[Federal Register Volume 84, Number 161 (Tuesday, August 20, 2019)]
[Rules and Regulations]
[Pages 43046-43069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17792]



[[Page 43046]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 30

[AU Docket No. 19-59; GN Docket No. 14-177; FCC 19-63]


Incentive Auction of Upper Microwave Flexible Use Service 
Licenses in the Upper 37 GHz, 39 GHz, and 47 GHz Bands for Next-
Generation Wireless Services; Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments, and Other Procedures for Auction 103; 
Bidding in Auction 103 Scheduled To Begin December 10, 2019

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes procedures for the upcoming auction 
of Upper Microwave Flexible Use Service licenses in the 37 GHz, 39 GHz, 
and 47 GHz bands (Auction 103). The Auction 103 Procedures Public 
Notice summarized here is intended to familiarize applicants with the 
procedures and other requirements governing participation in Auction 
103 by providing details regarding the procedures, terms, conditions, 
dates, and deadlines, as well as an overview of the post-auction 
application and payment processes.

DATES: Applications to participate in Auction 103 must be submitted 
prior to 6:00 p.m. ET on September 9, 2019. Upfront payments for 
Auction 103 must be received by 6:00 p.m. ET on October 22, 2019. 
Bidding in Auction 103 is scheduled to begin on December 10, 2019.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Mark 
Montano or Erik Beith in the Auctions Division of the Office of 
Economics and Analytics at (202) 418-0660. For general auction 
questions, the Auctions Hotline at (717) 338-2868. For Upper Microwave 
Flexible Use Service questions, Simon Banyai in the Broadband Division 
of the Wireless Telecommunications Bureau at (202) 418-2487.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice 
(Auction 103 Procedures Public Notice), AU Docket No. 19-59, GN Docket 
No. 14-177, FCC 19-63, adopted on July 10, 2019, and released on July 
11, 2019. The complete text of the document, including 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 
www.fcc.gov/auction/103/ or by using the search function for AU Docket 
No. 19-59 on the Commission's ECFS web page at www.fcc.gov/ecfs/. 
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. With the Auction 103 Procedures Public Notice, the Commission 
established the procedures for the upcoming incentive auction of Upper 
Microwave Flexible Use Service (UMFUS) licenses in the Upper 37 GHz 
(37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz (47.2-48.2 GHz) bands 
(Auction 103).
    2. The bidding for new licenses in Auction 103 is scheduled to 
commence on December 10, 2019. The Auction 103 Procedures Public Notice 
provides details regarding the procedures, terms, conditions, dates, 
and deadlines governing participation in Auction 103 bidding, and an 
overview of the post-auction application and payment processes. 
Although 39 GHz incumbents that accept modified licenses will not be 
eligible to bid on new licenses in Auction 103, certain procedures 
adopted in the document will affect how those modified licenses will be 
assigned to specific frequencies.

B. Background and Relevant Authority

    3. Prospective applicants for the auction 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 rules 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 document and any future public notices that may be 
released in proceeding 19-59.
    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 Auction 103. Copies of most auctions-related Commission 
documents, including public notices, can be retrieved from the 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 Auction 103

    5. Auction 103 will offer UMFUS licenses for all available spectrum 
in the Upper 37 GHz (37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz 
(47.2-48.2 GHz) bands. Auction 103 will offer 100 megahertz blocks of 
spectrum licensed by Partial Economic Area (PEA) service area. In 
combination, the Upper 37 GHz and the 39 GHz bands offer the largest 
amount of contiguous spectrum in the millimeter wave bands for 
flexible-use wireless services--a total of 2,400 megahertz--and the 47 
GHz band will provide an additional 1,000 megahertz of millimeter wave 
spectrum for such services. The Commission is limiting Auction 103 to 
only these bands because licenses for no other UMFUS spectrum bands are 
ready and/or suitable to be auctioned at this time.
    6. The specific number of Upper 37 GHz and 39 GHz licenses to be 
auctioned in each PEA will be determined by the Initial Commitments of 
39 GHz incumbents as described in the Spectrum Frontiers Fourth Report 
& Order, 84 FR 1618, February 2, 2019, and subsequent public notices in 
the proceeding. The licenses that will be available in the auction 
depend, in part, on upcoming decisions made by existing 39 GHz 
licensees (referred to herein as ``incumbents'') to either accept 
modified licenses, reconfigured to conform with the new band plan and 
service areas, or to relinquish all their existing spectrum usage 
rights in exchange for a share of the auction proceeds and the 
opportunity to bid on new licenses in Auction 103. If all incumbents 
choose to relinquish their licenses, the Commission will offer new 
licenses for 3,400 megahertz of

[[Page 43047]]

spectrum across all three spectrum bands, or 34 licenses in every PEA. 
Following the deadline for incumbents to submit their binding Initial 
Commitments, a public notice will announce the specific number of 
licenses available in each PEA in the Upper 37 GHz and 39 GHz bands for 
auction. This public notice will be released prior to the deadline for 
the submission of short-form applications to bid in Auction 103 so that 
potential applicants can make informed decisions about whether to 
apply.
    7. It is possible that an incumbent that chooses to receive 
modified licenses will decide to retain its partial PEA holding 
(resulting in a modified license that will cover less than the full 
geographic area of a PEA). The remaining portion of the spectrum block 
will thus have unassigned spectrum usage rights. The Commission will 
not make this ``white space'' available in the auction.
    8. Each of the bands available in Auction 103 will be licensed on 
an unpaired basis in 100 megahertz channel blocks by PEA. 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.

D. Auction Specifics

1. Auction Title and Start Date
    9. The auction of licenses in the Upper 37 GHz (37.6-38.6 GHz), 39 
GHz (38.6-40 GHz), and 47 GHz (47.2-48.2 GHz) bands will be referred to 
as Auction 103. Bidding in Auction 103 will begin on Tuesday, December 
10, 2019. The initial schedule for bidding rounds in Auction 103 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.
2. Auction Dates and Deadlines
    10. The following dates and deadlines apply to Auction 103:

    Auction Application Tutorial Available (via internet); August 2, 
2019
Short-Form Application (FCC Form 175)
    Filing Window Opens; August 26, 2019; 12:00 p.m. Eastern Time (ET)
Short-Form Application (FCC Form 175)
    Filing Window Deadline; September 9, 2019; 6:00 p.m. ET
    Upfront Payments (via wire transfer); October 22, 2019; 6:00 p.m. 
ET
    Bidding Tutorial Available (via internet); No later than November 
19, 2019
    Mock Auction; Starting week of December 2, 2019
    Bidding Begins in Auction 103; December 10, 2019
3. Requirements for Participation
    11. Those wishing to participate in Auction 103 must: Submit a 
short-form application (FCC Form 175) electronically prior to 6:00 p.m. 
ET on September 9, 2019, following the electronic filing procedures set 
forth in the FCC Form 175 Instructions (available at www.fcc.gov/auction/103/); submit a sufficient upfront payment and an FCC 
Remittance Advice Form (FCC Form 159) by 6:00 p.m. ET on October 22, 
2019, following the procedures and instructions set forth in the FCC 
Form 159 Instructions; and comply with all provisions outlined in the 
document and applicable Commission rules.

