[Federal Register Volume 83, Number 169 (Thursday, August 30, 2018)]
[Rules and Regulations]
[Pages 44416-44447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18692]



[[Page 44415]]

Vol. 83

Thursday,

No. 169

August 30, 2018

Part II





Federal Communications Commission





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47 CFR Parts 1, 2, 15, et al.





Auctions of Upper Microwave Flexible Use Licenses for Next-Generation 
Wireless Services; Rule

  Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / 
Rules and Regulations  

[[Page 44416]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 2, 15, 25, 30, and 101

[AU Docket No. 18-85; FCC 18-109]


Auctions of Upper Microwave Flexible Use Licenses for Next-
Generation Wireless Services

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes procedures, upfront payment amounts, 
minimum opening bids, dates and deadlines for the upcoming auctions of 
Upper Microwave Flexible Use Service (UMFUS) licenses in the 28 GHz and 
24 GHz bands. The Auctions 101 and 102 Procedures Public Notice 
summarized here is intended to familiarize applicants with the 
procedures and other requirements governing participation in Auctions 
101 and 102, and provides an overview of the post-auction application 
and payment processes.

DATES: Applications to participate in Auctions 101 and 102 must be 
submitted by 6:00 p.m. Eastern Time (ET) on September 18, 2018. Upfront 
payments for Auction 101 must be received by 6:00 p.m. ET on October 
23, 2018. Bidding in Auction 101 is scheduled to begin on November 14, 
2018.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 
Erik Beith or Kathryn Hinton at (202) 418-0660; for general auction 
questions: Auctions Hotline at (717) 338-2868; Wireless 
Telecommunications Bureau, Broadband Division: For Upper Microwave 
Flexible Use Service licensing and service rule questions: Nancy Zaczek 
at (202) 418-2487 or Tim Hilfiger at (717) 338-2578.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice 
(Auctions 101 and 102 Procedures Public Notice), AU Docket No. 18-85, 
adopted on August 2, 2018, and released on August 3, 2018, and a Public 
Notice announcing an updated list of licenses for Auction 102, released 
on August 9, 2018. The complete text of the Auctions 101 and 102 
Procedures Public Notice and the subsequent August 9th Public Notice, 
including all attachments and any related documents, is available for 
public inspection and copying from 8:00 a.m. to 4:30 p.m. ET Monday 
through Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the 
FCC Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554. The complete text is also available on the 
Commission's website at: https://www.fcc.gov/auction/101 and https://www.fcc.gov/auction/102. Alternative formats are available to persons 
with disabilities by sending an email to [email protected] or by calling 
the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).

I. General Information

A. Introduction

    1. By the Auctions 101 and 102 Procedures Public Notice, the 
Commission established procedures for the upcoming auctions of 5,984 
Upper Microwave Flexible Use Service (UMFUS) licenses in the 27.5-28.35 
GHz (28 GHz) and 24.25-24.45 and 24.75-25.25 GHz (24 GHz) bands 
(collectively, the UMFUS bands).
    2. The bidding in the auction for licenses in the 28 GHz band, 
which is designated as Auction 101, is scheduled to commence on 
November 14, 2018. Bidding in the auction for licenses in the 24 GHz 
band, which is designated as Auction 102, will be scheduled to commence 
after the conclusion of bidding in Auction 101. The Auctions 101 and 
102 Procedures Public Notice provides details regarding the procedures, 
terms, and conditions, as well as dates and deadlines, governing 
participation in Auctions 101 and 102, and an overview of the post-
auction application and payment processes.

B. Background and Relevant Authority

    3. Prospective applicants should familiarize themselves with the 
Commission's general competitive bidding rules, including recent 
amendments and clarifications, as well as Commission decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Prospective 
applicants should also familiarize themselves with the Commission's 
UMFUS service and competitive bidding requirements contained in part 30 
of the Commission's rules, as well as Commission orders concerning 
competitive bidding for UMFUS licenses. Applicants must also be 
thoroughly familiar with the procedures, terms, and conditions 
contained in the Auctions 101 and 102 Procedures Public Notice and any 
future public notices that may be released in proceeding 18-85.
    4. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in its public notices at any time 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to Auctions 101 and 102. Copies of most auctions-related 
Commission documents, including public notices, can be retrieved from 
the Commission's FCC Auctions internet site at www.fcc.gov/auctions/. 
Additionally, documents are available at the Commission's headquarters, 
located at 445 12th Street SW, Washington, DC 20554, during normal 
business hours.

C. Description of Licenses To Be Offered in Auctions 101 and 102

    5. The Commission will proceed to the assignment of 28 GHz licenses 
in Auction 101 and the assignment of 24 GHz licenses in Auction 102. 
Doing so will make 1.55 gigahertz of UMFUS spectrum available in 
Auctions 101 and 102, licensed on a geographic area basis. The 3,072 
licenses in the 28 GHz band offered in Auction 101 will be county-based 
licenses. There is a total of 3,232 counties. The 28 GHz county 
licenses that the Commission is making available in Auction 101 are 
defined by 1990 boundaries. The 28 GHz band will be licensed as two 
425-megahertz blocks (27.500-27.925 GHz and 27.925-28.350 GHz). For 
each county in which 28 GHz licenses will be available for auction, 
both blocks of the 28 GHz band will be available.
    6. Auction 102 will offer 2,912 licenses in the 24 GHz band, and 
the licenses will be based on PEAs. There is a total of 416 PEAs. The 
lower segment of the 24 GHz band (24.25-24.45 GHz) will be licensed as 
two 100-megahertz blocks, while the upper segment (24.75-25.25 GHz) 
will be licensed as five 100-megahertz blocks. In one PEA, one 75-
megahertz block will be licensed in the upper segment.
    7. Each of the bands available in Auctions 101 and 102 will be 
licensed on an unpaired basis. A licensee in these bands may provide 
any services permitted under a fixed or mobile allocation, as set forth 
in the non-Federal Government column of the Table of Frequency 
Allocations in Sec.  2.106 of the Commission's rules.
    8. Summaries of the licenses to be offered in Auctions 101 and 102 
are available on the Commission's FCC Auctions internet site. The 28 
GHz licenses available in Auction 101 do not

[[Page 44417]]

include counties within the boundaries of existing active 28 GHz 
licenses. The complete list of licenses to be offered in these auctions 
is provided in electronic format only, available as separate Attachment 
A files for each auction at www.fcc.gov/auction/101 and www.fcc.gov/auction/102, respectively.
    9. Active licenses in the 28 GHz band cover 1,696 full counties and 
one partial county. In Anchorage County, Alaska, part of the county is 
encumbered, and the other part will be offered in Auction 101. That 
county is noted with a double asterisk in Attachment A. The Commission 
notes that it has updated the list of licenses available in Auction 101 
to reflect that the previously partitioned portion of Horry County is 
now part of license WPOH936 and held by Horry Telephone Cooperative, 
Inc.
    10. The list of licenses to be offered in the 24 GHz band has been 
updated subsequent to the release of the Auctions 101 and 102 
Procedures Public Notice to adjust the categories and number of generic 
blocks that will be available in Auction 102.
    11. Specifically, on August 9, 2018, an updated list of licenses 
was made available which indicates that for Auction 102, in one PEA, 
one of the blocks in the upper 24 GHz band will have reduced bandwidth 
(75 megahertz). That block will be offered in an additional category, 
for a total of three categories of blocks in that PEA. That PEA is 
noted with an asterisk in the Attachment A file. In three other PEAs, 
one fewer block will be available in the upper 24 GHz band. 
Accordingly, the clock phase of Auction 102 will allow bidding for two 
generic 100-megahertz blocks in the lower 24 GHz segment (Category L) 
in every PEA and five generic 100-megahertz blocks in the upper 24 GHz 
segment (Category U) in most PEAs (i.e., those without an incumbent 
licensee). In three PEAs, four 100-megahertz Category U blocks will be 
available instead of five. In one other PEA, four 100-megahertz 
Category U blocks will be available plus one 75-megahertz block in the 
upper 24 GHz segment (Category UI). Additional information is available 
in the Attachment A file on the Auction 102 website.

D. Auction Specifics

1. Separate Auction Application and Bidding Processes
    12. The Commission will offer the 5,984 licenses through two 
separate auctions, Auctions 101 and 102, respectively. Bidding in 
Auction 101 for 28 GHz band licenses is scheduled to commence on 
November 14, 2018. Bidding will commence in Auction 102 for 24 GHz band 
licenses after the close of bidding in Auction 101.
    13. The Commission also will use separate application and bidding 
processes for Auctions 101 and 102. In addition, the Commission will 
accept auction applications during separate application filing 
windows--one for Auction 101 and one for Auction 102. The Commission 
will use its standard simultaneous multiple-round (SMR) auction format 
for Auction 101 (28 GHz) and a clock auction format, similar to that 
used for the forward auction portion (Auction 1002) of the Broadcast 
Incentive Auction, for Auction 102 (24 GHz).
    14. The filing window for Auction 102 will run concurrently with 
the filing window for Auction 101.
    15. The Commission's rules regarding certain application 
requirements and certifications (e.g., joint bidding agreements 
relating to the licenses subject to auction), the rule prohibiting 
certain communications, and the Commission's procedures regarding 
information available during the auction process will apply across both 
auctions. An applicant seeking to participate in both auctions must 
submit an application in each auction. The same applicant, filing two 
applications, one in each auction, is a single applicant for purposes 
of the rule prohibiting certain communications. Accordingly, that 
applicant's internal communications regarding the two auctions are not 
covered by the prohibition.
    16. The Commission notes that, while it is applying its limited 
information disclosure procedures across both auctions, certain bidding 
information is publicly available during the bidding process, 
including, for each license offered in Auction 101: The amount of every 
bid placed, the number of bidders that placed a bid, and whether a bid 
was withdrawn after each round. At the end of Auction 101 (i.e., after 
the last round of Auction 101), potential bidders in Auction 102 will 
have access to the public results data from each round of Auction 101, 
including the gross winning bid amounts. The Commission will defer the 
acceptance of upfront payments for Auction 102 until after the close of 
Auction 101. The deadline for submitting upfront payments for Auction 
102 will occur before the start of bidding in Auction 102, and will be 
announced in a later public notice. The Commission also will apply its 
bidding credit cap separately to each auction. The Commission 
anticipates that the bidding for Auction 102 will start no earlier than 
four weeks after the release of a public notice announcing the closing 
of Auction 101.
2. Auction Title and Start Date
    17. The auction of licenses in the 28 GHz band will be referred to 
as Auction 101-28 GHz Band. Bidding in Auction 101 will begin on 
Wednesday, November 14, 2018. The initial schedule for bidding rounds 
in Auction 101 will be announced by public notice at least one week 
before bidding in the auction starts. Unless otherwise announced, 
bidding on all licenses will be conducted on each business day until 
bidding has stopped on all licenses.
    18. The auction of licenses in the 24 GHz band will be referred to 
as Auction 102-24 GHz Band. The clock phase of Auction 102 will begin 
no sooner than four weeks after the release of a public notice 
announcing the closing of Auction 101. Unless otherwise announced, 
bidding on all generic spectrum blocks in all PEAs will be conducted on 
each business day until bidding has stopped on all spectrum blocks in 
all PEAs. Following the conclusion of the clock phase, the Auction 
System will make available more detailed information about the 
assignment phase to the winning clock phase bidders not less than five 
business days before starting the assignment phase. Winning bidders 
from the clock phase will be given scheduling information and bidding 
options for the assignment phase in the Auction System.
3. Auction Dates and Deadlines
    19. The following dates and deadlines apply to Auction 101:

Auction Application Tutorial Available (via internet)--August 28, 2018
Short-Form Application (FCC Form 175)
    Filing Window Opens--September 5, 2018; 12:00 noon ET
Short-Form Application (FCC Form 175)
    Filing Window Deadline--September 18, 2018; 6:00 p.m. ET
Upfront Payments (via wire transfer)--October 23, 2018; 6:00 p.m. ET
Bidding Tutorial Available (via internet)--No later than November 1, 
2018
Mock Auction--November 8, 2018
Bidding Begins in Auction 101--November 14, 2018

    20. The following dates and deadlines apply to Auction 102:

Auction Application Tutorial Available (via internet)--August 28, 2018
Short-Form Application (FCC Form 175)
    Filing Window Opens--September 5, 2018; 12:00 noon ET
Short-Form Application (FCC Form 175)
    Filing Window Deadline--September

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18, 2018; 6:00 p.m. ET

    21. The remainder of the pre-auction dates and deadlines for 
Auction 102 will be announced in a later public notice to be released 
by the Bureau after the close of bidding in Auction 101. That public 
notice will announce when the bidding tutorial will become available, 
the upfront payment deadline, the date of the clock and assignment 
phase mock auction, and when bidding will begin in the clock phase of 
Auction 102.
4. Requirements for Participation
    22. Those wishing to participate in Auction 101 and/or Auction 102 
must:
     Submit a separate short-form application (FCC Form 175) 
electronically for each auction in which they seek to participate prior 
to 6:00 p.m. ET on September 18, 2018, following the electronic filing 
procedures set forth in the FCC Form 175 Instructions. Detailed 
instructions for submitting an FCC Form 175 for Auction 101 and Auction 
102 (FCC Form 175 Instructions) can be accessed at www.fcc.gov/auction/101 and www.fcc.gov/auction/102/.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) for the particular auction by 6:00 p.m. ET 
on the applicable deadline, following the procedures and instructions 
set forth in the FCC Form 159 Instructions. Detailed instructions for 
submitting an FCC Form 159 for Auction 101 (FCC Form 159 Instructions) 
can be accessed at www.fcc.gov/auction/101/. The Bureau will prepare 
and release after the close of bidding in Auction 101 detailed 
instructions for submitting an FCC Form 159 for Auction 102.
    [cir] For Auction 101, the deadline for submitting upfront payments 
and FCC Form 159 is 6:00 p.m. ET on October 23, 2018.
    [cir] For Auction 102, the deadline for submitting upfront payments 
and FCC Form 159 will be announced in a later public notice.
     Comply with all provisions outlined in the Auctions 101 
and 102 Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auctions 101 and 102

A. General Information Regarding Short-Form Applications

    23. An application to participate in Auction 101 or Auction 102, 
referred to as a short-form application or FCC Form 175, provides 
information that the Commission uses to determine whether the applicant 
has the legal, technical, and financial qualifications to participate 
in a Commission auction for spectrum licenses. The short-form 
application is the first part of the Commission's two-phased auction 
application process. In the first phase, a party seeking to participate 
in Auction 101 and/or Auction 102 must file a separate short-form 
application for each auction in which it seeks to participate, in which 
it certifies, under penalty of perjury, its qualifications. Eligibility 
to participate in Auction 101 and/or Auction 102 is based on an 
applicant's short-form application(s) and certifications and on the 
applicant's submission of a sufficient upfront payment for the 
auction(s). In the second phase of the process, each winning bidder 
must file a more comprehensive post-auction, long-form application (FCC 
Form 601) for the licenses it wins in each auction, and it must have a 
complete and accurate ownership disclosure information report (FCC Form 
602) on file with the Commission. The Commission reminds applicants 
that being deemed qualified to bid in Auction 101 or Auction 102 does 
not constitute a determination that a party is qualified to hold a 
Commission license or is eligible for a designated entity bidding 
credit.
    24. A party seeking to participate in Auction 101 and/or Auction 
102 must file a separate FCC Form 175 electronically for each auction 
in which it wishes to participate via the Auction Application System 
prior to 6:00 p.m. ET on September 18, 2018, following the procedures 
prescribed in the FCC Form 175 Instructions. If an applicant claims 
eligibility for a bidding credit, the information provided in its FCC 
Form 175 as of the filing date will be used to determine whether the 
applicant may request the claimed bidding credit. An applicant that 
files an FCC Form 175 for Auction 101 and/or Auction 102 will be 
subject to the Commission's rule prohibiting certain communications. 
The prohibition of certain communications will apply across both 
auctions (i.e., will apply to any applicant in either Auction 101 or 
102). An applicant is subject to the prohibition beginning at the 
deadline for filing short-form applications--6:00 p.m. ET on September 
18, 2018. The prohibition will end for applicants in both auctions on 
the post-auction down payment deadline for Auction 102.
    25. An applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. Each applicant 
must make a series of certifications under penalty of perjury on its 
FCC Form 175 related to the information provided in its application and 
its participation in the auction, and it must confirm that it is 
legally, technically, financially, and otherwise qualified to hold a 
license. If an Auction 101 or Auction 102 applicant fails to make the 
required certifications in its FCC Form 175 by the filing deadline, its 
application will be deemed unacceptable for filing and cannot be 
corrected after the filing deadline.
    26. An applicant should note that submitting an FCC Form 175 (and 
any amendments thereto) constitutes a representation by the certifying 
official that he or she is an authorized representative of the 
applicant with authority to bind the applicant, that he or she has read 
the form's instructions and certifications, and that the contents of 
the application, its certifications, and any attachments are true and 
correct. Applicants are not permitted to make major modifications to 
their FCC Form 175 applications after the filing deadline. A change in 
the required certifications is considered a major change and would 
therefore not be permitted. Submitting a false certification to the 
Commission may result in penalties, including monetary forfeitures, 
license forfeitures, ineligibility to participate in future auctions, 
and/or criminal prosecution.
    27. Applicants are cautioned that because the required information 
submitted in FCC Form 175 bears on each applicant's qualifications, 
requests for confidential treatment will not be routinely granted. The 
Commission has held generally that it may publicly release confidential 
business information where the party has put that information at issue 
in a Commission proceeding or where the Commission has identified a 
compelling public interest in disclosing the information. The 
Commission has specifically held that information submitted in support 
of receiving bidding credits in auction proceedings should be made 
available to the public.
    28. With respect to a particular auction (i.e., Auction 101 or 
Auction 102), the same party may not bid based on more than one auction 
application, i.e., as more than one applicant. Therefore, a party may 
not submit more than one short-form application for Auction 101 or for 
Auction 102. A party that wishes to participate in both Auctions 101 
and 102 must file a separate auction application for each auction--one 
for Auction 101 and one for Auction 102. That same party, however, may 
not file more than one short-form application for a particular auction 
(e.g., may not file two short-form applications for Auction 101). If a

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party submits multiple short-form applications for either auction, only 
one application may be the basis for that party to become qualified to 
bid in that auction.
    29. A party is generally permitted to participate in a Commission 
auction only through a single bidding entity. The filing of 
applications in a single auction (i.e., either Auction 101 or Auction 
102) by multiple entities controlled by the same individual or set of 
individuals will generally not be permitted. This restriction applies 
across all applications in each auction (i.e., Auction 101 or Auction 
102), without regard to the licenses or geographic areas selected. The 
Commission adopted a limited exception to the general prohibition on 
the filing of multiple applications by commonly-controlled entities for 
qualified rural wireless partnerships and individual members of such 
partnerships. Under this limited exception, each qualifying rural 
wireless partnership and its individual members will be permitted to 
participate separately in an auction. The filing of applications in 
both auctions (i.e., one application for Auction 101 and one 
application for Auction 102) by entities controlled by the same 
individual or set of individuals will generally only be permitted if 
the two applicants are identical (i.e., the same entity applies as an 
applicant in both auctions).
    30. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications for 
Auctions 101 and 102 to determine whether each application complies 
with the application requirements and whether it has provided all 
required information concerning the applicant's qualifications for 
bidding. After this review is completed for a particular auction, a 
public notice will be released announcing the status of applications 
for that auction and identifying the applications that are complete and 
those that are incomplete because of minor defects that may be 
corrected. That 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. To become a qualified bidder, 
an applicant must have a complete application (i.e., have timely 
corrected any identified deficiencies) and make a timely and sufficient 
upfront payment. Qualified bidders for each auction will be identified 
by public notice at least 10 days prior to the respective mock auction.
    31. An applicant should consult the Commission's rules to ensure 
that all required information is included in its short-form 
application. To the extent the information in the Auctions 101 and 102 
Procedures Public Notice 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 
Auctions 101 and 102 and/or use the contact information provided in the 
Auctions 101 and 102 Procedures Public Notice to consult with 
Commission staff to better understand the information it must submit in 
its short-form application.

B. Authorized Bidders

    32. An applicant must designate at least one individual as an 
authorized bidder, and no more than three, in its FCC Form 175. The 
Commission's rules prohibit an individual from serving as an authorized 
bidder for more than one auction applicant. For Auctions 101 and 102, 
the same individual may not be listed as an authorized bidder in more 
than one FCC Form 175 submitted for a particular auction. An applicant 
may not use an individual as an authorized bidder in one auction, if 
that individual is identified as an authorized bidder in the other, 
unless the two applicants are identical. In other words, an individual 
may be listed as an authorized bidder in an application filed in 
Auction 101 and in another application filed in Auction 102 only if 
both applications are filed by the same entity.

C. License or License Area Selection

    33. An applicant must select all of the licenses (Auction 101) or 
license areas (Auction 102) on which it may want to bid from the list 
of available licenses or PEAs on its FCC Form 175 for the appropriate 
auction. Under the Commission's adopted SMR auction design for Auction 
101, an applicant will identify on its auction application the licenses 
offered on which it may wish to bid during the auction. Under the 
Commission's adopted clock auction design for Auction 102, an applicant 
will select on its auction application all of the PEA(s) on which it 
may want to bid from the list of available PEAs. An applicant must 
carefully review and verify its license or PEA selections, as 
applicable, before the FCC Form 175 filing deadline because those 
selections cannot be changed after the auction application filing 
deadline. The auction system will not accept bids on licenses or 
generic blocks in PEAs that were not selected on the applicant's FCC 
Form 175.

