(s), and the authorizations 
the applicant has, if applicable, to access the spectrum. Because these 
factors will vary for each applicant, the Commission declines to 
designate specific spectrum bands as ``safe harbors'' based on whether 
providers have historically met the relevant requirements for certain 
performance tier and latency combinations using those spectrum bands.
    70. Collection of Identifiers Associated With Information Submitted 
to the Commission in Other Contexts. In addition to information 
provided in a short-form application, any relevant information that an 
applicant has submitted to the Commission in other contexts may be 
considered during application review for purposes of determining 
whether the applicant is expected to be reasonably capable of meeting 
the public interest obligations for its selected performance tier and 
latency combination(s) if it becomes a winning bidder and is authorized 
to receive Phase II support. This other information would include the 
following: Data reported in FCC Form 477 Local Telephone Competition 
and Broadband Report (FCC Form 477), FCC Form 481 Carrier Annual 
Reporting Data Collection Form (FCC Form 481), and FCC Form 499-A 
Annual Telecommunications Reporting Worksheet (FCC Form 499-A), 
including non-public information. For example, whether an applicant 
already offers service that meets the public interest obligations 
associated with its selected performance tier and latency 
combination(s) and the number of subscribers to that service may be 
considered.
    71. Specifically, applicants must submit in the short-form 
application any FCC Registration Numbers (FRNs) that an applicant or 
its parent company--and in the case of a holding company applicant, the 
operating companies identified in its application--has used to submit 
its FCC Form 477 data during the past two years. Because the short-form 
application deadline is March 30, 2018, the Commission will collect FCC 
Form 477 FRNs that were used for the filings for data as of June 30, 
2017, data as of December 31, 2016, and data as of June 30, 2016. 
Requiring submission of the FRNs that an applicant has used for FCC 
Form 477, will allow reviewers to cross-reference FCC Form 477 data 
that an applicant (or a related entity) has filed during the past two 
years.
    72. An applicant must also submit in the short-form application any 
study area codes (SACs) indicating that the applicant (or its parent 
company/subsidiaries) is an existing ETC. A holding-company applicant 
must submit the SACs of its operating companies identified in the 
application. An applicant is required by the Commission's Phase II 
short-form application rules to disclose its status as an ETC if 
applicable.
    73. Finally, applicants must submit in the short-form application 
any FCC Form 499 filer identification numbers that the applicant or its 
parent company and, in the case of a holding company, its operating 
companies identified in the application have used to file an FCC Form 
499-A in the past year, if applicable. Because the short-form 
application filing deadline is March 30, 2018, applicants must submit 
filer identification numbers that were used for the April 3, 2017 
filing.
    74. Limiting Eligibility to Bid for Certain Performance Tier and 
Latency Combinations. The Commission will preclude applicants planning 
to use certain technologies to meet their Phase II obligations from 
becoming eligible to bid for performance tier and latency combinations 
that are inconsistent with those technologies. Specifically, the 
Auction Application System will not allow an applicant that selects low

[[Page 13599]]

latency in combination with any of the performance tiers to also select 
geostationary satellites as the technology for those performance tier 
and latency combinations. The Auction Application System also will not 
allow an applicant that selects the Gigabit performance tier in 
combination with either high or low latency in its short-form 
application to also select geostationary satellites as the technology 
for those tier and latency combinations.
    75. In addition, the Auction Application System will allow an 
applicant that selects the Gigabit and Above Baseline performance tiers 
to also select the fixed wireless and/or digital subscriber line (DSL) 
technologies for those performance tiers on the short-form application. 
However, the applicant's most recent publicly available FCC Form 477 
deployment and subscription data, in addition to the applicant's 
operational information, will be used to determine the applicant's 
eligibility to bid in those tiers. If the FCC Form 477 data for that 
period do not show that the applicant offers residential Gigabit 
service using fixed wireless or DSL (whichever is selected by the 
applicant), the applicant will not be deemed eligible to bid in the 
Gigabit performance tier. If an applicant does not offer a fixed 
wireless or DSL service at or above 100/20 Mbps based on its FCC Form 
477 data, the applicant may be deemed eligible to bid in the Above 
Baseline performance tier, but that determination will be informed by 
its FCC Form 477 data as well as its operational information.
    76. Applicants that propose to use other technologies that lack 
historical deployment data are not precluded from bidding for any 
specific performance tier and latency combination if such applicants 
become qualified to bid. Without historical deployment data, the 
Commission is unable to decide categorically whether it can reasonably 
predict that a new technology would generally be able to meet the 
relevant public interest obligations by the required service 
milestones. The Commission will consider each application proposing to 
use such a new technology on a case-by-case basis, taking into account 
the applicant's experience, its responses to the short-form operational 
questions, its spectrum access (if applicable), and other information 
collected in the short-form application. The additional costs of having 
to review these technologies on a case-by-case basis are outweighed by 
the potential benefits to consumers if an applicant can use new 
technologies to bring advanced services to unserved areas.
    77. Standard for Evaluating Information on Performance Tier and 
Latency Combinations; Initial and Final Determinations of Eligibility 
to Bid on Selected Combinations. The Bureaus will review the 
information submitted by an applicant in its short-form application as 
well as any other relevant and available information to determine 
whether the applicant has planned how it would provide service if 
awarded support and whether it is expected to be reasonably capable of 
meeting the public interest obligations for its selected performance 
tier and latency combination(s) in its selected state(s). If an 
applicant demonstrates that it is reasonably capable of meeting the 
public interest obligations for one or more selected tier and latency 
combinations in a state, the applicant will be deemed eligible to bid 
for those performance tier and latency combination(s) in that state.
    78. If an applicant is unable to demonstrate that it is reasonably 
capable of meeting the relevant public interest obligations for its 
selected performance tier and latency combination(s) based on the 
information submitted in its short-form application and other available 
information, the Bureaus will deem the application incomplete. The 
applicant will then have another opportunity during the application 
resubmission period to submit additional information to demonstrate 
that it meets this standard. The Bureaus will notify the applicant that 
additional information is required to assess the applicant's 
eligibility to bid for one or more of the specific performance tier and 
latency combination(s) selected in its short-form application. During 
the application resubmission filing window, the applicant will be able 
to submit additional information to establish its eligibility to bid 
for the relevant performance tier and latency combination(s). An 
applicant will also have the option of selecting a lesser performance 
tier and latency combination for which it might be more likely to meet 
the relevant public interest obligations. The Commission considers 
these to be permissible minor modifications of the short-form 
application. After the Auction 903 qualified bidders are announced, 
each applicant will be able to view its final eligibility determination 
for each performance tier and latency combination in the selected 
state(s) for which it is eligible through the Auction Application 
System. An applicant must have at least one performance tier and 
latency combination deemed eligible in at least one state in order to 
become qualified to bid. The bidding system will be configured to 
permit a qualified bidder to bid only for the performance tier and 
latency combination(s) for which it has been deemed eligible to bid.
    79. Due Diligence Certification. Each applicant has sole 
responsibility for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the level of Phase II 
support for which it will seek to bid in Auction 903 if it becomes a 
qualified bidder. Each qualified bidder is responsible for assuring 
that, if it becomes a winning bidder and is ultimately authorized to 
receive Phase II support, it will be able to build and operate 
facilities in accordance with the Phase II obligations and the 
Commission's rules generally.
    80. Applicants should be aware that Auction 903 represents an 
opportunity to apply for Phase II support, subject to certain 
conditions and regulations. Auction 903 does not constitute an 
endorsement by the Commission of any particular service, technology, or 
product, nor does the award of Phase II support constitute a guarantee 
of business success.
    81. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, the Commission strongly encourages each applicant to 
review all underlying Commission orders and to assess all pertinent 
economic factors relating to the deployment of service in a particular 
area.
    82. Each applicant should perform technical analyses or refresh its 
previous analyses to assure itself that, should it become a winning 
bidder for Phase II support, it will be able to build and operate 
facilities that fully comply with all applicable technical and legal 
requirements and will advertise and provide the service to customers. 
Each applicant should verify that it can identify enough locations 
within the eligible census blocks that it intends to include in its 
bids to be able to offer service meeting the relevant requirements to 
the required number of locations if it becomes a winning bidder and is 
authorized to receive Phase II support. Each Phase II support recipient 
will be required to offer service meeting the relevant requirements to 
the total number of locations across all the winning bids in each state 
where it is authorized to receive support. The total number of 
locations where a Phase II support recipient is required to offer 
service in each state is determined by

[[Page 13600]]

adding up the number of locations the CAM estimated for each eligible 
census block included in the support recipient's winning bids in the 
state. The Commission has adopted a process by which support recipients 
that cannot identify enough locations to meet their state location 
totals can demonstrate that the number of actual, on-the-ground 
locations is lower than the number estimated by the CAM. Such a 
demonstration must be made within one year after the release of the 
Auction 903 closing public notice and will be subject to review by WCB 
following comment by relevant stakeholders and potentially an audit. 
Applicants' due diligence should be informed by the availability of and 
requirements for this process, in addition to other factors.
    83. The Commission strongly encourages each applicant to conduct 
its own research prior to Auction 903 to determine the existence of 
pending administrative or judicial proceedings that might affect its 
decision on participation in the auction. The due diligence 
considerations mentioned in the document 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 applicant to determine how 
much research to undertake, depending upon specific facts and 
circumstances related to its interests.
    84. Pending and future judicial proceedings, as well as certain 
pending and future proceedings before the Commission--including 
applications, applications for modification, notices of proposed 
rulemaking, notices of inquiry, petitions for rulemaking, requests for 
special temporary authority, waiver requests, petitions to deny, 
petitions for reconsideration, informal objections, and applications 
for review--may relate to or affect licensees or applicants for support 
in Auction 903. Each prospective applicant is responsible for assessing 
the likelihood of the various possible outcomes and for considering the 
potential impact on Phase II support available through this auction.
    85. Each applicant is solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect its ability to bid on or otherwise receive Phase II 
support. Each applicant is responsible for undertaking research to 
ensure that any support won in this auction will be suitable for its 
business plans and needs. Each applicant must undertake its own 
assessment of the relevance and importance of information gathered as 
part of its due diligence efforts.
    86. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third-party databases, including, for example, court docketing systems. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, an applicant 
must obtain or verify such information from independent sources or 
assume the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into the Commission's 
databases.
    87. To confirm an applicant's understanding of its obligations, the 
applicant must certify under penalty of perjury in its short-form 
application that the applicant acknowledges that it has sole 
responsibility for investigating and evaluating all technical, 
marketplace, and regulatory factors that may have a bearing on the 
level of Connect America Fund Phase II support it submits as a bid, and 
that, if the applicant wins support, it will be able to build and 
operate facilities in accordance with the Connect America Fund 
obligations and the Commission's rules generally.
    88. This certification will help ensure that an applicant 
acknowledges and accepts responsibility, if it becomes a qualified 
bidder, for its bids and any forfeitures imposed in the event of 
default, and that it will not attempt to place responsibility for the 
consequences of its bidding activity on either the Commission or any of 
its contractors.
    89. Eligible Telecommunications Carrier Certification. An applicant 
must acknowledge in its short-form application that it must be 
designated as an ETC for the areas in which it will receive support 
prior to being authorized to receive support. Only ETCs designated 
pursuant to section 214(e) of the Communications Act of 1934, as 
amended (the Act), 47 U.S.C. 254 ``shall be eligible to receive 
specific Federal universal service support.'' Section 214(e)(2) states 
the primary responsibility for ETC designation. However, section 
214(e)(6) provides that the Commission is responsible for processing 
requests for ETC designation when the service provider is not subject 
to the jurisdiction of any state commission. Support is disbursed only 
after the provider receives an ETC designation and satisfies the other 
long-form application requirements.
    90. The Commission decided that an applicant need not be an ETC as 
of the initial short-form application filing deadline for Auction 903, 
but that it must obtain a high-cost ETC designation for the areas 
covered by its winning bids within 180 days after being announced as a 
winning bidder. Absent a waiver of the deadline, a long-form applicant 
that fails to obtain the necessary ETC designations by this deadline 
will be subject to an auction forfeiture as described below, and will 
not be authorized to receive Phase II support. In addition to all the 
requirements for participating in the Phase II auction, each applicant 
should be familiar with the requirements for a high-cost ETC. For 
example, all high-cost ETCs are required to offer Lifeline voice and 
broadband service to qualifying low-income consumers pursuant to the 
Lifeline program rules. Moreover, when the requirement has been fully 
implemented, each Phase II support recipient will be required to bid on 
category one telecommunications and internet access services in 
response to a posted FCC Form 470 seeking broadband service that meets 
the connectivity targets for the schools and libraries universal 
service support program (E-rate) for eligible schools and libraries 
located within any area in a census block where the ETC is receiving 
Phase II support. A high-cost ETC may also be subject to state-specific 
requirements imposed by the state that designates it as an ETC.
    91. Procedures for Limited Disclosure of Application Information. 
Consistent with the Commission's practice in the Mobility Fund Phase I 
auction (Auction 901) and recent spectrum auctions, procedures limit 
the application information that will be disclosed to the public.
    92. Specifically, to help ensure anonymous bidding and to protect 
applicants' competitively sensitive information, the Commission will 
withhold from the public, as well as other applicants, the following 
information submitted with an Auction 903 short-form application at 
least until after the auction closes and the results are announced:
     The state(s) selected by an applicant.
     The state(s) for which the applicant has been determined 
to be eligible to bid.
     The performance tier and latency combination(s) selected 
by an applicant and the associated weight for each combination.
     The spectrum access attachment submitted with the short-
form application.

