[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Rules and Regulations]
[Pages 50767-50785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20526]


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

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 52

[AU Docket No. 19-101; WC Docket No. 17-192; CC Docket No. 95-155; FCC 
19-75]


Auction of Toll Free Numbers in the 833 Code; Notice and Filing 
Requirements, Upfront Payments, and Other Procedures for the 833 
Auction; Bidding Scheduled To Occur on December 17, 2019

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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

SUMMARY: This document summarizes procedures for the upcoming auction 
of certain toll free numbers in the 833 code (833 Auction). The 833 
Auction Procedures Public Notice summarized here is intended to 
familiarize applicants with the procedures and other requirements 
governing participation in the 833 Auction and provides overview of the 
post-auction payment and toll free number reservation processes and 
secondary market transaction disclosures.

DATES: Application to participate in the 833 Auction must be submitted 
prior to 6:00 p.m. ET on October 18, 2019. Upfront payments for the 833 
Auction must be received by 6:00 p.m. ET on November 27, 2019. Bidding 
in Auction 103 is scheduled to occur on December 17, 2019.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Scott 
Mackoul in the Auctions Division of the Office of Economics and 
Analytics at (202) 418-0660. For toll free number questions, Matthew 
Collins in the Wireline Competition Bureau's Competition Policy 
Division at (202) 418-7141.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice (833 
Auction Procedures Public Notice), AU Docket No. 19-101; WC Docket No. 
17-192; CC Docket No. 95-155, FCC 19-75, adopted on August 1, 2019 and 
released on August 2, 2019. The complete text of the 833 Auction 
Procedures Public Notice is available for public inspection and copying 
from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday 
or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference 
Information Center, 445 12th Street SW, Room CY-A257, Washington, DC 
20554. The complete text is also available on the Commission's website 
at https://www.fcc.gov/wireline-competition/competition-policy-division/numbering-resources/833-toll-free-number-auction or by using 
the search function for AU Docket No. 19-101, WC Docket No. 17-192, or 
CC Docket No. 95-155 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 833 Auction Procedures Public Notice, the Commission 
establishes procedures for the upcoming auction of certain toll free 
numbers in the 833 code (833 Auction). The 833 Auction, which will 
serve as an experiment in using competitive bidding as a way to assign 
toll free numbers, will make available 17,638 numbers in the 833 code. 
Bidding in the 833 Auction will occur on December 17, 2019. The 833 
Auction Procedures Public Notice provides details regarding the 
procedures, terms, and conditions, as well as dates and deadlines, 
governing participation in the 833 Auction, and an overview of post-
auction payments and requirements, including disclosure requirements 
for post-auction secondary market transactions.

B. Background and Relevant Authority

    2. In 2018, the Commission modified its toll free assignment rule 
in the Toll Free Assignment Modernization Order, 83 FR 53377, October 
23, 2018, to provide greater flexibility and permit alternative 
approaches to assigning numbers. Specifically, the Commission added 
competitive bidding as a method to assign toll free numbers and, as an 
experiment in using this approach, established the 833 Auction to 
assign numbers that were requested by two or more Responsible 
Organizations (``RespOrgs'') during the 833 pre-code opening process.
    3. The Commission set out the general framework for the 833 Auction 
in the Toll Free Assignment Modernization Order and designated Somos, 
Inc., the Toll Free Numbering Administrator, as the auctioneer. The 
Commission opened participation in the 833 Auction to not only RespOrgs 
but also potential subscribers who may wish to participate directly. 
The Commission also called for a pre-bidding process during which it 
would seek comment on detailed auction procedures, as is typical in 
Commission auctions.
    4. In May 2019, the Commission initiated the pre-bidding process by