D. Disclosure of Agreements and Bidding Arrangements

    34. An applicant must provide in its FCC Form 175 a brief 
description of, and identify each party to, any partnerships, joint 
ventures, consortia or agreements, arrangements, or understandings of 
any kind relating to the licenses being auctioned, including any 
agreements that address or communicate directly or indirectly bids 
(including specific prices), bidding strategies (including the specific 
licenses on which to bid or not to bid), or the post-auction market 
structure, to which the applicant, or any party that controls or is 
controlled by the applicant, is a party. A controlling interest 
includes all individuals or entities with positive or negative de jure 
or de facto control of the licensee. The applicant must certify under 
penalty of perjury in its FCC Form 175 that it has described, and 
identified each party to, any such agreements, arrangements, or 
understandings into which it has entered. An applicant may continue 
negotiating, discussing, or communicating with respect to a new 
agreement after the FCC Form 175 filing deadline, provided that the 
communications involved do not relate both to the licenses being 
auctioned and to bids or bidding strategies or post-auction market 
structure. An auction applicant that enters into any agreement relating 
to the licenses being auctioned during an auction is subject to the 
same disclosure obligations it would be for agreements existing at the 
FCC Form 175 filing deadline, and it must maintain the accuracy and 
completeness of the information in its pending auction application.
    35. If parties agree in principle on all material terms prior to 
the application filing deadline, each party to the agreement that is 
submitting an auction application must provide a brief description of, 
and identify the other party or parties to, the agreement on its 
respective FCC Form 175, even if the agreement has not been reduced to 
writing. If the parties have not agreed in principle by the FCC Form 
175 filing deadline, they should not describe, or include the names of 
parties to, the discussions on their applications.
    36. The Commission's rules now generally prohibit joint bidding and 
other arrangements involving auction applicants (including any party 
that controls or is controlled by, such applicants). Joint bidding 
arrangements include arrangements relating to the

[[Page 44420]]

licenses being auctioned that address or communicate, directly or 
indirectly, bidding at the auction, bidding strategies, including 
arrangements regarding price or the specific licenses on which to bid, 
and any such arrangements relating to the post-auction market 
structure. The Commission notes that application of this prohibition 
requires a case-by-case determination based on the details of a 
specific arrangement. The Commission directs the Bureau to make such 
determinations expeditiously.
    37. This prohibition applies to joint bidding arrangements 
involving two or more nationwide providers, as well as joint bidding 
arrangements involving a nationwide provider and one or more non-
nationwide providers, where any party to the arrangement is an 
applicant for the auction. A non-nationwide provider refers to any 
provider of communications services that is not a nationwide provider. 
Non-nationwide providers may enter into agreements to form a consortium 
or a joint venture (as applicable) that result in a single party 
applying to participate in an auction. While two or more non-nationwide 
providers may participate in an auction through a joint venture, a 
nationwide and a non-nationwide provider may not do so. A designated 
entity (DE) can participate in only one consortium or joint venture in 
an auction, which shall be the exclusive bidding vehicle for its 
members in that auction, and non-nationwide providers that are not 
designated entities may participate in an auction through only one 
joint venture, which also shall be the exclusive bidding vehicle for 
its members in that auction. A consortium is an entity formed to apply 
as a single applicant to bid at auction pursuant to an agreement by two 
or more separate and distinct legal entities that individually are 
eligible to claim the same designated entity benefits under Sec.  
1.2110 of the Commission's rules, provided that no member of the 
consortium may be a nationwide provider. A joint venture means a 
legally cognizable entity formed to apply as a single applicant to bid 
at auction pursuant to an agreement by two or more separate and 
distinct legal entities, provided that no member of the joint venture 
may be a nationwide provider. The general prohibition on joint bidding 
arrangements excludes certain agreements, including those that are 
solely operational in nature. Agreements that are solely operational in 
nature are those that address operational aspects of providing a mobile 
service, such as agreements for roaming, spectrum leasing and other 
spectrum use arrangements, or device acquisition, as well as agreements 
for assignment or transfer of licenses, provided that any such 
agreement does not both relate to the licenses at auction and address 
or communicate, directly or indirectly, bidding at auction (including 
specific prices to be bid) or bidding strategies (including the 
specific licenses on which to bid or not to bid) or post-auction market 
structure.
    38. The Commission's rules require each auction applicant to 
certify in its short-form application that it has disclosed any 
arrangements or understandings of any kind relating to the licenses 
being auctioned to which it (or any party that controls or is 
controlled by it) is a party. The applicant must also certify that it 
(or any party that controls or is controlled by it) has not entered and 
will not enter into any arrangement or understanding of any kind 
relating directly or indirectly to bidding at auction with, among 
others, any other applicant or a nationwide provider.
    39. The Commission has identified AT&T, Sprint, T-Mobile, and 
Verizon Wireless as nationwide providers for the purpose of 
implementing its competitive bidding rules in Auctions 101 and 102. The 
Commission will apply the rule prohibiting joint bidding arrangements 
to any applicant for Auction 101 or Auction 102. The rule prohibiting 
joint bidding arrangements will apply to all applicants (including any 
party that controls or is controlled by, such applicants) to 
participate in either auction, and not just to applicants for the same 
auction. A party wishing to participate in either auction will be 
required to disclose in its short-form application any bidding 
arrangements or understandings of any kind relating to the licenses 
being offered in either Auction 101 or Auction 102. The Commission will 
apply the agreement disclosure requirement and prohibition against 
joint bidding agreements such that the licenses being auctioned and 
licenses at auction include all of the licenses being offered in 
Auctions 101 and 102.
    40. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an excepted agreement that has been disclosed in an FCC Form 175, 
the Commission reminds applicants that certain discussions or exchanges 
could nonetheless touch upon impermissible subject matters, and that 
compliance with the Commission's rules will not insulate a party from 
enforcement of the antitrust laws.
    41. Applicants should bear in mind that a winning bidder will be 
required to disclose in its FCC Form 601 post-auction application the 
specific terms, conditions, and parties involved in any agreement 
relating to the licenses being auctioned into which it had entered 
prior to the time bidding was completed. This applies to any bidding 
consortium, joint venture, partnership, or other agreement, 
arrangement, or understanding of any kind entered into relating to the 
competitive bidding process, including any agreements relating to the 
licenses being auctioned that address or communicate directly or 
indirectly bids (including specific prices), bidding strategies 
(including the specific licenses on which to bid or not to bid), or the 
post-auction market structure, to which the applicant, or any party 
that controls or is controlled by the applicant, is a party.

E. Ownership Disclosure Requirements

    42. Each applicant must comply with the applicable part 1 ownership 
disclosure requirements and provide information required by Sec. Sec.  
1.2105 and 1.2112, and, where applicable, Sec.  1.2110, of the 
Commission's rules. In completing FCC Form 175, 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. Sec.  1.2105 and 1.2112, and, 
where applicable, Sec.  1.2110, of the Commission's rules. Each 
applicant is responsible for ensuring that information submitted in its 
short-form application is complete and accurate.
    43. 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 175 will automatically be pre-filled into certain 
ownership sections on the applicant's FCC Form 175, if such information 
is in an electronic format compatible with FCC Form 175. The FCC Form 
175 instructions provide additional details on pre-filled information. 
Applicants are encouraged to submit an FCC Form 602 ownership report or 
update any ownership information on file with the Commission in an FCC 
Form 602 ownership report prior to starting an application for Auction 
101 or Auction 102 to ensure that their most recent

[[Page 44421]]

ownership information is pre-filled into their short-form applications 
and, for applicants seeking to participate in both Auctions 101 and 
102, to reduce the number of changes that need to be made in both 
applications. Each applicant must carefully review any ownership 
information automatically entered into its FCC Form 175, including any 
ownership attachments, to confirm that all information supplied on FCC 
Form 175 is complete and accurate as of the application filing 
deadline. Any information that needs to be corrected or updated must be 
changed directly in FCC Form 175.

F. Foreign Ownership Disclosure Requirements

    44. Section 310 of the Communications Act requires the Commission 
to review foreign investment in radio station licenses and imposes 
specific restrictions on who may hold certain types of radio licenses. 
The provisions of section 310 apply to applications for initial radio 
licenses, applications for assignments and transfers of control of 
radio licenses, and spectrum leasing arrangements under the 
Commission's secondary market rules. In completing the FCC Form 175, an 
applicant will be required to disclose information concerning foreign 
ownership of the applicant. If an applicant has foreign ownership 
interests in excess of the applicable limit or benchmark set forth in 
section 310(b), it may seek to participate in Auction 101 and/or 
Auction 102 as long as it has filed a petition for declaratory ruling 
with the Commission prior to the FCC Form 175 filing deadline. An 
applicant must certify in its FCC Form 175 that, as of the deadline for 
filing its application to participate in a particular auction, the 
applicant either is in compliance with the foreign ownership provisions 
of section 310 or has filed a petition for declaratory ruling 
requesting Commission approval to exceed the applicable foreign 
ownership limit or benchmark in section 310(b) that is pending before, 
or has been granted by, the Commission. Additional information 
concerning foreign ownership disclosure is provided in the FCC Form 175 
Filing Instructions.

G. Information Procedures During the Auction Process

    45. The Commission will limit information available in Auctions 101 
and 102. The Commission will not make public until after bidding in 
both auctions has closed: (1) The licenses or PEAs that an applicant 
selects for bidding in its FCC Form 175, (2) the amount of any upfront 
payment made by or on behalf of an applicant for Auction 101 or Auction 
102, (3) any applicant's bidding eligibility, and (4) any other 
bidding-related information that might reveal the identity of the 
bidder placing a bid.
    46. Information to be made public after each round of bidding in 
Auction 101 will include, for each license, the number of bidders that 
placed a bid on the license, the amount of every bid placed, whether a 
bid was withdrawn, the minimum acceptable bid amount for the next 
round, and whether the license has a provisionally winning bid. The 
Auction System will indicate whether any proactive waivers were 
submitted in each round and the stage transition percentage--the 
percentages of licenses (as measured in bidding units) on which there 
were new bids--for the round. After the last round in Auction 101, the 
Commission will also make public the gross winning bid amount for each 
license. In Auction 102, information to be made public after each round 
of bidding in the clock phase will include, for each category of 
license in each geographic area, the supply, the aggregate demand, the 
price at the end of the last completed round, and the price for the 
next round.
    47. Any information relating to either auction that is non-public 
under the Commission's limited information procedures will remain non-
public until after bidding has closed in both auctions.
    48. The Commission will make non-public information relating to 
Auctions 101 and 102, including the results of the respective auctions, 
available only after the close of bidding in Auction 102. Bidders' 
license and/or PEA selections, as applicable, upfront payment amounts, 
bidding eligibility, bids, and other bidding-related actions concerning 
Auctions 101 and 102 will be made publicly available after the close of 
bidding in Auction 102. The Commission retains the discretion not to 
use limited information procedures if the Bureau, after examining the 
level of potential competition based on the short-form applications 
filed for Auction 101 and Auction 102, determines that the 
circumstances indicate that limited information procedures would not be 
an effective tool for deterring anti-competitive behavior. The 
identities of bidders placing specific bids or withdrawals (as 
applicable) and the net bid amounts (reflecting bidding credits) for 
Auctions 101 and 102 will not be disclosed until after the close of 
bidding in Auction 102. Bidders will have access to additional 
information related to their own bidding and bid eligibility. For 
example, bidders will be able to view their own level of eligibility, 
before and during each respective auction, through the FCC auction 
bidding system.
    49. The Commission warns applicants that the direct or indirect 
communication to other applicants or the public disclosure of non-
public information (e.g., bid withdrawals, proactive waivers submitted, 
reductions in eligibility, identities of bidders) could violate the 
Commission's rule prohibiting certain communications. To the extent an 
applicant believes that such a disclosure is required by law or 
regulation, including regulations issued by the SEC, the Commission 
strongly urges that the applicant consult with the Commission staff in 
the Auctions and Spectrum Access Division before making such 
disclosure.

H. Prohibited Communications and Compliance With Antitrust Laws

    50. The rules prohibiting certain communications set forth in Sec.  
1.2105(c) apply to each applicant that files a short-form application 
(FCC Form 175) in Auction 101 or Auction 102. Section 1.2105(c)(1) of 
the Commission's rules provides that, subject to specified exceptions, 
after the short-form application filing deadline, all applicants are 
prohibited from cooperating or collaborating with respect to, 
communicating with or disclosing, to each other or any nationwide 
provider of communications services that is not an applicant, or, if 
the applicant is a nationwide provider, any non-nationwide provider 
that is not an applicant, in any manner the substance of their own, or 
each other's, or any other applicants' bids or bidding strategies 
(including post-auction market structure), or discussing or negotiating 
settlement agreements, until after the down payment deadline.
    51. The Commission will apply its rule prohibiting certain 
communications across both auctions, using the Auction 102 down payment 
deadline to determine when the prohibition ends for applicants in 
either auction. The rule prohibiting certain communications will apply 
to communications between every applicant to participate in either 
auction regarding any such applicant's bids or bidding strategies 
relating to either auction.
1. Entities Subject to Sec.  1.2105(c)
    52. An applicant for purposes of this rule includes all controlling 
interests in the entity submitting the FCC Form 175 auction 
application, as well as all holders of interests amounting to 10 
percent or more of the entity, and all officers and directors of that 
entity. A

[[Page 44422]]

party that submits an application for either auction becomes an 
applicant for both auctions under the rule at the application deadline, 
and that status does not change based on later developments. An auction 
applicant that does not correct deficiencies in its application, fails 
to submit a timely and sufficient upfront payment, or does not 
otherwise become qualified, remains an applicant for purposes of the 
rule and remains subject to the prohibition on certain communications 
until the Auction 102 down payment deadline.
2. Prohibition Applies Until Down Payment Deadline
    53. Section 1.2105(c)'s prohibition on certain communications 
begins at an auction's short-form application filing deadline and ends 
at the auction's down payment deadline after the auction closes, which 
will be announced in a future public notice.
    54. The Commission will use Auction 102's post-auction down payment 
deadline to determine when the prohibition ends for applicants in 
either auction. The prohibition on certain communications for 
applicants in either Auction 101 or Auction 102 will begin at the 
short-form application filing deadline for both auctions and will end 
at the down payment deadline for Auction 102.
3. Scope of Prohibition on Communications; Prohibition on Joint Bidding 
Agreements
    55. The Commission in 2015 amended Sec.  1.2105(c) to extend the 
prohibition on communications to cover all applicants for an auction 
regardless of whether the applicants seek permits or licenses in the 
same geographic area, or market. In addition, the rule now applies to 
communications by applicants with non-applicant nationwide providers of 
communications services and by nationwide applicants with non-applicant 
non-nationwide providers. The Commission now prohibits a joint bidding 
arrangement, including arrangements relating to the permits or licenses 
being auctioned that address or communicate, directly or indirectly, 
bidding at the auction, bidding strategies, including arrangements 
regarding price or the specific permits or licenses on which to bid, 
and any such arrangements relating to the post-auction market 
structure. The revised rule provides limited exceptions for a 
communication within the scope of any arrangement consistent with the 
exclusion from the Commission's rule prohibiting joint bidding, 
provided such arrangement is disclosed on the applicant's auction 
application. Applicants may continue to communicate pursuant to any 
pre-existing agreements, arrangements, or understandings that are 
solely operational or that provide for the transfer or assignment of 
licenses, provided that such agreements, arrangements, or 
understandings are disclosed on their applications and do not both 
relate to the licenses at auction and address or communicate bids 
(including amounts), bidding strategies, or the particular permits or 
licenses on which to bid or the post-auction market structure.
    56. The prohibition against communicating in any manner includes 
public disclosures as well as private communications and indirect or 
implicit communications. Consequently, an applicant must take care to 
determine whether its auction-related communications may reach another 
applicant. The Commission reminds applicants that they must determine 
whether their communications with other parties are permissible under 
the rule once the prohibition begins at the deadline for submitting 
applications, even before the public notice identifying the applicants 
is released.
    57. Parties subject to Sec.  1.2105(c) should take special care in 
circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any applicant's 
bids or bidding strategies. Such information may 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 through the shared officer, which creates an apparent 
violation of the rule.
    58. Section 1.2105(c)(1) prohibits applicants from communicating 
with specified other parties only with respect to their own, or each 
other's, or any other applicant's bids or bidding strategies. A 
communication conveying bids or bidding strategies (including post-
auction market structure) must also relate to the licenses being 
auctioned in order to be covered by the prohibition. Thus, the 
prohibition is limited in scope and does not apply to all 
communications between or among the specified parties.
    59. Business discussions and negotiations that are unrelated to 
bidding in Auction 101 or Auction 102 and that do not convey 
information about the bids or bidding strategies, including the post-
auction market structure, of an applicant in either auction, 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 101 or 
Auction 102 will not violate the rule. In contrast, communicating, 
among other things, how a party will participate, including specific 
geographic areas selected, specific bid amounts, and/or whether or not 
the party is placing bids, would convey bids or bidding strategies and 
would be prohibited.
    60. Each applicant must remain vigilant not to communicate, 
directly or indirectly, information that affects, or could affect, bids 
or bidding strategies. Certain discussions might touch upon subject 
matters that could convey price or geographic information related to 
bidding strategies. Such subject areas include, but are not limited to, 
management, sales, local marketing agreements, and other transactional 
agreements.
    61. The Commission cautions applicants that 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. The Commission has 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.
    62. When completing a short-form application, each applicant should 
avoid any statements or disclosures that may violate Sec.  1.2105(c). 
An applicant should avoid including any information in its short-form 
application that might convey information regarding its license or PEA 
selection, as applicable, such as referring to certain licenses or 
markets in describing agreements, including any information in 
application attachments

[[Page 44423]]

that will be publicly available that may otherwise disclose the 
applicant's license or PEA selections, or using applicant names that 
refer to licenses being offered.
    63. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate Sec.  1.2105(c) even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.
4. Communicating With Third Parties
    64. Section 1.2105(c) 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. The applicant should 
take 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 specified parties, as 
that would violate the rule. For example, an applicant might require a 
third party, such as a lender, to sign a non-disclosure 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.
    65. In the case of an individual, the objective precautionary 
measure of a firewall is not available. An individual that is privy to 
bids or bidding information of more than one applicant presents a 
greater risk of becoming a conduit for a prohibited communication. The 
Commission emphasizes that 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.
    66. The Commission's rules prohibit separate applicants for each 
auction (i.e., within one auction) or separate applicants for either 
auction (e.g., one applicant for Auction 101 and another for Auction 
102) from designating the same individual on their short-form 
applications to serve as an authorized bidder. A violation of the rules 
could also occur if the authorized bidders are different individuals 
employed by the same organization (e.g., a law firm, engineering firm, 
or consulting firm). 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.  1.2105(c). The 
Commission cautions that filing a certifying statement that 
precautionary steps have been taken will not outweigh specific evidence 
of an actual violation.
    67. The Commission reminds potential applicants that they may 
discuss the short-form application or bids for specific licenses or 
license areas with the counsel, consultant, or expert of their choice 
before the short-form application deadline. 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 licenses or PEAs selected on the 
short-form application, is conveyed to that individual. 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.
    68. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, an applicant's statement to the press that it 
intends to stop bidding in an auction could give rise to a finding of a 
Sec.  1.2105 violation. Similarly, an applicant's public statement of 
intent not to place bids during bidding in Auction 101 or Auction 102 
could also violate the rule.
5. Section 1.2105(c) Certifications
    69. By electronically submitting its FCC Form 175 auction 
application, each applicant for Auction 101 and Auction 102 certifies 
its compliance with Sec.  1.2105(c) of the rules. If an applicant has a 
non-controlling interest with respect to more than one application, the 
applicant must certify that it has established internal control 
procedures to preclude any person acting on behalf of the applicant 
from possessing information about the bids or bidding strategies of 
more than one applicant or communicating such information with respect 
to either applicant to another person acting on behalf of and 
possessing such information regarding another applicant. However, the 
mere filing of 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. Any applicant found to have violated these communication 
prohibitions may be subject to sanctions.
6. Duty To Report Prohibited Communications
    70. Section 1.2105(c)(4) requires that any applicant that makes or 
receives a communication that appears to violate Sec.  1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. Each applicant's obligation to report any such communication 
continues beyond the five-day period after the communication is made, 
even if the report is not made within the five-day period.
7. Procedures for Reporting Prohibited Communications
    71. A party reporting any information or communication pursuant to 
Sec. Sec.  1.65, 1.2105(a)(2), or 1.2105(c)(4) must take care to ensure 
that any report of a prohibited communication does not itself give rise 
to a violation of Sec.  1.2105(c). For example, a party's report of a 
prohibited communication could violate the rule by communicating 
prohibited information to other parties specified under the rule 
through the use of Commission filing procedures that allow such 
materials to be made available for public inspection.
    72. 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. This 
process differs from filing procedures used in connection with other 
Commission rules and processes, which may call for submission of 
filings to the Commission's Office of the Secretary or ECFS. Filing 
through the Office of Secretary or ECFS could allow the report to 
become publicly available and might result in the communication of 
prohibited information to other auction applicants. Any reports 
required by Sec.  1.2105(c) must be filed consistent with

[[Page 44424]]

the instructions set forth in the Auctions 101 and 102 Procedures 
Public Notice. For Auctions 101 and 102, 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 sent to both [email protected] and [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.
    73. 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. Filers requesting confidential treatment of documents must be 
sure that the cover page of the filing prominently displays that the 
documents seek confidential treatment. For example, a filing might 
include a cover page stamped with Request for Confidential Treatment 
Attached or Not for Public Inspection. Any such request must cover all 
the material to which the request applies. The Commission encourages 
such parties to coordinate with the Auctions and Spectrum Access 
Division staff about the procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements
    74. Each applicant that is a winning bidder will be required to 
provide as part of its long-form application any agreement or 
arrangement it has entered into and a summary of the specific terms, 
conditions, and parties involved in any agreement it has entered into. 
Such agreements must have been entered into prior to the filing of 
short-form applications. This applies to any bidding consortia, joint 
venture, partnership, or agreement, understanding, or other arrangement 
entered into relating to the competitive bidding process, including any 
agreement relating to the post-auction market structure. Failure to 
comply with the Commission's rules can result in enforcement action.
9. Additional Information Concerning Prohibition of Certain 
Communications in Commission Auctions
    75. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of Sec.  1.2105(c) is available on 
the Commission's auction web page at https://www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications/.
10. Antitrust Laws
    76. Compliance with the disclosure requirements of Sec.  
1.2105(c)(4) 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.
    77. 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 101, Auction 102, and in future 
auctions, among other sanctions.