II. Applying To Participate in Auction 103

A. General Information Regarding Short-Form Applications

    12. An application to participate in Auction 103, 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 103 must file a 
short-form application in which it certifies, under penalty of perjury, 
its qualifications. Eligibility to participate in Auction 103 is based 
on an applicant's short-form application and certifications, and on the 
applicant's submission of a sufficient upfront payment for the auction. 
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 the auction, and it must have a complete 
and accurate ownership disclosure information report (FCC Form 602) on 
file with the Commission.
    13. A party seeking to participate in Auction 103 must file an FCC 
Form 175 electronically via the Auction Application System prior to 
6:00 p.m. ET on September 9, 2019, 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 103 will be subject to the Commission's rule 
prohibiting certain communications. An applicant is subject to the 
prohibition beginning at the deadline for filing short-form 
applications--6:00 p.m. ET on September 9, 2019. The prohibition will 
end for applicants on the post-auction down payment deadline for 
Auction 103.
    14. 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 103 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.
    15. 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. 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.
    16. 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.
    17. The same party may not bid based on more than one auction 
application, i.e., as more than one applicant. If a party submits 
multiple short-form

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applications for an auction, only one application may be the basis for 
that party to become qualified to bid in that auction.
    18. A party is generally permitted to participate in a Commission 
auction only through a single bidding entity. The filing of 
applications in Auction 103 by multiple entities controlled by the same 
individual or set of individuals will generally not be permitted.
    19. A party that is a 39 GHz incumbent is eligible to submit FCC 
Form 175 to participate in Auction 103 only if the party submitted an 
Initial Commitment to relinquish its spectrum usage rights under all 
its 39 GHz licenses in exchange for an incentive payment. If an 
incumbent submits such an Initial Commitment and wishes to offset any 
payments for new licenses with incentive payments, the same entity, 
using the same FCC Registration Number (FRN), that filed FCC Form 175-A 
must also file FCC Form 175. In all other cases, regardless of any 
relationship between an FCC Form 175 applicant and an FCC Form 175-A 
applicant, a winning bidder will be obligated to pay its gross winning 
bids, i.e., without reduction by any incentive payment.
    20. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications for 
Auction 103 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, a public notice will be released 
announcing the status of applications and identifying the applications 
that are complete and those that are incomplete because of minor 
defects that may be corrected. 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 will be identified by public notice 
at least 10 days prior to the mock auction.
    21. 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 document does not 
address a potential applicant's specific operating structure, or if the 
applicant needs additional information or guidance concerning the 
following disclosure requirements, the applicant should review the 
educational materials for Auction 103 and/or use the contact 
information provided to consult with Commission staff to better 
understand the information it must submit in its short-form 
application.

B. License Area Selection

    22. An applicant must select all the license areas on which it may 
want to bid from the list of available PEAs on its FCC Form 175. An 
applicant must carefully review and verify its PEA selections before 
the FCC Form 175 filing deadline because those selections cannot be 
changed after the auction application filing deadline. The FCC Auction 
Bidding System (bidding system) will not accept bids for blocks in PEAs 
that were not selected on the applicant's FCC Form 175.

C. Disclosure of Agreements and Bidding Arrangements

    23. 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 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.
    24. 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.
    25. The Commission's rules 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 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.
    26. 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. The Commission considers AT&T, Sprint, T-
Mobile, and Verizon Wireless to be nationwide providers for the purpose 
of implementing its competitive bidding rules in Auction 103. The 
prohibition applies to joint bidding arrangements between an applicant 
and an incumbent that files an FCC Form 175-A (or any party that 
controls or is controlled by it) as part of the process for it to make 
an Initial Commitment.
    27. 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. 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. The general prohibition of joint bidding arrangements excludes 
certain agreements, including those that are solely operational in 
nature.
    28. The Commission's rules require each 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

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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.
    29. 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, 
certain discussions or exchanges could nonetheless touch upon 
impermissible subject matters, and compliance with the Commission's 
rules will not insulate a party from enforcement of the antitrust laws.
    30. 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.

D. Ownership Disclosure Requirements

    31. 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% or more. Each applicant is responsible for ensuring that 
information submitted in its short-form application is complete and 
accurate.
    32. 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. 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 103 to 
ensure that their most recent ownership information is pre-filled into 
their short-form 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.

E. Foreign Ownership Disclosure Requirements

    33. 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. 
Section 310 applies 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 FCC Form 175, an applicant is 
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 103 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 the 
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.

F. Information Procedures During the Auction Process

    34. The Commission is limiting information available in Auction 103 
in order to prevent the identification of bidders placing particular 
bids until after the bidding has closed. The Commission will not make 
public until after bidding has closed: (1) The license areas that an 
applicant selects for bidding in its short-form application, (2) the 
amount of any upfront payment made by or on behalf of an applicant, (3) 
any applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid.
    35. Once the bidding in Auction 103 starts, under the limited 
information procedures (sometimes also referred to as anonymous 
bidding), information to be made public after each round of bidding 
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. The identities of 
bidders placing specific bids and the net bid amounts (reflecting 
bidding credits or incentive payments) will not be disclosed until 
after the close of bidding.
    36. 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 the 
auction, through the FCC auction bidding system. Each incumbent bidder 
will also be apprised of the size of its potential incentive payment on 
a round-by-round basis during the clock phase.
    37. After the close of bidding, bidders' PEA selections, upfront 
payment amounts, bidding eligibility, bids, and other bidding-related 
actions will be made publicly available.
    38. The direct or indirect communication to other applicants or the 
public disclosure of non-public information (e.g., 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 U.S. Securities and Exchange Commission, the 
applicant should consult with the Commission staff in the Auctions 
Division before making such disclosure.

G. Prohibited Communications and Compliance With Antitrust Laws

    39. 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 103. 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

[[Page 43050]]

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.
1. Entities Subject to Sec.  1.2105(c)
    40. 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% or 
more of the entity, and all officers and directors of that entity. A 
party that submits an application becomes an applicant under the rule 
at the application deadline, and that status does not change based on 
later developments.
    41. The prohibited communications rule shall apply to 
communications between a short-form applicant and an incumbent that 
files an application (FCC Form 175-A) as part of the Initial Commitment 
process for Auction 103. The rule applies even if such an incumbent 
chooses not to file FCC Form 175 to bid for licenses in Auction 103.
2. Prohibition Applies Until Down Payment Deadline
    42. Section 1.2105(c)'s prohibition of 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. In addition, for an 
incumbent that files and/or is identified in an FCC Form 175-A, the 
Incumbent 39 GHz Licensee Short-Form Application, the prohibition of 
certain communications began at the FCC Form 175-A filing deadline on 
July 15, 2019.
3. Scope of Prohibition of Communications; Prohibition of Joint Bidding 
Agreements
    43. The Commission amended Sec.  1.2105(c) in 2015 to extend the 
prohibition of 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 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.
    44. 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.
    45. 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.
    46. 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. The Commission 
consistently has made clear that application of the rule prohibiting 
communications has never required total suspension of essential ongoing 
business. Entities subject to the prohibition may negotiate agreements 
during the prohibition period, provided that the communications 
involved do not relate both (1) to the licenses being auctioned and (2) 
to bids or bidding strategies or post-auction market structure.
    47. Business discussions and negotiations that are unrelated to 
bidding in Auction 103 and that do not convey information about the 
bids or bidding strategies, including the post-auction market 
structure, of an applicant are not prohibited by the rule. Moreover, 
not even 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 103 will not violate the rule. In 
contrast, communicating 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.
    48. 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.
    49. 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 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

[[Page 43051]]

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.
    50. 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 PEA selections, 
such as referring to certain markets in describing agreements, 
including any information in application attachments that will be 
publicly available that may otherwise disclose the applicant's PEA 
selections, or using applicant names that refer to licenses being 
offered.
    51. 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
    52. 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, however, 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.
    53. 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. 
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.
    54. Potential applicants 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 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.
    55. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, even though communicating that it has applied 
to participate in the auction will not violate the rule, an applicant's 
statement to the press that it intends to stop bidding in 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 103 could also violate the rule.
5. Section 1.2105(c) Certifications
    56. By electronically submitting its FCC Form 175 auction 
application, each applicant 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
    57. 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
    58. A party reporting any information or communication pursuant to 
Sec.  1.65, Sec.  1.2105(a)(2), or Sec.  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.
    59. 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 
rule is designed to minimize the risk of inadvertent dissemination of 
information in such reports. Any reports required by Sec.  1.2105(c) 
must be filed consistent with the instructions set forth in the 
document. Such reports must be filed with Margaret W. Wiener, the Chief 
of the Auctions Division, Office of Economics and Analytics, by the 
most expeditious means available. Any such report should be submitted 
by email to Ms. Wiener and sent to [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 Division, Office 
of Economics and Analytics, Federal Communications Commission, 445 12th 
Street SW, Room 6-C466, Washington, DC 20554.

[[Page 43052]]

    60. A party seeking to report such a prohibited communication 
should consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection by 
following the procedures specified in Sec.  0.459 of the Commission's 
rules. Such parties should coordinate with the Auctions Division staff 
about the procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements
    61. 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
    62. A summary listing of documents issued by the Commission and the 
Wireless Telecommunications Bureau/Office of Economics and Analytics 
addressing the application of Sec.  1.2105(c) is available on the 
Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications/.
10. Antitrust Laws
    63. Applicants remain subject to the antitrust laws. 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.
    64. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, it 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 103 and in future auctions, among 
other sanctions.