[[Page 50768]]

releasing a public notice seeking comment on auction procedures to be 
used in the 833 Auction. Seven parties submitted filings in response to 
the 833 Auction Comment Public Notice, 84 FR 24424, May 28, 2019.
    5. Section 251(e)(1) of the Communications Act of 1934, as amended 
(the Act), empowers the Commission to ensure that toll free numbers are 
allocated in an equitable and orderly manner that serves the public 
interest. Pursuant to this statutory mandate, the Commission has the 
authority to set policy with respect to all facets of numbering 
administration in the United States, and must do so in an efficient, 
fair, and orderly manner. As in the Toll Free Assignment Modernization 
Order, the actions the Commission takes in the 833 Auction Procedures 
Public Notice are designed to meet the statutory requirement that 
numbers be made ``available on an equitable basis,'' by establishing 
auction and secondary market procedures that are efficient, orderly, 
and fair.
    6. In addition to the Toll Free Assignment Modernization Order, 
other Commission decisions and rules provide additional information 
useful to any party interested in participating in the 833 Auction. For 
example, many of the application and bidding requirements set forth in 
the 833 Auction Procedures Public Notice are based on the Commission's 
general competitive bidding rules. Thus, prospective applicants should 
familiarize themselves with those rules, including recent amendments 
and clarifications, as well as Commission decisions in proceedings 
regarding competitive bidding procedures and application requirements.
    7. Moreover, as part of their due diligence responsibilities, 
applicants must be thoroughly familiar with the procedures, terms, and 
conditions contained in 833 Auction Procedures Public Notice and any 
future public notices that may be released in the 833 Auction 
proceeding (AU Docket No. 19-101, WC Docket No. 17-192, CC Docket No. 
95-155). 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 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 the 833 Auction. Copies of most auctions-related 
Commission documents, including public notices, can be retrieved at 
www.fcc.gov/auctions, and copies of documents related to the 833 
Auction can be retrieved at https://www.fcc.gov/wireline-competition/competition-policy-division/numbering-resources/833-auction. 
Additionally, documents are available through Somos at http://auction.somos.com/ and at the Commission's headquarters, located at 445 
12th Street SW, Washington, DC 20554, during normal business hours.

C. Toll Free Numbers Offered in 833 Auction

    8. In the 833 pre-code opening process, the Commission's Wireline 
Competition Bureau authorized RespOrgs to identify up to 2,000 desired 
numbers in the 833 code and submit a request for those numbers to 
Somos. Somos identified 17,638 toll free numbers as requested by two or 
more RespOrgs and placed those numbers in unavailable status. In the 
Toll Free Assignment Modernization Order, the Commission announced that 
the rights to use these 17,638 toll free numbers in the 833 code would 
be offered in the 833 Auction.
    9. The Commission, in the Toll Free Assignment Modernization Order, 
provided one exception to making these numbers available in the 833 
Auction by allowing government entities and non-profit health and 
safety organizations to file petitions to set aside numbers from the 
auction for use for public health and safety purposes. On April 16, 
2019, the Wireline Competition Bureau released a Public Notice seeking 
petitions to set aside toll free numbers pursuant to this exception. No 
petitions were submitted. Consequently, all 17,638 numbers previously 
identified as having multiple requests will be offered in the 833 
Auction. 833 Auction applicants must select the toll free numbers (from 
the available list) for which they may bid on their auction 
applications. If a particular available toll free number is not 
selected on any auction application, it will not be available in the 
auction. A complete list of these 17,638 numbers is available in 
electronic format only at http://auction.somos.com/.