I. Provisions for Small Businesses and Rural Service Providers

    78. The Commission's designated entity rules apply to all licenses 
acquired with bidding credits, including those won in Auctions 101 and 
102. A bidding credit represents an amount by which a bidder's winning 
bid will be discounted. Applicants should note that all references to a 
winning bid in the context of designated entity bidding credits for 
Auction 102 (e.g., the application of a small business discount to an 
applicant's winning bid) refer to the calculated license price. A 
disclosable interest holder of an applicant seeking designated entity 
benefits is defined as any individual or entity holding a 10 percent or 
greater interest of any kind in the applicant, including but not 
limited to, a 10 percent or greater interest in any class of stock, 
warrants, options, or debt securities in the applicant or licensee.
    79. In Auctions 101 and 102, bidding credits will be available to 
applicants demonstrating eligibility for a small business or a rural 
service provider bidding credit and subsequently winning license(s). 
Bidding credits will not be cumulative--for each auction, an applicant 
is permitted to claim either a small business bidding credit or a rural 
service provider bidding credit, but not both. Each applicant must also 
certify that it is eligible for the claimed bidding credit in its FCC 
Form 175. Each applicant should review carefully the Commission's 
decisions regarding the designated entity provisions as well as the 
part 1 rules.
    80. The Commission reminds applicants applying for designated 
entity bidding credits that they should take due account of the 
requirements of the Commission's rules and implementing orders 
regarding de jure and de facto control of such applicants. These rules 
include a prohibition, which applies to all applicants (whether or not 
seeking bidding credits), against changes in ownership of the applicant 
that would constitute an assignment or transfer of control. Any 
substantial change in ownership or control is classified as a major 
amendment. Applicants should not expect to receive any opportunities to 
revise their ownership structure after the filing of their short- and 
long-form applications, including making revisions to their agreements 
or other arrangements with interest holders, lenders, or others in 
order to address potential concerns relating to compliance with the 
designated entity bidding credit requirements.
1. Small Business Bidding Credit
    81. For Auctions 101 and 102, bidding credits will be available to 
eligible small businesses and consortia thereof. Under the service 
rules applicable to the UMFUS licenses to be offered in Auctions 101 
and 102, the level of bidding credit available is determined as 
follows:
     A bidder with attributed average annual gross revenues 
that do not exceed $55 million for the preceding three years is 
eligible to receive a 15 percent discount on its winning bid.
     A bidder with attributed average annual gross revenues 
that do not exceed $20 million for the preceding three years is 
eligible to receive a 25 percent discount on its winning bid.
    82. Small business bidding credits are not cumulative; for each 
auction, an eligible applicant may receive either the

[[Page 44425]]

15 percent or the 25 percent bidding credit on its winning bid, but not 
both. The Commission's unjust enrichment provisions also apply to a 
winning bidder that uses a bidding credit and subsequently seeks to 
assign or transfer control of its license within a certain period to an 
entity not qualifying for the same level of small business bidding 
credit. For example, the Commission's unjust enrichment provisions 
would not apply to a winning bidder that uses the 15 percent small 
business bidding credit and seeks to transfer control of its license to 
an entity that qualifies for either the 15 percent small business 
bidding credit or the rural service provider bidding credit. The 
provisions would apply if that same winning bidder uses the 25 percent 
small business bidding credit, unless the proposed transferee also 
qualifies for the 25 percent small business bidding credit.
    83. Each applicant claiming a small business bidding credit must 
disclose the gross revenues for the preceding three years for each of 
the following: (1) The applicant, (2) its affiliates, (3) its 
controlling interests, and (4) the affiliates of its controlling 
interests. The applicant must also submit an attachment that lists all 
parties with which the applicant has entered into any spectrum use 
agreements or arrangements for any licenses that be may won by the 
applicant in Auction 101 or Auction 102, as applicable. In addition, to 
the extent that an applicant has an agreement with any disclosable 
interest holder for the use of more than 25 percent of the spectrum 
capacity of any license that may be won in Auction 101 or Auction 102, 
the identity and the attributable gross revenues of any such 
disclosable interest holder must be disclosed. This attribution rule 
will be applied on a license-by-license basis. As a result, an 
applicant may be eligible for a bidding credit on some, but not all, of 
the licenses for which it is bidding in Auction 101 or Auction 102. If 
an applicant is applying as a consortium of small businesses, the 
disclosures described in this paragraph must be provided for each 
consortium member.
2. Rural Service Provider Bidding Credit
    84. An eligible applicant may request a 15 percent discount on its 
winning bid using a rural service provider bidding credit, subject to a 
$10 million cap. The Commission determines eligibility for bidding 
credits, including the rural service provider bidding credit, on a 
service-by-service basis. To be eligible for a rural service provider 
bidding credit, an applicant must: (1) Be a service provider that is in 
the business of providing commercial communications services and, 
together with its controlling interests, affiliates, and the affiliates 
of its controlling interests, has fewer than 250,000 combined wireless, 
wireline, broadband, and cable subscribers; and (2) serve predominantly 
rural areas, defined as counties with a population density of 100 or 
fewer persons per square mile. The Commission has not adopted a 
specific threshold for the proportion of an applicant's customers who 
are located in rural areas, in order for an applicant to be eligible 
for a rural service provider bidding credit, the primary focus of its 
business activity must be the provision of services to rural areas. 
These eligibility requirements must be satisfied by the FCC Form 175 
filing deadline. Additionally, an applicant may count any subscriber as 
a single subscriber even if that subscriber receives more than one 
service. For instance, a subscriber receiving both wireline and 
telephone service and broadband would be counted as a single 
subscriber.
    85. Each applicant seeking a rural service provider bidding credit 
must disclose the number of subscribers it has, along with the number 
of subscribers of its affiliates, controlling interests, and the 
affiliates of its controlling interests. The applicant must also submit 
an attachment that lists all parties with which the applicant has 
entered into any spectrum use agreements or arrangements for any 
licenses that be may won by the applicant in Auction 101 or Auction 
102, as applicable. To the extent that an applicant has an agreement 
with any disclosable interest holder for the use of more than 25 
percent of the spectrum capacity of any license that may be won in 
Auction 101 or Auction 102, the identity and the attributable 
subscribers of any such disclosable interest holder must be disclosed. 
Eligible rural service providers may also form a consortium. If an 
applicant is applying as a consortium of rural service providers, the 
disclosures described in this paragraph, including the certification, 
must be provided for each consortium member.
3. Caps on Bidding Credits
    86. Eligible applicants claiming either a small business or rural 
service provider bidding credit will be subject to certain caps on the 
total amount of bidding credits that any eligible applicant may 
receive. The Commission adopts a $25 million cap on the total amount of 
bidding credits that may be awarded to an eligible small business in 
Auction 101 and Auction 102 (i.e., $25 million in each auction). The 
Commission adopts a $10 million cap on the total amount of bidding 
credits that may be awarded to an eligible rural service provider in 
Auction 101 and Auction 102 (i.e., $10 million in each auction). An 
entity is not eligible for a rural service provider bidding credit if 
it has already claimed a small business bidding credit. No winning 
designated entity bidder will be able to obtain more than $10 million 
in bidding credits in total for licenses won in markets with a 
population of 500,000 or less. To the extent an applicant seeking a 
small business bidding credit does not claim the full $10 million in 
bidding credits in those smaller markets, it may apply the remaining 
balance to its winning bids on licenses in larger markets, up to the 
aggregate $25 million cap.
4. Attributable Interests
a. Controlling Interests and Affiliates
    87. An applicant's eligibility for designated entity benefits is 
determined by attributing the gross revenues (for those seeking small 
business benefits) or subscribers (for those seeking rural service 
provider benefits) of the applicant, its affiliates, its controlling 
interests, and the affiliates of its controlling interests. Controlling 
interests of an applicant include individuals and entities with either 
de facto or de jure control of the applicant. Typically, ownership of 
greater than 50 percent of an entity's voting stock evidences de jure 
control. De facto control is determined on a case-by-case basis based 
on the totality of the circumstances. The following are some common 
indicia of de facto control:
     The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
     the entity has authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
licensee;
     the entity plays an integral role in management decisions.
    88. Applicants should refer to Sec.  1.2110(c)(2) of the 
Commission's rules and the FCC Form 175 Instructions to understand how 
certain interests are calculated in determining control for purposes of 
attributing gross revenues. For example, officers and directors of an 
applicant are considered to have a controlling interest in the 
applicant.
    89. Affiliates of an applicant or controlling interest include an 
individual or entity that (1) directly or indirectly controls or has 
the power to control the applicant, (2) is directly or indirectly 
controlled by the applicant, (3) is directly or indirectly controlled 
by

[[Page 44426]]

a third party that also controls or has the power to control the 
applicant, or (4) has an identity of interest with the applicant. The 
Commission's definition of an affiliate of the applicant encompasses 
both controlling interests of the applicant and affiliates of 
controlling interests of the applicant. For more information on the 
application requirements regarding controlling interests and 
affiliates, applicants should refer to Sec.  1.2110(c)(2) and (5) 
respectively, as well as the FCC Form 175 Instructions.
    90. An applicant seeking a small business bidding credit must 
demonstrate its eligibility for the bidding credit by: (1) Meeting the 
applicable small business size standard, based on the controlling 
interest and affiliation rules, and (2) retaining control, on a 
license-by-license basis, over the spectrum associated with the 
licenses for which it seeks small business benefits. Applicants should 
note that control and affiliation may arise through, among other 
things, ownership interests, voting interests, management and other 
operating agreements, or the terms of any other types of agreements--
including spectrum lease agreements--that independently or together 
create a controlling, or potentially controlling, interest in the 
applicant's or licensee's business as a whole. Except under the limited 
provisions provided for spectrum manager lessors, the Commission's 
decision to discontinue its policy requiring designated entity 
licensees to operate as primarily facilities-based providers of service 
directly to the public does not alter the rules that require the 
Commission to consider whether any particular use agreement may confer 
control of or create affiliation with the applicant. Once an applicant 
demonstrates eligibility as a small business under the first prong, it 
must also be eligible for benefits on a license-by-license basis under 
the second prong. As part of making the FCC Form 175 certification that 
it is qualified as a designated entity under Sec.  1.2110, an applicant 
is certifying that it does not have any spectrum use or other 
agreements that would confer de jure and de facto control of any 
license it seeks to acquire with bidding credits. For instance, if an 
applicant has a spectrum use agreement on a particular license that 
calls into question whether, under the Commission's affiliation rules, 
the user's revenues should be attributed to the applicant for that 
particular license, rather than for its overall business operations, 
the applicant could be ineligible to acquire or retain benefits with 
respect to that particular license. An applicant need not be eligible 
for small business benefits on each of the spectrum licenses it holds 
in order to demonstrate its overall eligibility for such benefits.
    91. Applicants should note that if an applicant executes a spectrum 
use agreement that does not comply with the Commission's relevant 
standard of de facto control, it will be subject to unjust enrichment 
obligations for the benefits associated with that particular license, 
as well as the penalties associated with any violation of section 
310(d) of the Communications Act and related regulations, which require 
Commission approval of transfers of control. Although in this scenario 
the applicant may not be eligible for a bidding credit and may be 
subject to the Commission's unjust enrichment rules, the applicant need 
not be eligible for small business benefits on each of the spectrum 
licenses it holds in order to demonstrate its overall eligibility for 
such benefits. If that spectrum use agreement (either alone or in 
combination with the designated entity controlling interest and 
attribution rules), goes so far as to confer control of the applicant's 
overall business, the gross revenues of the additional interest holders 
will be attributed to the applicant, which could render the applicant 
ineligible for all current and future small business benefits on all 
licenses. The Commission applies the same de facto control standard to 
designated entity spectrum manager lessors that is applied to non-
designated entity spectrum manager lessors.
b. Limitation on Spectrum Use
    92. The Commission determined that a new attribution rule will 
apply going forward under which the gross revenues (or the subscribers, 
in the case of a rural service provider) of an applicant's disclosable 
interest holder are attributable to the applicant, on a license-by-
license basis, if the disclosable interest holder has an agreement with 
the applicant to use, in any manner, more than 25 percent of the 
spectrum capacity of any license won by the applicant and acquired with 
a bidding credit during the five-year unjust enrichment period for the 
applicable license. A disclosable interest holder of an applicant 
seeking designated entity benefits is defined as any individual or 
entity holding a ten percent or greater interest of any kind in the 
applicant, including but not limited to, a ten percent or greater 
interest in any class of stock, warrants, options or debt securities in 
the applicant or licensee. Any applicant seeking a bidding credit for 
licenses won in Auction 101 or Auction 102 will be subject to this 
attribution rule and must make the requisite disclosures.
    93. The Commission also determined that certain disclosable 
interest holders may be excluded from this attribution rule. An 
applicant claiming the rural service provider bidding credit may have 
spectrum license use agreements with a disclosable interest holder, 
without having to attribute the disclosable interest holder's 
subscribers, so long as the disclosable interest holder is 
independently eligible for a rural service provider credit and the use 
agreement is otherwise permissible under the Commission's existing 
rules. If applicable, the applicant must attach to its FCC Form 175 any 
additional information as may be required to indicate any license (or 
license area) that may be subject to this attribution rule or to 
demonstrate its eligibility for the exception from this attribution 
rule. To the extent an Auction 101 or Auction 102 applicant is required 
to submit any such additional information, the applicant must not 
disclose details of its submission to others as it would reveal 
information regarding its license or PEA selection(s), respectively. 
The Commission intends to withhold from public disclosure all 
information contained in any such attachments until after the close of 
Auction 102.
    c. Exceptions From Attribution Rules for Small Businesses and Rural 
Service Providers
    94. Applicants claiming designated entity benefits may be eligible 
for certain exceptions from the Commission's attribution rules. For 
example, in calculating an applicant's gross revenues under the 
controlling interest standard, it will not attribute to the applicant 
the personal net worth, including personal income, of its officers and 
directors. To the extent that the officers and directors of the 
applicant are controlling interest holders of other entities, the gross 
revenues of those entities will be attributed to the applicant. If an 
officer or director operates a separate business, the gross revenues 
derived from that separate business would be attributed to the 
applicant, although any personal income from such separate business 
would not be attributed. The Commission also exempts from attribution 
to the applicant the gross revenues of the affiliates of a rural 
telephone cooperative's officers and directors, if certain conditions 
specified in Sec.  1.2110(b)(4)(iii) of the Commission's rules are met. 
An applicant claiming this exemption must

[[Page 44427]]

provide, in an attachment, an affirmative statement that the applicant, 
affiliate and/or controlling interest is an eligible rural telephone 
cooperative within the meaning of Sec.  1.2110(b)(4)(iii), and the 
applicant must supply any additional information as may be required to 
demonstrate eligibility for the exemption from the attribution rule.
    95. An applicant claiming a rural service provider bidding credit 
may be eligible for an exception from the Commission's attribution 
rules as an existing rural partnership. To qualify for this exception, 
an applicant must be a rural partnership providing service as of July 
16, 2015, and each member of the rural partnership must individually 
have fewer than 250,000 combined wireless, wireline, broadband, and 
cable subscribers. The Commission will evaluate eligibility for an 
existing rural wireless partnership on the same basis as it would for 
an applicant applying for a bidding credit as a consortium of rural 
service providers. A partnership that includes a nationwide provider as 
a member will not be eligible for the benefit. Members of such 
partnerships that fall under this exception may also apply as 
individual applicants or members of a consortium (to the extent that it 
is otherwise permissible to do so under the Commission's rules) and 
seek eligibility for a rural service provider bidding credit.
    96. A consortium of small businesses or rural service providers may 
seek an exception from the Commission's attribution rules. A consortium 
of small businesses or rural service providers is a conglomerate 
organization composed of two or more entities, each of which 
individually satisfies the definition of small business or rural 
service provider. A consortium must provide additional information for 
each member demonstrating each member's eligibility for the claimed 
bidding credit in order to show that the applicant satisfies the 
eligibility criteria for the bidding credit. The gross revenue or 
subscriber information of each consortium member will not be aggregated 
for purposes of determining the consortium's eligibility for the 
claimed bidding credit. This information must be provided to ensure 
that each consortium member qualifies for the bidding credit sought by 
the consortium.

J. Tribal Lands Bidding Credit

    97. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
wireline penetration rate equal to or below 85 percent is eligible to 
receive a tribal lands bidding credit as set forth in Sec. Sec.  1.2107 
and 1.2110(f) of the Commission's rules. A tribal lands bidding credit 
is in addition to, and separate from, any other bidding credit for 
which a winning bidder may qualify.
    98. A winning bidder applies for a tribal lands bidding credit 
after the auction when it files its FCC Form 601 post-auction 
application. When initially filing the post-auction application, the 
winning bidder will be required to advise the Commission whether it 
intends to seek a tribal lands bidding credit, for each license won in 
a particular auction, by checking the designated box(es). After stating 
its intent to seek a tribal lands bidding credit, the winning bidder 
will have 180 days from the close of the applicable post-auction 
application filing window to amend its application to select the 
specific tribal lands to be served and provide the required tribal 
government certifications. Licensees receiving a tribal lands bidding 
credit are subject to performance criteria as set forth in Sec.  
1.2110(f)(3)(vii). For additional information on the tribal lands 
bidding credit, including how the amount of the credit is calculated, 
applicants should review the Commission's rulemaking proceeding 
regarding tribal lands bidding credits and related public notices. 
Relevant documents can be viewed on the Commission's website by going 
to www.fcc.gov/auctions/ and clicking on the Tribal Lands Credits link.