[[Page 13601]]

     The performance tier and latency combination(s) for which 
the applicant has been determined to be eligible to bid and the 
associated weight for each combination.
     An applicant's responses to the questions in Appendix A of 
the CAF II Auction Procedures Public Notice and any supporting 
documentation submitted in any attachment(s) that are intended to 
demonstrate an applicant's ability to meet the public interest 
obligations for each performance tier and latency combination that the 
applicant has selected in its application.
     Any financial information contained in an applicant's 
short-form application for which the applicant has requested 
confidential treatment under the abbreviated process in Sec.  
0.459(a)(4) of the Commission's rules.
    93. All other application information that is not subject to a 
request for confidential treatment will be publicly available upon the 
release of the public notice announcing the status of submitted short-
form applications after initial review.
    94. Any applicant may use an abbreviated process under Sec.  
0.459(a)(4) to request confidential treatment of the financial 
information contained in its short-form application. The abbreviated 
process allows applicants to answer a simple yes/no question on FCC 
Form 183 as to whether they wish their information to be withheld from 
public inspection. Requests to withhold financial data that applicants 
elsewhere disclose to the public will not be granted and that 
information may be disclosed in the normal course.
    95. Unlike the typical Sec.  0.459 process, which requires that an 
applicant submit a statement of the reasons for withholding the 
information for which confidential treatment is sought from public 
inspection, an applicant that seeks confidential treatment of the 
financial information contained in its short-form application need not 
submit a statement that conforms with the requirements of Sec.  
0.459(b) unless and until its request for confidential treatment is 
challenged. Because the Commission has found in other contexts that 
financial information that is not otherwise publicly available could be 
competitively sensitive, applicants seeking confidential treatment of 
financial information may use this abbreviated process. The Commission 
will not, however, permit an applicant to seek confidential treatment 
of the total financial score that it receives for its financial metrics 
(using the five-point scale adopted above) pursuant to the Sec.  
0.459(a)(4) abbreviated process. Because an applicant's total financial 
score will not identify an applicant's specific financial information, 
it does not raise the same competitive sensitivity concerns.
    96. The Sec.  0.459(a)(4) abbreviated process for requesting 
confidential treatment may not be used by an applicant to request 
confidential treatment of any information in its short-form application 
other than its financial information. Thus, an applicant that wishes to 
seek confidential treatment of any other portion(s) of its short-form 
application must file a regular Sec.  0.459 request for confidential 
treatment of any such information with its short-form application 
(other than responses to the questions in Appendix A of the CAF II 
Auction Procedures Public Notice and associated supporting 
documentation that the Commission presumes to be competitively 
sensitive). This request must include a statement of the reasons for 
withholding those portions of the application from public inspection. 
Additionally, in the event an applicant's abbreviated request for 
confidential treatment of the financial information contained in its 
short-form application is challenged, the applicant must submit a 
request for confidential treatment of its financial information that 
conforms with the requirements of Sec.  0.459 within 10 business days 
after receiving notice of the challenge.
    97. After the auction closes and the results are announced, the 
Commission no longer has a need to preserve anonymous bidding. 
Accordingly, the Commission will make publicly available all short-form 
application information that was withheld from the public prior to and/
or during the auction, except for (1) responses to the questions in 
Appendix A of the CAF II Auction Procedures Public Notice and any 
supporting information submitted in any attachment(s) that are intended 
to demonstrate an applicant's ability to meet the public interest 
obligations for the performance tier and latency combination(s) that 
the applicant selected in its application, and (2) any financial 
information for which the Sec.  0.459(a)(4) abbreviated confidential 
treatment process was requested and continues to be afforded. This 
approach is consistent with the Commission's interest in a transparent 
auction process and its practice in the Mobility Fund Phase I auction 
and typical spectrum auctions.
    98. Prohibited Communications and Compliance with Antitrust Laws. 
To help protect competition in the auction, the Commission's rules 
prohibit an applicant from communicating certain auction-related 
information to another applicant from the auction application filing 
deadline until the post-auction deadline for winning bidders to file 
long-form applications for support. More specifically, Sec.  1.21002 of 
the Commission's rules prohibits an applicant in Auction 903 from 
cooperating or collaborating with any other applicant with respect to 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies, and from communicating with any other applicant in 
any manner the substance of its own, or one another's, or any other 
competing applicant's bids or bidding strategies during the prohibition 
period. The rule provides an exception for communications between 
applicants if those applicants identify each other on their respective 
applications as members of a joint bidding arrangement and certify that 
the application identifies all real parties in interest to agreements 
related to the applicant's participation in the auction. The targeted 
restrictions imposed by the rule are necessary to serve the important 
public interest in a fair and competitive auction.
    99. Entities Covered by Sec.  1.21002. Section 1.21002's 
prohibition of certain communications will apply to any applicant that 
submits a short-form application to participate in Auction 903. This 
prohibition applies to all applicants that submit short-form 
applications regardless of whether such applicants become qualified 
bidders or actually bid.
    100. ``Applicant'' for purposes of this section includes the entity 
filing the application, each party capable of controlling the 
applicant, and each party that may be controlled by the applicant or by 
a party capable of controlling the applicant.
    101. Subject to the joint bidding arrangement exception, the 
prohibition applies to communications of an applicant that are conveyed 
to another applicant. The prohibition of ``communicating in any 
manner'' includes public disclosures as well as private communications 
and indirect or implicit communications, as well as express statements 
of bids and bidding strategies. Consequently, an applicant must take 
care to determine whether its auction-related communications may reach 
another applicant, unless the exception applies.
    102. Applicants subject to Sec.  1.21002 should take special care 
in circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any other 
applicant's bids or bidding strategies. Information received by a party 
related to the applicant may

[[Page 13602]]

be deemed to have been received by the applicant under certain 
circumstances. For example, Commission staff have found that, where an 
individual serves as an officer and director for two or more 
applicants, the bids and bidding strategies of one applicant are 
presumed conveyed to the other applicant, and, absent a disclosed 
agreement that makes the rule's exception applicable, the shared 
officer creates an apparent violation of the rule. Commission staff 
have not addressed a situation where non-officers or directors receive 
information regarding a competing applicant's bids or bidding 
strategies and whether that information should be presumed to be 
communicated to the applicant.
    103. Prohibition Applies Until Long-Form Application Deadline. The 
Sec.  1.21002 prohibition of certain communications begins at the 
short-form application filing deadline and ends at the long-form 
application deadline. Long-form applications will be due within 10 
business days after release of the Auction 903 closing public notice, 
unless otherwise provided by public notice.
    104. Prohibited Communications. Section 1.21002 prohibits an 
applicant from communicating with another applicant only with respect 
to ``its own, or one another's, or any other competing applicant's bids 
or bidding strategies.'' Thus, the prohibition does not apply to all 
communications between or among applicants; it applies to any 
communication conveying, in whole or part, directly or indirectly, the 
applicant's or a competing applicant's bids or bidding strategies.
    105. All applicants applying to obtain support are ``competing 
applicants'' under the rule. Parties apply to participate in Auction 
903 to obtain support from a fixed budget that is insufficient to 
provide support at the reserve price to all eligible areas. The bidding 
system determines which areas will receive support based on the bids 
placed for any areas. As in the reverse auction portion of the 
broadcast incentive auction, applicants are competing with one another 
regardless of whether each seeks to serve different geographic areas 
with Phase II support.
    106. A communication must convey ``bids or bidding strategies'' to 
be covered by the prohibition. The prohibition applies to the same 
subject matter included in ``joint bidding arrangements,'' as defined 
for purposes of determining impermissible state overlaps among 
applicants. Those arrangements (i) relate to any eligible area in the 
Phase II auction and (ii) address or communicate bids or bidding 
strategies, including arrangements regarding Phase II support levels 
(i.e., bidding percentages) and specific areas on which to bid, as well 
as any arrangements relating to the post-auction market structure in an 
eligible area. Thus, covered parties should be careful to avoid direct 
or indirect communications with another applicant that (i) relate to 
any Phase II auction eligible area(s) and (ii) address Phase II support 
levels, including potential arrangements regarding the post-auction 
market structure in eligible areas.
    107. Business discussions and negotiations that are unrelated to 
bidding in Auction 903 and that do not convey information about Phase 
II bids or bidding strategies are not prohibited by the rule. Moreover, 
not all auction-related information is covered by the prohibition. For 
example, communicating merely whether a party has or has not applied to 
participate in Auction 903 will not violate the rule. In contrast, 
communicating how a party will participate, including specific states 
and/or tier and latency combinations selected, specific percentages 
bid, and/or whether or not the party is placing bids, would convey bids 
or bidding strategies and would be prohibited.
    108. While Sec.  1.21002 does not prohibit business discussions and 
negotiations among auction applicants that are not auction related, 
each applicant must remain vigilant not to communicate, directly or 
indirectly, information that affects, or could affect, bids or bidding 
strategy. Certain discussions might touch upon subject matters that 
could convey cost information and bidding strategies. Such subject 
areas include, but are not limited to, management, sales, local 
marketing agreements, and other transactional agreements.
    109. Bids or bidding strategies may be communicated outside of 
situations that involve one party subject to the prohibition 
communicating privately and directly with another such party. 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 found a violation of the rule 
against prohibited communications when 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.''
    110. Likewise, when completing short-form applications, each 
applicant should avoid any statements or disclosures that may violate 
Sec.  1.21002, particularly in light of the limited information 
procedures in effect for Auction 903. Specifically, an applicant should 
avoid including any information in its short-form application that 
might convey information regarding its state selection, such as 
referring to certain states or markets in describing bidding 
agreements, including any information in attachments that will be 
publicly available that may otherwise disclose the applicant's state 
selections, or, to the extent it has an alternative option, using 
applicant names that refer to states or locations within a state.
    111. 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, even though communicating that it has 
applied to participate in the auction will not violate the rule, an 
applicant's statement to the press that it intends to stop bidding in 
the auction could give rise to a finding of a Sec.  1.21002 violation. 
Similarly, an applicant's public statement of intent not to place bids 
during Auction 903 bidding could also violate the rule.
    112. Applicants should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate Sec.  1.21002 even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.
    113. Communicating with Third Parties. Section 1.21002 does not 
prohibit an applicant from communicating bids or bidding strategies to 
a third-party, such as a consultant or consulting firm, counsel, or 
lender, provided that the applicant takes appropriate steps to ensure 
that any third party it employs for advice pertaining to its bids or 
bidding strategies does not become a conduit for prohibited 
communications to other applicants, unless both applicants are parties 
to a joint bidding arrangement disclosed on their respective 
applications. For example, an applicant might require a third party, 
such as a lender, to sign a non-disclosure

[[Page 13603]]

agreement before the applicant communicates any information regarding 
bids or bidding strategy to the third party. Within third-party firms, 
separate individual employees, such as attorneys or auction 
consultants, may advise individual applicants on bids or bidding 
strategies, as long as such firms implement firewalls and other 
compliance procedures that prevent such individuals from communicating 
the bids or bidding strategies of one applicant to other individuals 
representing separate applicants. Although firewalls and/or other 
procedures should be used, their existence is not an absolute defense 
to liability, if a violation of the rule has occurred.
    114. As Commission staff have explained in the context of the 
broadcast incentive auction, in the case of an individual, the 
objective precautionary measure of a firewall is not available. As a 
result, an individual that is privy to bids or bidding information of 
more than one applicant presents a greater risk of engaging in a 
prohibited communication. The Commission will take the same approach to 
interpreting the prohibited communications rule in Auction 903. Whether 
a prohibited communication has taken place in a given case will depend 
on all the facts pertaining to the case, including who possessed what 
information, what information was conveyed to whom, and the course of 
bidding in the auction.
    115. Separate Auction 903 applicants should not specify the same 
individual on their short-form applications to serve as an authorized 
bidder. A violation of Sec.  1.21002 could occur if an individual acted 
as the authorized bidder for two or more applicants because a single 
individual may, even unwittingly, be influenced by the knowledge of the 
bids or bidding strategies of multiple applicants, in his or her 
actions on behalf of such applicants. Also, if the authorized bidders 
are different individuals employed by the same organization (e.g., a 
law firm, engineering firm, or consulting firm), a violation similarly 
could occur. In the latter 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 Sec.  1.21002.
    116. Whether a communication is prohibited is fact dependent and 
determined on a case-by-case basis. Therefore, the Commission cannot 
categorically announce more ``flexible'' or lenient enforcement 
intentions or speculate on whether hypothetical, broadly described 
conduct would constitute a violation of the rule. Nonetheless, 
Commission precedent makes clear that an individual consultant hired by 
multiple applicants to offer bidding advice during the auction presents 
a greater risk of violating Sec.  1.21002 than an individual consultant 
who estimates the costs of individual projects for multiple applicants 
without weighing in on bidding strategies during the bidding.
    117. Potential applicants may discuss the short-form application or 
bids for specific CBGs with the counsel, consultant, or expert of their 
choice before the short-form application deadline. Furthermore, the 
same third-party individual could continue to give advice after the 
short-form deadline regarding the application, provided that no 
information pertaining to bids or bidding strategies, including 
state(s) selected on the short-form application, is conveyed to that 
individual. With respect to bidding, the same third-party individual 
could, before the short-form application deadline, assist more than one 
potential applicant with calculating how much support the specific 
applicant would require to provide service in each CBG for which it is 
interested in bidding. If such work can be completed in advance of the 
short-form application deadline, it would eliminate the need for third-
party bidding advice during the auction. Finally, to the extent 
potential applicants can develop bidding instructions prior to the 
short-form deadline that a third party could implement without changes 
during bidding, the third party could follow such instructions for 
multiple applicants provided that those applicants do not communicate 
with the third party during the prohibition period.
    118. Section 1.21001(b)(4) Certification. By electronically 
submitting a short-form application, each applicant in Auction 903 
certifies its compliance with Sec. Sec.  1.21001(b)(4) and 1.21002. In 
particular, an applicant must certify under penalty of perjury that the 
application discloses all real parties in interest to any agreements 
involving the applicant's participation in the competitive bidding for 
Phase II support. Also, the applicant must certify that it and all 
applicable parties have complied with and will continue to comply with 
47 CFR 1.21002.
    119. 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 
Sec.  1.21002(b) may be subject to sanctions.
    120. Duty to Report Prohibited Communications. Section 1.21002(c) 
provides that any applicant that makes or receives a communication that 
appears to violate Sec.  1.21002 must report such communication in 
writing to the Commission immediately, and in no case later than five 
business days after the communication occurs. An applicant's obligation 
to make such a report continues until the report has been made.
    121. In addition, Sec.  1.65 of the Commission's rules 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, Sec.  1.65 requires an Auction 903 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 Sec.  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 an applicant that is a 
member of a joint bidding arrangement identified on the application 
pursuant to Sec.  1.21001(b)(4).
    122. Sections 1.65(a) and 1.21002 of the Commission's rules require 
each applicant in competitive bidding proceedings to furnish additional 
or corrected information within five days of a significant occurrence, 
or to amend its short-form application no more than five days after the 
applicant becomes aware of the need for amendment. These rules are 
intended to facilitate the auction process by making information that 
should be publicly available promptly accessible to all participants 
and to enable the Bureaus to act expeditiously on those changes when 
such action is necessary.
    123. Procedure for Reporting Prohibited Communications. A party 
reporting any prohibited communication pursuant to Sec.  1.65, Sec.  
1.21001(b), or Sec.  1.21002(c) must take care to ensure that any 
report of the prohibited communication does not itself give rise to a 
violation of

[[Page 13604]]