D. Auction Specifics

1. Auctioneer
    10. In the Toll Free Assignment Modernization Order, the Commission 
designated Somos as the auctioneer for the 833 Auction. As such, Somos 
will be required to implement the procedures established in the 833 
Auction Procedures Public Notice to conduct the auction, including: 
Accepting applications to participate in the bidding (auction 
applications); reviewing the applications for sufficiency; accepting 
upfront payments; announcing which applicants are qualified to bid 
(qualified bidders); accepting and processing the bids; announcing the 
winning bidders; and accepting final payments. To accomplish these 
tasks, Somos must provide an online system(s) for the 833 Auction that 
will accept auction applications and bids (collectively Somos Auction 
System) and Somos must provide procedures to accept both upfront and 
final payments.
2. Auction Dates and Deadlines
    11. The following dates and deadlines apply to the 833 Auction:

Auction Registration, Application, and Bidding Tutorials Available (via 
internet)-No later than September 11, 2019
Auction Application (FCC Form 833) Filing Window Opens--October 7, 
2019; 12:00 noon Eastern Time (ET)
Auction Application (FCC Form 833) Filing Window Deadline--October 18, 
2019; 6:00 p.m. ET
Upfront Payments--November 27, 2019; 6:00 p.m. ET
Mock Auction--December 13, 2019
Bidding in the 833 Auction--December 17, 2019
3. Requirements for Participation
    12. Those wishing to participate in the 833 Auction must:
     Register for an Auction ID online through the Somos 
Auction System;
     Submit an auction application (FCC Form 833) 
electronically through the Somos Auction System prior to 6:00 p.m. ET 
on October 18, 2019, following filing procedures set forth in the 833 
Auction Procedures Public Notice and any FCC Form 833 instructions 
provided by Somos;
     Submit a sufficient upfront payment to Somos by 6:00 p.m. 
ET on November 27, 2019, following the procedures set forth in the 833 
Auction Procedures Public Notice; and
     Comply with all provisions outlined in the 833 Auction 
Procedures Public Notice and applicable Commission rules and orders.

II. Implementation of 833 Auction Principles

    13. In the Toll Free Assignment Modernization Order, the Commission 
established certain principles to promote the transparency and 
efficiency of the 833 Auction, and reduce the potential for conflicts 
of interest and anticompetitive strategic behavior by participants. The 
Commission sought comment in the 833 Auction Comment

[[Page 50769]]

Public Notice on specific procedures to implement these principles, and 
in the 833 Auction Procedures Public Notice, the Commission describes 
how these principles will be implemented for the 833 Auction.