K. Provisions Regarding Former and Current Defaulters

    99. Each applicant must make certifications regarding whether it is 
a current or former defaulter or delinquent. A current defaulter or 
delinquent is not eligible to participate in Auction 101 or Auction 
102, but a former defaulter or delinquent may participate so long as it 
is otherwise qualified and makes an upfront payment that is fifty 
percent more than would otherwise be necessary. An applicant is 
considered a current defaulter or a current delinquent when it, any of 
its affiliates, any of its controlling interests, or any of the 
affiliates of its controlling interests, is in default on any payment 
for any Commission construction permit or license (including a down 
payment) or is delinquent on any non-tax debt owed to any Federal 
agency as of the filing deadline for auction applications. Non-tax debt 
owed to any Federal agency includes all amounts owed under Federal 
programs, including contributions to the Universal Service Fund, 
Telecommunications Relay Services Fund, and the North American 
Numbering Plan Administration, notwithstanding that the administrator 
of any such fund may not be considered a Federal agency under the Debt 
Collection Improvement Act of 1996. For example, an applicant with a 
past due USF contribution as of the auction application filing deadline 
would be disqualified from participating in Auctions 101 and 102 under 
the Commission's rules. If the applicant cures the overdue debt prior 
to the auction application filing deadline (and such debt does not fall 
within one of the exclusions described in Sec.  1.2105(a)(2)(xii)), it 
may be eligible to participate in Auctions 101 and 102 as a former 
defaulter. Each applicant must certify under penalty of perjury on its 
FCC Form 175 that it, its affiliates, its controlling interests, and 
the affiliates of its controlling interests are not in default on any 
payment for a Commission construction permit or license (including down 
payments) and that it is not delinquent on any non-tax debt owed to any 
Federal agency. Additionally, an applicant must certify under penalty 
of perjury whether it (along with its controlling interests) has ever 
been in default on any payment for a Commission construction permit or 
license (including down payments) or has ever been delinquent on any 
non-tax debt owed to any Federal agency, subject to certain exclusions. 
The term controlling interest is defined in Sec.  1.2105(a)(4)(i) of 
the Commission rules.
    100. An applicant is considered a former defaulter or a former 
delinquent when, as of the FCC Form 175 deadline, the applicant or any 
of its controlling interests has defaulted on any Commission 
construction permit or license or has been delinquent on any non-tax 
debt owed to any Federal agency, but has since remedied all such 
defaults and cured all of the outstanding non-tax delinquencies. The 
applicant may exclude from consideration any cured default on a 
Commission construction permit or license or cured delinquency on a 
non-tax debt owed to a Federal agency for which any of the following 
criteria are met: (1) The notice of the final payment deadline or 
delinquency was received more than seven years before the FCC Form 175 
filing deadline; (2) the default or delinquency amounted to less than 
$100,000; (3) the default or delinquency was paid within two quarters 
(i.e., six months) after receiving the notice of the final payment 
deadline or delinquency; or (4) the default or delinquency was the 
subject of a legal or arbitration proceeding and was cured upon

[[Page 44428]]

resolution of the proceeding. Notice to a debtor may include notice of 
a final payment deadline or notice of delinquency and may be express or 
implied depending on the origin of any Federal non-tax debt giving rise 
to a default or delinquency. The date of receipt of the notice of a 
final default deadline or delinquency by the intended party or debtor 
will be used for purposes of verifying receipt of notice. A debt will 
not be deemed to be in default or delinquent until after the expiration 
of a final payment deadline. To the extent that the rules providing for 
payment of a specific federal debt permit payment after an original 
payment deadline accompanied by late fee(s), such debts would not be in 
default or delinquent for purposes of applying the former defaulter 
rules until after the late payment deadline. Any winning bidder that 
fails timely to pay its post-auction down payment or the balance of its 
final winning bid amount(s) or is disqualified for any reason after the 
close of an auction will be in default and subject to a default 
payment. Commission staff provide individual notice of the amount of 
such a default payment as well as procedures and information required 
by the Debt Collection Improvement Act of 1996, including the payment 
due date and any charges, interest, and/or penalties that accrue in the 
event of delinquency. Such notice provided by Commission staff 
assessing a default payment arising out of a default on a winning bid 
constitutes notice of the final payment deadline with respect to a 
default on a Commission license.
    101. In addition to the Auctions 101 and 102 Procedures Public 
Notice, applicants are encouraged to review the Bureau's previous 
guidance on default and delinquency disclosure requirements in the 
context of the auction short-form application process. Parties are also 
encouraged to consult with the Bureau's Auctions and Spectrum Access 
Division staff if they have any questions about default and delinquency 
disclosure requirements.
    102. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the red 
light rule that implement its obligations under the Debt Collection 
Improvement Act of 1996, which governs the collection of debts owed to 
the United States. Under the red light rule, applications and other 
requests for benefits filed by parties that have outstanding debts owed 
to the Commission will not be processed. The Commission's adoption of 
the red light rule does not alter the applicability of any of its 
competitive bidding rules, including the provisions and certifications 
of Sec. Sec.  1.2105 and 1.2106, with regard to current and former 
defaults or delinquencies.
    103. The Commission reminds each applicant that its Red Light 
Display System, which provides information regarding debts currently 
owed to the Commission, may not be determinative of an auction 
applicant's ability to comply with the default and delinquency 
disclosure requirements of Sec.  1.2105. While the red light rule 
ultimately may prevent the processing of long-form applications by 
auction winners, an auction applicant's lack of current red light 
status is not necessarily determinative of its eligibility to 
participate in an auction (or whether it may be subject to an increased 
upfront payment obligation). A prospective applicant in Auctions 101 
and/or 102 should note that any long-form applications filed after the 
close of bidding in the respective auction will be reviewed for 
compliance with the Commission's red light rule, and such review may 
result in the dismissal of a winning bidder's long-form application. 
Applicants that have their long-form applications dismissed will be 
deemed to have defaulted and will be subject to default payments under 
47 CFR 1.2104(g) and 1.2109(c). The Commission strongly encourages each 
applicant to carefully review all records and other available Federal 
agency databases and information sources to determine whether the 
applicant, or any of its affiliates, or any of its controlling 
interests, or any of the affiliates of its controlling interests, owes 
or was ever delinquent in the payment of non-tax debt owed to any 
Federal agency. To access the Commission's Red Light Display System, go 
to: https://apps.fcc.gov/redlight/login.cfm/.

L. Optional Applicant Status Identification

    104. Applicants owned by members of minority groups and/or women, 
as defined in Sec.  1.2110(c)(3), and rural telephone companies, as 
defined in Sec.  1.2110(c)(4), may identify themselves regarding this 
status in filling out their FCC Form 175 applications. This applicant 
status information is collected for statistical purposes only and 
assists the Commission in monitoring the participation of various 
groups in its auctions.

M. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    105. After the initial FCC Form 175 filing deadline, an Auction 101 
and/or Auction 102 applicant will be permitted to make only minor 
changes to its application(s) consistent with the Commission's rules. 
Minor amendments include any changes that are not major, such as 
correcting typographical errors and supplying or correcting information 
as requested to support the certifications made in the application. 
Examples of minor changes include the deletion or addition of 
authorized bidders (to a maximum of three); the revision of addresses 
and telephone numbers of the applicant, its responsible party, and its 
contact person; and change in the applicant's selected bidding option 
(electronic or telephonic). Major modification to an FCC Form 175 
(e.g., change of license or PEA selection, certain changes in ownership 
that would constitute an assignment or transfer of control of the 
applicant, change in the required certifications, change in applicant's 
legal classification that results in a change in control, or change in 
claimed eligibility for a higher percentage of bidding credit) will not 
be permitted after the initial FCC Form 175 filing deadline. If an 
amendment reporting changes is a major amendment, as described in Sec.  
1.2105(b)(2), the major amendment will not be accepted and may result 
in the dismissal of the application. Any change in control of an 
applicant will be considered a major modification, and the application 
will consequently be dismissed. The Commission reiterates that, even if 
an applicant's FCC Form 175 is dismissed, the applicant would remain 
subject to the communication prohibitions of 47 CFR 1.2105(c) until the 
down-payment deadline for Auction 102, which will be established after 
Auction 102 closes.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
    106. 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 Auction 
101 or Auction 102. An applicant's FCC Form 175 and associated 
attachments for a particular auction will remain pending until the 
release of a public notice announcing the close of that auction. The 
Commission reminds Auction 101 and Auction 102 applicants that they 
remain subject to the Sec.  1.2105(c) prohibition of certain 
communications until the post-auction deadline for making down

[[Page 44429]]

payments on winning bids in Auction 102. An applicant's post-auction 
application (FCC Form 601) is considered pending from the time it is 
accepted for filing by the Commission until a Commission grant or 
denial of the application is no longer subject to reconsideration by 
the Commission or to review by any court. An applicant for Auction 101 
or Auction 102 must furnish additional or corrected information to the 
Commission within five business days after a significant occurrence, or 
amend its FCC Form 175 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(s) even if a reported change 
may result in the dismissal of the application because it is 
subsequently determined to be a major modification.
3. Modifying an FCC Form 175
    107. A party seeking to participate in Auction 101 and/or Auction 
102 must file an FCC Form 175 electronically for each auction via the 
FCC's Auction Application System. During the initial filing window for 
both auctions, an applicant will be able to make any necessary 
modifications to its respective FCC Form 175 in the Auction Application 
System. An applicant that has certified and submitted its FCC Form 175 
before the close of the initial filing window may continue to make 
modifications as often as necessary until the close of that window; the 
applicant must re-certify and re-submit its FCC Form 175 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. The 
Commission strongly advises applicants to retain a copy of this 
confirmation page.
    108. An applicant will also be allowed to modify its FCC Form 175 
in the Auction Application System, except for certain fields, during 
the resubmission filing window and after the release of the public 
notice announcing the qualified bidders for an auction. An applicant 
will not be allowed to modify electronically in the Auction Application 
System the applicant's legal classification, the applicant's name, or 
the certifying official. During these times, if an applicant needs to 
make permissible minor changes to its FCC Form 175, or must make 
changes in order to maintain the accuracy and completeness of its 
application pursuant to Sec. Sec.  1.65 and 1.2105(b)(4), 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).
    109. An applicant's ability to modify its FCC Form 175 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 appropriate for each auction and between the closing of 
the resubmission filing window and the release of the public notice 
announcing the qualified bidders for an auction. 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, contact information (e.g., name, address, telephone number, 
etc.), and bidding preference (telephonic or electronic) in the Auction 
Application System. An applicant will not be able to modify any other 
pages of the FCC Form 175 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 175, or changes to 
maintain the accuracy and completeness of its application, the 
applicant must submit a letter briefly summarizing the changes to its 
FCC Form 175 via email to [email protected] for Auction 101 and 
[email protected] for Auction 102. The email summarizing the changes 
must include a subject line referring to Auction 101 or Auction 102, as 
appropriate, and the name of the applicant, for example, Re: Changes to 
Auction 101 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 175 application(s) electronically in the Auction Application 
System once it is again open and available to applicants.
    110. 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). If an applicant needs to make a permissible 
minor change of this nature, it must submit a written request by email 
to [email protected] for Auction 101, and [email protected] for 
Auction 102, 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 re-certify and re-submit its FCC Form 
175 in the Auction Application System to confirm and effect the 
change(s).
    111. 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.
    112. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System. Parties 
submitting information related to their applications should use caution 
to ensure that their submissions do not contain confidential 
information or communicate information that would violate Sec.  
1.2105(c) or the limited information procedures adopted for Auctions 
101 and 102. An applicant seeking to submit, outside of the Auction 
Application System, information that might reflect non-public 
information, such as an applicant's license or PEA selection(s), 
upfront payment amount, or bidding eligibility, 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.
    113. Questions about FCC Form 175 amendments should be directed to 
the Auctions and Spectrum Access Division at (202) 418-0660.

III. Preparing for Bidding in Auctions 101 And 102

A. Due Diligence

    114. Each potential bidder is solely responsible for investigating 
and evaluating all technical and marketplace factors that may have a 
bearing on the value of the licenses that it is seeking in Auction 101 
and/or Auction 102. The Commission makes no representations or 
warranties about the use of this spectrum or these licenses for 
particular services. Each applicant should be aware that a Commission 
auction represents an opportunity to become a Commission licensee, 
subject to certain conditions and regulations. This includes the 
established authority of the Commission to alter the terms of existing 
licenses by rulemaking, which is equally applicable to licenses awarded 
by auction. A Commission auction does not constitute an endorsement by 
the Commission of any

[[Page 44430]]

particular service, technology, or product, nor does a Commission 
license constitute a guarantee of business success.
    115. 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 potential bidder 
to perform technical analyses and/or refresh its previous analyses to 
assure itself that, should it become a winning bidder for any Auction 
101 or Auction 102 license, it will be able to build and operate 
facilities that will fully comply with all applicable technical and 
legal requirements. The Commission strongly encourages each applicant 
to inspect any prospective sites for communications facilities located 
in, or near, the geographic area for which it plans to bid, confirm the 
availability of such sites, and to familiarize itself with the 
Commission's rules regarding the National Environmental Policy Act.
    116. The Commission also strongly encourages each applicant in 
Auction 101 and Auction 102 to continue to conduct its own research 
throughout the applicable auction(s) in order to determine the 
existence of pending or future administrative or judicial proceedings 
that might affect its decision on continued participation in the 
auction(s). Each applicant is responsible for assessing the likelihood 
of the various possible outcomes and for considering the potential 
impact on licenses available in an auction. The due diligence 
considerations mentioned in the Auctions 101 and 102 Procedures Public 
Notice do not constitute an exhaustive list of steps that should be 
undertaken prior to participating in Auction 101 or Auction 102. The 
burden is on the potential bidder to determine how much research to 
undertake, depending upon the specific facts and circumstances related 
to its interests.
    117. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the licenses available in Auctions 101 and 102. Each potential 
bidder is responsible for undertaking research to ensure that any 
licenses won in these auctions will be suitable for its business plans 
and needs. Each potential bidder must undertake its own assessment of 
the relevance and importance of information gathered as part of its due 
diligence efforts.
    118. The Commission makes no representations or guarantees 
regarding the accuracy or completeness of information in its databases 
or any third-party databases, including, for example, court docketing 
systems. To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, it must 
obtain or verify such information from independent sources or assume 
the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.

B. Licensing Considerations

1. Incumbency and Sharing Issues
    119. Potential applicants in Auctions 101 and 102 should consider 
carefully the operations of incumbent licensees in the 28 GHz and 24 
GHz bands when developing business plans, assessing market conditions, 
and evaluating the availability of equipment for mmW services. Active 
licenses in the 28 GHz band cover 1,696 full counties and one partial 
county; active licenses in the 24 GHz band currently cover nine PEAs 
and are the subject of pending applications for license modification. 
Detailed information about existing incumbent licenses is available 
publicly in the Universal Licensing System (ULS) through interactive 
searches (http://wireless2.fcc.gov/UlsApp/UlsSearch/searchAdvanced.jsp) 
and database downloads (http://wireless.fcc.gov/uls/index.htm?job=transaction&page=weekly). Incumbent licenses can be 
identified by searching for active, regular licenses within the UU 
radio service in the 27500-28350 MHz band. Incumbent licenses in the 24 
GHz band can be identified by searching for active, regular licenses 
within the TZ radio service. Incumbent licenses are contained in the 
``Market Based Services'' download file.
    120. In addition to incumbent licensees, potential applicants in 
Auctions 101 and 102 should consider carefully the implications of the 
Commission's sharing schemes for the 28 GHz and 24 GHz bands. In the 
2018 Spectrum Frontiers Order, the Commission decided to license FSS 
earth stations in the 24.75-25.25 GHz band on a co-primary basis under 
the provisions in Sec.  25.136(d). This means that the 24.75-25.25 GHz 
band would be available only for individually licensed FSS earth 
stations that meet specific requirements adopted in the 2018 Spectrum 
Frontiers Order, 83 FR 34478, July 20, 2018, (e.g., limitations on 
population covered, number of earth station locations in a PEA, and a 
prohibition on earth stations in places where they would preclude 
terrestrial service to people or equipment that are in transit or are 
present at mass gatherings).
    121. Accordingly, the Commission calls particular attention in 
Auctions 101 and 102 to the incumbency and spectrum-sharing issues 
concerning the 28 GHz and 24 GHz bands, respectively. Each applicant 
should follow closely releases from the Commission concerning these 
issues and consider carefully the technical and economic implications 
for commercial use of the UMFUS bands.
2. International Coordination
    122. Potential bidders seeking licenses for geographic areas 
adjacent to the Canadian and Mexican border should be aware that the 
use of some or all of the upper microwave frequencies they acquire in 
Auction 101 and/or Auction 102 are subject to international agreements 
with Canada and Mexico. The Commission routinely works with the United 
States Department of State and Canadian and Mexican government 
officials to ensure the efficient use of the spectrum as well as 
interference-free operations in the border areas near Canada and 
Mexico. Until such time as any adjusted agreements, as needed, between 
the United States, Mexico and/or Canada can be agreed to, operations in 
the upper microwave bands must not cause harmful interference across 
the border, consistent with the terms of the agreements currently in 
force.
3. Quiet Zones
    123. Upper microwave licensees must individually apply for and 
receive a separate license for each transmitter if the proposed 
operation would affect the radio quiet zones set forth in the 
Commission's rules.
4. Environmental Review Requirements
    124. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act and other 
federal environmental statutes. The construction of a wireless antenna 
facility under certain circumstances may be considered a federal 
action, and where it is, the licensee must comply with the Commission's 
environmental rules for each such facility. Where applicable, these 
environmental rules require, among other things, that the licensee (i) 
consult with expert agencies having environmental responsibilities, 
including the U.S. Fish and Wildlife Service, the State Historic 
Preservation Office, the U.S. Army Corps of

[[Page 44431]]

Engineers, and the Federal Emergency Management Agency (through the 
local authority with jurisdiction over floodplains); (ii) assess the 
effect of facility construction on historic properties by following the 
provisions of the Commission's Nationwide Programmatic Agreement 
Regarding the Section 106 National Historic Preservation Act Review 
Process; and (iii) prepare an environmental assessment for any facility 
that may have a significant impact in or on wilderness areas, wildlife 
preserves, threatened or endangered species, designated critical 
habitats, historical or archaeological sites, Native American religious 
sites, floodplains (if the facility cannot be elevated above the base 
flood elevation), surface features, or migratory birds; or that 
includes high intensity white lights in residential neighborhoods or 
excessive radio frequency emission.
5. Mobile Spectrum Holdings Policies
    125. The Commission reminds bidders of the Commission's mobile 
spectrum holding policies applicable to the mmW bands. For purposes of 
reviewing proposed secondary market transactions, the Commission 
adopted in the 2017 Spectrum Frontiers Order, 83 FR 37, January 2, 
2018, a threshold of 1850 megahertz of combined mmW spectrum in the 24 
GHz, 28 GHz, 37 GHZ, 39 GHz, and 47 GHz bands. In the 2018 Spectrum 
Frontiers Order, the Commission eliminated the pre-auction limit of 
1250 megahertz that had been adopted for the 28 GHz, 37 GHz, and 39 GHz 
bands, consistent with the Commission's conclusion not to adopt a pre-
auction limit for the 24 GHz and 47 GHz bands. Further, the Commission 
will conduct an ex post case-by-case review of the acquisition through 
auction of spectrum in the UMFUS bands. The Commission found that it is 
in the public interest to review applications for initial licenses 
filed post-auction on a case-by-case basis using the same 1850 
megahertz threshold it uses for reviewing applications for secondary 
market transactions.

C. Bidder Education

    126. Before the opening of the concurrent short-form filing windows 
for Auctions 101 and 102 on September 5, 2018, detailed educational 
information will be provided in various formats to would-be 
participants on the Auction 101 and Auction 102 web pages, 
respectively.
    127. The Commission has directed the Bureau to provide various 
materials on the pre-auction processes in advance of the opening of the 
concurrent short-form application windows for Auctions 101 and 102, 
beginning with the release of step-by-step instructions for completing 
the FCC Form 175. In addition, the Bureau will provide an online 
application procedures tutorial for the auctions covering information 
on pre-auction preparation, completing short-form applications, and the 
application review process.
    128. The Bureau will provide separate educational materials on the 
bidding processes for Auction 101 and Auction 102 in advance of the 
start of each mock auction, beginning with release of a user guide for 
each bidding system, followed by online bidding procedures tutorials 
for the respective auctions.
    129. The 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 
screen shots of the online application and bidding systems. The online 
tutorials will be accessible on the ``Education'' tab of the Auction 
101 and Auction 102 websites at www.fcc.gov/auction/101 and 
www.fcc.gov/auction/102, respectively. Once posted, the tutorials will 
be accessible anytime.

D. Short-Form Applications: Due Before 6:00 p.m. ET on September 18, 
2018

    130. In order to be eligible to bid in Auction 101 or Auction 102, 
an applicant must first follow the procedures to submit a short-form 
application (FCC Form 175) for the relevant auction electronically via 
the Auction Application System, following the instructions set forth in 
the FCC Form 175 Instructions. The short-form application for each 
auction will become available with the opening of the initial filing 
window and must be submitted prior to 6:00 p.m. ET on September 18, 
2018. Late applications will not be accepted. No application fee is 
required.
    131. Applications may be filed for Auction 101 and/or Auction 102 
at any time beginning at noon ET on September 5, 2018, until the 
respective filing window closes at 6:00 p.m. ET on September 18, 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 initial filing deadline for each auction 
on September 18, 2018.
    132. An applicant must always click on the CERTIFY & SUBMIT button 
on the ``Certify & Submit'' screen to successfully submit its FCC Form 
175 and any modifications; otherwise, the application or changes to the 
application will not be received or reviewed by Commission staff. 
Additional information about accessing, completing, and viewing the FCC 
Form 175 is provided in the FCC Form 175 Instructions. 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.
    133. The Commission cautions applicants that it periodically 
performs scheduled maintenance of its IT systems. During scheduled 
maintenance activities, which typically occur over the weekends, every 
effort is made to minimize any downtime to auction-related systems, 
including the auction application system. However, there are occasions 
when auction-related systems may be temporarily unavailable.

E. Application Processing and Minor Modifications

1. Public Notice of Applicant's Initial Application Status and 
Opportunity for Minor Modifications
    134. After the deadline for filing auction applications, the 
Commission 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. 
With respect to each auction, the Bureau 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 175 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.
    135. After the initial application filing deadline on September 18, 
2018, applicants can make only minor

[[Page 44432]]

modifications to their applications. Major modifications (e.g., change 
of license or PEA selection, certain changes in ownership that would 
constitute an assignment or transfer of control of the applicant, 
change in the required certifications, change in applicant's legal 
classification that results in a change in control, or change in 
claimed eligibility for a higher percentage of bidding credit) 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 
101 or Auction 102.
    136. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 175, 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] for Auction 101 and 
[email protected] for Auction 102.
2. Public Notice of Applicant's Final Application Status After Upfront 
Payment Deadline
    137. After Commission staff review resubmitted applications for a 
particular auction, the Bureau will release a public notice identifying 
applicants that have become qualified bidders for that auction. For 
each auction, a Qualified Bidders Public Notice will be issued before 
bidding in the auction begins. Qualified bidders are those applicants 
with submitted FCC Form 175 applications that are deemed timely filed 
and complete.