H. Provisions for Small Businesses and Rural Service Providers

    65. The Commission's designated entity rules apply to all licenses 
acquired with bidding credits, including those won in Auction 103. A 
bidding credit represents an amount by which a bidder's winning bid 
will be discounted.
    66. In Auction 103, 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--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.
    67. Applicants applying for designated entity bidding credits 
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.
    68. An incumbent bidding in Auction 103 and claiming a bidding 
credit may receive a bidding credit discount only on winning bid 
amounts that exceed any incentive payment to that incumbent. This 
limitation applies even if the incumbent uses different entities that 
are commonly controlled to submit FCC Form 175-A and FCC Form 175. The 
ownership information that an applicant is required to submit at both 
the short-form and long-form application stages will permit Commission 
staff to uncover any controlling interest in common in the two entities 
and ensure that bidding credit discounts are properly calculated when 
determining payments due.
1. Small Business Bidding Credit
    69. For Auction 103, 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 Auction 103, 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% 
discount on its winning bid; and 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% discount on its winning bid.
    70. Small business bidding credits are not cumulative; an eligible 
applicant may receive either the 15% or the 25% 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.
    71. 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 may be won by the 
applicant in Auction 103. In addition, to the extent that an applicant 
has an agreement with any disclosable interest holder for the use of 
more than 25% of the spectrum capacity of any license that may be won 
in Auction 103, the identity and the attributable gross revenues of any 
such disclosable interest holder must be disclosed. This attribution 
rule will be

[[Page 43053]]

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 103. 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
    72. An eligible applicant may request a 15% discount on its winning 
bid using a rural service provider bidding credit, subject to the $10 
million cap. 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. 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.
    73. 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 103. To the extent 
that an applicant has an agreement with any disclosable interest holder 
for the use of more than 25% of the spectrum capacity of any license 
that may be won in Auction 103, 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
    74. 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 credit discounts that any eligible applicant 
may receive. The Commission adopts a $25 million cap on the total 
amount of bidding credit discounts that may be awarded to an eligible 
small business in Auction 103. The Commission adopts a $10 million cap 
on the total amount of bidding credit discounts that may be awarded to 
an eligible rural service provider in Auction 103. 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 credit 
discounts 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
    75. 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% 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% 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; and the entity plays 
an integral role in management decisions.
    76. 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.
    77. Affiliates of an applicant or controlling interest include an 
individual or entity that (1) directly or indirectly controls or has 
the power to control the applicant, (2) is directly or indirectly 
controlled by the applicant, (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant, or (4) has an ``identity of interest'' with the applicant. 
The Commission's definition of an affiliate of the applicant 
encompasses both controlling interests of the applicant and affiliates 
of controlling interests of the applicant.
    78. 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. 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.
    79. 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

[[Page 43054]]

penalties associated with any violation of section 310(d) of the 
Communications Act and related regulations, which require Commission 
approval of transfers of control. 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
    80. 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% 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 10% or greater interest of any kind in the applicant, 
including but not limited to, a 10% 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 103 will be subject to this attribution rule and must make the 
requisite disclosures.
    81. 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. The Commission intends to withhold from public disclosure all 
information contained in any such attachments until after the close of 
Auction 103.
c. Exceptions From Attribution Rules for Small Businesses and Rural 
Service Providers
    82. 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. 
Moreover, 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 has also exempted from 
attribution to the applicant the gross revenues of the affiliates of a 
rural telephone cooperative's officers and directors, if certain 
conditions specified in Sec.  1.2110(b)(4)(iii) of the Commission's 
rules are met. An applicant claiming this exemption must provide, in an 
attachment, an affirmative statement that the applicant, affiliate and/
or controlling interest is an eligible rural telephone cooperative 
within the meaning of 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.
    83. 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.
    84. 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.
I. Provisions Regarding Former and Current Defaulters
    85. 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 103, but a former 
defaulter or delinquent may participate so long as it is otherwise 
qualified and makes an upfront payment that is 50% 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, 
within the meaning of the rule, 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

[[Page 43055]]

disqualified from participating in Auction 103 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 Auction 103 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 the exclusions. The 
term controlling interest is defined in Sec.  1.2105(a)(4)(i) of the 
Commission rules.
    86. 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 
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 to timely 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.
    87. Applicants are encouraged to review 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 Auctions Division staff if they have any questions about 
default and delinquency disclosure requirements.
    88. 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.
    89. The Commission's Red Light Display System, which provides 
information regarding debts currently owed to the Commission, may not 
be determinative of an auction applicant's ability to comply with the 
default and delinquency disclosure requirements of 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 Auction 103 
should note that any long-form applications filed after the close of 
bidding will be reviewed for compliance with the Commission's red light 
rule, and such review may result in the dismissal of a winning bidder's 
long-form application. Applicants that have their long-form 
applications dismissed will be deemed to have defaulted and will be 
subject to default payments under Sec. Sec.  1.2104(g) and 1.2109(c) of 
the Commission's rules. Each applicant should 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.

J. Optional Applicant Status Identification

    90. 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.

K. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    91. After the initial FCC Form 175 filing deadline, an Auction 103 
applicant will be permitted to make only minor changes to its 
application 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

[[Page 43056]]

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 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. 
Even if an applicant's FCC Form 175 is dismissed, the applicant would 
remain subject to the communication prohibitions of Sec.  1.2105(c) 
until the down-payment deadline for Auction 103.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
    92. 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 
103. An applicant's FCC Form 175 and associated attachments will remain 
pending until the release of a public notice announcing the close of 
the auction. Auction 103 applicants remain subject to the Sec.  
1.2105(c) prohibition of certain communications until the post-auction 
deadline for making down payments on winning bids in Auction 103. 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 103 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
    93. A party seeking to participate in Auction 103 must file an FCC 
Form 175 electronically via the FCC's Auction Application System. 
During the initial filing window, an applicant will be able to make any 
necessary modifications to its FCC Form 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.
    94. 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).
    95. 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, 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 it 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]. The email summarizing the changes must include a 
subject line referring to Auction 103 and the name of the applicant, 
for example, Re: Changes to Auction 103 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.
    96. 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], 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).
    97. 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. 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.
    98. 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 Auction 
103. An applicant seeking to submit, outside of the Auction Application 
System, information that might reflect non-public information, such as 
an applicant's PEA selection(s), upfront

[[Page 43057]]

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.
    99. Questions about FCC Form 175 amendments should be directed to 
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 103

A. Due Diligence

    100. 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 103. 
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 particular 
service, technology, or product, nor does a Commission license 
constitute a guarantee of business success.
    101. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
Each potential bidder should perform technical analyses and/or refresh 
its previous analyses to assure itself that, should it become a winning 
bidder for any Auction 103 license, it will be able to build and 
operate facilities that will fully comply with all applicable technical 
and legal requirements. Each applicant should 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 familiarize itself with the Commission's rules regarding the 
National Environmental Policy Act.
    102. Each applicant in Auction 103 should continue to conduct its 
own research throughout the auction to determine the existence of 
pending or future administrative or judicial proceedings that might 
affect its decision on continued participation in the auction. 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 document do not constitute an exhaustive list of steps that should 
be undertaken prior to participating in Auction 103. 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.
    103. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the licenses available in Auction 103. Each potential bidder is 
responsible for undertaking research to ensure that any licenses won in 
the auction will be suitable for its business plans and needs. Each 
potential bidder must undertake its own assessment of the relevance and 
importance of information gathered as part of its due diligence 
efforts.
    104. 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
    105. Potential applicants in Auction 103 should consider carefully 
the operations of incumbent licensees currently in the 39 GHz band when 
developing business plans, assessing market conditions, and evaluating 
the availability of equipment for mmW services. 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.
    106. Potential applicants in Auction 103 should consider carefully 
the implications of the Commission's sharing schemes for the Upper 37 
GHz band. This includes satellite/terrestrial sharing in the Upper 37 
GHz, 39 GHz, and 47 GHz bands. Licensees operating in the Upper 37 GHz 
band near specific Federal sites must coordinate with those Federal 
operations. The Commission established a coordination process to 
accommodate the military's potential need for additional sites in the 
Upper 37 GHz band, while protecting the interests of non-Federal 
licensees.
2. International Coordination
    107. 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 103 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. Environmental Review Requirements
    108. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act (NEPA), the 
National Historic Preservation Act (NHPA), and other environmental 
statutes. Licensees and other applicants that propose to build certain 
types of communications facilities for licensed service must follow 
Commission procedures implementing obligations under NEPA and NHPA 
prior to constructing the facilities. Under NEPA, a licensee or 
applicant must assess if certain environmentally sensitive conditions 
specified in the Commission's rules are relevant to the proposed 
facilities and prepare an environmental assessment (EA) when 
applicable. If an EA is required, facilities may not be constructed 
until environmental processing is completed. Under the NHPA, a licensee 
or applicant must follow the procedures in Sec.  1.1320 of the 
Commission's rules, the Nationwide Programmatic Agreement Regarding the 
Section 106 National Historic Preservation Act Review Process, and the 
Nationwide Programmatic Agreement for the Collocation of Wireless 
Antennas. Compliance with section 106 of the NHPA requires tribal 
consultation, and if construction of the communications facilities 
would have adverse effects on