Sec.  1.21002. For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that allow such materials to be made available for public 
inspection.
    124. Parties must file only a single report concerning a prohibited 
communication and must file that report with the Commission personnel 
expressly charged with administering the Commission's auctions. The 
Commission's rule is designed to minimize the risk of inadvertent 
dissemination of information in such reports. Any reports required by 
Sec.  1.21002(c) must be filed consistent with the instructions set 
forth in the document. For Auction 903, 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 6-C217, Washington, 
DC 20554.
    125. 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 Sec.  0.459 of the Commission's 
rules. Such parties are encouraged to coordinate with the Auctions and 
Spectrum Access Division staff about the procedures for submitting such 
reports.
    126. Winning Bidders Must Disclose Terms of Agreements. Each 
applicant that is a winning bidder may be required to disclose in its 
long-form application the specific terms, conditions, and parties 
involved in any agreement into which it has entered. This may apply to 
any bidding consortia, joint venture, partnership, or agreement, 
understanding, or other arrangement entered into relating to the 
competitive bidding process, including any agreement relating to the 
post-auction market structure. Failure to comply with the Commission's 
rules can result in enforcement action.
    127. Additional Information Concerning Prohibition of Certain 
Communications in Commission Auctions. Section 1.21002 is consistent 
with similar rules the Commission has applied in other Commission 
auctions. Applicants may gain insight into the public policies 
underlying Sec.  1.21002 by reviewing information about the application 
of these other rules. Decisions applying these rules by courts and by 
the Commission and its bureaus in other Commission auctions can be 
found at http://wireless.fcc.gov/auctions/prohibited_communications. 
Applicants utilizing these precedents should keep in mind the specific 
language of the rule applied in past decisions, as well as any 
differences in the context of the applicable auctions.
    128. Antitrust Laws. 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 Sec.  1.21002 will not 
insulate a party from enforcement of the antitrust laws. For instance, 
a violation of the antitrust laws could arise out of actions taking 
place well before any party submits 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, Commission staff have 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.''
    129. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. If an applicant 
is found to have violated the antitrust laws or the Commission's rules 
in connection with its participation in the competitive bidding 
process, it may be subject to a forfeiture and may be prohibited from 
participating further in Auction 903 and in future auctions, among 
other sanctions.
    130. Red Light Rule. The Commission adopted rules, including a 
provision referred to as the ``red light rule,'' that implement the 
Commission's obligation under the Debt Collection Improvement Act of 
1996, which governs the collection of debts owed to the United States, 
including debts owed to the Commission. 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. 
Applicants seeking to participate in Auction 903 are subject to the 
Commission's red light rule. Pursuant to the red light rule, unless 
otherwise expressly provided for, the Commission will withhold action 
on an application by any entity found to be delinquent in its debt to 
the Commission.
    131. Because robust participation is critical to the success of the 
Phase II auction, the Commission finds good cause to provide a limited 
waiver of the red light rule for any applicant seeking to participate 
in Auction 903 that is red-lighted for debt owed to the Commission at 
the time it timely files a short-form application. Specifically, a red-
lighted applicant seeking to participate in Auction 903 will have until 
the close of the application resubmission filing window to pay any 
debt(s) associated with the red light. No further opportunity to cure 
will be allowed. If an applicant has not resolved its red light 
issue(s) by the close of the initial filing window, its application 
will be deemed incomplete. If the applicant has not resolved its red 
light issue(s) by the close of the application resubmission window, 
Commission staff will immediately cease all processing of the 
applicant's short-form application, and the applicant will be deemed 
not qualified to bid in the auction. As noted above, this waiver is 
limited. It does not waive or otherwise affect the Commission's right 
or obligation to collect any debt owed to the Commission by an Auction 
903 applicant by any means available to the Commission, including set 
off, referral of debt to the United States Treasury for collection, 
and/or by red lighting other applications or requests filed by an 
Auction 903 applicant.
    132. Potential applicants for Auction 903 should review their own 
records, as well as the Commission's Red Light Display System (RLD), to 
determine whether they owe non-tax debt to the Commission and should 
try to resolve and pay any outstanding debt(s) prior to submitting a 
short-form application. The RLD enables a party to check the status of 
its account by individual FCC Registration Numbers (FRNs) and links 
other FRNs sharing the same Tax Identification Number (TIN) when 
determining whether there are outstanding delinquent debts. The RLD is 
available at http://www.fcc.gov/

[[Page 13605]]

redlight/. Additional information is available at https://www.fcc.gov/debt_collection/.
    133. Additionally, an Auction 903 applicant may incur debt to the 
Commission after it files its short-form application and may fail to 
pay that debt when due. An applicant should note that the Commission 
will conduct additional red light checks prior to authorizing Phase II 
auction support. Qualified bidders are encouraged to continue to review 
their own records as well as the RLD periodically during the auction 
and to resolve and pay all outstanding debts to the Commission as soon 
as possible. The Commission will not authorize any winning bidder to 
receive Phase II auction support until its red light issues have been 
resolved.
    134. USF Debarment. The Commission's rules provide for the 
debarment of those convicted of or found civilly liable for defrauding 
the high-cost support program. Auction 903 applicants are reminded that 
those rules apply with equal force to the Phase II auction.
    135. Modifications to FCC Form 183. Only Minor Modifications 
Allowed. After the initial FCC Form 183 filing deadline, an Auction 903 
applicant will be permitted to make only minor changes to its 
application consistent with the Commission's rules. Examples of minor 
changes include the deletion or addition of authorized bidders (to a 
maximum of three) and the revision of addresses and telephone numbers 
of the applicant, its responsible party, and its contact person. Major 
modification to an FCC Form 183 (e.g., adding a state in which the 
applicant intends to bid, certain changes in ownership that would 
constitute an assignment or transfer of control of the applicant, 
change of certifying official, change in applicant's legal 
classification that results in a change in control) will not be 
permitted after the initial FCC Form 183 filing deadline. If an 
amendment reporting changes is a ``major amendment,'' as described in 
Sec.  1.21001(d)(4), the major amendment will not be accepted and may 
result in the dismissal of the application.
    136. Duty to Maintain Accuracy and Completeness of FCC Form 183. 
Pursuant to Sec.  1.65 of the Commission's rules, each applicant has a 
continuing obligation to maintain the accuracy and completeness of 
information furnished in a pending application, including a pending 
application to participate in the Phase II auction. Consistent with the 
requirements for the Commission's spectrum auctions, an applicant for 
Auction 903 must furnish additional or corrected information to the 
Commission within five business days after a significant occurrence, or 
amend its FCC Form 183 no more than five business days after the 
applicant becomes aware of the need for the amendment. An applicant is 
obligated to amend its pending application even if a reported change 
may result in the dismissal of the application because it is 
subsequently determined to be a major modification.
    137. Modifying an FCC Form 183. As noted above, an entity seeking 
to participate in Auction 903 must file an FCC Form 183 electronically 
via the FCC's Auction Application System. During the initial filing 
window, an applicant will be able to make any necessary modifications 
to its FCC Form 183 in the Auction Application System. An applicant 
that has certified and submitted its FCC Form 183 before the close of 
the initial filing window may continue to make modifications as often 
as necessary until the close of that window; however, the applicant 
must re-certify and resubmit its FCC Form 183 before the close of the 
initial filing window to confirm and effect its latest application 
changes. After each submission, a confirmation page will be displayed 
stating the submission time and submission date.
    138. An applicant will also be allowed to modify its FCC Form 183 
in the Auction Application System, except for certain fields, during 
the resubmission filing window and after the release of the public 
notice announcing the Auction 903 qualified bidders. During these 
times, if an applicant needs to make permissible minor changes to its 
FCC Form 183, or must make changes in order to maintain the accuracy 
and completeness of its application pursuant to Sec.  1.65, it must 
make the change(s) in the Auction Application System and then re-
certify and re-submit its application to confirm and effect the 
change(s).
    139. An applicant's ability to modify its FCC Form 183 in the 
Auction Application System will be limited between the closing of the 
initial filing window and the opening of the application resubmission 
filing window and between the closing of the resubmission filing window 
and the release of the public notice announcing the Auction 903 
qualified bidders. During these periods, an applicant will be able to 
view its submitted application, but will be permitted to modify only 
the applicant's address, responsible party address, and contact 
information (e.g., name, address, telephone number, etc.) in the 
Auction Application System. An applicant will not be able to modify any 
other pages of FCC Form 183 in the Auction Application System during 
these periods. If, during these periods, an applicant needs to make 
other permissible minor changes to its FCC Form 183, or changes to 
maintain the accuracy and completeness of its application pursuant to 
Sec.  1.65, the applicant must submit a letter briefly summarizing the 
changes to its FCC Form 183 via email to [email protected]. The email 
summarizing the changes must include a subject line referring to 
Auction 903 and the name of the applicant, for example, ``Re: Changes 
to Auction 903 Auction Application of XYZ Corp.'' Any attachments to 
the email must be formatted as Adobe[supreg] Acrobat[supreg] (PDF) or 
Microsoft[supreg] Word documents. An applicant that submits its changes 
in this manner must subsequently modify, certify, and submit its FCC 
Form 183 application electronically in the Auction Application System 
once it is again open and available to applicants.
    140. Applicants should also note that even at times when the 
Auction Application System is open and available to applicants, the 
system will not allow an applicant to make certain other permissible 
changes itself (e.g., correcting a misstatement of the applicant's 
legal classification). This is the case because certain fields on the 
FCC Form 183 will no longer be available to/changeable by the applicant 
after the initial filing window closes. If an applicant needs to make a 
permissible minor change of this nature, it must submit a written 
request by email to [email protected], requesting that the Commission 
manually make the change on the applicant's behalf. Once Commission 
staff has informed the applicant that the change has been made in the 
Auction Application System, the applicant must then recertify and 
resubmit its FCC Form 183 in the Auction Application System to confirm 
and effect the change(s).
    141. As with filing FCC Form 183, any amendment(s) to the 
application 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.
    142. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System. Further, as 
discussed above, parties submitting information

[[Page 13606]]

related to their applications should use caution to ensure that their 
submissions do not contain confidential information or communicate 
information that would violate Sec.  1.21002 or the limited information 
procedures adopted for Auction 903. An applicant seeking to submit, 
outside of the Auction Application System, information that might 
reflect non-public information, such as an applicant's state and/or 
performance tier and latency selection(s) or specific information about 
bid(s), should consider including in its email 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 
Sec.  1.21002.
    143. Questions about FCC Form 183 amendments should be directed to 
the Auctions and Spectrum Access Division at (202) 418-0660.

VI. Preparing for Bidding in Auction 903

    144. Bidder Education. Prior to the deadline for applications to 
participate in Auction 903, detailed educational information will be 
provided in various formats to would-be participants.
    145. The Commission will provide various materials on the pre-
auction process in advance of the opening of the short-form application 
window, beginning with the release of step-by-step instructions for 
completing Form 183. In addition, the Commission will provide an online 
application procedures tutorial covering information on pre-auction 
preparation, completing short-form applications, the application review 
process, and Phase II rules. Moreover, the Commission will conduct a 
workshop or webinar on the pre-auction application process, with an 
opportunity for participants to ask questions.
    146. The Commission will provide separate educational materials on 
the bidding process in advance of the start of the mock auction, 
beginning with release of a user guide for the bidding system, followed 
by an online bidding procedures tutorial. The Commission will also 
conduct a workshop or webinar on the bidding process with an 
opportunity for participants to ask questions.
    147. Based on the Commission's experience with past auctions, 
parties interested in participating in this auction will find these 
educational opportunities an efficient and effective way to further 
their understanding of the application and bidding processes. The 
Auction 903 online tutorials will allow viewers to navigate the 
presentation outline, review written notes, listen to audio of the 
notes, and search for topics using a text search function. Additional 
features of this web-based tool include links to auction-specific 
Commission releases, email links for contacting Commission staff, and a 
timeline with deadlines for auction preparation. The online tutorials 
will be accessible on the ``Education'' tab of the Phase II auction 
website at https://www.fcc.gov/connect-america-fund-phase-ii-auction. 
Once posted, the tutorials will be accessible anytime.
    148. Finally, the Commission's Office of Communications Business 
Opportunities will engage with small providers interested in the 
auction process.
    149. Short-Form Applications: Due Before 6:00 p.m. ET on March 30, 
2018. In order to be eligible to bid in this auction, applicants must 
first follow the procedures to submit a short-form application (FCC 
Form 183) electronically via the Auction Application System, following 
the instructions to be released with a public notice in advance of the 
opening of the filing window. This short-form application will become 
available with the opening of the initial filing window and must be 
submitted prior to 6:00 p.m. ET on March 30, 2018. Late applications 
will not be accepted. No application fee is required.
    150. Applications may be filed at any time beginning at noon ET on 
March 19, 2018, until the filing window closes at 6:00 p.m. ET on March 
30, 2018. Applicants are strongly encouraged to file early and are 
responsible for allowing adequate time for filing their applications. 
There are no limits or restrictions on the number of times an 
application can be updated or amended until the filing deadline on 
March 30, 2018.
    151. An applicant must always click on the CERTIFY & SUBMIT button 
on the ``Certify & Submit'' screen to successfully submit its FCC Form 
183 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 183 will be provided in a separate public notice. Applicants 
requiring technical assistance should contact FCC Auctions Technical 
Support 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.
    152. Application Processing and Minor Modifications. Public Notice 
of Applicant's Initial Application Status and Opportunity for Minor 
Modifications. After the deadline for filing auction applications, the 
Bureaus will process all timely submitted applications to determine 
whether each applicant has complied with the application requirements 
and provided all information concerning its qualifications for bidding, 
and subsequently will issue a public notice with applicants' initial 
application status identifying (1) those that are complete and (2) 
those that are incomplete or deficient because of defects that may be 
corrected. The public notice will include the deadline for resubmitting 
corrected applications and a paper copy will be sent to the contact 
address listed in the FCC Form 183 for each applicant by overnight 
delivery. In addition, each applicant with an incomplete application 
will be sent information on the nature of the deficiencies in its 
application, along with the name and phone number of a Commission staff 
member who can answer questions specific to the application.
    153. After the initial application filing deadline on March 30, 
2018, applicants can make only minor modifications to their 
applications. Major modifications (e.g., change control of the 
applicant, change the certifying official, or selecting additional 
states in which to bid) will not be permitted. After the deadline for 
resubmitting corrected applications, an applicant will have no further 
opportunity to cure any deficiencies in its application or provide any 
additional information that may affect Commission staff's ultimate 
determination of whether and to what extent the applicant is qualified 
to participate in Auction 903.
    154. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 183, unless the applicant's certifying official or contact 
person notifies Commission staff in writing that another representative 
is authorized to speak on the applicant's behalf. Authorizations may be 
sent by email to [email protected].
    155. Public Notice of Applicant's Final Application Status. After 
the Bureaus review resubmitted applications, they will release a public 
notice identifying applicants that have become qualified bidders. The 
Auction 903 Qualified Bidders Public Notice will be issued at least 15 
business days before bidding in Auction 903 begins. Qualified bidders 
are those applicants