F. Upfront Payments

    138. In order to be eligible to bid in Auction 101 or Auction 102, 
a sufficient upfront payment and a complete and accurate FCC Remittance 
Advice Form (FCC Form 159, Revised 2/03) must be submitted for each 
auction before 6:00 p.m. ET on the applicable deadline. Since the 
upfront payments for Auctions 101 and 102 will be deposited and managed 
in separate accounts in the U.S. Treasury for each auction, an 
applicant interested in applying for both auctions will be required to 
make a separate upfront payment for each auction into the appropriate 
account. After completing its short-form application, an applicant will 
have access to an electronic pre-filled version of the FCC Form 159. An 
accurate and complete FCC Form 159 must accompany each payment. Proper 
completion of this form is critical to ensuring correct crediting of 
upfront payments. Payers using the pre-filled FCC Form 159 are 
responsible for ensuring that all of the information on the form, 
including payment amounts, is accurate. Detailed instructions for 
completing FCC Form 159 for Auction 101 were made available by the 
Bureau on August, 6, 2018, and can be accessed at www.fcc.gov/auction/101. The Bureau will prepare and release after the close of Auction 101 
detailed instructions for submitting an FCC Form 159 for Auction 102.
    139. For Auction 101, the deadline for submitting an upfront 
payment and FCC Form 159 is October 23, 2018. The Auctions 101 and 102 
Procedures Public Notice describes the procedures for submitting an 
upfront payment for Auction 101. The Bureau will announce the deadline 
and procedures for the submission of upfront payments for Auction 102 
by public notice after bidding in Auction 101 concludes. Under this 
approach, an Auction 102 applicant that participated in Auction 101 
could take into account the licenses it won in Auction 101 when 
determining the amount of its upfront payment for Auction 102.
1. Making Upfront Payments by Wire Transfer for Auction 101
    140. Upfront payments for Auction 101 must be wired to, and will be 
deposited in, the U.S. Treasury. Wire transfer payments for Auction 101 
must be received before 6:00 p.m. ET on October 23, 2018, but no sooner 
than October 1, 2018. An applicant must initiate the wire transfer 
through its bank, authorizing the bank to wire funds from the 
applicant's account to the proper account at the U.S. Treasury. No 
other payment method is acceptable. To avoid untimely payments, 
applicants should discuss arrangements (including bank closing 
schedules) with their bankers several days before they plan to make the 
wire transfer, and allow sufficient time for the transfer to be 
initiated and completed before the deadline. Paragraph 147 of the 
Auctions 101 and 102 Procedures Public Notice lists the information 
needed to place an order for a wire transfer for Auction 101.
    141. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must print and fax 
a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to [email protected]. On the fax cover sheet 
or in the email subject header, write ``Wire Transfer--Auction Payment 
for Auction 101.'' In order to meet the upfront payment deadline, an 
applicant's payment must be credited to the Commission's account for 
Auction 101 before the deadline.
    142. Each applicant is responsible for ensuring timely submission 
of its upfront payment and for timely filing of an accurate and 
complete FCC Form 159. An applicant should coordinate with its 
financial institution well ahead of the due date regarding its wire 
transfer and allow sufficient time for the transfer to be initiated and 
completed prior to the deadline. The Commission repeatedly has 
cautioned auction participants about the importance of planning ahead 
to prepare for unforeseen last-minute difficulties in making payments 
by wire transfer. Each applicant also is responsible for obtaining 
confirmation from its financial institution that its wire transfer to 
the U.S. Treasury was successful and from Commission staff that its 
upfront payment was timely received and that it was deposited into the 
proper account. To receive confirmation from Commission staff, contact 
Gail Glasser of the Office of Managing Director's Revenue & Receivables 
Operations Group/Auctions at (202) 418-0578, or alternatively, Theresa 
Meeks at (202) 418-2945.
    143. All payments must be made in U.S. dollars. All payments must 
be made by wire transfer. Upfront payments for Auction 101 go to an 
account number different from the accounts used in previous FCC 
auctions.
    144. Failure to deliver a sufficient upfront payment as instructed 
herein by the applicable upfront payment deadline will result in 
dismissal of the short-form application and disqualification from 
participation in the auction.
2. Upfront Payments and Bidding Eligibility
    145. The Commission has authority to determine appropriate upfront 
payments for each license being auctioned, taking into account such 
factors as the efficiency of the auction process and the potential 
value of similar licenses. An upfront payment is a refundable deposit 
made by each applicant seeking to participate in bidding to establish 
its eligibility to bid on licenses. Upfront payments that are related 
to the inventory of licenses being auctioned protect against frivolous 
or insincere bidding and provide the Commission with a source of funds 
from

[[Page 44433]]

which to collect payments owed at the close of bidding.
    146. Applicants that are former defaulters must pay upfront 
payments 50 percent greater than non-former defaulters. For purposes of 
this classification as a former defaulter or a former delinquent, 
defaults and delinquencies of the applicant itself and its controlling 
interests are included. For this purpose, the term ``controlling 
interest'' is defined in 47 CFR 1.2105(a)(4)(i).
    147. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the licenses or generic blocks on which it will 
bid. Generally for Auctions 101 and 102, upfront payments will be based 
on MHz-pops, and that the amount of the upfront payment submitted by an 
applicant will determine its initial bidding eligibility, the maximum 
number of bidding units on which a bidder may place bids in any single 
round. In order to bid on a license or generic block, qualified bidders 
must have a current eligibility level that meets or exceeds the number 
of bidding units assigned to that license or generic block in a PEA. 
The Commission has set bidding units (and corresponding upfront 
payments) such that all blocks in a PEA, including any blocks with 
fewer than 100 megahertz of bandwidth, will be assigned the same number 
of bidding units based on 100 megahertz of bandwidth. At a minimum, 
therefore, an applicant's total upfront payment must be enough to 
establish eligibility to bid on at least one of the licenses or at 
least one generic block in a PEA selected on its FCC Form 175 for 
Auction 101 or Auction 102, respectively, or else the applicant will 
not be eligible to participate in the applicable auction. An applicant 
does not have to make an upfront payment to cover all of the licenses 
or a block in all of the PEAs it selects on its FCC Form 175, but only 
enough to cover the maximum number of bidding units that are associated 
with the licenses or generic blocks in a PEA on which it wishes to 
place bids and hold provisionally winning bids in any given round, as 
applicable. The total upfront payment does not affect the total dollar 
amount the bidder may bid on any given license or generic block.
    148. The Commission adopts a tiered approach under which upfront 
payment amounts will vary by market population. For the county-based 
licenses and generic blocks that fall within PEAs 1-50, upfront 
payments are based on $0.001 per MHz/pop; for those licenses and 
generic blocks in PEAs 51-100, upfront payments are based on $0.0002 
per MHz/pop; and for all other licenses and generic blocks, upfront 
payments are based on $0.0001 per MHz/pop. The results of these 
calculations are subject to a minimum of $100 and will be rounded using 
the Commission's standard rounding procedures for auctions: Results 
above $10,000 are rounded to the nearest $1,000; results below $10,000 
but above $1,000 are rounded to the nearest $100; and results below 
$1,000 are rounded to the nearest $10. The upfront payments equal 
approximately half the minimum opening bids. A summary of the upfront 
payment amounts is set forth in Attachment A of the Auctions 101 and 
102 Procedures Public Notice. The specific upfront payment amounts and 
bidding units for each license offered in Auction 101 will be provided 
in electronic format only, available as a separate ``Attachment A'' 
file at www.fcc.gov/auction/101. Likewise, the specific upfront payment 
amounts and bidding units for one generic block in each PEA offered in 
Auction 102 will be provided in electronic format only, available as a 
separate ``Attachment A'' file at www.fcc.gov/auction/102.
    149. The Commission will assign each license and generic block in a 
PEA a specific number of bidding units, but does so with the number of 
bidding units equal to one bidding unit per $10 of the upfront payment. 
The number of bidding units for a given license or generic block in a 
PEA is fixed and does not change during an auction as prices change. 
Thus, in calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on, if applicable) 
in any single round for a particular auction, and submit an upfront 
payment amount for that auction covering that number of bidding units. 
In order to make this calculation, an applicant should add together the 
bidding units for all of the licenses or generic blocks in PEAs, as 
applicable, on which it seeks to be active in any given round. 
Applicants should check their calculations carefully, as there is no 
provision for increasing a bidder's eligibility after the upfront 
payment deadline.
    150. If an applicant is a former defaulter, it must calculate its 
upfront payment for all of its selected licenses or generic blocks in 
PEAs, as applicable, by multiplying the number of bidding units on 
which it wishes to be active by 1.5. In order to calculate the number 
of bidding units to assign to former defaulters, the Commission will 
divide the upfront payment received by 1.5 and round the result up to 
the nearest bidding unit.

G. Auction Registration

    151. All qualified bidders for Auctions 101 and 102 are 
automatically registered for the respective auction. Registration 
materials will be distributed prior to the auctions by overnight 
delivery. The mailing will be sent only to the contact person at the 
contact address listed in the FCC Form 175 and will include the 
SecurID[supreg] tokens that will be required to place bids and the 
Auction Bidder Line phone number.
    152. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder for Auction 101 that has not received this mailing by noon on 
November 6, 2018, should call the Auctions Hotline at (717) 338-2868. 
Receipt of this registration mailing is critical to participating in 
the auctions, and each applicant is responsible for ensuring it has 
received all the registration materials.
    153. 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.

H. Remote Electronic Bidding via the FCC Auction Bidding System

    154. Bidders will be able to participate in Auctions 101 and 102 
over the internet using the Commission's bidding system (Auction 
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 175. Each SecurID[supreg] token 
is tailored to a specific auction. SecurID[supreg] tokens issued for 
other auctions or obtained from a source other than the FCC will not 
work for Auctions 101 or 102. Please note that the SecurID[supreg] 
tokens can be recycled, and the Commission encourages bidders to return 
the tokens to the FCC. Pre-addressed envelopes will be provided to

[[Page 44434]]

return the tokens once the auction has ended.
    155. The Commission makes no warranties whatsoever, and shall not 
be deemed to have made any warranties, with respect to the Auction 
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 
Auction 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 Auction System.
    156. To the extent an issue arises with the Auction System itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
Auction 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 Auction 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 Auction System.
    157. As with the application system, there are occasions when other 
auction-related systems, including the Commission's Auction System, may 
be temporarily unavailable due to schedule maintenance of the 
Commission's IT systems.

I. Mock Auction

    158. All qualified bidders will be eligible to participate in a 
mock auction for whichever auctions they are qualified (i.e., Auction 
101 and/or Auction 102), which will be scheduled during the week before 
the first day of bidding in the applicable auction. The mock auctions 
will enable qualified bidders to become familiar with the Auction 
System and to practice submitting bids prior to the auctions. 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 auctions may reduce the 
likelihood of a bidder making a mistake during the auctions. Details 
regarding the mock auctions will be announced in the Qualified Bidders 
Public Notice for Auction 101 and Auction 102, respectively.

J. Fraud Alert

    159. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auctions 101 and 102 
to deceive and defraud unsuspecting investors. Common warning signals 
of fraud include the following:
     The first contact is a ``cold call'' from a telemarketer, 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example, by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of investment is less than $25,000.
     The sales representative makes verbal representations that 
(a) the Internal Revenue Service, Federal Trade Commission (FTC), 
Securities and Exchange Commission (SEC), FCC, or other government 
agency has approved the investment; (b) the investment is not subject 
to state or federal securities laws; or (c) the investment will yield 
unrealistically high short-term profits. In addition, the offering 
materials often include copies of actual FCC releases, or quotes from 
FCC personnel, giving the appearance of FCC knowledge or approval of 
the solicitation.
    160. Information about deceptive telemarketing investment schemes 
is available from the FCC as well as the FTC and SEC. Additional 
sources of information for potential bidders and investors may be 
obtained from the following sources:

 The FCC's Consumer Call Center at (888) 225-5322 or by 
visiting https://www.fcc.gov/general/frauds-scams-and-alerts-guides
 the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting 
http://ftc.gov/bcp/edu/pubs/consumer/invest/inv03.shtm
 the SEC at (202) 942-7040 or by visiting https://www.sec.gov/investor

    161. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National Fraud 
Information Center at (202) 835-0618.

IV. Bidding in Auctions 101 and 102

A. Auction 101--28 GHz

1. Auction Structure
a. Simultaneous Multiple-Round Auction
    162. The Commission will use its standard SMR auction format for 
Auction 101. This type of auction offers every license for bid at the 
same time and consists of successive bidding rounds in which qualified 
bidders may place bids on individual licenses. Unless otherwise 
announced, bids will be accepted on all licenses in each round of the 
auction until bidding stops on every license.
b. Auction Bidding System
    163. All bidding will take place remotely either through the FCC 
auction bidding system or by telephonic bidding. There will be no on-
site bidding during Auction 101. Please note that telephonic bid 
assistants are required to use a script when entering bids placed by 
telephone. Telephonic bidders are therefore reminded to allow 
sufficient time to bid by placing their calls well in advance of the 
close of a round. The length of a call to place a telephonic bid may 
vary; please allow a minimum of ten minutes.
    164. In order to access the bidding function of the FCC auction 
bidding system, bidders must be logged in during the bidding round 
using the passcode generated by the SecurID[supreg] token and a 
personal identification number (PIN) created by the bidder. Bidders are 
strongly encouraged to print a round summary for each round after they 
have completed all of their activity for that round.
    165. An Auction 101 bidder's ability to bid on specific licenses is 
determined by two factors: (1) The licenses selected on the bidder's 
FCC Form 175; and (2) the bidder's eligibility. The bid submission 
screens will allow bidders to submit bids on only those licenses the 
bidder selected on its FCC Form 175.
    166. In each round, eligible bidders will be able to place bids on 
a given license in any of up to nine pre-defined bid amounts. Bidders 
in Auction 101 may place bids only on individual licenses--they will 
not be permitted to place any package bids (i.e., bids for multiple 
licenses in a ``package''). For each license, the FCC auction bidding 
system will list the acceptable bid amounts in a drop-down box. Bidders 
use the drop-down box to select from among the acceptable bid amounts. 
The FCC auction bidding system also includes an upload function that 
allows

[[Page 44435]]

text files containing bid information to be uploaded.
    167. During a round, an eligible bidder may submit bids for as many 
licenses as it wishes (providing that it is eligible to bid on the 
specific licenses), remove bids placed in the current bidding round, 
withdraw provisionally winning bids from previous rounds, or 
permanently reduce eligibility. If multiple bids are submitted for the 
same license in the same round, the system takes the last bid entered 
as that bidder's bid for the round.
c. Availability of Bidding Information
    168. Limited information about the results of a round will be made 
public after the conclusion of the round. Specifically, after a round 
closes, the Bureau will make available for each license its current 
provisionally winning bid amount, the minimum acceptable bid amount for 
the following round, the amounts of all bids placed on the license 
during the round, and whether the license is FCC-held. The system will 
also provide an entire license history detailing all activity that has 
taken place on a license with the ability to sort by round number. The 
reports will be publicly accessible. Moreover, after Auction 102 
closes, the Bureau will make available complete reports of all bids 
placed during each round of the auction, including bidder identities.
    169. As in past Commission auctions, bidders will have secure 
access to certain non-public bidding information while bidding is 
ongoing. Specifically, after each round ends, and before the next round 
begins, the following information will be made available to individual 
bidders:
     The bidder's activity, based on all bids in the previous 
round; and
     Summary statistics of the bidder's bidding/bid-related 
actions in each round, including the licenses on which it bid and the 
price it bid for each of those licenses, the result of each of its 
bids, whether it has any provisionally winning bids, and remaining 
activity rule waivers.
d. Round Structure
    170. Auction 101 will consist of sequential bidding rounds, each 
followed by the release of round results. The initial schedule of 
bidding rounds will be announced in the public notice listing the 
qualified bidders, which is released at least one week before the start 
of bidding in the auction. Details on viewing round results, including 
the location and format of downloadable round results files will be 
included in the same public notice. Multiple bidding rounds may be 
conducted each day.
    171. The Bureau will retain the discretion to change the bidding 
schedule in order to foster an auction pace that reasonably balances 
speed with the bidders' need to study round results and adjust their 
bidding strategies. This will allow the Bureau to change the amount of 
time for bidding rounds, the amount of time between rounds, or the 
number of rounds per day, depending upon bidding activity and other 
factors.
e. Eligibility and Activity Rule
    172. A bidder's initial (maximum) bidding eligibility (as measured 
in bidding units) for Auction 101 will be based on its upfront payment. 
The amount of the upfront payment submitted by a bidder determines 
initial bidding eligibility, the maximum number of bidding units on 
which a bidder may be active. Each license is assigned a specific 
number of bidding units as listed in Attachment A. Bidding units 
assigned to each license do not change as prices rise during the 
auction. Upfront payments are not attributed to specific licenses. 
Rather, a bidder may place bids on any of the licenses selected on its 
FCC Form 175 as long as the total number of bidding units associated 
with those licenses do not exceed its current eligibility. Eligibility 
cannot be increased during the auction; it can only remain the same or 
decrease. Thus, in calculating its upfront payment amount and therefore 
its initial bidding eligibility, an applicant must determine the 
maximum number of bidding units on which it may wish to bid or hold 
provisionally winning bids in any single round, and submit an upfront 
payment amount covering that total number of bidding units. At a 
minimum, an applicant's upfront payment must cover the bidding units 
for at least one of the licenses selected on its FCC Form 175. The 
total upfront payment does not affect the total dollar amount a bidder 
may bid on any given license.
    173. The Commission will employ an activity rule that requires 
bidders to bid actively throughout the auction, rather than wait until 
late in the auction before participating. An activity rule helps ensure 
that an auction closes within a reasonable period of time. The bidding 
system calculates a bidder's activity in a round as the sum of the 
bidding units associated with any licenses upon which it places bids 
during the current round and the bidding units associated with any 
licenses for which it holds provisionally winning bids. If a bidder 
removes bids in the current round or withdraws provisionally winning 
bids, those bids no longer count towards the bidder's activity. Bidders 
are required to be active on a specific percentage of their current 
bidding eligibility during each round of the auction. Failure to 
maintain the requisite activity level will result in the use of an 
activity rule waiver, if any remain, or a reduction in the bidder's 
eligibility, possibly curtailing or eliminating the bidder's ability to 
place additional bids in the auction. Specifically, the minimum 
required activity is expressed as a percentage of the bidder's current 
eligibility and increases by stage as the auction progresses. The 
activity rule will be 80 percent during each round of Stage One and 95 
percent in Stage Two.
f. Auction Stages
    174. The Commission will conduct Auction 101 in two stages. A 
bidder desiring to maintain its current bidding eligibility will be 
required to be active on licenses representing at least 80 percent of 
its current bidding eligibility during each round of Stage One and at 
least 95 percent of its current bidding eligibility in Stage Two.
    175. Stage One: In each round of the first stage of the auction, a 
bidder desiring to maintain its current bidding eligibility is required 
to be active on bidding units associated with licenses representing at 
least 80 percent of its current bidding eligibility. Failure to 
maintain the required activity level will result in the use of an 
activity rule waiver or a reduction in the bidder's bidding eligibility 
for the next round of bidding. During Stage One, a bidder's reduced 
eligibility for the next round will be calculated by multiplying the 
bidder's current round activity by five-fourths (\5/4\).
    176. Stage Two: In each round of the second stage, a bidder 
desiring to maintain its current bidding eligibility is required to be 
active on 95 percent of its current bidding eligibility. Failure to 
maintain the required activity level will result in the use of an 
activity rule waiver or a reduction in the bidder's bidding eligibility 
for the next round of bidding. During Stage Two, a bidder's reduced 
eligibility for the next round will be calculated by multiplying the 
bidder's current round activity by twenty-nineteenths (\20/19\).
    Caution: Since activity requirements increase in Stage Two, bidders 
must carefully check their activity during the first round following a 
stage transition to ensure that they are meeting the increased activity 
requirement. This is especially critical for bidders that have 
provisionally winning bids and do not plan to submit new bids. In past 
auctions, some bidders have