[[Page 43058]]

historic or tribally significant properties, an EA must be prepared.
4. Mobile Spectrum Holdings Policies
    109. Bidders should be aware of the Commission's mobile spectrum 
holding policies applicable to the mmW bands. For purposes of reviewing 
proposed secondary market transactions, the Commission adopted a 
threshold of 1850 megahertz of combined mmW spectrum in the 24 GHz, 28 
GHz, 37 GHz, 39 GHz, and 47 GHz bands. 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

    110. Before the opening of the short-form filing window for Auction 
103 on August 26, 2019, detailed educational information will be 
provided in various formats to would-be participants on the Auction 103 
web page. The Commission has directed the Office of Economics and 
Analytics (Office) to provide various materials on the pre-bidding 
processes in advance of the opening of the short-form application 
window, beginning with the release of step-by-step instructions for 
completing the FCC Form 175. The Office will also provide an online 
application procedures tutorial for the auction covering information on 
pre-bidding preparation, completing short-form applications, and the 
application review process.
    111. In advance of the start of the mock auction, the Office will 
provide educational materials on the bidding processes for Auction 103, 
beginning with release of a user guide for the bidding system and 
bidding system file formats, followed by an online bidding procedures 
tutorial. The educational materials shall be released as soon as 
reasonably possible to provide potential applicants and bidders with 
time to understand them and ask any questions before having to make 
material decisions about their participation in the auction.
    112. Parties interested in participating in Auction 103 will find 
the interactive, online tutorials an efficient and effective way to 
further their understanding of the application and bidding processes. 
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 in the Education section of the Auction 103 website at 
www.fcc.gov/auction/103. Once posted, the tutorials will be accessible 
anytime.

D. Short-Form Applications: Due Before 6:00 p.m. ET on September 9, 
2019

    113. In order to be eligible to bid in Auction 103, an applicant 
must first follow the procedures to submit a short-form application 
(FCC Form 175) electronically via the Auction Application System, 
following the instructions set forth in the FCC Form 175 Instructions. 
The short-form application will become available with the opening of 
the initial filing window and must be submitted prior to 6:00 p.m. ET 
on September 9, 2019. Late applications will not be accepted. No 
application fee is required.
    114. Applications may be filed at any time beginning at noon ET on 
August 26, 2019, until the filing window closes at 6:00 p.m. ET on 
September 9, 2019. Applicants should 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 on September 9, 
2019.
    115. 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. All calls to Technical Support 
are recorded.

E. Application Processing and Minor Modifications

1. Public Notice of Applicant's Initial Application Status and 
Opportunity for Minor Modifications
    116. 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. 
The Office 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.
    117. After the initial application filing deadline on September 9, 
2019, applicants can make only minor 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 103.
    118. 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].
2. Public Notice of Applicant's Final Application Status After Upfront 
Payment Deadline
    119. After Commission staff review resubmitted applications, the 
Office will release a public notice identifying applicants that have 
become qualified bidders for that auction. A Qualified Bidders Public 
Notice will be issued before bidding in the auction begins.

[[Page 43059]]

Qualified bidders are those applicants with submitted FCC Form 175 
applications that are deemed timely filed and complete.

F. Upfront Payments

    120. In order to be eligible to bid in Auction 103, a sufficient 
upfront payment and a complete and accurate FCC Remittance Advice Form 
(FCC Form 159, Revised 2/03) must be submitted before 6:00 p.m. ET on 
October 22, 2019. 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 the information on the form, 
including payment amounts, is accurate.
1. Making Upfront Payments by Wire Transfer for Auction 103
    121. Upfront payments for Auction 103 must be wired to, and will be 
deposited in, the U.S. Treasury. Wire transfer payments for Auction 103 
must be received before 6:00 p.m. ET on October 22, 2019. 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 and other specific bank wire transfer requirements, 
such as an in-person written request before a specified time of day) 
with their bankers several days before they plan to make the wire 
transfer, and must allow sufficient time for the transfer to be 
initiated and completed before the deadline. The information needed to 
place an order for a wire transfer is set forth in the document.
    122. 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 103''. To meet the upfront payment deadline, an applicant's 
payment must be credited to the Commission's account for Auction 103 
before the deadline.
    123. 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 
Scott Radcliffe of the Office of Managing Director's Revenue & 
Receivables Operations Group/Auctions at (202) 418-7518, Theresa Meeks 
at (202) 418-2945, or Gail Glasser at (202) 418-0578.
    124. All payments must be made in U.S. dollars. All payments must 
be made by wire transfer. Upfront payments for Auction 103 go to an 
account number different from the accounts used in previous FCC 
auctions.
    125. Failure to deliver a sufficient upfront payment as instructed 
by the upfront payment deadline will result in dismissal of the short-
form application and disqualification from participation in the 
auction.
2. Completing and Submitting FCC Form 159
    126. Information that supplements the standard instructions for FCC 
Form 159 (Revised 2/03) is provided to help ensure correct completion 
of FCC Form 159 for upfront payments for Auction 103. Applicants need 
to complete FCC Form 159 carefully because mistakes may affect bidding 
eligibility and the lack of consistency between information provided in 
FCC Form 159 (Revised 2/03), FCC Form 175, long-form application, and 
correspondence about an application may cause processing delays.
3. Upfront Payments and Bidding Eligibility
    127. 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 which to collect payments owed at the close of bidding.
    128. Applicants that are former defaulters must pay upfront 
payments 50% 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.
    129. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the generic blocks on which it will bid. Upfront 
payments are based on MHz-pops, and 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 for a block, qualified 
bidders must have a current eligibility level that meets or exceeds the 
number of bidding units assigned to that generic block in a PEA. At a 
minimum, an applicant's total upfront payment must be enough to 
establish eligibility to bid on at least one block in one of the PEAs 
selected on its FCC Form 175 for Auction 103, or else the applicant 
will not be eligible to participate in the auction. The total upfront 
payment does not affect the total dollar amount the bidder may bid.
    130. The Commission adopts upfront payments for a generic block in 
a PEA based on $0.00025 per weighted MHz-pop for PEAs 1-50, $0.00005 
per weighted MHz-pop for PEAs 51-100, and $0.000025 per weighted MHz-
pop in other PEAs, with a minimum upfront payment amount of $250 per 
generic block in a PEA. The upfront payment amount per block in each 
PEA is set forth in Attachment A of the document, available at 
www.fcc.gov/auction/103/. The upfront payment amounts are approximately 
one-fourth the minimum opening bid amounts.
    131. The Commission will assign each generic block in a PEA a 
specific 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 bid in any

[[Page 43060]]

single round 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 the 
number of blocks in PEAs 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.
    132. If an applicant is a former defaulter, it must calculate its 
upfront payment for all of its selected generic blocks in PEAs 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