[[Page 13607]]

with submitted FCC Form 183 applications that are deemed timely filed 
and complete.
    156. Auction Registration. All qualified bidders are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight delivery. The mailing will be sent 
only to the contact person at the contact address listed in the FCC 
Form 183 and will include the SecurID[supreg] tokens that will be 
required to place bids and the Auction Bidder Line phone number.
    157. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder that has not received this mailing by noon on July 9, 2018, 
should call the Auctions Hotline at (717) 338-2868. Receipt of this 
registration mailing is critical to participating in the auction, and 
each applicant is responsible for ensuring it has received all the 
registration materials.
    158. In the event that SecurID[supreg] tokens are lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request replacements. To request replacement of 
these items, call the Auction Bidder Line at the telephone number 
provided in the registration materials or the Auction Hotline at (717) 
338-2868.
    159. Remote Electronic Bidding via the CAF II Bidding System. 
Bidders will be able to participate in Auction 903 over the internet 
using the CAF II Bidding System. Only qualified bidders are permitted 
to bid. Each authorized bidder must have his or her own SecurID[supreg] 
token, which the Commission will provide at no charge. Each applicant 
with one authorized bidder will be issued two SecurID[supreg] tokens, 
while applicants with two or three authorized bidders will be issued 
three tokens. A bidder cannot bid without his or her SecurID tokens. 
For security purposes, the SecurID[supreg] tokens and a telephone 
number for bidding questions are only mailed to the contact person at 
the contact address listed on the FCC Form 183. 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 903. Please note that the SecurID[supreg] tokens 
can be recycled and the Bureaus encourage bidders to return the tokens 
to the FCC. Pre-addressed envelopes will be provided to return the 
tokens once the auction has ended.
    160. The Commission makes no warranties whatsoever, and shall not 
be deemed to have made any warranties, with respect to the CAF II 
Bidding System, including any implied warranties of merchantability or 
fitness for a particular purpose. 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 use, revenue, or business information, 
or any other direct, indirect, or consequential damages) arising out of 
or relating to the existence, furnishing, functioning, or use of the 
CAF II Bidding System. Moreover, no obligation or liability will arise 
out of the Commission's technical, programming, or other advice or 
service provided in connection with the CAF II Bidding System.
    161. To the extent an issue arises with the CAF II Bidding System 
itself, the Bureaus will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
CAF II Bidding System or attributable to a bidder, including, but not 
limited to, a bidder's hardware, software, or internet access problem 
that prevents the bidder from submitting a bid prior to the end of a 
round, the Commission shall have no obligation to resolve or remediate 
such an issue on behalf of the bidder. Similarly, if an issue arises 
due to bidder error using the CAF II Bidding System, the Commission 
shall have no obligation to resolve or remediate such an issue on 
behalf of the bidder. Accordingly, after the close of a bidding round, 
the results of bid processing will not be altered absent evidence of 
any failure in the CAF II Bidding System.
    162. Mock Auction. All qualified bidders will be eligible to 
participate in a mock auction, which will be scheduled during the week 
before the first day of bidding in Auction 903. The mock auction will 
enable qualified bidders to become familiar with the CAF II Bidding 
System and to practice submitting bids prior to the auction. The 
Commission strongly recommends that all qualified bidders, including 
all their authorized bidders, participate to assure that they can log 
in to the bidding system and gain experience with the bidding 
procedures. Participating in the mock auction may reduce the likelihood 
of a bidder making a mistake during the auction. Details regarding the 
mock auction will be announced in the Auction 903 Qualified Bidders 
Public Notice.

VII. Bidding in Auction 903

    163. Auction Structure: Reverse Auction Mechanism. Multi-Round 
Reverse Auction Format. The Commission will conduct Auction 903 using a 
multi-round, descending clock auction.
    164. At a very high level, bidding in Auction 903 works as follows: 
In each round of the auction, a bidder will be asked whether it is 
willing to provide service to an area, at a performance tier and 
latency it indicates, in exchange for a support amount that is at least 
as high as an amount announced by the bidding system. In each 
subsequent round, the announced support amount will be less than the 
amount from the previous round. To the extent that the bidder is 
willing to accept the announced amount, it will so indicate by 
submitting a ``bid'' on a spreadsheet indicating the area, the tier and 
latency, and the current amount that it accepts. If the current round's 
announced support amount becomes too low for the bidder, the bidder can 
simply stop bidding for the area or alternatively, can enter a bid that 
indicates the lowest amount it will accept (an amount higher than the 
round's announced amount and lower than the last round's announced 
amount) in exchange for providing the service.
    165. As set forth in the sections below, the announced support 
amount that the bidder responds to in a round depends on a percentage--
applicable to bidding for all areas--as well as the reserve price for 
the specific area and the level of service that the bidder proposes to 
provide if it is assigned support for the area. These factors are 
linked through a formula. However, the bidding template--the 
spreadsheet--will show the support amount for a bid as well as the 
various factors determining that support amount in a given bidding 
round. Therefore, to bid effectively, a bidder need only determine the 
lowest amount of support it will accept in exchange for providing 
service to an area and bid for support that is at least that amount.
    166. The Commission is mindful of the need to make the bidding 
process as simple as possible, while ensuring an orderly, fair, and 
transparent auction. The Commission will provide ample bidder education 
prior to the auction to help ensure that all potential auction 
participants are confident of the bidding procedures the Commission 
adopts.
    167. Minimum Geographic Area for Bidding. The Commission will use 
CBGs containing one or more eligible census blocks as the minimum 
geographic area for bidding in the auction. In December 2017, WCB 
released a list of eligible census blocks based on December 31, 2016 
FCC Form 477 data. This list included approximately 214,000 eligible

[[Page 13608]]

census blocks, which are located in approximately 30,300 CBGs. WCB will 
release a revised map and list of eligible census blocks.
    168. Auction Delay, Suspension, or Cancellation. By announcement, 
the auction may be delayed, suspended, or cancelled in the event of 
natural disaster, technical obstacle, network disruption, evidence of 
an auction security breach or unlawful bidding activity, administrative 
or weather necessity, or for any other reason that affects the fair and 
efficient conduct of the competitive bidding. In such cases, the 
Bureaus, in their sole discretion, may elect to resume the auction 
starting from the point at which the auction was suspended or cancel 
the auction in its entirety.
    169. Bidding Procedures. Bidding Overview. The Commission will use 
a descending clock auction to identify the providers that will be 
eligible to become authorized to receive Phase II support, subject to 
post-auction application review. This auction also will establish the 
amount of support that each winning bidder will be eligible to receive 
using a ``second-price'' rule. Pursuant to the Phase II Auction Order, 
81 FR 44413, July 7, 2016, the auction assigns winning bids based on 
the percentage each bid represents of its respective area's reserve 
price and determines support amounts that take into account the 
performance tier and latency specified in the bid.
    170. The Bureaus will conduct the Phase II auction over the 
internet, and bidders will upload bids in a specified file format for 
processing by the bidding system. Before each bidding round, the 
bidding system will announce a new base clock percentage, which will 
set a lower limit on the range of percentages for which bids will be 
accepted during that round. The percentage specified in a bid implies 
an annual support amount for the area, based on the specified 
performance tier and latency combination.
    171. The opening base clock percentage implies a support amount 
that is equal to the full reserve price, and the base clock percentage 
then descends from one round to the next. In a round, a bidder can 
submit a bid for a given area at any percentage that is greater than or 
equal to the round's base clock percentage and less than the previous 
round's base clock percentage. As of the close of a round, each bid 
represents an irrevocable offer to meet the terms of the bid if it 
becomes a winning bid. That is, a bid indicates that the bidder is 
willing to provide service to the locations in the area in accordance 
with its specified performance tier and latency requirements in 
exchange for support. The support amount will be no less than the 
support amount implied by the bid percentage.
    172. The base clock percentage will continue to descend in a series 
of bidding rounds, implying decreasing support amounts, until the 
aggregate amount of support represented by the bids placed in a round 
at the base clock percentage is no greater than the budget. At that 
point, when the budget ``clears,'' the bidding system will assign 
support to bidders in areas where there are no competing bids. Bidding 
will continue, however, for areas where there are competing bids, and 
the clock will continue to descend in subsequent rounds. When there is 
no longer competition for any area, the auction will end. A winning 
bidder may receive support in amounts at least as high, because of the 
second-price rule, as the support amounts corresponding to the 
percentages of their winning bids.
    173. The bidding procedures implement the Commission's prior 
decisions on bidding in the Phase II auction in a straightforward and 
simple way. Accordingly, to compete effectively in the auction, a 
potential bidder need only determine the percentage corresponding to 
the lowest amount of support it will accept to serve a given area using 
its chosen technology and bid in the auction down to that percentage. 
The Commission sets forth the rules governing how the auction system 
collects bids and determines winning bids and support amounts. The 
Commission addresses these in detail so that potential participants can 
understand exactly how the auction works. Among the bidding rules the 
Commission addresses are procedures for two optional variations on the 
basic bid submission approach, namely, procedures for instructing the 
system to submit proxy bids on behalf of the bidder and procedures for 
a type of package bidding. The Commission includes these options 
because the Commission finds that they will simplify the bidding 
process for those bidders that choose to use them, without unfairly 
disadvantaging bidders that do not choose to use them.
    174. Reserve Prices. The reserve price for each CBG is the sum of 
the amounts calculated for each eligible census block in that CBG. For 
all eligible high-cost census blocks (i.e., census blocks with average 
costs above the funding threshold but below the extremely high-cost 
threshold), a reserve price is set based on the annual support per-
location calculated by the CAM for that census block. For census blocks 
with average costs that exceed the extremely high-cost threshold, the 
Commission will impose a $146.10 per-location-per-month funding cap so 
that the reserve price will be equal to $146.10 multiplied by the 
number of locations in that census block as determined by the CAM 
multiplied by 12 months. These procedures will ensure that no census 
blocks will receive more Phase II support than the CAM calculates is 
necessary for deploying and operating a voice and broadband-capable 
network in that census block. The list of eligible census blocks is 
accompanied by the corresponding CBG list, which identifies the reserve 
price, on an annual basis, for each CBG.
    175. Finally, for administrative simplicity, the Commission rounds 
the calculated reserve prices for each CBG (based on the sum of the 
reserve prices for each eligible census block in the CBG) to the 
nearest dollar. For example, if the calculated annual reserve price for 
a CBG is $15,000.49, the reserve price will be rounded down to $15,000 
for the auction; and if a reserve price is $15,000.50, the reserve 
price will be rounded up to $15,001. Thus, any CBG with a calculated 
annual reserve price of less than $0.50 is ineligible for the Phase II 
auction.
    176. Bid Collection. Round Structure. The Phase II descending clock 
auction will consist of sequential bidding rounds according to an 
announced schedule providing the start time and closing time of each 
bidding round. As is typical for Commission auctions, the Bureaus 
retain the discretion to change the bidding schedule--with advance 
notice to bidders--in order to foster an auction pace that reasonably 
balances speed with giving bidders sufficient time to review round 
results and plan their bidding. The Bureaus may modify the amount of 
time for bidding rounds, the amount of time between rounds, and/or the 
number of rounds per day, depending on bidding activity and other 
factors.
    177. Base Clock Percentage. Before each bidding round, the bidding 
system announces a base clock percentage that determines the range of 
acceptable price point percentages for bids submitted in the round. 
Except in Round 1, a bid may be submitted at the base clock percentage, 
or at any higher price point percentage up to but not including, the 
base clock percentage from the previous round. In Round 1, a bid may be 
submitted at the base clock percentage or at any higher price point 
percentage, up to and including the opening base clock percentage.
    178. A bid submitted at the base clock percentage indicates that 
the bidder is

[[Page 13609]]

willing to provide the required service in the bid area in exchange for 
a payment at least as large as that implied by the base clock 
percentage. A bid submitted at a higher price point percentage 
indicates that the bidder will provide service in the area at a support 
payment at least as great as that implied by the price point percentage 
of its bid, but not at lower support amounts.
    179. Opening Base Clock Percentage. The bidding system will set the 
opening base clock percentage at 100 percent of an area's reserve price 
plus an additional percentage equal to the largest weight corresponding 
to the performance tier and latency combinations submitted by any 
qualified bidder in the auction. For example, if any applicant is 
qualified to bid to provide service at the Minimum performance tier and 
high latency--a T+L combination with an assigned weight of 90--the 
opening base clock percentage will be 190 percent. Starting the clock 
at this level will allow bidders with higher-weighted performance tier 
and latency combinations to compete, for multiple bidding rounds, with 
bidders offering performance tier and latency combinations with lower 
weights. At base clock percentages above 100, the implied support 
amounts of bids at higher performance tier and latency combinations 
with lower weights may not decrease from round to round, remaining 
instead at the area's full reserve price.
    180. Clock Decrements. The bidding system will decrement the base 
clock percentage by 10 percentage points in each round. However, the 
Bureaus have the discretion to change that amount during the auction--
within certain limits--if it appears that a lower or higher decrement 
would better manage the pace of the auction. For example, if bidding is 
proceeding particularly slowly, the bid decrement may be increased to 
speed up the auction, with advance notice to bidders, recognizing that 
a bidder has the option of bidding at an intra-round price point 
percentage if the base clock percentage falls to a percentage 
corresponding to an amount of support that is no longer sufficient. The 
bidding system will use a decrement of 10 percent at the start of the 
auction, and any further changes to the decrement will be limited to 
between 5 percent and 20 percent.
    181. Implied Support Amounts Based on Performance Tier and Latency 
Weights. To calculate the implied annual support amount at a bid 
percentage, an area-specific reserve price is adjusted for the bid 
percentage and the weights for the performance tier and latency 
combination of the bid, set forth below, with implied support not to 
exceed the reserve price. This approach is consistent with previous 
Commission decisions regarding the Phase II auction.
    182. The base clock percentage in each round will imply, for each 
performance tier and latency (T+L) combination, a total amount of 
annual support in dollars for each area available for bidding. The 
annual support amount implied at the base clock percentage will be the 
smaller of the reserve price and the annual support amount obtained by 
using a formula that incorporates the performance tier and latency 
weights. Specifically:

Implied Annual Support Amount (at the base clock percentage) =
[GRAPHIC] [TIFF OMITTED] TR29MR18.002

Where:

R denotes the area's reserve price
T denotes the tier weight
L denotes the latency weight
BC denotes the base clock percentage

    183. Minimum performance tier bids will have a 65 weight; Baseline 
performance tier bids will have a 45 weight; Above Baseline performance 
tier bids will have a 15 weight; and Gigabit performance tier bids will 
have zero weight. Moreover, high latency bids will have a 25 weight and 
low latency bids will have zero weight added to their respective 
performance tier weight. The lowest possible weight for a performance 
tier and latency combination is 0, and the highest possible weight is 
90. Each weight uniquely defines a performance tier and latency (T+L) 
combination, as shown in the table below.