[[Page 44436]]

inadvertently lost bidding eligibility or used an activity rule waiver 
because they did not re-verify their activity status at stage 
transitions. Bidders may check their activity against the required 
activity level in the FCC Bidding System.
g. Stage Transitions
    177. Auction 101 will start in Stage One. The Bureau will have the 
discretion to advance the auction to the next stage by announcement in 
the bidding system during the auction. In exercising this discretion, 
the Bureau will consider a variety of measures of auction activity, 
including but not limited to, the percentage of bidding units 
associated with licenses on which there are new bids, the number of new 
bids, and the increase in revenue.
    178. The Bureau will have the discretion to further alter the 
activity requirements before and/or during the auction as circumstances 
warrant. For example, the Bureau could decide to add an additional 
stage with a higher activity requirement, not to transition to Stage 
Two if it finds that the auction is progressing satisfactorily under 
the Stage One activity requirement, or to transition to Stage Two with 
an activity requirement that is higher or lower than the 95 percent 
adopted herein. If the Bureau exercises this discretion, it will alert 
bidders by announcement in the FCC auction bidding system.
    179. If the Bureau implements stages with activity requirements 
other than the ones listed, a bidder's reduced eligibility for the next 
round will be calculated by multiplying the bidder's current round 
activity by the reciprocal of the activity requirement. For example, 
with a 98 percent activity requirement, the bidder's current round 
activity would be multiplied by 50/49; with a 100 percent activity 
requirement, the bidder's current round activity would become its 
bidding eligibility (current round activity would be multiplied by 1/
1).
h. Activity Rule Waivers
    180. When a bidder's activity in the current round is below the 
required minimum level, the bidder may preserve its current level of 
eligibility through an activity rule waiver, if available. An activity 
rule waiver applies to an entire round of bidding, not to a particular 
license. Activity rule waivers can be either proactive or automatic. 
Activity rule waivers are principally a mechanism for a bidder to avoid 
the loss of bidding eligibility in the event that exigent circumstances 
prevent it from bidding in a particular round. Specifically, the 
Commission will provide each bidder in Auction 101 with three activity 
rule waivers that may be used as set forth at the bidder's discretion 
during the course of the auction.
    181. The FCC auction bidding system will assume that a bidder that 
does not meet the activity requirement would prefer to use an activity 
rule waiver (if available) rather than lose bidding eligibility. 
Therefore, the system will automatically apply a waiver at the end of 
any bidding round in which a bidder's activity level is below the 
minimum required unless (1) the bidder has no activity rule waivers 
remaining or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, thereby meeting the activity 
requirement. If a bidder has no waivers remaining and does not satisfy 
the required activity level, the bidder's current eligibility will be 
permanently reduced, possibly curtailing or eliminating the ability to 
place additional bids in the auction.
    182. A bidder with insufficient activity, however, may wish to 
reduce its bidding eligibility rather than use an activity rule waiver. 
If so, the bidder must affirmatively override the automatic waiver 
mechanism during the bidding round by using the reduce eligibility 
function in the FCC auction bidding system. In this case, the bidder's 
eligibility would be permanently reduced to bring it into compliance 
with the adopted activity rule. Reducing eligibility is an irreversible 
action; once eligibility has been reduced, a bidder cannot regain its 
lost bidding eligibility.
    183. Under the Commission's adopted simultaneous stopping rule, a 
bidder may apply an activity rule waiver proactively as a means to keep 
the auction open without placing a bid. If a bidder proactively were to 
apply an activity rule waiver (using the proactive waiver function in 
the FCC auction bidding system) during a bidding round in which no bids 
are placed or withdrawn, the auction will remain open and the bidder's 
eligibility will be preserved. However, an automatic waiver applied by 
the FCC auction bidding system in a round in which there are no new 
bids or a proactive waiver will not keep the auction open.
i. Stopping Rule
    184. For Auction 101, the Commission will employ a simultaneous 
stopping rule approach, which means all licenses remain available for 
bidding until bidding stops on every license. Specifically, bidding 
will close on all licenses after the first round in which no bidder 
submits any new bids, applies a proactive waiver, or withdraws any 
provisionally winning bids. Provisionally winning bids are bids that 
would become final winning bids if the auction were to close in that 
given round. Bidding will remain open on all licenses until bidding 
stops on every license. Consequently, it is not possible to determine 
in advance how long the bidding in Auction 101 will last.
    185. In addition, the Bureau will retain the discretion to exercise 
any of the following stopping options during Auction 101:
    Option 1. The auction will close for all licenses after the first 
round in which no bidder applies a waiver, no bidder withdraws a 
provisionally winning bid, or no bidder places any new bid on a license 
for which it is not the provisionally winning bidder. Thus, absent any 
other bidding activity, a bidder placing a new bid on a license for 
which it is the provisionally winning bidder would not keep the auction 
open under this modified stopping rule.
    Option 2. The auction will close for all licenses after the first 
round in which no bidder applies a waiver, no bidder withdraws a 
provisionally winning bid (if withdrawals are permitted in Auction 
101), or no bidder places any new bid on a license that already has a 
provisionally winning bid. Thus, absent any other bidding activity, a 
bidder placing a new bid on a FCC-held license (a license that does not 
have a provisionally winning bid) would not keep the auction open under 
this modified stopping rule.
    Option 3. The auction will close using a modified version of the 
simultaneous stopping rule that combines Option 1 and Option 2.
    Option 4. The auction will close after a specified number of 
additional rounds (special stopping rule) to be announced by the 
Bureau. If the Bureau invokes this special stopping rule, it will 
accept bids in the specified final round(s), after which the auction 
will close.
    Option 5. The auction will remain open even if no bidder places any 
new bid, applies a waiver, or withdraws any provisionally winning bids. 
In this event, the effect will be the same as if a bidder had applied a 
waiver. The activity rule will apply as usual, and a bidder with 
insufficient activity will lose bidding eligibility or use a waiver.
    186. The Bureau will exercise these options only in certain 
circumstances, for example, where the auction is proceeding unusually 
slowly or quickly, there is minimal overall bidding activity, or it 
appears likely that the auction will not close within a reasonable 
period of time or will close

[[Page 44437]]

prematurely. Before exercising these options, the Bureau is likely to 
attempt to change the pace of Auction 101. For example, the Bureau may 
adjust the pace of bidding by changing the number of bidding rounds per 
day and/or the minimum acceptable bids. The Bureau retains continuing 
discretion to exercise any of these options with or without prior 
announcement by the Bureau during the auction.
j. Auction Delay, Suspension, or Cancellation
    187. For Auction 101, at any time before or during the bidding 
process, the Bureau may delay, suspend, or cancel bidding in the 
auction in the event of a natural disaster, technical obstacle, network 
interruption, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. The Bureau will notify participants of any such delay, 
suspension, or cancellation by public notice and/or through the FCC 
auction bidding system's announcement function. If the bidding is 
delayed or suspended, the Bureau may, in its sole discretion, elect to 
resume the auction starting from the beginning of the current round or 
from some previous round, or cancel the auction in its entirety. The 
Bureau will exercise this authority solely at its discretion, and not 
as a substitute for situations in which bidders may wish to apply their 
activity rule waivers.
2. Bid Collection and Winner Determination Procedures
a. Reserve Price or Minimum Opening Bids
    188. The Commission has established minimum opening bid amounts for 
Auction 101. The bidding system will not accept bids lower than these 
amounts. In addition, the Commission has not established an aggregate 
reserve price or license reserve prices different from minimum opening 
bid amounts for the licenses to be offered in Auction 101. A reserve 
price is an amount below which an item, or group of items, may not be 
won.
    189. For Auction 101, minimum opening bid amounts will be 
calculated on a license-by-license basis using a formula based on 
bandwidth and license area population. The Commission adopts a tiered 
approach, under which minimum opening bid amounts will vary by market 
population. For the county-based licenses that fall within PEAs 1-50, 
minimum opening bid amounts are based on $0.002 per MHz/pop; for those 
in PEAs 51-100, minimum opening bid amounts are based on $0.0004 per 
MHz/pop; and for all others, minimum opening bid amounts are based on 
$0.0002 per MHz/pop. A summary of the minimum opening bid amounts is 
set forth in Attachment A of the Auctions 101 and 102 Procedures Public 
Notice. The specific minimum opening bid amount for each license 
offered in Auction 101 will be provided in electronic format only, 
available as a separate ``Attachment A'' file at www.fcc.gov/auction/101. The results of these calculations are subject to a minimum of $200 
and will be rounded.
b. Bid Amounts
    190. In each round, an eligible bidder will be able to place a bid 
on a given license in any of up to nine different amounts. The FCC 
auction bidding system interface will list the acceptable bid amounts 
for each license.
(i) Minimum Acceptable Bid Amounts
    191. The first of the acceptable bid amounts is called the minimum 
acceptable bid amount. In Auction 101, the minimum acceptable bid 
amount for a license will be equal to its minimum opening bid amount 
until there is a provisionally winning bid on the license. After there 
is a provisionally winning bid for a license, the minimum acceptable 
bid amount for that license will be equal to the amount of the 
provisionally winning bid plus a percentage of that bid amount 
calculated using an activity-based formula. In general, the percentage 
will be higher for a license receiving many bids than for a license 
receiving few bids. In the case of a license for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the second highest bid received for the license.
    192. The percentage of the provisionally winning bid used to 
establish the minimum acceptable bid amount (the additional percentage) 
is calculated based on an activity index at the end of each round. The 
activity index is a weighted average of (a) the number of distinct 
bidders placing a bid on the license in that round, and (b) the 
activity index from the prior round. Specifically, the activity index 
is equal to a weighting factor times the number of bidders placing a 
bid covering the license in the most recent bidding round plus one 
minus the weighting factor times the activity index from the prior 
round. For Round 1 calculations, because there is no prior round (i.e., 
no round 0), the activity index from the prior round is set at 0. The 
additional percentage is determined as one plus the activity index 
times a minimum percentage amount, with the result not to exceed a 
given maximum. The additional percentage is then multiplied by the 
provisionally winning bid amount to obtain the minimum acceptable bid 
for the next round. The result will be rounded using the Commission's 
standard rounding procedures for auctions. The Commission set the 
weighting factor initially at 0.5, the minimum percentage at 0.1 (10 
percent), and the maximum percentage at 0.2 (20 percent). At these 
initial settings, the minimum acceptable bid for a license will be 
between 10 percent and 20 percent higher than the provisionally winning 
bid, depending upon the bidding activity for the license. Equations and 
examples are shown in Attachment B.
(ii) Additional Bid Amounts
    193. The FCC auction bidding system calculates any additional bid 
amounts using the minimum acceptable bid amount and an additional bid 
increment percentage. The minimum acceptable bid amount is multiplied 
by the additional bid increment percentage, and that result (rounded) 
is the additional increment amount. The first additional acceptable bid 
amount equals the minimum acceptable bid amount plus the additional 
increment amount. The second additional acceptable bid amount equals 
the minimum acceptable bid amount plus two times the additional 
increment amount; the third additional acceptable bid amount is the 
minimum acceptable bid amount plus three times the additional increment 
amount; etc. The Commission will set the additional bid increment 
percentage at five percent initially. Hence, the calculation of the 
additional increment amount would be (minimum acceptable bid amount) * 
(0.05), rounded. The first additional acceptable bid amount equals 
(minimum acceptable bid amount) + (additional increment amount); the 
second additional acceptable bid amount equals (minimum acceptable bid 
amount) + (2*(additional increment amount)); the third additional 
acceptable bid amount equals (minimum acceptable bid amount) + 
(3*(additional increment amount)); etc.
(iii) Bid Amount Changes
    194. The Bureau will retain the discretion to change the minimum 
acceptable bid amounts, the additional bid amounts, the number of 
acceptable bid amounts, and the parameters of the formulas used to 
calculate minimum acceptable bid amounts and additional bid amounts if 
the Bureau determines

[[Page 44438]]

that circumstances so dictate. Further, the Bureau retains the 
discretion to do so on a license-by-license basis, and the discretion 
to limit (a) the amount by which a minimum acceptable bid for a license 
may increase compared with the corresponding provisionally winning bid, 
and (b) the amount by which an additional bid amount may increase 
compared with the immediately preceding acceptable bid amount. For 
example, the Bureau may set a $100,000 limit on increases in minimum 
acceptable bid amounts over provisionally winning bids. Thus, if 
calculating a minimum acceptable bid using the activity-based formula 
results in a minimum acceptable bid amount that is $200,000 higher than 
the provisionally winning bid on a license, the minimum acceptable bid 
amount would instead be capped at $100,000 above the provisionally 
winning bid. If the Bureau exercises this discretion, it will alert 
bidders by announcement in the FCC auction bidding system during the 
auction.
c. Provisionally Winning Bids
    195. The FCC auction bidding system will determine provisionally 
winning bids consistent with practices in past auctions. At the end of 
each bidding round, the bidding system will determine a provisionally 
winning bid for each license based on the highest bid amount received 
for the license. A provisionally winning bid will remain the 
provisionally winning bid until there is a higher bid on the same 
license at the close of a later round. Provisionally winning bids at 
the end of Auction 101 become the winning bids.
    196. If identical high bid amounts are submitted on a license in 
any given round (i.e., tied bids), the FCC auction bidding system will 
use a pseudo-random number generator to select a single provisionally 
winning bid from among the tied bids. The remaining bidders, as well as 
the provisionally winning bidder, can submit higher bids in later 
rounds. However, if the auction were to end with no other bids being 
placed, the winning bidder would be the one that placed the 
provisionally winning bid. If the license receives any bids in a later 
round, the provisionally winning bid again will be determined by the 
highest bid amount received for the license.
    197. A provisionally winning bid will be retained until there is a 
higher bid on the license at the close of a later round, unless the 
provisionally winning bid is withdrawn. For Auction 101, a bid that was 
provisionally winning in a round counts toward bidding activity for 
purposes of the activity rule in the later round.
d. Bid Removal and Bid Withdrawal
(i) Bid Removal
    198. Each qualified bidder has the option of removing any bids 
placed in a round provided that such bids are removed before the close 
of that bidding round. By removing a bid within a round, a bidder 
effectively ``unsubmits'' the bid. A bidder removing a bid placed in 
the same round is not subject to withdrawal payments. Removing a bid 
will affect a bidder's activity because a removed bid no longer counts 
toward bidding activity for the round. Once a round closes, a bidder 
may no longer remove a bid.
(ii) Bid Withdrawal
    199. The Commission will allow each bidder to withdraw 
provisionally winning bids in no more than two rounds during the course 
of the auction. The two rounds in which a bidder may withdraw 
provisionally winning bids will be at the bidder's discretion, and 
there is no limit on the number of provisionally winning bids that a 
bidder may withdraw in either of the rounds in which it withdraws bids. 
Withdrawals must be in accordance with the Commission's rules, 
including the bid withdrawal payment provisions specified in Sec.  
1.2104(g). Once a bid withdrawal is submitted during a round, that 
withdrawal cannot be unsubmitted even if the round has not yet ended.
    200. If a provisionally winning bid is withdrawn, the minimum 
acceptable bid amount will equal the amount of the second highest bid 
received for the license, which may be less than, or in the case of 
tied bids, equal to, the amount of the withdrawn bid. The Bureau will 
retain the discretion to lower the minimum acceptable bid on such 
licenses in the next round or in later rounds. The Commission will 
serve as a placeholder provisionally winning bidder on the license 
until a new bid is submitted on that license.
(iii) Calculation of Bid Withdrawal Payment
    201. Generally, the Commission imposes payments on bidders that 
withdraw provisionally winning bids during the course of an auction. If 
a bidder withdraws its bid and there is no higher bid in the same or 
later auction(s), the bidder that withdrew its bid is responsible for 
the difference between its withdrawn bid and the winning bid in the 
same or later auction(s). The payment will equal the lower of: (1) The 
difference between the net withdrawn bid and the subsequent net winning 
bid; or (2) the difference between the gross withdrawn bid and the 
subsequent gross winning bid. If there are multiple bid withdrawals on 
a single license and no subsequent higher bid is placed and/or the 
license is not won in the same auction, the payment for each bid 
withdrawal will be calculated based on the sequence of bid withdrawals 
and the amounts withdrawn. No withdrawal payment will be assessed for a 
withdrawn bid if either the subsequent winning bid or any subsequent 
intervening withdrawn bid, in either the same or later auction(s), 
equals or exceeds that withdrawn bid. Thus, a bidder that withdraws a 
bid will not be responsible for any final withdrawal payment if there 
is a subsequent higher bid in the same or later auction(s).
    202. However, if a license for which a bid had been withdrawn does 
not receive a subsequent higher bid or winning bid in the same auction, 
the FCC cannot calculate the final withdrawal payment until that 
license receives a higher bid or winning bid in a later auction. In 
such cases, when that final withdrawal payment cannot yet be 
calculated, the FCC imposes on the bidder responsible for the withdrawn 
bid an interim bid withdrawal payment, which will be applied toward any 
final bid withdrawal payment that is ultimately assessed.
    203. The amount of the interim bid withdrawal payment is 
established in advance of bidding in each auction and may range from 
three percent to twenty percent of the withdrawn bid amount. The 
Commission established an interim bid withdrawal payment of 15 percent 
of the withdrawn bid for Auction 101. Section 1.2104(g) provides 
specific examples showing application of the bid withdrawal payment 
rule.
3. Auction Results
    204. After the Bureau announces the auction results, it will 
provide a means for the public to view and download bidding and results 
data.
4. Auction Announcements
    205. The Commission and/or Bureau will use auction announcements to 
report necessary information to bidders, such as schedule changes. All 
auction announcements will be available by clicking a link in the FCC 
auction bidding system.
B. Auction 102--24 GHz
1. Auction Structure
c. Clock and Assignment Phases
    206. The Commission will conduct Auction 102 using an ascending 
clock

[[Page 44439]]

auction design with two phases. In the first phase of the auction--the 
clock phase--bidders will indicate their demands for generic license 
blocks in specific geographic areas (i.e., PEAs). In the second phase--
the assignment phase--winning clock-phase bidders will have the 
opportunity to bid for their preferred combinations of frequency-
specific licenses, consistent with their clock-phase winnings, in a 
series of single sealed-bid rounds conducted by PEA or, in some cases, 
PEA group.
    207. The Bureau has prepared and released, concurrent with the 
Auctions 101 and 102 Procedures Public Notice, updated technical guides 
that provide the mathematical details of the adopted auction design and 
algorithms for the clock and assignment phases of Auction 102. The 
Auction 102 Clock Phase Technical Guide details the adopted procedures 
for the clock phase of Auction 102. The Auction 102 Assignment Phase 
Technical Guide details the adopted procedures for the assignment 
phase. The information in the updated technical guides supplements the 
decisions in the Auctions 101 and 102 Procedures Public Notice. The 
guides may be found on the Commission's website at: https://www.fcc.gov/auction/102.
d. Generic Blocks and Bidding Categories
    208. In the clock phase, the Commission will conduct bidding for 
generic blocks in two categories in most PEAs (i.e., those without an 
incumbent licensee). There generally will be two generic blocks in the 
lower 24 GHz segment (Category L) and five generic blocks in the upper 
24 GHz segment (Category U). Therefore, in each round of the clock 
phase, a bidder will have the opportunity to bid for up to two blocks 
of spectrum in Category L and for up to five blocks in Category U, in 
each PEA without an incumbent licensee.
    209. An incumbent in the 24 GHz band, currently holds 100 megahertz 
in Block B in three PEAs (PEA 15--Phoenix, AZ; PEA 26--Las Vegas; PEA 
76--Reno, NV) and 25 megahertz in Block G in one PEA (PEA 75--
Albuquerque, NM). The Commission will auction the remaining 75 
megahertz in PEA 75--Albuquerque, NM, resulting in one additional 
category in the upper band (Category UI), for a total of three 
categories.
    210. Bidding in the auction will determine a single final clock 
phase price for the generic blocks in each category in each PEA.
e. Auction Bidding System
    211. As is standard practice for FCC auctions, the Commission will 
conduct Auction 102 over the internet using the FCC auction bidding 
system. Bidders will also have the option of placing bids by telephone 
through a dedicated auction bidder line. There will be no on-site 
bidding during Auction 102. Please note that telephonic bid assistants 
are required to use a script when entering bids placed by telephone. 
Telephonic bidders are therefore reminded to allow sufficient time to 
bid by placing their calls well in advance of the close of a round. The 
length of a call to place a telephonic bid may vary; please allow a 
minimum of ten minutes. The toll-free telephone number for the auction 
bidder line will be provided to qualified bidders prior to the start of 
bidding in the auction.
    212. In order to access the bidding function of the FCC auction 
bidding system, bidders must be logged in during the bidding round 
using the passcode generated by the SecurID[supreg] token and a PIN 
created by the bidder. Bidders are strongly encouraged to print a round 
summary for each round after they have completed all of their activity 
for that round.
    213. An Auction 102 bidder's ability to bid on generic license 
blocks in specific PEAs is determined by two factors: (1) the PEA(s) 
selected on the bidder's FCC Form 175; and (2) the bidder's 
eligibility. The bid submission screens will allow bidders to submit 
bids only on categories of generic blocks in the PEA(s) the bidder 
selected on its FCC Form 175.
    214. In the first round of the clock phase, an eligible bidder will 
indicate how many blocks in a bidding category in a PEA it demands at 
the minimum opening bid price. The bidding system will not accept bids 
lower than these amounts. A bidder must have sufficient eligibility to 
place a bid on the particular license block(s). Bidders in Auction 102 
may place bids only on individual license blocks in a category in a 
PEA--they will not be permitted to place any package bids (i.e., bids 
for multiple blocks in a ``package''). In each subsequent round, an 
eligible bidder will be able to express its demand for blocks in a 
category in a specific PEA at the clock price or at a price between the 
previous round's price and the new clock price. The FCC auction bidding 
system also includes an upload function that allows text files 
containing bid information to be uploaded.
    215. During each round of the clock phase, a bidder may also remove 
bids placed in the current bidding round. If a bidder submits multiple 
bids for the same category in a PEA in a round, the system takes the 
last bid entered as that bidder's bid for the round.
    216. After the clock phase concludes but before bidding begins in 
the assignment phase, the auction bidding system will provide to each 
clock phase winner a menu of assignment phase bidding options 
consisting of possible configurations of frequency-specific licenses on 
which it can bid in each category in each PEA in which it holds winning 
clock phase bids. A bidder can assign a price using a sealed bid to one 
or more possible frequency assignment options for which it wishes to 
express a preference, consistent with its winning bids for generic 
blocks in the clock phase. Participation in the assignment phase is 
voluntary.
f. Stopping Rule
    217. The Commission will use a simultaneous stopping rule for the 
clock phase of Auction 102, under which all categories of blocks in all 
PEAs will remain available for bidding until the bidding stops on every 
category in every PEA. The clock phase of bidding will close for all 
categories of blocks in all PEAs after the first round in which there 
is no excess demand in any category in any PEA. Bidding will remain 
open on all categories of licenses in all PEAs until bidding stops on 
every category. Consequently, it is not possible to determine in 
advance how long the bidding in Auction 102 will last.
    218. The assignment phase of Auction 102 will close after 
frequency-specific licenses in all PEAs have been assigned.
g. Availability of Bidding Information
    219. The Commission will make public after each round of the clock 
phase of Auction 102, for each bidding category in each PEA: The 
supply; the aggregate demand; the posted price of the last completed 
round; and the clock price for the next round. The posted price of the 
previous round is, generally: the opening price if supply exceeds 
demand; the clock price of the previous round if demand exceeds supply; 
or the price at which a reduction caused demand to equal supply. The 
identities of bidders demanding blocks in a specific category or PEA 
will not be disclosed until after Auction 102 concludes (i.e., after 
the close of bidding in the assignment phase).
    220. Each bidder will have access to additional information related 
to its own bidding and bid eligibility. Specifically, after the bids of 
a round have been processed, the bidding system will advise each bidder 
of the number of blocks it holds after the