    133. All qualified bidders for Auction 103 are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight delivery. The mailing will be sent 
only to the contact person at the contact address listed in the FCC 
Form 175 and will include the SecurID[supreg] tokens that will be 
required to place bids and the Auction Bidder Line phone number.
    134. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder for Auction 103 that has not received this mailing by noon on 
November 27, 2019, should call the Auctions Hotline at (717) 338-2868. 
Receipt of this registration mailing is critical to participating in 
the auction, and each applicant is responsible for ensuring it has 
received all the registration materials.
    135. If 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

    136. Bidders will be able to participate in Auction 103 over the 
internet using the FCC Auction Bidding System (bidding system). Only 
qualified bidders are permitted to bid. Each authorized bidder must 
have his or her own SecurID[supreg] token, which the Commission will 
provide at no charge. Each applicant with one authorized bidder will be 
issued two SecurID[supreg] tokens, while applicants with two or three 
authorized bidders will be issued three tokens. A bidder cannot bid 
without his or her SecurID tokens. For security purposes, the 
SecurID[supreg] tokens and a telephone number for bidding questions are 
only mailed to the contact person at the contact address listed on the 
FCC Form 175. Each SecurID[supreg] token is tailored to a specific 
auction. SecurID[supreg] tokens issued for other auctions or obtained 
from a source other than the FCC will not work for Auction 103. 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 return the tokens once the auction has ended.
    137. The Commission makes no warranties whatsoever and shall not be 
deemed to have made any warranties, with respect to the bidding system, 
including any implied warranties of merchantability or fitness for a 
particular purpose. In no event shall the Commission, or any of its 
officers, employees, or agents, be liable for any damages whatsoever 
(including, but not limited to, loss of business profits, business 
interruption, loss of use, revenue, or business information, or any 
other direct, indirect, or consequential damages) arising out of or 
relating to the existence, furnishing, functioning, or use of the 
bidding system. Moreover, no obligation or liability will arise out of 
the Commission's technical, programming, or other advice or service 
provided in connection with the bidding system.
    138. To the extent an issue arises with the bidding system itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
bidding system or attributable to a bidder, including, but not limited 
to, a bidder's hardware, software, or internet access problem that 
prevents the bidder from submitting a bid prior to the end of a round, 
the Commission shall have no obligation to resolve or remediate such an 
issue on behalf of the bidder. Similarly, if an issue arises due to 
bidder error using the bidding system, the Commission shall have no 
obligation to resolve or remediate such an issue on behalf of the 
bidder. Accordingly, after the close of a bidding round, the results of 
bid processing will not be altered absent evidence of any failure in 
the bidding system.

I. Mock Auction

    139. All qualified bidders will be eligible to participate in a 
mock auction for the clock phase, which will begin during the week of 
December 2, 2019. The mock auction will enable qualified bidders to 
become familiar with the bidding system and to practice submitting bids 
prior to the auction. All qualified bidders, including all their 
authorized bidders, should participate to assure that they can log in 
to the bidding system and gain experience with the bidding procedures. 
Participating in the mock auction may reduce the likelihood of a bidder 
making a mistake during the auction. Details regarding the mock auction 
will be announced in the Qualified Bidders Public Notice.
    140. After the clock phase of the auction concludes, a separate 
mock auction for the assignment phase will be held for those qualified 
bidders that won generic blocks in the clock phase.

J. Fraud Alert

    141. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction 103 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.
    142. 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:

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     The FCC's Consumer Call Center at (888) 225-5322 or by 
visiting 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.
    143. 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 Auction 103

A. Auction Structure

1. Clock and Assignment Phases
    144. Auction 103 will use an ascending clock auction design with 
two phases. In the first phase of the auction--the clock phase--bidders 
will indicate their demands for a number of generic license blocks in 
specific categories and 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.
    145. The Office, in conjunction with the Wireless 
Telecommunications (Bureau) has prepared and released updated technical 
guides that provide the mathematical details of the adopted auction 
design and algorithms for the clock and assignment phases of Auction 
103. The guides may be found on the Commission's website at 
www.fcc.gov/auction/103.
2. Generic Blocks and Bidding Categories
    146. In the clock phase, the Commission will conduct bidding for 
two categories of generic blocks in all PEAs. The first category will 
consist of the available blocks in 37.6-40 GHz. This category, 
designated Category M/N, will comprise a total of 24 blocks: 10 in the 
Upper 37 GHz band (Blocks M1-M10) and 14 in the 39 GHz band (Blocks N1-
N14). Fewer generic blocks may be available in Category M/N in some 
PEAs depending on whether incumbents submit Initial Commitment(s) to 
accept modified licenses for full or partial PEAs (Option 1 or Option 
2). A second category, Category P, will consist of the 10 blocks in 
47.2-48.2 GHz (Blocks P1-P10). The final auction inventory will be 
announced on August 23, 2019, after the deadline for submitting Initial 
Commitments. Bidding in the auction will determine a single final clock 
phase price for the generic blocks in each category in each PEA.
    147. Frequency block assignments for any licensee--whether an 
incumbent electing to receive modified licenses or an incumbent 
relinquishing licenses and participating in this auction--will be made 
in the assignment phase using the entire 37.6-40 GHz band as a single 
contiguous swath of spectrum. Incumbents that do not bid in the auction 
and instead receive modified licenses may, under certain circumstances, 
be assigned frequencies not subject to site-specific Federal 
coordination, however. For incumbents choosing to receive modified 
licenses instead of bidding in Auction 103, their existing licenses 
will be modified in accordance with the Commission's Section 316 
authority. To the extent that an incumbent can demonstrate that the 
assignment of frequencies where Federal coordination is required 
pursuant to the specific coordination sites listed under Sec.  30.205 
of the Commission's rules would fundamentally change the nature of 
operations authorized under its license, it may be eligible for a 
waiver seeking assurance that its modified licenses will be assigned to 
frequencies not subject to Federal coordination. The Commission 
anticipates that granting relief will only be necessary in those 
circumstances in which the petitioner can provide a specific 
explanation of why Federal coordination in a particular geographic area 
would hamper its existing operations in such a way as to effect a 
fundamental change in the incumbent's spectrum usage rights. Conclusory 
assertions that an incumbent will be harmed by frequency assignments in 
the PEAs in which coordination zones exist will not be sufficient.
    148. The Commission has directed the Bureau to address any such 
waiver petitions expediently to ensure the auction process can move 
forward. To facilitate expedient action by the Bureau, incumbents 
seeking this type of waiver must file a request no later than 11:59 
p.m. ET on August 16, 2019, the day after the Initial Commitment 
deadline, by submitting the request--along with a request for 
confidential treatment--via email to [email protected].
3. Incentive Payments
    149. The final clock phase price for a generic license block in 
Category M/N in a given PEA will determine the incentive payment 
associated with 100 megahertz of relinquished spectrum rights in that 
PEA. An incumbent that relinquishes a partial license will be entitled 
to an incentive payment equal to the final clock phase price for a 
Category M/N block times the fraction of its relinquished rights, 
measured in weighted MHz-pops, relative to the full number of weighted 
MHz-pops in the PEA.
    150. An incumbent that both relinquishes holdings equivalent to a 
full block of spectrum rights in Category M/N in a PEA and wins a 
generic block in the category in the same PEA will, in effect, receive 
an incentive payment credit equal to the final clock phase price and 
incur an obligation in the same amount, for a net clock phase payment 
of zero. If an incumbent chooses to bid for specific frequencies in the 
assignment phase, the incumbent will be obligated for any additional 
payment.
    151. An incumbent that is eligible for bidding credits and that 
both relinquishes spectrum and bids for new licenses will receive a 
bidding credit discount only on its net cash payment for new licenses.
4. Net Revenue Requirement
    152. The Commission will consider bids on licenses in the Upper 37 
GHz, 39 GHz, and 47 GHz bands in determining whether net revenues are 
sufficient to cover incentive payments to incumbents. The Commission 
will consider only clock phase bids, net of an estimate of bidding 
credit discounts, in determining whether the requirement is met. The 
Commission will make available to bidders an estimate of the current 
shortfall for meeting the net revenue requirement, updated after each 
round of bidding, until the requirement is met. The Commission will 
indicate whether the requirement has been met on the Public Reporting 
System (PRS).
    153. The revenue estimate that the bidding system considers and the 
shortfall figure the Commission makes available before the net revenue 
requirement has been met will be conservative estimates. It will not be 
known whether the clock phase winners will be designated entities that 
can claim a bidding credit until the clock phase bidding has ended. 
Consequently, the revenue estimate that is used to calculate the 
shortfall for rounds before the net revenue requirement has been met 
will assume, for a category in a PEA with excess demand, that blocks 
are won by the bidders with the highest bidding credit percentages, to 
the extent that designated entities are among the bidders still 
demanding blocks in the category in the PEA. This includes a check to 
consider bidding credit caps. In so doing, the Commission avoids a