                                                       Weights for Performance Tiers and Latencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Minimum                               Baseline                           Above baseline                            Gigabit
--------------------------------------------------------------------------------------------------------------------------------------------------------
   High latency         Low latency        High latency       Low latency        High latency       Low latency        High latency       Low latency
--------------------------------------------------------------------------------------------------------------------------------------------------------
              90                  65                 70                 45                 40                 15                 25                  0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    184. As the formula indicates, the implied support amount for an 
area cannot exceed an area's reserve price. As long as the base clock 
percentage remains at or above 100 plus the weight for the tier and 
latency combination of the bid (100+T+L), the implied annual support 
for a bid will be equal to the area's reserve price. Therefore, in some 
rounds when the base clock percentage is above 100, there may be a bid 
for a given area at a tier and latency combination with implied annual 
support equal to the reserve price, and another bid for the same area 
at a higher weighted performance tier and latency combination, with 
implied support below the area's reserve price. However, once the base 
clock percentage is decremented below 100, the implied annual support 
for all area, performance tier, and latency combinations will be below 
each area's respective reserve price.
    185. The formula above (the ``implied support formula'') can be 
used to determine the implied support at any price point percentage by 
substituting a given percentage for the base clock percentage.
    186. The clock auction format with a base clock percentage and 
weights for performance tier and latency combinations implements the 
Commission's prior decisions and provides a simple way to compare bids 
of multiple types.
    187. Acceptable Bids. To submit a bid for support to provide 
service to an area in the auction, the bidding system will require that 
a bidder specify the area, a performance tier and latency combination, 
and a price point percentage, which will in turn correspond to an 
indicated implied support amount for the bid. Such a bid is an offer to 
serve the eligible census blocks within the specified CBG at the 
indicated performance tier and latency, for a total amount of annual 
support that is at least the implied support amount of the bid. Several 
requirements will also apply to bid submission; the bidding system will 
advise bidders if a bid that the bidder attempts to submit does not 
meet these conditions. A bid may optionally include additional 
information for package bidding, as described in the following section.
    188. One Bid per Geographic Area per Round. A bidder will be able 
to place only one bid on a given CBG in a round, be it a bid for only 
that area or a package

[[Page 13610]]

bid including the area. Further, a bidder will be able to bid only for 
CBGs in states for which it is qualified to bid after review of its 
short-form application.
    189. The restriction on overlapping bids by a single bidder will 
simplify bid strategies for bidders and eliminate the need for the 
bidding system to use mathematical optimization to consider multiple 
ways to assign winning bids to a bidder, thus simplifying bid 
processing. Accordingly, the bidding system will not accept multiple 
bids by a bidder in a round that include the same area.
    190. The Commission prohibits commonly controlled applicants or 
applicants subject to joint bidding arrangements from selecting any of 
the same states on their applications. This prohibition will ensure 
that such entities jointly will not be able to submit overlapping bids 
for the same geographic areas. These application procedures, together 
with the requirement that a single bidder place only a single bid on a 
given area in a round, will reduce the potential for undesirable 
strategic bidding during the auction.
    191. Tier and Latency Combinations. A bidder cannot change the 
performance tier and latency combination in a bid for a particular area 
from round to round. Instead, once a bidder has submitted a bid for a 
CBG at a particular performance tier and latency combination, any bids 
in subsequent rounds by that bidder for the same CBG must specify the 
same performance tier and latency combination. This restriction will 
simplify bidding strategies without an appreciable loss in useful 
flexibility for bidders that are eligible to bid for more than one 
performance tier and latency combination in a given area.
    192. Acceptable Bid Amounts. In each round, a bidder may submit a 
bid at the base clock percentage for the round, or at any price point 
percentage greater than the base clock percentage and less than the 
previous round's base clock percentage. The price point percentage of 
the bid may be specified with up to two decimal places (e.g., 98.44%).
    193. By providing bidders the option to bid at intermediate price 
points, the Commission can shorten the bidding process by using larger 
decrements to the base clock percentage without running the risk that a 
large drop in aggregate implied support from one round to the next will 
leave a significant amount of the budget unspent. The option to bid at 
intermediate price point percentages will also allow a bidder to 
indicate more precisely the minimum amount of support it will accept 
for an area, and it reduces the likelihood of ties.
    194. A bid must specify a percentage that implies a support amount 
that is one percent or more of an area's reserve price to be 
acceptable. In other words, the bidding system will only accept a bid 
for a price point percentage that is at least T+L+1. One percent 
represents a sufficiently small fraction of the model-derived reserve 
price to serve as a minimum acceptable bid for bidders with legitimate 
support needs.
    195. Bids for a Package of Areas. Bidders have the option of 
placing a package bid to serve multiple CBGs. The bid processing 
procedures may assign fewer than all the areas in the bid to the bidder 
provided that the support associated with the assigned areas is at 
least equal to a bidder-specified minimum scale percentage of the 
support requested for the full list.
    196. Under these procedures, a bidder will specify a package bid by 
specifying the CBGs in the bid, a performance tier and latency 
combination for each CBG, a single price point percentage for the bid, 
and a minimum scale percentage no higher than 75 percent that indicates 
the bidder's lowest acceptable partial assignment of the package.
    197. Every CBG in a package bid must be in the same state, but 
there is no limit to the total amount of implied support that may be 
included in a single package. Different CBGs in the bid may have 
different performance tier and latency combinations. For a given round, 
a CBG can appear in at most one bid--either a single bid or a package 
bid--submitted by the bidder.
    198. The use of package bidding is optional: A bidder that is not 
interested in package bidding can bid for support in individual areas 
just as though there were no package bidding provisions. The bidding 
experience for a bidder that chooses not to use package bidding will be 
no more complicated than if package bidding were not an option. 
Additionally, the package bidding procedures include measures that 
minimize complexity. Because all bidders will be limited to placing 
only one bid on a CBG in a round, and because the implied support 
amount of a package bid is simply the sum of the implied support 
amounts of the CBGs in the package--that is, the bidding system does 
not have any inherent bias toward assigning packages--the option of 
package bidding does not increase the number of options a bidder has to 
consider. Bid options regarding packages are also simplified by a 
constraint on the composition of packages after the clearing round: 
Once a bidder bids for a package, it can only bid on the same package 
or smaller subsets of the package in subsequent rounds.
    199. To help all bidders--both large and small--understand the 
bidding procedures related to package bidding, the Bureaus will provide 
further educational opportunities and materials well in advance of the 
auction. This should help bidders determine how best to place their 
bids and whether to make use of package bidding.
    200. Bids Placed by Proxy Bidding Instructions. A bidder has the 
option of placing bids via proxy bidding instructions in Auction 903. 
These procedures will reduce a bidder's need to submit bids manually 
every bidding round and provide the bidder with a safeguard against 
accidentally failing to submit a bid, as long as the bidding percentage 
of the proxy instruction is below the current round's base clock 
percentage. Proxy procedures will make it possible for a bidder to 
simplify greatly its auction participation by setting its proxy 
instruction at the lowest amount of support that the bidder is willing 
to accept, so that the bidder need not bid again in the auction.
    201. Specifically, when a bidder places a bid, the bidder may 
specify a price point percentage that is below the base clock 
percentage for the round in which the bid is placed. Doing so results 
in both a bid at the current round's base clock percentage and proxy 
instructions for bids at lower percentages in subsequent rounds. The 
bidding system will generate a bid in any subsequent bidding round in 
which the percentage specified in the proxy instruction (the ``proxy 
bid percentage'') is equal to or below the base clock percentage for 
the round. If the proxy bid percentage is greater than the base clock 
percentage of a round but lower than the prior round's base clock 
percentage, then the bidding system will generate a bid at the proxy 
bid percentage. If the proxy instruction is not subsequently updated, 
this will be the last round in which the proxy instruction will 
automatically place a bid.
    202. Bids generated according to proxy instructions will be 
processed in the same way as any other bids placed in the auction. 
Proxy instructions may be used for bids for individual areas and for 
package bids. Proxy instructions will carry forward in rounds after the 
clearing round for areas that have not been assigned, as long as the 
proxy bid percentage is still valid. A bidder may override a bid 
generated according to proxy instruction, cancel, or enter new

[[Page 13611]]

proxy bidding instructions at any time during a round.
    203. Bidders are responsible for actively monitoring the status of 
their bids, including any proxy instructions as well as the overall 
progress of the auction, using the reports and files available in the 
bidding system. Providing bidding-related information only through the 
bidding system assures that non-public information is available only to 
individuals that are authorized bidders for entities that have been 
found qualified to bid through the Commission's pre-auction processes. 
This is consistent with the Commission's anonymous bidding procedures, 
protects against possible misuse of bidding information, and promotes 
auction integrity.
    204. Proxy bidding instructions will be treated as confidential 
information and will not be disclosed to the public at any time after 
the auction concludes because they may reveal private cost information 
that would not otherwise be made public (e.g., if proxy bidding 
instructions are not fully implemented because the base clock 
percentage does not fall as low as the specified proxy percentage).
    205. Activity Rules. The Commission adopts activity rules to 
encourage bidders to express their bidding interests early and 
consistently, which will generate reliable information for bidders 
about the level of bidding in the various CBGs in the auction. A 
bidder's overall bidding activity in a round, measured as the sum of 
implied support dollars for all its bids, may not exceed the bidder's 
activity from the previous round. The Commission also adopts a 
switching rule to limit a bidder's ability in a round to switch to 
areas on which it did not bid at the base clock percentage of the 
previous round. This switching ability is based on a certain percentage 
of the implied support of the bidder's bids at the base clock 
percentage in the previous round. The Commission gives the Bureaus 
discretion to change the switching percentage, with notice, during the 
auction, although the Commission does not at this time anticipate 
needing to do so.
    206. The Commission adopts a switching percentage of 20 percent for 
the second bidding round of the auction only. Therefore, a bidder's 
activity in the second round of the auction for areas on which it did 
not bid at the first round's base clock percentage may not exceed 20 
percent of its total implied support from bids at the first round's 
base clock percentage. This change in the switching percentage for the 
second round gives bidders greater flexibility to shift their bidding 
as information is revealed about the extent of competition for various 
areas. In this regard, the ability to switch bidding areas will be most 
useful in the second round because the greatest amount of new 
information about bidding across CBGs will be made available after the 
first round of bidding.
    207. The Commission limits the higher switching percentage to the 
second round, however, to encourage an orderly bidding process that 
generates reliable information about aggregate cost and competition 
across areas. Accordingly, for the third and subsequent rounds up until 
the budget has cleared, the switching percentage will be 10 percent. No 
switching of areas is permitted after the clearing round, since bidding 
in any additional round is limited to areas with bids at the previous 
base clock percentage that have not been assigned.
    208. Bid Processing. Once a bidding round closes, the bidding 
system will consider the submitted bids to determine whether an 
additional round of bidding at a lower base clock percentage is needed 
to bring the amount of requested support down to a level within the 
Phase II auction budget. If the total requested support at the base 
clock percentage exceeds the budget, the bidding system will initiate 
another bidding round with a lower base clock percentage.
    209. If, instead, the system determines that the total requested 
support from bids at the base clock percentage has fallen to an amount 
within the budget, the just-concluded round will be deemed the clearing 
round, and the bidding system will begin the process of assigning 
winning bids and determining support amounts using a second price rule. 
If, in the clearing round, there are multiple bids for any area at the 
base clock percentage, the bidding system will commence another round 
of bidding to resolve the competition for support in those areas only.
    210. After the clearing round, bidding rounds will continue for 
these areas at lower base clock percentages until, for each of the 
contested areas, there is a single lowest bid. The winning bidder for 
an area will then generally be assigned support at the price point 
percentage of the second lowest bid.
    211. As a result of these bid processing procedures, the bids that 
can be assigned under the budget in the clearing round and in any later 
rounds will determine the areas that will be provided support under 
Phase II. At most, one bid per area will be assigned support. The 
specifications of that bid, in turn, determine the performance tier and 
latency combination at which service will be provided to the locations 
in the eligible census blocks in the area.
    212. The bid processing procedures fall into three categories: 
Before, during, and after the round in which the budget clears. 
Additional details and examples of bid processing will be provided in 
the technical guide released by the Bureaus.
    213. Bid Processing in Rounds Before the Clearing Round. Aggregate 
Cost at the Base Clock Percentage. After each bidding round until the 
budget has cleared, in order to determine whether the budget will clear 
in that round, the bidding system will calculate an ``aggregate cost,'' 
an estimate of what it would cost to assign support at the base clock 
percentage to the bids submitted in the round. Specifically, the 
aggregate cost is the sum of the implied support amounts for all the 
areas receiving bids at the base clock percentage for the round, 
evaluated at the base clock percentage. The calculation counts support 
for each area only once, even if the area receives bids, potentially 
including package bids, from multiple bidders. If there are multiple 
bids for an area at different performance tier and latency 
combinations, the calculation uses the bid with the highest implied 
support amount. If the aggregate cost for the round exceeds the budget, 
the bidding system will implement another regular bidding round with a 
lower base clock percentage.
    214. Clearing Determination. The first round in which the aggregate 
cost, as calculated above, is less than or equal to the overall support 
budget is deemed the clearing round. In the clearing round, the bidding 
system will further process bids submitted in the round, to determine 
those areas that can be assigned and the support amounts winning 
bidders will receive. Once the clearing round has been identified, the 
system no longer calculates the aggregate cost, even if there are 
subsequent bidding rounds.
    215. Bid Processing in the Clearing Round. In the clearing round, 
the bidding system will consider bids in more detail to determine those 
bids that can be assigned in that round; the ``second prices'' 
corresponding to those bids, subject to post-auction application 
review; and those bids that will carry over for bidding in an 
additional bidding round or rounds.
    216. Until the clearing round, the auction is generally driven by 
cross-area competition for the budget, and implied support amounts for 
all areas are reduced in proportion to the reduction in the base clock. 
In estimating cost, the system does not determine which of the multiple 
bids competing for support in