[[Page 44440]]

round (its processed demand) for every category and PEA, and of its 
eligibility for the next round.
    221. After the clock phase concludes but before bidding begins in 
the assignment phase, the auction bidding system will provide to each 
assignment phase bidder a menu of bidding options consisting of 
possible configurations of frequency-specific licenses on which it can 
bid in each category in each PEA in which it holds winning clock-phase 
bids. These bidding options will be consistent with the bidder's clock-
phase winnings. The bidding system will also announce the order in 
which assignment rounds will take place and indicate which PEAs will be 
grouped together for bidding. The bidding system will provide clock 
phase winning bidders with this information as soon as possible and 
will announce a schedule of assignment phase rounds that will commence 
no less than five business days later.
    222. After each assignment round, the bidding system will advise 
each bidder of its own assignment and assignment payment for each PEA 
or PEA group assigned in the round. The bidding system will also 
provide each bidder with its current total payment (gross and net) for 
the PEAs for which an assignment round has already completed, as well 
as its corresponding capped and uncapped bidding credit discounts. This 
information will provide the bidder a running estimate during the 
assignment rounds of the dollar amount it will owe at the end of the 
auction.
h. Auction Delay, Suspension, or Cancellation
    223. At any time before or during the bidding process, the Bureau 
may delay, suspend, or cancel bidding in Auction 102 in the event of a 
natural disaster, technical obstacle, network interruption, 
administrative or weather necessity, evidence of an auction security 
breach or unlawful bidding activity, or for any other reason that 
affects the fair and efficient conduct of competitive bidding. The 
Bureau will notify participants of any such delay, suspension, or 
cancellation by public notice and/or through the FCC auction bidding 
system's announcement function. If the bidding is delayed or suspended, 
the Bureau may, in its sole discretion, elect to resume the auction 
starting from the beginning of the current round or from some previous 
round, or cancel the auction in its entirety. The Bureau will exercise 
this authority solely at its discretion.
2. Clock Phase Bid Collection and Bid Processing Procedures
a. Round Structure
    224. The Commission will conduct the clock phase of Auction 102 in 
a series of rounds, with bidding being conducted simultaneously for all 
spectrum blocks available in the auction. During the clock phase, the 
Bureau will announce clock prices for blocks in each category in each 
geographic area, and qualified bidders will submit quantity bids for 
the number of blocks they seek. Bidding rounds will be open for 
predetermined periods of time, during which bidders will indicate their 
demands for blocks at the prices associated with the current round. The 
round's clock price is the highest price associated with the round. The 
lowest price associated with a round is the posted price of the 
previous round. As in SMR auctions, bidders will be subject to activity 
and eligibility rules that govern the pace at which they participate in 
the auction.
    225. In each geographic area, the clock price for a category of 
generic blocks will increase from round to round if bidders indicate 
aggregate demand that exceeds the number of blocks available in the 
category. The clock rounds will continue until, for all categories of 
blocks in all geographic areas, the number of blocks demanded does not 
exceed the supply of available blocks. At that point, those bidders 
indicating demand in a category in a PEA at the final clock phase price 
will be deemed winning bidders.
    226. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of bidding. 
The Bureau retains the discretion to change the bidding schedule in 
order to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. Accordingly, the Bureau may change the amount of time for 
bidding rounds, the amount of time between rounds, or the numbers of 
rounds per day, depending upon bidding activity and other factors.
b. Eligibility and Activity Rule
    227. Bidders are required to maintain a minimum, high level of 
activity in each clock round in order to maintain bidding eligibility, 
which will help ensure that the auction moves quickly and promote a 
sound price discovery process. The activity requirement will be set 
between 92 and 97 percent of a bidder's bidding eligibility in all 
clock rounds. Further, the initial activity requirement will be set at 
95 percent. Failure to maintain the requisite activity level will 
result in a reduction in the bidder's eligibility, possibly curtailing 
or eliminating the bidder's ability to place additional bids in the 
auction.
    228. The Commission will use upfront payments to determine initial 
(maximum) eligibility in terms of bidding units. Each spectrum block in 
a PEA will be assigned a specific number of bidding units based on the 
number of MHz-pops in the PEA. Each block available in a PEA will have 
the same number of bidding units. A bidder's upfront payment will 
determine the maximum number of blocks as measured by their associated 
bidding units that a bidder can demand at the start of the auction.
    229. Generally, the activity rule will be satisfied when a bidder 
has bidding activity on blocks with bidding units that total at least 
95 percent of its eligibility in the round. If the activity rule is 
met, then the bidder's eligibility will not change in the next round. 
Bidding eligibility will be reduced as the auction progresses if a 
bidder does not meet the activity requirement.
    230. For this clock auction, a bidder's activity in a round for 
purposes of the activity rule will be the sum of the bidding units 
associated with the bidder's processed demands. For instance, if a 
bidder requests a reduction in the quantity of blocks it demands in a 
category, but the FCC auction bidding system does not accept the 
request because demand for the category would fall below the available 
supply, the bidder's activity will reflect its unreduced demand.
    231. The Bureau will retain the discretion to change the activity 
requirement before and/or during the auction within the 92-97 percent 
range, as circumstances warrant. Any changes to the activity 
requirement will be announced in advance via the auction bidding 
system, giving bidders sufficient notice to adjust their bidding 
strategies if needed.
    232. Bidders are required to indicate their demands in every round, 
even if their demands at the new round's prices are unchanged from the 
previous round. Missing bids--bids that are not reconfirmed--are 
treated by the auction bidding system as requests to reduce to a 
quantity of zero blocks for the category. If these requests are 
applied, or applied partially, a bidder's bidding activity, and hence 
its bidding eligibility for the next round, will be reduced.
    233. The Commission will not provide for activity rule waivers to 
preserve a bidder's eligibility in the event that its bidding activity 
does not meet the activity requirement in a

[[Page 44441]]

round. Allowing waivers would create uncertainty with respect to the 
exact level of bidder demand, interfering with the basic clock price-
setting and winner determination mechanism. Moreover, uncertainty about 
the level of demand would affect the way bidders' requests to reduce 
demand are processed by the FCC auction bidding system.
c. Acceptable Bid Amounts
(i) Reserve Price or Minimum Opening Bids
    234. The Commission established minimum opening bid amounts for 
Auction 102. In Round 1 of the clock phase, a bidder will indicate how 
many blocks in a bidding category in a PEA it demands at the minimum 
opening bid price. The bidding system will not accept bids lower than 
these amounts.
    235. Minimum opening bid amounts will be calculated using a formula 
based on 100 megahertz of bandwidth and license area population for 
blocks in all categories regardless of actual bandwidth for blocks in a 
category in a PEA. The Commission adopts a tiered approach, under which 
minimum opening bid amounts will vary by market population. For PEAs 1-
50, minimum opening bid amounts are based on $0.002 per MHz/pop; for 
PEAs 51-100, minimum opening bid amounts are based on $0.0004 per MHz/
pop; and for all other PEAs, minimum opening bid amounts are based on 
$0.0002 per MHz/pop. A summary of the minimum opening bid amounts is 
set forth in Attachment A of the Auctions 101 and 102 Public Notice. 
The specific minimum opening bid amount for each license offered in 
Auction 102 will be provided in electronic format only, available as a 
separate ``Attachment A'' file at www.fcc.gov/auction/102. The results 
of these calculations are subject to a minimum of $200 and will be 
rounded.
(ii) Clock Price Increments
    236. After bidding in the first round and before each later round, 
the FCC auction bidding system will announce a clock price for the next 
round, which is the highest price to which bidders can respond during 
the round. For each round, the clock price for each category in each 
PEA will be set by adding a fixed percentage increment to the posted 
price for the previous round. As long as aggregate demand for blocks in 
a category exceeds the supply of blocks, the percentage increment will 
be added to the clock price from the prior round. If demand equaled 
supply at an intra-round bid price in a previous round, then the clock 
price for the next round will be set by adding the percentage increment 
to the intra-round bid price.
    237. The initial increment will be set at ten percent. The 
Commission may adjust the increment as rounds continue. The five-to-
fifteen percent increment range will allow the FCC to set a percentage 
that manages the auction pace, taking into account bidders' needs to 
evaluate their bidding strategies while moving the auction along 
quickly. Increments may be changed during the auction on a PEA-by-PEA 
or category-by-category basis based on bidding activity to ensure that 
the system can offer appropriate price choices to bidders.
(iii) Intra-Round Bids
    238. The Commission will permit a bidder to make intra-round bids 
by indicating a price between the previous round's posted price and the 
new clock price at which its demand for blocks in a category in a PEA 
changes. In placing an intra-round bid, a bidder will indicate a 
specific price and a quantity of blocks it demands if the price for 
blocks in the category in the PEA should increase beyond that price. 
For example, consider a round where the clock price increases from $100 
to $110. A bidder indicated in the previous round that it demanded 3 
blocks at $100, but its demand changes from 3 blocks to 2 blocks when 
the price increases beyond $105 and up to $110. To indicate that 
preference, the bidder should submit an intra-round bid for 2 blocks at 
a price of $105.
    239. Intra-round bids are optional; a bidder may choose to express 
its demands only at the clock prices.
(iv) Bid Removal and Bid Withdrawal
    240. The FCC auction bidding system allows a bidder to remove any 
of the bids it placed in a round before the close of that round. By 
removing a bid placed within a round, a bidder effectively 
``unsubmits'' the bid. A bidder removing a bid placed in the same round 
is not subject to withdrawal payments. Removing a bid will affect a 
bidder's activity because a removed bid no longer counts toward bidding 
activity for the round. Once a round closes, a bidder may no longer 
remove a bid.
    241. Bid withdrawals, analogous to withdrawals of provisionally 
winning bids in an SMR auction, are not available in Auction 102. 
However, bidders in Auction 102 may request to reduce demand for 
generic blocks in a bidding category.
(v) No Bidding Aggregation
    242. The Commission does not adopt any package bidding procedures 
for the clock phase of Auction 102. A bidder may bid for multiple 
blocks in a bidding category in a PEA and may submit bids for multiple 
PEAs. The assignment phase will assign contiguous blocks to winners of 
multiple blocks in a category in a PEA, and give bidders an opportunity 
to express their preferences for specific frequency blocks, thereby 
facilitating aggregations of licenses.
d. Changing Demand, Bid Types, and Bid Processing
    243. For each category in each PEA, a bidder can either bid to 
maintain its processed demand from the previous round at the current 
round's clock price or bid to change its demand at a price associated 
with the round. A bid to change demand could involve either a decrease 
or an increase in the demanded quantity.
    244. Bids to maintain demand are always applied during bid 
processing. However, if a bidder demands fewer blocks in a category 
than its processed demand from the previous round, the bidding system 
will treat the bid as a request to reduce demand that will be 
implemented only if aggregate demand would not fall below the available 
supply of blocks in the category. If a bidder demands more blocks in a 
category than its processed demand from the previous round, the bidding 
system will treat the bid as a request to increase demand that will be 
implemented only if that would not cause the bidder's activity to 
exceed its eligibility.
    245. The bidding system will process bids after a round ends in 
order of price point, where the price point represents the percentage 
of the bidding interval for the round. For example, if the posted price 
for the previous round is $5,000 and the clock price of the current 
round is $6,000, a price of $5,100 will correspond to the 10 percent 
price point, since it is 10 percent of the bidding interval between 
$5,000 and $6,000. Once a round ends, the bidding system will process 
bids in ascending order of price point, first considering intra-round 
bids in order of price point and then bids at the clock price. The 
system will consider bids at the lowest price point for all categories 
in all PEAs, then look at bids at the next price point, and so on. In 
processing the bids submitted in the round, the FCC auction bidding 
system will determine the extent to which there is excess demand for 
each category in each PEA in order to determine whether a bidder's

[[Page 44442]]

requested reduction(s) in demand can be implemented. In processing the 
bids submitted in the round, the FCC auction bidding system will also 
determine the bidding units associated with a bidder's most recent 
processed demand in order to determine whether the bidder's requested 
increase(s) in demand can be implemented.
    246. For a given category in a given PEA, the uniform price for all 
of the blocks in the category will stop increasing when aggregate 
demand no longer exceeds the available supply of blocks in the 
category. If no further bids are placed, the final clock phase price 
for the category will be the stopped price.
    247. In order to facilitate bidding for multiple blocks in a PEA, 
bidders will be permitted to make two types of bids: simple bids and 
switch bids.
     A ``simple'' bid indicates a desired quantity of licenses 
in a category at a price (either the clock price or an intra-round 
price). Simple bids may be applied partially. A simple bid that 
involves a reduction from the bidder's previous demands may be 
implemented partially if aggregate excess demand is insufficient to 
support the entire reduction. A simple bid to increase a bidder's 
demands in a category may be applied partially if the total number of 
bidding units associated with the bidder's demand exceeds the bidder's 
bidding eligibility for the round.
     A ``switch'' bid allows the bidder to request to move its 
demand for a quantity of licenses from the L category to the U 
category, or vice versa, within the same PEA. Switch bids may not be 
made between Category U or L and Category UI. A switch bid may be 
applied partially, but the increase in demand in the ``to'' category 
will always match in quantity the reduction in the ``from'' category.
    248. These bid types will allow bidders to express their demand for 
blocks in the next clock round without running the risk that they will 
be forced to purchase more spectrum at a higher price than they wish. 
When a bid to reduce demand can be applied only partially, the uniform 
price for the category will stop increasing at that point, since the 
partial application of the bid results in demand falling to equal 
supply. Hence, a bidder that makes a simple bid or a switch bid that 
cannot be fully applied will not face a price for the remaining demand 
that is higher than its bid price.
    249. Because in any given round some bidders may increase demands 
for licenses in a category while others may request reductions, the 
price point at which a bid is considered by the bidding system can 
affect whether it is accepted. However, bids not accepted because of 
insufficient aggregate demand or insufficient eligibility at a given 
price point will be held in a queue and considered, again in order, if 
there should be excess supply or sufficient eligibility later in the 
processing after other bids are processed.
    250. Once a round closes, the auction system will process the bids 
by first considering the bid submitted at the lowest price point and 
determine whether it can be accepted given aggregate demand as 
determined most recently and given the associated bidder's eligibility. 
If the bid can be accepted, or partially accepted, the number of 
licenses the bidder demands will be adjusted, and aggregate demand will 
be recalculated accordingly. If the bid cannot be accepted in part or 
in full, the unfulfilled bid, or portion thereof, will be held in a 
queue to be considered later during bid processing for that round. The 
FCC auction bidding system will then consider the bid submitted at the 
next highest price point, accepting it in full, in part, or not at all, 
given recalculated aggregate demand and given the associated bidder's 
eligibility. Any unfulfilled requests will again be held in a queue, 
and aggregate demand will again be recalculated. Every time a bid or 
part of a bid is accepted and aggregate demand has been recalculated, 
the unfulfilled bids held in queue will be reconsidered, in the order 
of their original price points (and by pseudo-random number, in the 
case of tied price points). The auction bidding system will not carry 
over unfulfilled bid requests to the next round, however. The bidding 
system will advise bidders of the status of their bids when round 
results are released.
    251. After the bids are processed in each round, the FCC auction 
bidding system will announce, for each bidding category in each PEA: 
the aggregate demand; the posted price; and the clock price for the 
next round, to indicate a range of acceptable bids for the next round. 
If demand fell to equal supply during the round, the posted price will 
be equal to the intra-round price at which that occurred. If there is 
excess demand, a fixed percentage increment will be added to the clock 
price for the previous round, and this percentage increment will be the 
same for all categories in all PEAs. However, if in the round, an 
intra-round bid brings demand down to the point at which it is equal to 
supply, the increment will be added to that intra-round price. Each 
bidder will also be informed of its own processed demand for every 
category and PEA and of its own eligibility for the next round.
e. Winning Bids in the Clock Phase
    252. Bidders that hold processed demand in a category in a PEA at 
the time the stopping rule is met will become winning bidders and will 
be assigned frequency-specific licenses in the assignment phase.
    253. The final clock phase price is the posted price of the final 
round. This will be the price at which a reduction caused demand for 
the blocks to equal the supply of blocks in the category in the PEA. 
For categories in PEAs where supply exceeds demand, the final clock 
phase price will be the opening price.
3. Assignment Phase Bid Collection and Bid Processing Procedures
    254. The assignment phase will determine which frequency-specific 
licenses will be won by the winning bidders of generic blocks during 
the clock phase. In the assignment phase, winning bidders will have the 
opportunity to bid for preferred combinations of frequency-specific 
licenses. A bidder can assign a price using a sealed bid to one or more 
possible frequency assignments for which it wishes to express a 
preference, consistent with its winning bids for generic blocks in the 
clock phase. For instance, if a bidder won two Category U blocks and 
one Category L block in the clock phase, then it will only be offered 
the option of bidding for frequency assignments with exactly two 
Category U licenses and for frequency assignments with exactly one 
Category U license. The bid prices will represent the maximum payment 
that the bidder is willing to pay for the frequency-specific license 
assignment, in addition to the final price established in the clock 
phase for the generic blocks. These procedures will determine the 
optimal assignment of licenses within each PEA based on bid amounts in 
the assignment phase. As a simple example, assume two bidders won one 
Category L block each in a given PEA in the clock phase, so each was 
presented with bidding options Block A and Block B. One bidder bid 10 
for Block A and 0 for Block B, the other bidder bid 12 for Block A and 
0 for Block B in the assignment phase. The auction system will assign 
Block A to the second bidder, and Block B to the first bidder.
    255. Participation in the assignment phase is voluntary: A winning 
bidder in the clock phase of Auction 102 need not participate in order 
to be assigned a number of licenses corresponding to the outcome of the 
clock phase. Moreover, a bidder that wins multiple blocks in a

[[Page 44443]]

category in a PEA will be assigned contiguous blocks of licenses, even 
without participating in the assignment phase. A winner of a block in a 
category that includes only a single block will not bid for an 
assignment in the assignment phase.
a. Round Structure: Sequencing and Grouping of Rounds
    256. Sequencing of rounds. The Commission will conduct assignment 
rounds for the largest markets first. The Commission will conduct a 
separate assignment round for each of the top 40 PEAs sequentially, 
beginning with the largest PEAs. Top 40 PEAs are PEAs 1-40. Once the 
top 40 PEAs have been assigned, the Commission will conduct, for each 
Regional Economic Area Grouping (REAG), a series of assignment rounds 
for the remaining PEAs within that region. The Commission will sequence 
the assignment rounds within a REAG in descending order of population 
for a PEA group or individual PEA.
    257. Grouping of PEAs. To reduce the total amount of time required 
to complete the assignment phase, where feasible, the Commission will 
group into a single market for assignment any non-top 40 PEAs within a 
region in which the supply of blocks is the same in each category, the 
same bidders won the same number of blocks in each category, and all 
are subject to the small markets bidding cap or all not subject to the 
cap, which will also help maximize contiguity across PEAs. Accordingly, 
in markets where these criteria are met, a bidder will submit a single 
set of bids for assignment options that will apply to all the PEAs in 
the group and will be assigned the same frequency-specific licenses in 
each PEA.
    258. In addition, to the extent practical, the Commission will 
conduct the bidding for the different REAGs in parallel. That is, 
bidding for assignments in multiple PEAs or PEA groups will take place 
during the same timed bidding round. This will also help reduce the 
length of the assignment phase.
b. Acceptable Bids and Bid Processing
    259. Prior to the start of the assignment phase, the bidding system 
will provide each bidder with bidding options for all possible 
contiguous frequency assignments for each category in each PEA in which 
the bidder won blocks in the clock phase. In each assignment round, a 
bidder will be asked to assign a price to one or more of the bidding 
options for which it wishes to express a preference, consistent with 
its winning bid(s) for generic blocks in the clock phase. The price 
will represent a maximum payment that the bidder is willing to pay, in 
addition to the base price established in the clock phase for the 
generic blocks, for the frequency-specific license or licenses in its 
bid.
    260. A bidder will submit its preferences for blocks it won in the 
upper and lower segments separately, rather than submitting bids for 
preferences that include blocks in both segments. That is, if a bidder 
won one block in the lower segment and two blocks in the upper segment, 
it would not be able to submit a single bid amount for an assignment 
that included all three blocks. Instead, it would submit its bid for an 
assignment in the lower segment separately from its bid or bids for 
assignments in the upper segment.
    261. An optimization approach will be used to determine the winning 
frequency assignment for each category in each PEA or PEA group. The 
Commission adopts procedures such that the auction bidding system will 
select the assignment that maximizes the sum of bid amounts among all 
assignments where every bidder is assigned contiguous spectrum. If 
multiple blocks in Category U in a PEA remain unsold, the unsold 
licenses will be contiguous.
    262. Further, the additional price a bidder will pay for a specific 
frequency assignment (above the final clock phase price) will be 
calculated consistent with a generalized ``second price'' approach--
that is, the winner will pay a price that would be just sufficient to 
result in the bidder receiving that same winning frequency assignment 
while ensuring that no group of bidders is willing to pay more for an 
alternative assignment where every bidder is assigned contiguous 
spectrum. This price will be less than or equal to the price the bidder 
indicated it was willing to pay for the assignment. Determining prices 
in this way encourages bidders to bid their full value for the 
assignment, knowing that if the assignment is selected, they will pay 
no more than would be necessary to ensure that the outcome is 
competitive.
c. Assignment Phase Payment Calculations
    263. When all assignment rounds have completed, a bidder's final 
payment is determined by summing the final clock phase prices across 
all licenses that it won and its assignment payments across all 
assignment phase markets, and then applying any applicable bidding 
credit discounts to the sum.
4. Calculating Individual License Prices
    264. While final auction payments for winning bidders will be 
calculated with bidding credit caps and assignment payments applied on 
an aggregate basis, rather than to individual licenses, the auction 
bidding system will also calculate a per-license price for each 
license. Such individual prices may be needed if a licensee later 
incurs license-specific obligations, such as unjust enrichment 
payments.
    265. After the assignment phase, the auction bidding system will 
determine a net and gross post-auction price for each license that was 
won by a bidder by apportioning assignment payments and bidding credit 
discounts (only applicable for the net price) across all the licenses 
that the bidder won. To calculate the gross per-license price, the 
auction bidding system will apportion the assignment payment to 
licenses in proportion to the final clock phase price of the licenses 
that the bidder is assigned in that category and market. To calculate 
the net price, the auction bidding system will first apportion any 
applicable bidding credit discounts to each category and assignment 
phase market in proportion to the gross payment for that category and 
that market. Then, for each assignment phase market, the auction 
bidding system will apportion the assignment payment and the discount 
to licenses in proportion to the final clock phase price of the 
licenses that the bidder is assigned in that category for that market.
5. Auction Results
    266. After the Bureau announces the auction results, it will 
provide a means for the public to view and download bidding and results 
data.
6. Auction Announcements
    267. The Commission and/or Bureau will use auction announcements to 
report necessary information to bidders, such as schedule changes. All 
auction announcements will be available by clicking a link in the FCC 
auction bidding system.