[[Page 43062]]

potential situation whereby the net revenue requirement appears to be 
met, but then actual net revenues are insufficient to cover incentive 
payments when bidding credits are considered. If the net revenue 
requirement has not been met after a round, the estimated shortfall 
will be calculated as the incentive payments across all incumbents 
after the round minus the revenue estimate across all categories and 
PEAs, rounded up to the nearest $1 million.
    154. If the net revenue requirement has been satisfied at the time 
that the clock phase bidding stops for both categories of blocks, the 
bidding system will determine the winning bidders of generic blocks, 
and the auction will proceed to the assignment phase. If the net 
revenue requirement has not been satisfied at the time bidding stops in 
the clock phase, the auction will end, and no new licenses will be 
assigned. Incumbents in the 39 GHz band will retain their original 
licenses pending further decisions by the Commission.
5. FCC Auction Bidding System
    155. The Commission will conduct Auction 103 over the internet 
using the bidding system. Bidders will have the option of placing bids 
by telephone through a dedicated auction bidder line. There will be no 
on-site bidding during Auction 103. 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, but allow a 
minimum of 10 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.
    156. In order to access the bidding function of the 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 bid summary for each round after they have completed all their 
activity for that round.
    157. An Auction 103 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 
blocks in the PEA(s) the bidder selected on its FCC Form 175.
    158. 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. A bidder must have sufficient 
eligibility to place a bid on the particular license block(s). 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 
bidding system also includes an upload function that allows bid files 
in the CSV format to be uploaded.
    159. During each round of the clock phase, a bidder may also remove 
bids placed in the current bidding round. If a bidder modifies its bids 
for blocks in a category in a PEA in a round, the system takes the last 
bid submission as that bidder's bid for the round.
    160. After the clock phase concludes but before bidding begins in 
the assignment phase, the 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. 
Incumbents that submit an Initial Commitment to accept modified 
licenses will have frequencies assigned in the assignment phase but 
will not be eligible to bid for frequency assignment options.
6. Stopping Rule
    161. The Commission will use a simultaneous stopping rule for the 
clock phase of Auction 103, 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 103 will last.
    162. The assignment phase of Auction 103 will close after 
frequency-specific licenses in all PEAs have been assigned.
7. Availability of Bidding Information
    163. The Commission will make public after each round of the clock 
phase of Auction 103, for each category of blocks 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 identities of 
bidders demanding blocks in a specific category or PEA will not be 
disclosed until after Auction 103 concludes (i.e., after the close of 
bidding in the assignment phase).
    164. Each bidder will have access to additional information related 
to its own bidding and bid eligibility. After the bids of a round have 
been processed, the bidding system will inform each bidder of the 
number of blocks it holds after the round (its processed demand) for 
every category and PEA, its eligibility for the next round, and the 
value of the potential incentive payment.
    165. After the clock phase concludes but before bidding begins in 
the assignment phase, the 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 sooner than five business days later.
    166. After each assignment round, the bidding system will inform 
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, together with the total of any incentive payments from the 
clock phase, will provide the bidder a running estimate during the 
assignment rounds of the dollar amount it will owe or receive as a net 
incentive payment at the end of the auction.
8. Auction Delay, Suspension, or Cancellation
    167. At any time before or during the bidding process, the Office, 
in conjunction with the Bureau, may delay, suspend, or cancel bidding 
in Auction 103 in the event of a natural

[[Page 43063]]

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 Office will notify 
participants of any such delay, suspension, or cancellation by public 
notice and/or through the bidding system's announcement function. If 
the bidding is delayed or suspended, the Office 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 Office and Bureau will exercise this authority at 
their discretion.

B. Clock Phase Bid Collection and Bid Processing Procedures

1. Round Structure
    168. The Commission will conduct the clock phase of Auction 103 in 
a series of rounds, with bidding conducted simultaneously for all 
spectrum blocks available in the auction. During the clock phase, the 
bidding system 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. Bidders will be subject to activity and eligibility 
rules that govern the pace at which they participate in the auction.
    169. 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.
    170. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of bidding. 
The bidding schedule may be changed to foster an auction pace that 
reasonably balances speed with the bidders' need to study round results 
and adjust their bidding strategies. Such changes may include 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. Any changes to the bidding schedule will be announced 
several rounds before the change occurs.
2. Eligibility and Activity Rule
    171. 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 is between 90 
and 100% of a bidder's bidding eligibility in all clock rounds. The 
initial activity requirement is 95%. 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.
    172. Upfront payments will be used 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 weighted 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.
    173. The activity rule will be satisfied when a bidder has bidding 
activity on blocks with bidding units that total at least the activity 
requirement (set between 90 and 100%) 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.
    174. 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, which may not be equal to its submitted demands. For 
instance, if a bidder requests a reduction in the quantity of blocks it 
demands in a category, but the 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.
    175. 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 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.
    176. The Office will retain the discretion to change the activity 
requirement before and/or during the auction within the 90-100% range, 
as circumstances warrant. Any changes to the activity requirement will 
be announced in advance via the bidding system, giving bidders 
sufficient notice to adjust their bidding strategies if needed.
    177. 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 round.
3. Acceptable Bid Amounts
a. Reserve Price or Minimum Opening Bids
    178. The Commission establishes minimum opening bid amounts for 
Auction 103. 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.
    179. Minimum opening bid amounts will be calculated using a formula 
based on 100 megahertz of bandwidth and license area population, 
weighted using an index of relative prices from past auctions. For PEAs 
1-50, minimum opening bid amounts are based on $0.001 per MHz-pop; for 
PEAs 51-100, minimum opening bid amounts are based on $0.0002 per MHz-
pop; and for all other PEAs, minimum opening bid amounts are based on 
$0.0001 per MHz-pop, with a minimum of $1,000. The minimum opening bid 
amount per block in each PEA is set forth in a separate Attachment A of 
the document, available at www.fcc.gov/auction/103/.
b. Clock Price Increments
    180. After bidding in the first round and before each later round, 
the 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 bidding system will set the clock price for 
each category in each PEA 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-

[[Page 43064]]

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.
    181. The initial increment will be set at 10%. The Office may 
adjust the increment as rounds continue, and if it does so, it will 
provide advance notice to bidders. The 5%-20% increment range will 
allow the Office 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.
c. Intra-Round Bids
    182. A bidder may 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.
    183. Intra-round bids are optional; a bidder may choose to express 
its demands only at the clock prices.
    184. Intra-round bidding allows the bidding system to use 
relatively large clock increments, thereby speeding the clock phase, 
without running the risk that a jump in the clock price will overshoot 
the market clearing price--the point at which demand for blocks equals 
the available supply.
d. Bid Removal and Bid Withdrawal
    185. The 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.
    186. Bid withdrawals, analogous to withdrawals of provisionally 
winning bids in an SMR auction, are not available in Auction 103. 
However, bidders in Auction 103 may request to reduce demand for 
generic blocks in a bidding category.
e. No Bidding Aggregation
    187. The Commission does not adopt any package bidding procedures 
for the clock phase of Auction 103. 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.
4. Changing Demand, Bid Types, and Bid Processing
    188. 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 can involve either a decrease or 
an increase in the demanded quantity.
    189. 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 processed 
activity to exceed its eligibility.
    190. 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. 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 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 requested reduction(s) in demand can be implemented. In 
processing the bids submitted in the round, the 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.
    191. 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.
    192. 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 
demand in a category may be applied partially if the total number of 
bidding units associated with the bidder's full increase in 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 M/N category to the P category, or vice versa, within 
the same PEA. 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.
    193. 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 applied fully will not face a price that is higher than its 
bid price.
    194. Because bids are processed in order of price point, and 
aggregate demand for a category in a PEA can change from price point to 
price point, the price point at which a bid is considered by the 
bidding system can affect whether the bid 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 demand or 
sufficient eligibility later in the processing after other bids are 
processed.
    195. Once a round closes, the bidding 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 the bidder's current eligibility. If the 
bid can be accepted, or partially accepted, the number of

[[Page 43065]]

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 
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 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 bidding system will not carry over unfulfilled bid 
requests to the next round, however. The bidding system will inform 
bidders of the status of their bids when round results are released.
    196. After the bids are processed in each round, the 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. 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.
5. Winning Bids in the Clock Phase
    197. Bidders that hold processed demand in a category in a PEA at 
the time the stopping rule is met will, provided that the net revenue 
requirement is satisfied, become winning bidders and will be assigned 
frequency-specific licenses in the assignment phase.
    198. 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.