[[Page 13612]]

the same area will be assigned, although it does take into account that 
only one bid per area may be assigned. Processing during the clearing 
round and subsequent rounds considers intra-area competition as well, 
assigning support to bids at the lowest bid percentage for a given 
area, as long as any assigned package bids meet the bid's minimum scale 
percentage. Bid processing in the clearing round also determines 
support amounts for assigned bids according to a second-price rule, so 
that bids are supported at a price percentage at least as high as the 
bid percentage.
    217. Assignment. Once the bid processing procedures establish that 
the current round is the clearing round, the bidding system will begin 
to assign winning bids with support to at most one bid for a given 
area. The system will first assign bids made at the base clock 
percentage for areas not bid on by another bidder at the base clock 
percentage. Any package bids at the base clock percentage that include 
areas bid on by another bidder at the base clock percentage must meet 
the package bidder's minimum scale percentage without those areas in 
order to be assigned.
    218. The system then considers all other bids submitted in the 
round in ascending order of price point percentage to see if additional 
bids can be assigned and, considering the bids assigned so far, to 
determine the highest price point percentage at which the total support 
cost of the assigned bids does not exceed the budget (the ``clearing 
price point''). Recall that a bid may be placed at any price point 
percentage equal to or greater than the current base clock percentage 
and less than the previous round's base clock percentage. Bids at price 
point percentages above the clearing price point are not assigned.
    219. As it considers bids in ascending price point percentage 
order, the system assigns a bid if no other bid for the same area has 
already been assigned, as long as the area did not receive any bid at 
the base clock percentage and the areas to be assigned in a package bid 
meet the bid's minimum scale percentage. Ties are broken by using the 
highest pseudo-random number. The bidding system also checks to ensure 
that sufficient budget is available to assign the bid. If the bidding 
system encounters a bid that cannot be supported within the remaining 
budget, it will skip that bid and continue to consider other bids in 
ascending price point percentage order.
    220. To determine whether there is sufficient budget to support a 
bid as it is considered for assignment, the bidding system keeps a 
running sum of support costs.
    221. At each ascending price point increment, starting at the base 
clock percentage, the running cost calculation is the sum of support 
for three types of bids. First, for assigned bids for which there were 
no other bids for support for their respective areas at price points 
lower than the currently considered price point percentage, the system 
calculates the cost of providing support as the amount of support 
implied by the currently considered price point. Second, for assigned 
bids for areas that did receive other bids at price points lower than 
the currently considered price point, support is generally calculated 
as the amount implied by the next-higher price point at which the area 
received a bid (where next-higher is relative to the price point of the 
assigned bid, not the currently considered price point). The only 
exception to this arises if there is a bid for the area with a bid 
percentage below the bid percentage of the assigned bid for the area 
and the former bid cannot be assigned because it is a package bid that 
does not meet the minimum scale percentage. In that case, the support 
is calculated as the amount implied by the bid percentage of the 
assigned bid. Third, areas bid at the base clock percentage that were 
not assigned in the round are evaluated as they are in the pre-clearing 
aggregate cost calculation: only one bid per area is included in the 
calculation, and if there are bids for an area at different performance 
tier and latency combinations, the calculation uses the bid with the 
highest implied support amount, all evaluated at the base clock 
percentage.
    222. The bidding system continues to assign bids meeting the 
assignment criteria in ascending price point order as long as the cost 
calculation does not exceed the budget. The highest price point at 
which the running total cost will not exceed the budget is identified 
as the clearing price point.
    223. Support Amount Determination. Bids that are assigned for areas 
that receive no other bids at less than the clearing price point are 
supported at an amount implied by the clearing price point percentage.
    224. Bids assigned in the clearing round, when there is also a bid 
for the area at a price point below the clearing price point, are 
generally supported at an amount determined by the bid percentage of 
the lowest unassigned bid for the area. Exceptions are that if the bid 
percentage of the lowest unassigned bid for the area is less than 
(e.g., a package bid that did not meet the minimum scale percentage) or 
equal to (i.e., tied with) the bid percentage of the assigned bid, then 
the assigned bid is supported at its own bid percentage. For example, 
applying the second price rule, if there are two bids for an area, the 
lower bid is supported at the bid price point percentage of the higher 
bid.
    225. Bids and Bid Processing in Rounds After the Clearing Round. 
Carried-Forward and Acceptable Bids. After the clearing round, there 
will be further bidding to resolve competition for areas where more 
than one bidder is still bidding for support at the base clock 
percentage in the clearing round. After the clearing round and any 
subsequent round, bidding will continue only for areas where there were 
multiple bids at the previous round's base clock percentage that could 
not be assigned. Such bids may have been for a given unassigned area 
that received multiple single bids, package bids that were not assigned 
because the bidder's minimum scale percentage for the package was not 
met, or remainders of package bids--unassigned areas from package bids 
that were partially assigned.
    226. Bids at the base clock percentage for unassigned areas will 
carry over automatically to the next bidding round at the previous 
round's base clock percentage, since the bidder had previously placed a 
bid at that percentage. In the round into which the bids are carried 
forward, a bidder with a carried-forward bid for an area may also bid 
for support for these areas at the current round's base clock 
percentage or at intermediate price points. In rounds after the 
clearing round, a bidder cannot switch to bidding for an area for which 
it did not bid in the previous round.
    227. Although a bid for an unassigned package will carry over at 
the previous clock percentage, the bidder for such a package may group 
the bids for the areas in the package into smaller packages and bid on 
those smaller packages at current round percentages. However, the 
unassigned remainders of assigned package bids--that is, the areas for 
which there are competing bids--will carry over as individual area 
bids. Any bids the bidder places for the remainder areas at the new 
round percentages must be submitted as individual area bids--that is, 
the bidder cannot create a new package of any of the unassigned 
remainders.
    228. If a proxy instruction is at a price point percentage below 
the base clock percentage of the previous round, it will continue to 
apply in rounds after the clearing round under the same conditions that 
apply to other bids. For package bids made by proxy that are only 
partially assigned because there are multiple bids at the base clock 
percentage, the proxy instructions will

[[Page 13613]]

continue to apply to the unassigned areas in the package bid. That is, 
the price point percentage specified in the proxy instructions will 
apply to each of the individual remainder areas.
    229. Bid Processing in Rounds After the Clearing Round. As in the 
clearing round, in subsequent rounds, the system considers bids for 
assignment and support amount determination in ascending price point 
percentage order. The system first considers bids at the new round's 
base clock percentage. The system will assign any bids for areas that 
received no other bids at the base clock percentage as long as any 
package bid meets the minimum scale percentage of the bid. The system 
then processes bids in ascending price point order, assigning those 
bids for as yet unassigned areas, as long as any package bids meet the 
minimum scale condition.
    230. If there is only one bid for an area in a round in addition to 
a carried-forward bid or bids, the assigned bid is paid at the base 
clock percentage for the previous round, consistent with the second-
price rule. If an assigned bid is for an area that received more than 
one bid in the round, the assigned bid is supported at the next higher 
price point percentage at which there is a bid for the area. The only 
exception to this arises when there is a bid for the area with a bid 
percentage below the bid percentage of the winning bid for the area and 
the former bid cannot be assigned because it is a package bid that does 
not meet the minimum scale percentage. In that case, the support is 
calculated as the amount implied by the bid percentage of the winning 
bid.
    231. If there is more than one bid for an area at the current base 
clock percentage, there will be another bidding round at a lower base 
clock percentage, with the same restrictions on bids and following the 
same assignment and pricing procedures. If all bidders for an area with 
carried forward bids decline to submit lower bids in a subsequent 
round, the bid with the highest pseudo-random number will be considered 
first for assignment according to the Commission's tie breaking 
procedures.
    232. Availability of Bidding Information. As in past Commission 
auctions, bidders will have secure access to certain non-public bidding 
information while bidding is ongoing. After each round ends, and before 
the next round begins, the Commission will make the following 
information available to individual bidders:
     The base clock percentage for the upcoming round.
     The aggregate cost at the previous round's base clock 
percentage up until the budget clears.
    [cir] The aggregate cost at the base clock percentage is not 
disclosed for the clearing round or any later round.
     The bidder's activity, based on all bids in the previous 
round, and activity based on bids at the base clock percentage.
    [cir] In rounds after the clearing round, the bidder's assigned 
support and the implied support of its carried-forward bids will be 
available.
     Summary statistics of the bidder's bidding in the previous 
round, including:
    [cir] The number of CBGs for which it bid, at the base clock 
percentage and at other price points, and for which proxy instructions 
are in effect for future rounds.
    [cir] After the clearing round, CBGs and support amounts it has 
been assigned and those for which it is still bidding, including a list 
of its carried-forward bids.
    [cir] A bidder will also have access to a downloadable file with 
all its bids submitted for each round.
     For all eligible areas in all states, including those in 
which the bidder was not qualified to bid or is not bidding, whether 
the number of bidders that placed bids at the previous round's base 
clock percentage was 0, 1, or 2 or more.
    [cir] The performance tier and latency combinations of the bids are 
not disclosed.
    [cir] For the clearing round and any subsequent round, bidders are 
also informed about which areas have been assigned.
    233. Prior to each round, the Commission will also make available 
to individual bidders the implied support amounts, corresponding to the 
areas and performance tier and latency combinations for which they are 
eligible to bid. These implied support amounts are calculated at the 
round's base clock percentage.
    234. The Commission balances its interest in providing bidders with 
sufficient information about the status of their own bids and bidding 
across all eligible areas to allow them to bid confidently and 
effectively, while restricting the availability of information that may 
facilitate identification of bidders placing particular bids, which 
could potentially lead to undesirable strategic bidding.
    235. The Commission will withhold information on the progress of 
the auction from the general public until after the close of bidding 
when auction results are announced. Accordingly, during the auction, 
the public will not have access to such interim information as the 
current round, base clock percentage, aggregate cost, or any summary 
statistics on bidding or assigned bids that may reveal or suggest the 
identities of bidders associated with any specific bids. Although 
auction participants will have access to information that is needed to 
inform their bidding, such information will be made publicly available 
only after the close of the auction in order to help preserve the 
integrity of the auction while it is in progress.
    236. After the close of bidding and announcement of auction 
results, the Commission will make publicly available all bidding data, 
except for proxy bidding instructions. This promotes the Commission's 
interest in a transparent auction process and is consistent with the 
Commission's typical practice post-auction.
    237. Closing Conditions. The auction will end once the overall 
budget has cleared and there are no longer competing bids for any 
areas.
    238. Auction Announcements. The Bureaus will use auction 
announcements to report necessary information to bidders. All auction 
announcements will be available by clicking a link in the CAF II 
Bidding System.
    239. Auction Results. After the Bureaus announce the auction 
results, they will provide a means for the public to view and download 
bidding and results data.

VIII. Post-Auction Procedures

    240. General Information Regarding Long-Form Applications. For the 
Phase II auction, the Commission adopted a two-phase auction 
application process. Pursuant to Sec.  1.21004(a), each Auction 903 
winning bidder is required to file an application for Phase II support, 
referred to as a long-form application, by the applicable deadline. 
Shortly after bidding has ended, the Bureaus will issue a public notice 
declaring the auction closed, identifying the winning bidders, and 
establishing the deadline for the long-form application. Winning 
bidders will use the new FCC Form 683 and the Auction Application 
System to submit their long-form applications. Details regarding the 
submission and processing of long-form applications will be provided in 
a public notice after the close of the bidding. After a long-form 
applicant's application has been reviewed and is considered to be 
complete, and the long-form applicant has submitted an acceptable 
letter of credit and accompanying Bankruptcy Code opinion letter as 
described below, a public notice will be released

[[Page 13614]]

authorizing the long-form applicant to receive Phase II support.
    241. Long-Form Application: Disclosures and Certifications. Unless 
otherwise provided by public notice, within 10 business days after 
release of the Auction 903 closing public notice, a long-form applicant 
must electronically submit a properly completed long-form application 
(FCC Form 683) for the areas for which it (or its parent/holding 
company or consortium/joint venture) was deemed a winning bidder. 
Further instructions and filing requirements will be provided to 
winning bidders in the auction closing public notice.
    242. Ownership Disclosure. A long-form applicant must fully 
disclose in its long-form application its ownership structure as well 
as information regarding the real party- or parties-in-interest in the 
applicant or application as set forth in Sec.  1.2112(a). A long-form 
applicant will already have ownership information on file with the 
Commission that was submitted in its short-form application during the 
pre-auction process, which may simply need to be updated as necessary.
    243. General Universal Service Certifications. A long-form 
applicant must certify in its long-form application that it is in 
compliance with all statutory and regulatory requirements for receiving 
the universal service support that it seeks as of the long-form 
application filing deadline, or that it will be in compliance with such 
requirements before being authorized to receive Phase II support. A 
long-form applicant must also certify that it will comply with all 
program requirements, including service milestones.
    244. In addition, a long-form applicant must certify that it is 
aware that if it is not authorized to receive support based on its 
application, the application may be dismissed without further 
consideration and penalties may apply.
    245. Financial and Technical Capability Certification. As in its 
pre-auction short-form application, a long-form applicant must certify 
in its long-form application that it is financially and technically 
capable of meeting the relevant public interest obligations for each 
performance tier and latency combination in the geographic areas in 
which it seeks support. A long-form applicant should be aware that in 
making a certification to the Commission it exposes itself to liability 
for a false certification. A long-form applicant should take care to 
review its resources and its plans before making the required 
certification and be prepared to document its review, if necessary.
    246. Public Interest Obligations Certification. A long-form 
applicant must certify in its long-form application that it will meet 
the relevant public interest obligations for each performance tier and 
latency combination for which it (or its parent/holding company or 
consortium/joint venture) was deemed a winning bidder, including the 
requirement that it will offer service at rates that are equal to or 
lower than the Commission's reasonable comparability benchmarks for 
fixed services offered in urban areas.
    247. Eligible Telecommunications Carrier Certification. A long-form 
applicant must acknowledge in its long-form application that it must be 
designated as an ETC in the relevant areas prior to being authorized to 
receive Phase II support in those areas. Specifically, the long-form 
applicant must certify that, if it has already been designated as an 
ETC in the relevant areas, it has provided a certification of its 
status in each such area and the relevant documentation supporting that 
certification in its long-form application. If the long-form applicant 
has not yet been designated as an ETC in the relevant areas, the long-
form applicant must certify that it will submit a certification of its 
status as an ETC in each such area and the relevant documentation 
supporting that certification prior to being authorized to receive such 
support. As described below, this certification of ETC status and 
documentation must be submitted within 180 days after the release of 
the Auction 903 closing public notice.
    248. Description of Technology and System Design. Each long-form 
applicant will be required to demonstrate that it is technically 
qualified to meet the relevant Phase II public interest obligations in 
the areas covered by the winning bids by submitting technical 
information to support the operational assertions made in the short-
form application. A long-form applicant is required to submit a 
detailed technology and system design description, including a network 
diagram that must be certified by a professional engineer. The 
professional engineer must certify that the network can deliver, to at 
least 95 percent of the required number of locations in each relevant 
state, voice and broadband service that meets the requisite performance 
requirements. Because it may take time for a long-form applicant to 
create a detailed technology and system design description that is 
tailored to such areas, it may submit its technology and system design 
description in two stages.
    249. Initial Overview. First, an applicant must submit with its 
long-form application (due within 10 business days after the release of 
the Auction 903 closing public notice) an overview of its intended 
technology and system design for each state in which winning bids were 
made. The overview must describe at a high level how the long-form 
applicant will meet its Phase II public interest obligations for the 
relevant performance tier and latency combination(s) using Phase II 
support (e.g., building a new network or expanding an existing network, 
deploying new technology or existing technology). This overview should 
avoid highly technical terminology or jargon unless such language is 
integral to the understanding of the project. The overview will be made 
publicly available.
    250. Detailed Description. Second, within 60 calendar days after 
the release of the Auction 903 closing public notice, a long-form 
applicant must submit, for each state in which winning bids were made, 
a more detailed description of its technology and system design. This 
second submission must describe the network to be built or upgraded, 
demonstrate the project's feasibility, and include the network diagram 
certified by a professional engineer. A long-form applicant can submit 
the detailed description as early as its initial long-form application 
filing deadline (i.e., within 10 business days after the release of the 
public notice announcing the close of Auction 903), but no later than 
60 calendar days after the public notice's release. It must describe in 
detail a network that fully supports the delivery of consumer voice and 
broadband service that meets the requisite performance requirements to 
at least 95 percent of the required number of locations in each state 
by the end of the six-year build-out period and for the duration of the 
10-year support term, assuming a 70 percent subscription rate by the 
final service milestone. It also must contain sufficient detail to 
demonstrate that the long-form applicant can meet the interim service 
milestones if it becomes authorized to receive support. If a long-form 
applicant submits a technology and system design description that lacks 
sufficient detail to demonstrate that the long-form applicant has the 
technical qualifications to meet the relevant Phase II obligations, the 
long-form applicant will be asked to provide further details about its 
proposed network. The Commission will treat all the information 
submitted with this second submission as confidential and will