V. Post-Auction Procedures

    268. Shortly after bidding has ended in each auction, the 
Commission will issue a public notice declaring that the respective 
auction closed and establishing the deadlines for submitting down 
payments, final payments, and the long-form applications (FCC Form 601) 
for the auction.

A. Down Payments

    269. Within 10 business days after release of the auction closing 
public

[[Page 44444]]

notices for Auctions 101 and 102, respectively, each winning bidder 
must submit sufficient funds (in addition to its upfront payment) to 
bring its total amount of money on deposit with the Commission for the 
applicable auction to 20 percent of the net amount of its winning bids 
(gross bids less any applicable bidding credits).

B. Final Payments

    270. Each winning bidder will be required to submit the balance of 
the net amount for each of its winning bids for each auction within 10 
business days after the applicable deadline for submitting down 
payments.

C. Long-Form Application (FCC Form 601)

    271. The Commission's rules provide that, within 10 business days 
after release of the auction closing public notice for a particular 
auction (i.e., Auction 101 or Auction 102), winning bidders must 
electronically submit a properly completed post-auction application 
(FCC Form 601) for the license(s) they won through the auction.
    272. A winning bidder claiming eligibility for a small business 
bidding credit or a rural service provider bidding credit must 
demonstrate its eligibility in its FCC Form 601 post-auction 
application for the bidding credit sought. Further instructions on 
these and other filing requirements will be provided to winning bidders 
in the auction closing public notices for Auctions 101 and 102, 
respectively.
    273. Winning bidders organized as bidding consortia must comply 
with the FCC Form 601 post-auction application procedures set forth in 
Sec.  1.2107(g) of the Commission's rules. Specifically, license(s) won 
by a consortium must be applied for as follows: (a) An individual 
member of the consortium or a new legal entity comprising two or more 
individual consortium members must file for licenses covered by the 
winning bids; (b) each member or group of members of a winning 
consortium seeking separate licenses will be required to file a 
separate FCC Form 601 for its/their respective license(s) in their 
legal business name; (c) in the case of a license to be partitioned or 
disaggregated, the member or group filing the applicable FCC Form 601 
shall include the parties' partitioning or disaggregation agreement 
with the FCC Form 601; and (d) if a DE credit is sought (either small 
business or rural service provider), the applicant must meet the 
applicable eligibility requirements in the Commission's rules for the 
credit.

D. Ownership Disclosure Information Report (FCC Form 602)

    274. Within 10 business days after release of the auction closing 
public notices for Auctions 101 and 102, respectively, each winning 
bidder must also comply with the ownership reporting requirements in 
Sec. Sec.  1.913, 1.919, and 1.2112 of the Commission's rules by 
submitting an ownership disclosure information report for wireless 
telecommunications services (FCC Form 602) with its FCC Form 601 post-
auction application.
    275. If a winning bidder already has a complete and accurate FCC 
Form 602 on file in the FCC's Universal Licensing System (ULS), it is 
not necessary to file a new report, but the winning bidder must certify 
in its FCC Form 601 application that the information on file with the 
Commission is complete and accurate. If the winning bidder does not 
have an FCC Form 602 on file, or if it is not complete and accurate, it 
must submit one.
    276. When a winning bidder submits an FCC Form 175, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but may be used to pre-fill the FCC Form 602 with the 
ownership information submitted on the winning bidder's FCC Form 175 
application. A winning bidder must review the pre-filled information 
and confirm that it is complete and accurate as of the filing date of 
the FCC Form 601 post-auction application before certifying and 
submitting the FCC Form 602. Further instructions will be provided to 
winning bidders in the auction closing public notices for Auctions 101 
and 102, respectively.

E. Tribal Lands Bidding Credit

    277. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
wireline penetration rate equal to or below 85 percent is eligible to 
receive a tribal lands bidding credit as set forth in Sec. Sec.  1.2107 
and 1.2110(f) of the Commission's rules. A tribal lands bidding credit 
is in addition to, and separate from, any other bidding credit for 
which a winning bidder may qualify.
    278. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal lands bidding credit 
after the auction when it files its FCC Form 601 post-auction 
application. When initially filing the post-auction application, the 
winning bidder will be required to advise the Commission whether it 
intends to seek a tribal lands bidding credit, for each license won in 
the auction, by checking the designated box(es). After stating its 
intent to seek a tribal lands bidding credit, the winning bidder will 
have 180 days from the close of the post-auction application filing 
window to amend its application to select the specific tribal lands to 
be served and provide the required tribal government certifications. 
Licensees receiving a tribal lands bidding credit are subject to 
performance criteria as set forth in Sec.  1.2110(f)(3)(vii). For 
additional information on the tribal lands bidding credit, including 
how the amount of the credit is calculated, applicants should review 
the Commission's rulemaking proceeding regarding tribal lands bidding 
credits and related public notices.

F. Default and Disqualification

    279. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment by 
the specified deadline, fails to submit a timely long-form application, 
fails to make a full and timely final payment, or is otherwise 
disqualified) is liable for default payments as described in Sec.  
1.2104(g)(2). This payment consists of a deficiency payment, equal to 
the difference between the amount of the bidder's winning bid and the 
amount of the winning bid the next time a license covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    280. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. The Commission set the additional default 
payment for Auctions 101 and 102 at 15 percent of the applicable bid.
    281. In case they are needed for post-auction administrative 
purposes, the bidding system will calculate individual per-license 
prices that are separate from final auction payments, which are 
calculated on an aggregate basis. The bidding system will apportion to 
individual licenses any assignment phase payments and any capped 
bidding credit discounts, since in both cases, a single amount may 
apply to multiple licenses.
    282. Finally, in the event of a default, the Commission has the 
discretion to re-auction the license or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the

[[Page 44445]]

Commission may declare the applicant and its principals ineligible to 
bid in future auctions and may take any other action that it deems 
necessary, including institution of proceedings to revoke any existing 
authorizations held by the applicant.

G. Refund of Remaining Upfront Payment Balance

    283. All refunds of upfront payment balances will be returned to 
the payer of record as identified on the FCC Form 159 unless the payer 
submits written authorization instructing otherwise. Since the upfront 
payments for each auction will be deposited and maintained in separate 
accounts, the Commission will not apply a bidder's refund of its 
upfront payment balance from Auction 101 to its upfront payment balance 
for Auction 102. Bidders are encouraged to use the Refund Information 
icon found on the Auction Application Manager page or the Refund Form 
link available on the Auction Application Submit Confirmation page in 
the FCC Auction Application System to access the form. After the 
required information is completed on the blank form, the form should be 
printed, signed, and submitted to the Commission by mail, fax, or email 
as instructed in the Auctions 101 and 102 Procedures Public Notice.
    284. If an applicant elected not to access the Refund Form through 
the Auction Application Manager page, the information requested in 
paragraph 299 of the Auctions 101 and 102 Procedures Public Notice must 
be supplied in writing and submitted by fax to the Revenue & 
Receivables Operations Group/Auctions at (202) 418-2843, by email to 
[email protected], or by mail to the Federal Communications 
Commission, Financial Operations, Revenue & Receivables Operations 
Group/Auctions, Gail Glasser, 445 12th Street SW, Room 1-C864, 
Washington, DC 20554. Refund processing generally takes up to two weeks 
to complete. Bidders with questions about refunds should contact Gail 
Glasser at (202) 418-0578 or Theresa Meeks at (202) 418-2945.

VI. Supplemental Final Regulatory Flexibility Analysis

    285. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), Initial Regulatory Flexibility Analyses (Spectrum 
Frontiers IRFAs) were incorporated in the Notice of Proposed 
Rulemakings in the 2016 Spectrum Frontiers Order, 2017 Spectrum 
Frontiers Order, and 2018 Spectrum Frontiers Order (collectively, 
Spectrum Frontiers Orders) and other Commission orders pursuant to 
which Auctions 101 and 102 will be conducted. A Supplemental Initial 
Regulatory Flexibility Analysis (Supplemental IRFA) was incorporated in 
the Auctions 101 and 102 Comment Public Notice. The Commission sought 
written public comment on the proposals in NPRMs and the Auctions 101 
and 102 Comment Public Notice, including comments on the Spectrum 
Frontiers IRFAs and the Supplemental IRFA. No comments were filed 
addressing the Spectrum Frontiers IRFAs or the Supplemental IRFA. Final 
Regulatory Flexibility Analyses (FRFAs) were also incorporated in the 
Spectrum Frontiers Orders pursuant to which Auctions 101 and 102 will 
be conducted. The Supplemental Final Regulatory Flexibility Analysis 
(Supplemental FRFA) supplements the Spectrum Frontiers FRFAs to reflect 
the actions taken in the Auctions 101 and 102 Procedures Public Notice 
and conforms to the RFA.
    286. Need for, and Objectives of, the Public Notice. The Auctions 
101 and 102 Procedures Public Notice implements competitive bidding 
rules adopted by the Commission in multiple notice-and-comment 
rulemaking proceedings as well as establishes additional procedures to 
be used by the Bureau, on delegated authority, for competitive bidding 
in Auctions 101 and 102 for 5,984 UMFUS licenses. The rules and 
procedures adopted for Auctions 101 and 102 seek to balance three 
goals: (1) Promoting competition in the auction; (2) avoiding undue 
burdens on the applicants; and (3) assigning mmW band licenses as 
expeditiously as possible. More specifically, the Auctions 101 and 102 
Procedures Public Notice provides an overview of the procedures, the 
auction dates and deadlines, requirements for participants, terms and 
conditions governing Auctions 101 and 102 and the post-auction 
application and payment processes, as well as setting the minimum 
opening bid amounts for each of the licenses offered in Auctions 101 
and 102.
    287. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 101 and Auction 102 
participants, the Commission in the Auctions 101 and 102 Procedures 
Public Notice adopted the following procedures:
     Use of separate application and bidding processes for 
Auctions 101 and 102, including concurrent application filing windows;
     application of the current rules prohibiting certain 
communications among and between applicants in either auction;
     identification of AT&T, Sprint, T-Mobile and Verizon 
Wireless as ``nationwide providers'' for the purpose of implementing 
the Commission's competitive bidding rules in Auctions 101 and 102;
     establishment of bidding credit caps for eligible small 
businesses and rural service providers in Auctions 101 and 102;
     use of a simultaneous multiple-round auction format for 
Auction 101, consisting of sequential bidding rounds with a 
simultaneous stopping rule (with discretion by the Bureau to exercise 
alternative stopping rules under certain circumstances);
     use of a clock auction format for Auction 102 under which 
each qualified bidder will indicate in successive clock bidding rounds 
its demands for categories of generic blocks in specific geographic 
areas;
     a specific minimum opening bid amount for each license 
available in Auction 101 and for generic blocks in each PEA available 
in Auction 102;
     a specific upfront payment amount for each license 
available in Auction 101 and for generic blocks in each PEA available 
in Auction 102;
     establishment of a bidder's initial bidding eligibility in 
bidding units based on that bidder's upfront payment through assignment 
of a specific number of bidding units for each license (Auction 101) or 
generic block (Auction 102);
     use of an activity rule that would require bidders to bid 
actively during the auction rather than waiting until late in the 
auction before participating;
     for Auction 101, a two-stage auction in which a bidder is 
required to be active on 80 percent of its bidding eligibility in each 
round of the first stage and on 95 percent of its bidding eligibility 
in each round of the second stage;
     for Auction 102, a requirement that bidders be active on 
between 92 and 97 percent of their bidding eligibility in all regular 
clock rounds;
     for Auction 101, provision of three activity rule waivers 
for each bidder to allow it to preserve eligibility during the course 
of the auction;
     for Auction 101, use of minimum acceptable bid amounts and 
additional bid increments, along with a methodology for calculating 
such amounts, with the Bureau retaining discretion to change its 
methodology if circumstances dictate;
     for Auction 102, establishment of acceptable bid amounts, 
including clock price increments and intra-round bids,

[[Page 44446]]

along with a methodology for calculating such amounts;
     for Auction 102, use of two bid types, along with a 
methodology for processing bids and requests to reduce demand;
     for Auction 101, a procedure for breaking ties if 
identical high bid amounts are submitted on a license in a given round;
     bid removal procedures;
     for Auction 101, provisions for bid withdrawals, including 
the establishment of an interim bid withdrawal percentage of 15 percent 
of the withdrawn bid;
     for Auction 102, prohibition of withdrawals;
     for Auction 102, establishment of an assignment phase that 
will determine which frequency-specific licenses will be won by the 
winning bidders of generic blocks during the clock phase; and
     establishment of an additional default payment of 15 
percent under Sec.  1.2104(g)(2) of the rules in the event that a 
winning bidder defaults or is disqualified after either auction.
    288. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that addressed the 
procedures and policies proposed in the Spectrum Frontiers IRFAs or the 
Supplemental IFRA.
    289. 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 comment filed by the Chief Counsel for Advocacy 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.
    290. The Chief Counsel did not file any comments in response to the 
proposed procedures in the Auctions 101 and 102 Comment Public Notice.
    291. Description and Estimate of the Number of Small Entities to 
Which the Proposed 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 proposed rules and 
policies, if 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.
    292. FRFAs were incorporated into the Spectrum Frontiers Orders. In 
those analyses, the Commission described in detail the small entities 
that might be significantly affected. In the Auctions 101 and 102 
Procedures Public Notice, the Commission hereby incorporates by 
reference the descriptions and estimates of the number of small 
entities from the previous FRFAs in the Spectrum Frontiers Orders.
    293. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission has designed 
the auction application process itself to minimize reporting and 
compliance requirements for applicants, including small business 
applicants. In the first part of the Commission's two-phased auction 
application process, parties desiring to participate in an auction file 
streamlined, short-form applications in which they certify under 
penalty of perjury as to their qualifications. Eligibility to 
participate in bidding is based on an applicant's short-form 
application and certifications, as well as its upfront payment. The 
Auctions 101 and 102 Procedures Public Notice provides instructions for 
each Auction 101 and 102 applicant to maintain the accuracy of its 
respective short-form application electronically using the FCC Auction 
Application System and/or by direct communication with the Auctions and 
Spectrum Access Division. Small entities and other Auction 101 and 
Auction 102 applicants will be qualified to bid in the respective 
auction(s) only if they comply with the following: (1) Submission of a 
separate short-form application for each auction in which they wish to 
participate that is timely and is found to be substantially complete, 
and (2) timely submission of a sufficient upfront payment for at least 
one of the licenses offered in Auctions 101 or 102, respectively. The 
timely submitted payment must be accompanied by a complete and accurate 
FCC Remittance Advice Form (FCC Form 159), and made by 6:00 p.m. ET on 
October 23, 2018, for Auction 101 and on a date to be announced for 
Auction 102, following the procedures and instructions set forth in the 
FCC Form 159 Instructions. An applicant whose application is found to 
contain deficiencies will have a limited opportunity to bring its 
application into compliance with the Commission's competitive bidding 
rules during a resubmission window. All qualified bidders will 
automatically be registered for the auction and mailed the necessary 
registration materials.
    294. In the second phase of the process, there are additional 
compliance requirements for winning bidders. As with other winning 
bidders, any small entity that is a winning bidder will be required to 
comply with the following: (1) Within 10 business days of release of 
the auction closing public notice for each auction (i.e., Auction 101 
or Auction 102), submit as a down payment sufficient funds (in addition 
to its upfront payment) to bring its total amount of money on deposit 
with the Commission for the applicable auction to 20 percent of the net 
amount of its winning bids; (2) within 10 business days after the down 
payment deadline submit the balance of the net amount for each of its 
winning bids; and (3) within 30 days following the close of bidding and 
notification to the winning bidders, unless a longer period is 
specified by public notice, electronically submit a properly completed 
long-form application (FCC Form 601) and required exhibits for each 
license won through Auctions 101 and 102, respectively. A winning 
bidder claiming eligibility for a small business bidding credit or a 
rural service provider bidding credit must demonstrate its eligibility 
in its FCC Form 601 post-auction application for the bidding credit 
sought.
    295. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its 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 and reporting requirements under the rule for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities.
    296. The Commission believes that the adopted procedures to 
facilitate participation in Auctions 101 and 102 will result in both 
operational and administrative cost savings for small entities and 
other auction participants. For example, in order to reduce the 
financial burden on small entities and other potential auction 
participants, as well as to reduce potential exposure risk, the 
Commission will accept

[[Page 44447]]

upfront payments for Auction 102 after the close of Auction 101. 
Additionally, for Auctions 101 and 102, two levels of bidding credits 
will be available to eligible small businesses and consortia thereof up 
to a maximum amount of $25 million per auction ($50 million combined 
for both auctions). This application of bidding credit caps separately 
to each auction should provide additional opportunities for 
participation by small businesses. Also, public data on Auction 101 
results will be made available prior to the start of bidding in Auction 
102. This data should provide potential Auction 102 bidders with 
sufficient information to analyze and understand price levels and 
demand for UMFUS licenses in Auction 101.
    297. In light of the numerous resources that will be available from 
the Commission at no cost, the processes and procedures adopted for 
Auctions 101 and 102 should result in minimal economic impact on small 
entities. For example, prior to each auction, the Commission will hold 
a mock auction to allow eligible bidders the opportunity to familiarize 
themselves with both the processes and systems that will be used in 
Auctions 101 and 102. During the auctions, participants will be able to 
access and participate in the auctions via the internet using a web-
based system, or telephonically, providing two cost effective methods 
of participation avoiding the cost of travel for in-person 
participation. Further, small entities as well as other auction 
participants will be able to avail themselves of hotlines for 
assistance with auction processes and procedures as well as technical 
support hotlines to assist with issues such as access to or navigation 
within the electronic FCC Form 175 and use of the FCC's auction bidding 
system. In addition, all auction participants will have access to 
various other sources of information and databases through the 
Commission that will aid in both their understanding and participation 
in the process. These steps coupled with the advanced communication of 
the bidding procedures ``rules of the road'' in Auctions 101 and 102 
should ensure that the auctions will be administered efficiently and 
fairly, with certainty for small entities as well as other auction 
participants.
    298. Report to Congress. The Commission will send a copy of the 
Auctions 101 and 102 Procedures Public Notice, 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 Auctions 101 and 102 Procedures Public Notice, including this 
Supplemental FRFA, to the Chief Counsel for Advocacy of the SBA. A copy 
of the Auctions 101 and 102 Procedures Public Notice (or summaries 
thereof) will also be published in the Federal Register.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2018-18692 Filed 8-29-18; 8:45 am]
 BILLING CODE 6712-01-P