C. Assignment Phase Bid Collection and Bid Processing Procedures

    199. 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. 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. The procedures will determine the optimal assignment of 
licenses within each category in each PEA based on bid amounts in the 
assignment phase.
    200. Participation in the assignment phase is voluntary; a winning 
bidder in the clock phase of Auction 103 need not bid 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 category in a 
PEA will be assigned contiguous blocks of licenses, even without 
bidding in the assignment phase.
    201. Each incumbent that submits an Initial Commitment to accept 
modified licenses will be assigned specific frequencies in the 
assignment phase, but only clock phase winners will be able to bid for 
their frequency preferences. Subject to the waiver process, incumbents 
accepting modified licenses as well as clock phase winners may be 
assigned frequency-specific licenses anywhere in the Upper 37 GHz/39 
GHz band, depending upon bidding in each assignment round.
1. Round Structure: Sequencing and Grouping of Rounds
    202. Sequencing of rounds. The Commission will conduct assignment 
rounds for the largest markets first. This sequencing will enable 
bidders to establish a ``footprint,'' making it easier for a bidder to 
incorporate frequency assignments from previously assigned areas into 
its bid preferences for other areas and recognizes that a bidder 
winning blocks in multiple PEAs may prefer contiguous blocks across 
adjacent PEAs.
    203. The Commission will conduct a separate assignment round for 
each of the top 20 PEAs sequentially, beginning with the largest PEAs. 
Once the top 20 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.
    204. Grouping of PEAs. To reduce the total amount of time required 
to complete the assignment phase, the Commission will group into a 
single market for assignment any non-top 20 PEAs within a region in 
which the same entities (winning bidders and incumbents keeping 
modified licenses) must be assigned the same number of blocks in each 
category, and all are subject to the small markets bidding cap or all 
are 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.
    205. In addition, 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.
2. Acceptable Bids and Bid Processing
    206. 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 the 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.
    207. A bidder will submit separate preferences for blocks it won in 
the Upper 37 and 39 GHz bands and blocks it won in the 47 GHz band, 
rather than submitting bids for preferences that include blocks in both 
categories. That is, if a bidder won one block in Category M/N and two 
blocks in Category P, it would not be able to submit a single bid 
amount for an assignment that included all three blocks. Instead, it 
would bid separately for assignments in Category M/N and assignments in 
Category P.
    208. An optimization approach will be used to determine the winning 
frequency assignment for each category in each PEA or PEA group. The 
bidding system will select the assignment that maximizes the sum of bid 
amounts among all assignments where every

[[Page 43066]]

bidder and every incumbent that accepts modified licenses is assigned 
contiguous spectrum. The bidding system will consider all assignment 
options of incumbents accepting modified licenses as though the 
incumbent had submitted bids of $0.
    209. 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 in which 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.
3. Assignment Phase Payment Calculations
    210. When all assignment rounds have been completed, a bidder's 
final net total payment takes into account the sum of final clock phase 
prices across all licenses that it won, its assignment payments across 
all assignment phase markets, any incentive payments accruing to the 
bidder, and any claimed bidding credits. Specifically, if a bidder is 
not claiming a bidding credit, its final net total 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 subtracting its total incentive payments across all 
licenses from the total.
    211. If a bidder claims a bidding credit, a bidding credit discount 
is calculated by applying the bidder's bidding credit percentage to the 
total net payment obligations as set forth above, capping the bidding 
credit discount if it exceeds the applicable caps for small businesses, 
rural service providers, and small markets. The resulting bidding 
credit discount is subtracted from the bidder's total net payment 
obligations to determine the final net total payment for a bidder with 
a bidding credit.

D. Calculating Individual License Prices

    212. 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 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.
    213. After the assignment phase, the bidding system will determine 
a net and gross price for each license that was won by a bidder by 
apportioning assignment payments and any bidding credit discount (which 
was calculated based on total net payment obligations taking account of 
any caps) across all the licenses that the bidder won. To calculate the 
gross per-license price, the bidding system will apportion the 
assignment payment to licenses in proportion to the final clock phase 
prices of the licenses that the bidder is assigned in that category and 
market. To calculate the net price, the 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 
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.

E. Auction Results

    214. The bidding system will determine winning bidders and their 
assigned licenses. After the Office announces the auction results, it 
will provide a means for the public to view and download bidding and 
results data.

F. Auction Announcements

    215. The Commission and/or Office 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 
bidding system.

V. Post-Auction Procedures

    216. Shortly after bidding has ended in Auction 103, the Commission 
will issue a public notice declaring that the 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

    217. Within 10 business days after release of the auction closing 
public notice for Auction 103, 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 to 20% of the net 
amount of its winning bids (gross winning bids less any incentive 
payment, then less any bidding credits, if applicable).

B. Final Payments

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

C. Long-Form Application (FCC Form 601)

    219. The Commission's rules provide that, within 10 business days 
after release of the auction closing public notice, winning bidders 
must electronically submit a properly completed post-auction 
application (FCC Form 601) for the license(s) they won through the 
auction.
    220. 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 notice for Auction 103.
    221. 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)

    222. Within 10 business days after release of the auction closing 
public notice for Auction 103, each winning bidder must also comply 
with the ownership reporting requirements in

[[Page 43067]]

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.
    223. 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.
    224. When a winning bidder submits an FCC Form 175, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but it 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 notice.

E. Tribal Lands Bidding Credit

    225. 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% 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.
    226. 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 inform 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

    227. 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.
    228. 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 additional default payment for Auction 
103 is 15% of the applicable bid.
    229. 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.
    230. Finally, in the event of a default, the Commission has the 
discretion to re-auction the license or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the Commission may 
declare the applicant and its principals ineligible to bid in future 
auctions and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant.

G. Refund of Remaining Upfront Payment Balance

    231. 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. 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 
document. Bidders may also provide the relevant information for a 
refund request in writing and fax it to Commission staff.

VI. Supplemental Final Regulatory Flexibility Analysis

    232. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), a Supplemental Initial Regulatory Flexibility Analysis 
(Supplemental IRFA) was incorporated in the Auction 103 Comment Public 
Notice released in April 2019. The Commission sought public comment on 
the proposals in the Auction 103 Comment Public Notice, including 
comments on the Supplemental IRFA. No comments were filed addressing 
the Supplemental IRFA. The Auction 103 Procedures Public Notice 
establishes the procedures to be used for Auction 103 and supplements 
the Initial and Final Regulatory Flexibility Analyses completed by the 
Commission in the Spectrum Frontiers Fourth Report & Order and other 
Commission orders pursuant to which Auction 103 will be conducted. This 
present Supplemental Final Regulatory Flexibility Analysis 
(Supplemental FRFA) conforms to the RFA.
    233. Need for, and Objectives of, the Rules. The Auction 103 
Procedures Public Notice implements auction procedures for those 
entities that seek to bid to acquire licenses in Auction 103. Auction 
103 will be the third auction of high-band spectrum in furtherance of 
the deployment of fifth-generation (5G) wireless, the Internet of 
Things (IoT), and other advanced spectrum-based services. The document 
adopts procedural rules and terms and conditions governing Auction 103, 
the post-auction application and payment processes, as well as setting 
the minimum opening bid amount for Upper Microwave Flexible Use Service

[[Page 43068]]