[[Page 13615]]

withhold it from routine public inspection. As the Commission does with 
short-form applications, the Commission will treat long-form applicants 
that submit this information as having made a request to treat this 
information as confidential trade secrets and/or commercial 
information. If a request for public inspection under Sec.  0.461 is 
made, however, the long-form applicant will be notified and will be 
required to justify confidential treatment of its request if the long-
form applicant has any objections to disclosure.
    251. Below, the Commission provides guidance on how a long-form 
applicant can successfully meet the requirement in Sec.  
54.315(b)(2)(iv) to provide a description of its technology and system 
design. Specifically, the Commission describes the types of information 
it would expect a long-form applicant to include, at a minimum, in a 
detailed description of its technology and system design in order to 
demonstrate that it has the technical qualifications to meet its Phase 
II obligations. The Commission recognizes that because a Phase II 
support recipient has six years to fully build out its network, the 
information submitted by the long-form applicant may be based on a 
preliminary network design that may be modified as the network is built 
out. The Commission's guidance is informed by the types of information 
that long-form applicants submitted for rural broadband experiment 
support during the long-form application stage to demonstrate that they 
had the technical qualifications to meet the relevant rural broadband 
experiment public interest obligations. These are also the types of 
information that the Commission expects a technically qualified long-
form applicant will have made preliminary decisions about in order to 
determine how much support it would need to meet the relevant Phase II 
auction public interest obligations and also to begin planning how it 
will meet the required service milestones.
    252. A long-form applicant, regardless of the technology (or 
technologies) it proposes to use, is expected to:
     Describe the proposed last mile architecture(s) and 
technologies (such architectures and technologies include, for example, 
wireless licensed or unlicensed, fiber, coaxial cable, satellite, 
digital subscriber line, hybrids, etc.), middle mile/backhaul topology 
(e.g., describe ring, mesh, tree and branch, and hybrid topologies), 
and the architecture used to provide voice service. This description 
should include the long-form applicant's Session Initiation Protocol 
(SIP) proxies, session border controllers, and various network 
databases. If the long-form applicant obtains these or other voice 
service functions as services from another provider or providers (for 
example, an over-the-top VoIP provider, or an incumbent or competitive 
local exchange carrier), the description should so indicate.
     Describe the network's scalability and features that 
improve reliability (such as redundancy).
     Indicate whether parts of the network will use the long-
form applicant's or another party's existing network facilities, 
including non-wireless facilities extending from the network to 
customers' locations. For non-wireless facilities that do not yet 
exist, the description should indicate whether the new facilities will 
be aerial, buried, or underground.
     Provide technical information about the methods, ``rules 
of thumb,'' and engineering assumptions used to size the capacity of 
the network's nodes (or gateways) and links. The information provided 
should demonstrate how the required performance for the relevant 
performance tier will be achieved during periods of peak usage, 
assuming a 70 percent subscription rate by the final service milestone.
     Provide a project plan that includes a network build-out 
schedule that includes but is not restricted to plans for construction 
of last mile and middle mile facilities. The build-out schedule should 
show the long-form applicant's projected milestones on an annual basis, 
including achievement of the interim service milestones described in 
Sec.  54.310(c) of the Commission's rules and completion of the network 
by the end of the sixth year of funding authorization. The project plan 
and included schedule should incorporate detailed information showing 
how the long-form applicant plans to offer, to at least 95 percent of 
the required number of locations in each relevant state, voice and 
broadband service meeting the relevant performance requirements when 
the system is complete. The project plan and included schedule should 
also incorporate the long-form applicant's plans for monitoring and 
maintaining the performance of the service for the duration of the 10-
year support term.
    253. The network diagram, which must be certified by a professional 
engineer, should:
     Identify all wireline and wireless segments of the 
proposed networks.
     Uniquely identify (i) major network nodes including their 
manufacturer and model, as well as their functions, locations, and 
throughput/capacity; (ii) access nodes or gateways, including their 
technology, manufacturer and model, location, and throughput/capacity; 
and (iii) major inter-nodal links (not last mile), and their 
throughput/capacity.
     Indicate how many locations will be offered service from 
each access node or from each gateway, and which performance tier or 
tiers will be supported at each access node.
     Indicate what parts of the network will be new deployment 
and what parts will use the long-form applicant's or another party's 
existing network facilities.
     Identify specialized nodes used in providing voice 
service.
     Explain how nodes or gateways are connected to the 
internet backbone and Public Switched Telephone Network.
    254. Additionally, a long-form applicant that proposes to use 
terrestrial fixed wireless technologies should:
     Explain, with technical detail, how the proposed spectrum 
can meet or exceed the relevant performance requirements at peak usage 
periods.
     Provide the calculations used, for each performance tier 
and frequency band, to design the last mile link budgets in both the 
upload and download directions at the cell edge, using the technical 
specifications of the expected base station and customer premise 
equipment.
     Provide coverage maps for the planned and/or existing 
networks that will be used to meet the Phase II public interest 
obligations, indicating where the upload and download speeds will meet 
or exceed the relevant performance tier speed(s). The coverage maps 
should be provided for each interim and final service milestone and 
should display the required service areas and target locations (or a 
representation thereof).
     Describe the underlying propagation model used to prepare 
the coverage maps and how the model incorporates the operating 
spectrum, antenna heights, distances, digital elevation, and clutter 
resolutions.
     Describe, for each relevant performance tier and latency 
combination, the base station equipment that the long-form applicant 
plans to use.
     Describe the planned customer premise equipment 
configuration.
    255. Additionally, a long-form applicant that proposes to use 
primarily satellite technologies should:
     Describe how many satellites that are in view 
simultaneously from any specific location will be required to meet the 
relevant Phase II public interest obligations.

[[Page 13616]]

     Describe how many uplink and downlink gateway antenna 
beams will be required on each satellite, and the capacity of each beam 
in megabits per second.
     Describe how many uplink and downlink user antenna beams 
will be required on each satellite, and the capacity of each beam in 
megabits per second.
     Describe how the gateway capacity is connected to user 
beams on the satellite, in terms of beams and data capacity per beam.
     Describe whether the capacity on the uplink and downlink 
beams would be able to be reallocated once a satellite commences 
operation, if the subscription rate is less than 70 percent in one beam 
but more than 70 percent in another beam.
    256. Available Funds Certification and Description. A long-form 
applicant must certify in its long-form application that it will have 
available funds for all project costs that exceed the amount of Phase 
II support to be received for the first two years of its support term. 
A long-form applicant must also describe how the required construction 
will be funded in each state. The description should include the 
estimated project costs for all facilities that are required to 
complete the project, including the costs of upgrading, replacing, or 
otherwise modifying existing facilities to expand coverage or meet 
performance requirements. The estimated costs must be broken down to 
indicate the costs associated with each proposed service area at the 
state level and must specify how Phase II support and other funds, if 
applicable, will be used to complete the project. The description must 
include financial projections demonstrating that the long-form 
applicant can cover the necessary debt service payments over the life 
of any loans. The Commission will treat all the information submitted 
with this submission as confidential and will withhold it from routine 
public inspection. The Commission will also treat long-form applicants 
that submit this information as having made a request to treat this 
information as confidential trade secrets and/or commercial 
information. If a request for public inspection under Sec.  0.461 is 
made, however, the long-form applicant will be notified and will be 
required to justify confidential treatment of its request if the long-
form applicant has any objections to disclosure.
    257. Spectrum Access. A long-form applicant that intends to use 
wireless technologies to meet the relevant Phase II public interest 
obligations must demonstrate that it currently has sufficient access to 
spectrum. Specifically, as in its pre-auction short-form application, a 
long-form applicant must, in its long-form application (i) identify the 
spectrum band(s) it will use for the last mile, backhaul, and any other 
parts of the network; (ii) describe the total amount of uplink and 
downlink bandwidth (in megahertz) that it has access to in each 
spectrum band for the last mile; (iii) describe the authorizations 
(including leases) it has obtained to operate in the spectrum, if 
applicable; and (iv) list the call signs and/or application file 
numbers associated with its spectrum authorizations, if applicable. A 
long-form applicant may propose to use more than one spectrum band to 
meet its Phase II public interest obligations. Each applicant must 
identify for which part of the network (e.g., last mile, backhaul, 
etc.) it intends to use each spectrum band. If the licensee is a 
different party than the long-form applicant, the licensee name and the 
relationship to the long-form applicant should be described. If the 
long-form applicant is leasing spectrum, the lease number should be 
provided along with the license information. As in the short-form 
application, an applicant that intends to provide service using 
satellite technology should describe its expected timing for applying 
for earth station license(s), and an applicant that intends to obtain 
microwave license(s) for backhaul should describe its expected timing 
for applying for microwave license(s) if these licenses have not 
already been obtained. To the extent that a long-form applicant will 
use licensed spectrum, it should provide details about how the licensed 
service area covers its winning bid area(s) (e.g., provide a list of 
geographic areas that the spectrum license covers and describe how 
those areas relate to the winning bid area(s)).
    258. A long-form applicant must also certify that the description 
of the spectrum access is accurate and that it will retain such access 
for at least 10 years after the date on which it is authorized to 
receive support. Applications will be reviewed to assess the 
reasonableness of the certification.
    259. Letter of Credit Commitment Letter. Within 60 days after the 
release of the Auction 903 closing public notice, a long-form applicant 
must submit a letter from a bank acceptable to the Commission, as set 
forth in Sec.  54.315(b)(3), committing to issue an irrevocable stand-
by letter of credit, in the required form, to the long-form applicant. 
The letter must, at a minimum, provide the dollar amount of the letter 
of credit and the issuing bank's agreement to follow the terms and 
conditions of the Commission's model letter of credit in Appendix B of 
the Phase II Auction Order, 81 FR 44413, July 7, 2016.
    260. Documentation of ETC Designation. Within 180 days after the 
release of the Auction 903 closing public notice, a long-form applicant 
is required to submit appropriate documentation of its high-cost ETC 
designation in all the areas for which it will receive support. 
Appropriate documentation should include the original designation 
order, any relevant modifications, e.g., expansion of service area or 
inclusion of wireless, along with any name-change orders. A long-form 
applicant is also required to provide documentation showing that the 
designated areas (e.g., census blocks, wire centers, etc.) cover the 
relevant winning bid areas so that it is clear that the long-form 
applicant has high-cost ETC status in each winning bid area. Such 
documentation could include maps of the long-form applicant's ETC 
designation area, map overlays of the winning bid areas, and/or charts 
listing designated areas. Additionally, a long-form applicant is 
required to submit a letter with its documentation from an officer of 
the company certifying that the long-form applicant's ETC designation 
for each state covers the relevant areas where the long-form applicant 
will receive support.
    261. Audited Financial Statements. Within 180 days after the 
release of the Auction 903 closing public notice, a long-form applicant 
that did not submit audited financial statements in its pre-auction 
short-form application must submit the financial statements from the 
prior fiscal year that are audited by an independent certified public 
accountant. Any long-form applicant that fails to submit the audited 
financial statements as required by the 180-day deadline will be 
subject to a base forfeiture of $50,000, which will be subject to 
adjustment upward or downward as appropriate based on the criteria set 
forth in the Commission's forfeiture guidelines.
    262. Letter of Credit and Bankruptcy Code Opinion Letter. After a 
long-form applicant's application has been reviewed and is considered 
to be complete, the Commission will issue a public notice identifying 
each long-form applicant that may be authorized to receive Phase II 
support. No later than 10 business days after the release of the public 
notice, a long-form applicant must obtain an irrevocable standby letter 
of credit at the value specified in Sec.  54.315(c)(1) from a bank 
acceptable to the Commission as set forth in

[[Page 13617]]

Sec.  54.315(c)(2) for each state where the long-form applicant is 
seeking to be authorized. The letter of credit must be issued in 
substantially the same form as set forth in the model letter of credit 
provided in Appendix B of the Phase II Auction Order, 81 FR 44413, July 
7, 2016.
    263. In addition, a long-form applicant will be required to provide 
with the letter of credit an opinion letter from legal counsel clearly 
stating, subject only to customary assumptions, limitations, and 
qualifications, that, in a proceeding under the Bankruptcy Code, the 
bankruptcy court would not treat the letter of credit or proceeds of 
the letter of credit as property of the long-form applicant's 
bankruptcy estate, or the bankruptcy estate of any other bidder-related 
entity requesting issuance of the letter of credit, under section 541 
of the Bankruptcy Code.
    264. Default Payment Requirements. Auction Forfeiture. Any Auction 
903 winning bidder or long-form applicant will be subject to a 
forfeiture in the event of a default before it is authorized to begin 
receiving support. A winning bidder or long-form applicant will be 
considered in default and will be subject to forfeiture if it fails to 
timely file a long-form application, fails to meet the document 
submission deadlines, is found ineligible or unqualified to receive 
Phase II support by the Bureaus on delegated authority, and/or 
otherwise defaults on its winning bids or is disqualified for any 
reason prior to the authorization of support. Any such determination by 
the Bureaus shall be final, and a winning bidder or long-form applicant 
shall have no opportunity to cure through additional submissions, 
negotiations, or otherwise. Agreeing to such payment in the event of a 
default is a condition for participating in bidding in the Phase II 
auction.
    265. In the event of an auction default, the Commission will impose 
a base forfeiture per violation of $3,000 subject to adjustment upward 
or downward based on the criteria set forth in the Commissions 
forfeiture guidelines, as adopted in the Phase II Auction Order. A 
violation is defined as any form of default with respect to the minimum 
geographic unit eligible for bidding. In other words, there shall be 
separate violations for each CBG assigned in a bid. To ensure that the 
amount of the base forfeiture is not disproportionate to the amount of 
a winning bidder's bid, the total base forfeiture is limited to five 
percent of the bidder's total assigned support for the bid for the 
support term.
    266. Non-Compliance Measures Post-Authorization. A long-form 
applicant that has received notice from the Commission that it is 
authorized to receive Phase II support will be subject to non-
compliance measures once it becomes a support recipient if it fails or 
is unable to meet its minimum coverage requirement, other service 
requirements, or fails to fulfill any other term or condition of Phase 
II support. As described in the December 2014 Connect America Order, 80 
FR 4445, January 27, 2015, and the Phase II Auction Order, 81 FR 44413, 
July 7, 2016, these measures will scale with the extent of non-
compliance, and include additional reporting, withholding of support, 
support recovery, and drawing on the support recipient's letter of 
credit if the support recipient cannot pay back the relevant support by 
the applicable deadline. A support recipient may also be subject to 
other sanctions for non-compliance with the terms and conditions of 
Phase II support, including, but not limited to, potential revocation 
of ETC designations and suspension or debarment. Additionally, a 
support recipient will be subject to any non-compliance measures that 
are adopted in conjunction with a methodology for high-cost support 
recipients to measure and report speed and latency performance to fixed 
locations.