(UMFUS) licenses in the Upper 37 GHz (37.6-38.6 GHz), 39 GHz (38.6-40 
GHz), and 47 GHz (47.2-48.2 GHz) bands that will be offered in Auction 
103.
    234. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 103 participants, the 
Commission adopts the following procedures:
     Establishment of bidding credit caps for eligible small 
businesses and rural service providers in Auction 103;
     use of a clock auction format for Auction 103 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 generic blocks 
in each PEA available in Auction 103;
     a specific upfront payment amount for generic blocks in 
each PEA available in Auction 103;
     establishment of a bidder's initial bidding eligibility in 
bidding units based on that bidder's upfront payment;
     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;
     a requirement that bidders be active on between 90% and 
100% of their bidding eligibility in all regular clock rounds;
     establishment of acceptable bid amounts, including clock 
price increments and intra-round bids, along with a proposed 
methodology for calculating such amounts;
     a proposed methodology for processing bids and requests to 
reduce demand;
     a procedure for breaking ties if identical high bid 
amounts are submitted on a license in a given round;
     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;
     establishment of an additional default payment of 15% 
under Sec.  1.2104(g)(2) of the rules in the event that a winning 
bidder defaults or is disqualified after the auction.
    235. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
address the procedures and policies proposed in the Supplemental IFRA.
    236. 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. The Chief Counsel did not file any comments in response to 
the procedures that were proposed.
    237. Description and Estimate of the Number of Small Entities to 
Which the Rules 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 rules and policies 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.
    238. Regulatory Flexibility Analyses were incorporated into prior 
Commission orders on this subject. In those analyses, the Commission 
described in detail the small entities that might be significantly 
affected. The Commission hereby incorporates by reference the 
descriptions and estimates of the number of small entities from the 
previous Regulatory Flexibility Analyses. Based on the information 
available in the Commission's public Universal Licensing System (ULS), 
the Commission estimates that there are currently 16 incumbent 39 GHz 
licensees. Of these incumbent 39 GHz licensees, the Commission 
estimates that up to 8 could be considered a ``small entity'' under the 
RFA.
    239. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission 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. In the 
second phase of the process, winning bidders file a more comprehensive 
long-form application. Thus, an applicant which fails to become a 
winning bidder does not need to file a long-form application and 
provide the additional showings and more detailed demonstrations 
required of a winning bidder.
    240. The Commission does not expect that the processes and 
procedures adopted in the Auction 103 Procedures Public Notice will 
require small entities to hire attorneys, engineers, consultants, or 
other professionals to participate in Auction 103 and comply with the 
procedures adopted because of the information, resources, and guidance 
the Commission makes available to potential and actual participants. 
The Commission cannot quantify the cost of compliance with the 
procedures; however, the Commission does not believe that the costs of 
compliance will unduly burden small entities that choose to participate 
in the auction. Processes and procedures are consistent with existing 
Commission policies and procedures used in prior auctions. Thus, some 
small entities may already be familiar with such procedures and have 
the processes and procedures in place to facilitate compliance 
resulting in minimal incremental costs to comply. For those small 
entities that may be new to the Commission's auction process, the 
various resources that will be made available, including, but not 
limited to, the mock auction, remote electronic or telephonic bidding, 
and access to hotlines for both technical and auction assistance, 
should help facilitate participation without the need to hire 
professionals. For example, an online tutorial will be released that 
will help applicants understand the procedures for filing the auction 
short-form applications. The Commission will offer other educational 
opportunities for applicants in Auction 103 to familiarize themselves 
with the FCC auction application system and the bidding system. The 
Commission expects small business entities that utilize the available 
resources to experience lower participation and compliance costs.
    241. 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

[[Page 43069]]

design standards; and (4) an exemption from coverage of the rule, or 
any part thereof, for such small entities.
    242. The Commission has taken steps to minimize any economic impact 
of its auction procedures on small businesses through among other 
things, the many free resources it provides potential auction 
participants. Consistent with the past practices in prior auctions, 
small entities that are potential participants will have access to 
detailed educational information and Commission personnel to help guide 
their participation in Auction 103, which should alleviate any need to 
hire professionals. More specifically, small entities and other auction 
participants may seek clarification of or guidance on complying with 
competitive bidding rules and procedures, reporting requirements, and 
using the bidding system. Additionally, an FCC Auctions Hotline will 
provide small entities one-on-one access to Commission staff for 
information about the auction process and procedures. Further, the FCC 
Auctions Technical Support Hotline is another resource which provides 
technical assistance to applicants, including small business entities, 
on issues such as access to or navigation within the electronic FCC 
Form 175 and use of the bidding system. Small entities and other would-
be participants will also be provided various materials on the pre-
bidding process in advance of the short-form application filing window, 
which includes step-by-step instructions on how to complete FCC Form 
175. In addition, small entities will have access to the web-based, 
interactive online tutorial produced by Commission staff to familiarize 
themselves with auction procedures, filing requirements, bidding 
procedures, and other matters related to an auction.
    243. Various databases and other sources of information, including 
the Auctions program websites, and copies of Commission decisions, will 
be available to the public without charge, providing a low-cost 
mechanism for small businesses to conduct research prior to and 
throughout the auction. Prior to and at the close of Auction 103, the 
Commission and Office will post public notices on the Auctions website, 
which articulate the procedures and deadlines for the auction. The 
Commission will make this information easily accessible and without 
charge to benefit all Auction 103 applicants, including small 
businesses, thereby lowering their administrative costs to comply with 
the Commission's competitive bidding rules.
    244. Eligible bidders will be given an opportunity to become 
familiar with auction procedures and the bidding system by 
participating in a mock auction. Eligible bidders will have access to a 
user guide for the bidding system, bidding file formats, and an online 
bidding procedures tutorial in advance of the mock auction. Further, 
the Commission will conduct Auction 103 electronically over the 
internet using a web-based auction system that eliminates the need for 
small entities and other bidders to be physically present in a specific 
location. Qualified bidders will also have the option to place bids by 
telephone. These mechanisms are made available to facilitate 
participation in Auction 103 by all eligible bidders and may result in 
significant cost savings for small business entities that use these 
alternatives. Moreover, the adoption of bidding procedures in advance 
of the auction, consistent with statutory directive, is designed to 
ensure that the auction will be administered predictably and fairly for 
all participants, including small businesses.
    245. Another step taken to minimize the economic impact for small 
entities participating in Auction 103 is the Commission's adoption of 
bidding credits for small businesses. In accordance with the service 
rules applicable to the UMFUS licenses to be offered in Auction 103, 
bidding credit discounts will be available to eligible small businesses 
and small business consortiums on the following basis: (1) 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% 
discount on its winning bid, or (2) 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% discount on its winning bid. 
Eligible applicants can receive only one of the available bidding 
credits--not both. This two-tier approach has proven successful for 
small businesses in past auctions.
    246. The total amount of bidding credit discounts that may be 
awarded to an eligible small business is capped at $25 million, and 
there is a $10 million cap on the total amount of bidding credit 
discounts that may be awarded to a rural service provider. The 
Commission adopts a $10 million cap on the overall amount of bidding 
credits that any winning small business bidder may apply to winning 
licenses in markets with a population of 500,000 or less. Based on the 
technical characteristics of the UMFUS bands and an analysis of past 
auction data, the Commission anticipates that the caps will allow the 
majority of small businesses to take full advantage of the bidding 
credit program, thereby lowering the relative costs of participation 
for small businesses. Furthermore, the Commission adopts upfront 
payment amounts that are one-fourth of the amounts proposed in the 
Auction 103 Comment Public Notice, which will minimize the economic 
impact on small entities.
    247. These procedures for the conduct of Auction 103 constitute the 
more specific implementation of the competitive bidding rules 
contemplated by parts 1 and 30 of the Commission's rules and the 
underlying rulemaking orders, and relevant competitive bidding orders, 
and are fully consistent therewith.
    248. Report to Congress. The Commission will send a copy of the 
Auction 103 Procedures Public Notice, including the Supplemental FRFA, 
in a report to Congress pursuant to the Congressional Review Act. In 
addition, the Commission will send a copy of the Auction 103 Procedures 
Public Notice, including the Supplemental FRFA to the Chief Counsel for 
Advocacy of the SBA. A copy of the Auction 103 Procedures Public 
Notice, and Supplemental FRFA (or summaries thereof), will also be 
published in the Federal Register.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2019-17792 Filed 8-19-19; 8:45 am]
BILLING CODE 6712-01-P