Auction 903 Short-Form Application Operational Questions

    Responses to these questions and any supporting documentation will 
be withheld from public disclosure.
Operational History (if Applicable)
    Answer on a nationwide basis:
    Has the applicant previously deployed consumer broadband networks 
(Yes/No)? If so, identify the date range for when broadband service was 
offered and in which state(s) service was offered. What specific last 
mile and interconnection (backhaul) technologies were used? Provide an 
estimate of how many subscribers are currently served. (If the 
applicant is no longer providing service in any state, estimate the 
number of customers that were served at the beginning of the last full 
year that the applicant did provide service.) What services (e.g., 
voice, video, broadband internet access) were provided?
Proposed Network(s) Using Funding From the Phase II Auction
    Answer for each state the applicant selected in its application:
    1. Which network architectures and technologies will be used in the 
applicant's proposed deployment? How will voice services be provided? 
How will broadband internet access service be provided?
    2. What are the relevant industry standards, if any, for the last-
mile technologies in the applicant's proposed deployment? If the 
applicant is proposing to use non-standard technologies, the applicant 
should identify which vendor(s) and product(s) are being considered, 
and provide links to the vendors' websites and to publicly available 
technical specifications of the product(s). (If technical 
specifications for the non-standard technologies are not available on a 
vendor's website, they may be submitted with this application.) 
Regardless of whether the applicant proposes to use standard or non-
standard technologies--what capabilities of this technology and 
proposed network will enable performance tier (speed and usage 
allowance), latency and (where applicable) voice service mean opinion 
score (MOS) requirements to be met?
    3. Can the applicant demonstrate that the technology and the 
engineering design will fully support the proposed performance tier, 
latency and voice service requirements for the requisite number of 
locations during peak periods (Yes/No)? What assumptions about 
subscription rate and peak period data usage is the applicant making in 
this assertion? Describe concisely the information that can be made 
available to support this assertion.
    4. Can the applicant demonstrate that all the network buildout 
requirements to achieve all service milestones can be met (Yes/No)? The 
applicant will be required to submit a detailed project plan in the 
long-form application if it is named as a winning bidder. Describe 
concisely the information that the applicant would make available in 
such a detailed project plan.
    5. For the proposed performance tier and latency combination, can 
the applicant demonstrate that potential vendors, integrators and other 
partners are able to provide commercially available and fully 
compatible network equipment/systems, interconnection, last mile 
technology and customer premise equipment (CPE) at cost consistent with 
applicant's buildout budget and in time to meet service milestones 
(Yes/No)? Describe concisely the information and sources of such 
information that the applicant could make available to support this 
response.
    6. Can the applicant describe how the network will be maintained 
and services provisioned (Yes/No)? Can the applicant demonstrate that 
it can provide internally developed operations systems for provisioning 
and maintaining the

[[Page 13618]]

proposed network including equipment and segments, interconnections, 
CPE and customer services at cost consistent with applicant's buildout 
budget and in time to meet service milestones (Yes/No)? If not, can the 
applicant demonstrate that potential vendors, integrators, and other 
partners are able to provide commercially available and fully 
compatible operations systems and tools for provisioning and 
maintaining the proposed network at cost consistent with applicant's 
buildout budget and in time to meet service milestones (Yes/No)? 
Describe concisely the information and sources of such information that 
the applicant could make available to support these responses.
    7. If the applicant is using satellite technologies, describe 
concisely the total satellite capacity available and possible methods 
the applicant will utilize to assign bandwidth and capacity for each 
spot beam.

                                           Auction 903 Spectrum Chart
----------------------------------------------------------------------------------------------------------------
                                              Paired licensed              Unpaired licensed      Unlicensed
                                 -------------------------------------------------------------------------------
      Spectrum band/service                             Downlink freq.     Uplink & downlink
                                  Uplink freq. (MHz)         (MHz)            freq. (MHz)      Unlicensed (MHz)
----------------------------------------------------------------------------------------------------------------
600 MHz.........................  663-698...........  617-652...........
Lower 700 MHz...................  698-716...........  728-746...........  716-728 (Downlink
                                                                           only).
Upper 700 MHz...................  776-787...........  746-757...........
800 MHz SMR.....................  813.5/817-824.....  858.5/862-869.....
Cellular........................  824-849...........  869-894...........
Broadband PCS...................  1,850-1,915.......  1,930-1,995.......
AWS-1...........................  1,710-1,755.......  2,110-2,155.......
AWS (H Block)...................  1,915-1,920.......  1,995-2,000.......
AWS-3...........................  1,755-1,780.......  2,155-2,180.......  1,695-1,710
                                                                           (Uplink only).
AWS-4...........................  ..................  ..................  2,000-2,020, 2,180-
                                                                           2,200 (Downlink
                                                                           only).
BRS/EBS.........................  ..................  ..................  2,496-2,690.......
WCS.............................  2,305-2,315.......  2,350-2,360.......  2,315-2,320, 2,345-
                                                                           2,350.
CBRS (3.5 GHz)..................  ..................  ..................  3,550-3,700.......
UMFUS (terrestrial).............  ..................  ..................  27,500-28,350,
                                                                           38,600-40,000.
70-80-90 GHz unpaired & 70-80       Point-to-Point Pairs for 70-80 GHz,   71,000-76,000,
 GHz paired (point-to-point          71,000-76,000 with 81,000-86,000.     81,000-86,000,
 terrestrial).                                                             92,000-95,000.
                                 ----------------------------------------
TV White Spaces.................  ..................  ..................  ..................  54-72, 76-88, 174-
                                                                                               216, 470-698.
900 MHz.........................  ..................  ..................  ..................  902-928.
2.4 GHz.........................  ..................  ..................  ..................  2,400-2,483.5.
5 GHz...........................  ..................  ..................  ..................  5,150-5,250, 5,250-
                                                                                               5,350, 5,470-
                                                                                               5,725, 5,725-
                                                                                               5,850.
24 GHz..........................  ..................  ..................  ..................  24,000-24,250.
57-71 GHz.......................  ..................  ..................  ..................  57,000-71,000.
Ku Band (satellite).............  12,750-13,250,      10,700-12,700.....
                                   14,000-14,500.
Ka Band (satellite).............  27,500-30,000.....  17,700-20,200.....
V Band (satellite)..............  47,200-50,200,      37,500-42,000.....
                                   50,400-52,400.
----------------------------------------------------------------------------------------------------------------

Abbreviations

AWS Advanced Wireless Services
BRS/EBS Broadband Radio Service/Education Broadband Service
CBRS Citizens Broadband Radio Service
PCS Personal Communications Service/Specialized Mobile Radio
SMR Upper Microwave Flexible Use
UMFUS Service
WCS Wireless Communications Service

IX. Procedural Matters

    267. Paperwork Reduction Act Analysis. This document seeks to 
implement the information collections adopted in the Phase II Auction 
Order, 81 FR 44413, July 7, 2016, and does not contain any additional 
information collection(s) subject to the Paperwork Reduction Act of 
1995 (PRA), Public Law 104-13. The Commission is currently seeking PRA 
approval for information collections related to the short-form 
application process and will in the future seek PRA approval for 
information collections related to the long-form application process. 
In addition, therefore, this document does not contain any new or 
modified information collection burden for small business concerns with 
fewer than 25 employees, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198.
    268. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 
the Commission prepared Initial Regulatory Flexibility Analyses (IRFAs) 
in connection with the USF/ICC Transformation FNPRM, 76 FR 78384, 
December 16, 2011, the April 2014 Connect America FNPRM, 79 FR 39163, 
July 9, 2014, and the Phase II Auction FNPRM, 81 FR 44413, July 7, 2016 
(collectively, Phase II FNPRMs). A Supplemental Initial Regulatory 
Flexibility Analysis (Supplemental IRFA) was also filed in the CAF II 
Auction Comment Public Notice, 82 FR 40520, August 25, 2017, in this 
proceeding. The Commission sought written public comment on the 
proposals in the Phase II FNPRMs and in the CAF II Auction Comment 
Public Notice, including comments on the IRFAs and the Supplemental 
IRFA. No comments were filed addressing the IRFAs. The Commission 
included Final Regulatory Flexibility Analyses (FRFAs)

[[Page 13619]]

in connection with the April 2014 Connect America Order, 79 FR 39163, 
July 9, 2014, the Phase II Auction Order, 81 FR 44413, July 7, 2016, 
and the Phase II Auction FNPRM Order, 82 FR 14466, March 21, 2017 
(collectively, Phase II Orders). This Supplemental Final Regulatory 
Flexibility Analysis (Supplemental FRFA) supplements the FRFAs in the 
Phase II Orders to reflect the actions taken in the document and 
conforms to the RFA.
    269. Need for, and Objectives of, The Document. The document 
establishes procedures for the Connect America Fund Phase II auction. 
In particular, the document establishes procedures for, among other 
things, how an applicant can become qualified to bid in the auction, 
how bidders will submit bids, and how bids will be processed to 
determine winners and assign support amounts.
    270. Following the release of the Phase II FNPRMs and Phase II 
Orders, the Commission released the CAF II Auction Comment Public 
Notice. The CAF II Auction Comment Public Notice proposed specific 
procedures for implementing the rules proposed in the Phase II FNPRMs 
and adopted in the Phase II Orders. The CAF II Auction Comment Public 
Notice did not change matters adopted in the Phase II Orders, but did 
request comment on how the proposals in the CAF II Auction Comment 
Public Notice might affect the previous regulatory flexibility analyses 
in this proceeding.
    271. The document establishes procedures for awarding Phase II 
support in Auction 903 through a multi-round, reverse auction, the 
minimum geographic area for bidding in the auction, aggregating 
eligible areas into larger geographic units for bidding, setting 
reserve prices, capping the amount of support per location provided to 
extremely high-cost census blocks, and the availability of application 
and auction information to bidders and to the public during and after 
the auction. The document also establishes detailed bidding procedures 
for conducting Auction 903 using a descending clock auction format, 
including bid collection, clock prices, bid format, package bidding 
format, proxy bidding, bidder activity rules, bid processing, and how 
support amounts are determined.
    272. To implement the rules adopted by the Commission in the Phase 
II Orders for the pre-auction process, the document establishes 
specific procedures and requirements for applying to participate and 
becoming qualified to bid in Auction 903, including designating the 
state(s) and performance tier/latency combinations in which an 
applicant intends to bid, and providing operational and financial 
information designed to allow the Commission to assess the applicant's 
qualifications to meet the Phase II public interest obligations for 
each area for which it seeks support. The document also sets forth 
information that a winning bidder will be required to submit in its 
post-auction long-form application in order to become authorized to 
receive Phase II support.
    273. Accordingly, the procedures established in the document are 
consistent with the Phase II Orders and the prior regulatory 
flexibility analyses set forth in this proceeding, and no changes to 
the Commission's earlier analyses are required.
    274. Summary of Significant Issues Raised by Public Comments in 
Response to the Supplemental IRFA. There were no comments filed that 
specifically addressed the proposed procedures presented in the 
Supplemental IRFA.
    275. Response to Comments by the Chief Counsel for Advocacy of the 
Small Business Administration. Pursuant to the Small Business Jobs Act 
of 2010, which amended the RFA, the Commission is required to respond 
to any comments filed by the Chief Counsel of the Small Business 
Administration (SBA), and to provide a detailed statement of any change 
made to the proposed procedures as a result of those comments.
    276. The Chief Counsel did not file any comments in response to the 
auction procedures proposed in this proceeding.
    277. Description and Estimate of the Number of Small Entities to 
Which the Procedures Will Apply. The RFA directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by the procedures adopted herein. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    278. As noted above, FRFAs were incorporated into the Phase II 
Orders. In those analyses, the Commission described in detail the small 
entities that might be significantly affected. In the document, the 
Commission hereby incorporates by reference the descriptions and 
estimates of the number of small entities from the previous FRFAs in 
the Phase II Orders.
    279. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The data, information and 
document collection required by the Phase II Orders as described in the 
previous FRFAs and the Supplemental IRFA in the CAF II Auction Comment 
Public Notice in this proceeding are hereby incorporated by reference.
    280. Steps Taken To Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant alternatives that it has 
considered in reaching its proposed approach, which may include the 
following four alternatives (among others): ``(1) The establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) and exemption 
from coverage of the rule, or any part thereof, for small entities.
    281. The analysis of the Commission's efforts to minimize the 
possible significant economic impact on small entities as described in 
the previous Phase II Orders FRFAs are hereby incorporated by 
reference. In addition, in establishing the bidding and application 
procedures for Auction 903, the Commission anticipates the challenges 
faced by small entities. Specifically, the bidding procedures 
established in the document are designed to facilitate the 
participation of qualified service providers of all kinds, including 
small entities, in the Phase II program, and to give all bidders, 
including small entities, the flexibility to place bids that align with 
their intended network construction or expansion, regardless of the 
size of their current network footprints. For example, the Commission 
will use CBGs containing one or more eligible census blocks as the 
minimum geographic area for bidding in the auction in order to provide 
bidders, including small providers, with flexibility to target their 
intended areas of network expansion or construction without 
significantly complicating the bidding process. To help ensure that all 
bidders--both large and small--understand the bidding procedures, 
including those related to package bidding, the Bureaus will

[[Page 13620]]

provide further educational opportunities and materials well in advance 
of the auction.
    282. Furthermore, the pre-auction application procedures set forth 
in the document are intended to require applicants to submit enough 
information to permit the Commission to determine their qualifications 
to participate in Auction 903, without requiring so much information 
that it is cost-prohibitive for any entity, including small entities, 
to participate. For example, the Commission adopts a modified version 
of the proposal in the CAF II Auction Comment Public Notice regarding 
an applicant's financial qualifications that no longer places added 
emphasis on an applicant's score for the current ratio and equity ratio 
metrics in light of concerns that those two thresholds are difficult 
for certain providers, including small providers, to meet.
    283. Finally, recognizing that some entities may be new to 
Commission auctions, the Commission announces the types of materials 
and other information the Commission will make available to help 
educate parties that have not previously applied to participate or bid 
in a Commission auction. Specifically, the Bureaus will compile and 
release a guide that provides further technical and mathematical detail 
regarding the bidding, assignment, and support amount determination 
procedures. Two online tutorials will be available to serve as 
references for potential applicants and bidders, and two workshops/
webinars will be held. Additionally, a mock auction will be conducted 
that will enable all qualified bidders, including small entities, to 
become familiar with the CAF II Bidding System and to practice 
submitting bids prior to the auction. By providing these resources, the 
Commission seeks to minimize any economic impact on small entities and 
help all entities--both large and small--fully understand the bidding 
and application procedures. The Bureaus also plan to work with the 
Commission's Office of Communications Business Opportunities to engage 
with small providers.
    284. Report to Congress. The Commission will send a copy of the 
document, including this Supplemental FRFA, in a report to Congress 
pursuant to the Congressional Review Act. In addition, the Commission 
will send a copy of the document, including this Supplemental FRFA, to 
the Chief Counsel for Advocacy of the SBA. A copy of the document and 
Supplemental FRFA (or summaries thereof) will also be published in the 
Federal Register.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2018-05142 Filed 3-28-18; 8:45 am]
 BILLING CODE 6712-01-P