A. Participation Through Single Applicant and Application

    14. The Commission adopts the proposal in the 833 Auction Comment 
Public Notice to allow a potential subscriber to participate in the 833 
Auction either (1) through a RespOrg that will bid on all the numbers 
in which the subscriber is interested in acquiring, or (2) by 
submitting its own application and bidding for all the numbers in which 
it is interested. Thus, a potential subscriber cannot selectively 
choose to be represented by a RespOrg to bid on its behalf for some 
numbers and submit an application on its own to bid for other numbers.
    15. In the Toll Free Assignment Modernization Order, the Commission 
required that potential subscribers participate in the 833 Auction 
through only a single auction applicant. In the 833 Auction Comment 
Public Notice, the Commission proposed to implement this principle by 
requiring that a potential subscriber may participate either through a 
RespOrg that will bid on all the numbers that the subscriber is 
interested in acquiring, or by submitting its own application and 
bidding for all of the numbers in which it is interested. The 
Commission received one comment on this issue. CenturyLink agrees with 
the Commission's proposal, asserting that this ``bright line on 
participation'' will help parties clarify their roles and promote the 
integrity of the auction process. The Commission agrees with 
CenturyLink's assessment and also believes the proposed application 
procedure is consistent with the requirement that a potential 
subscriber may participate through only a single auction applicant, 
which is necessary to implement the prohibition on certain 
communications, and with the decision to prohibit certain agreements 
among auction applicants. Thus, the Commission adopts the application 
procedure as proposed. If a potential subscriber is represented on 
applications submitted by multiple RespOrgs, or files its own 
application and is also represented on a RespOrg application, only one 
of the applications on which it is represented may become qualified to 
bid (i.e., any additional subscriber application(s) will be dismissed 
and/or any additional RespOrg applications will not be found qualified 
to bid for the potential subscriber's selected toll free number(s)).
    16. In the 833 Auction Comment Public Notice, the Commission 
proposed two certifications in the auction application related to the 
single applicant/application mandate. First, it proposed that the 
auction application require that each applicant certify that (i) if it 
is bidding on its own behalf, it is also not participating in the 
auction through another entity, and/or (ii) if it is bidding on behalf 
of potential subscriber(s), it is not aware that the potential 
subscriber(s) are participating through another applicant. Second, the 
Commission proposed requiring each applicant to certify that it, or any 
commonly-controlled entity, is not submitting multiple applications in 
the 833 Auction. The Commission received no comments on the proposed 
certifications, and concludes that the certifications should aid in 
enforcing the single applicant/application mandate. Thus, every 
applicant must certify in its auction application that: (1) It is not 
participating in the auction through another entity; (2) it is not 
aware that any entity on whose behalf it is bidding is participating 
through another applicant; and (3) it, or any commonly-controlled 
entity, is not submitting multiple applications in the 833 Auction. 
This language clarifies language proposed in the 833 Auction Comment 
Public Notice in order to emphasize that the requirement to bid only 
through a single applicant applies to every applicant, regardless of 
whether it is bidding on its own behalf, or on behalf of another 
entity. Moreover, by ``commonly-controlled entity,'' the Commission 
means an entity that controls or is controlled by another party.
    17. To identify commonly controlled entities in the 833 Auction, 
the 833 Auction Comment Public Notice proposed to define a 
``controlling interest'' as an individual or entity with positive or 
negative de jure or de facto control of the applicant. As noted in the 
833 Auction Comment Public Notice, the Commission's part 1 rules state 
that de jure control includes holding 50 percent or more of the voting 
stock of a corporation or holding a general partnership interest in a 
partnership. Ownership interests that are held indirectly by any party 
through one or more intervening corporations may be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain meets or 
exceeds 50 percent or represents actual control, it may be treated as 
if it were a 100 percent interest. De facto control is determined on a 
case-by-case basis. Examples of de facto control include constituting 
or appointing 50 percent or more of the board of directors or 
management committee; having authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
entity; or playing an integral role in management decisions.
    18. The 833 Auction Comment Public Notice also sought comment on a 
presumption of control by spouses and immediate family members. In this 
context ``immediate family member'' would mean father, mother, husband, 
wife, son, daughter, brother, sister, father- or mother-in-law, son- or 
daughter-in-law, brother- or sister-in-law, step-father or -mother, 
step-brother or -sister, step-son or -daughter, half brother or sister. 
The Commission proposed to place the burden on applicants to 
sufficiently demonstrate that spouses or family members should not be 
treated as having an identity of interest such that it creates common 
control, and that where the presumption has not been adequately 
rebutted, such spouses and family members will be subject to the 
prohibition on submission of multiple auction applications by commonly 
controlled entities.
    19. One commenter, 1-800 Contacts, opposes the Commission's 
proposal for defining the controlling interests of auction applicants, 
arguing that many toll free number subscribers are commonly owned 
``through large investment funds or corporate conglomerates,'' but 
``have no day-to-day involvement with each other'' and therefore, 
should be allowed to bid separately without having to develop a 
coordinated bidding strategy. 1-800 Contacts advocates a more lenient 
approach to controlling interests that would allow commonly owned (but 
not commonly controlled) entities to participate separately in the 
auction, specifically suggesting limiting control to ``de jure control 
combined with actual day-to-day involvement in the operational 
activities of the company.''
    20. In the Toll Free Assignment Modernization Order, the Commission 
stated that, while it would seek comment and decide how to define 
parties with common controlling interests in the pre-auction process, 
it anticipated using the Commission's definitions adopted for similar 
purposes in its spectrum auctions (e.g., Sec.  1.2105(a)(4)(i) of the 
Commission's rules). The Commission is unconvinced by the arguments of 
1-800 Contacts, and

[[Page 50770]]

it adopts the controlling interest standard as proposed in the 833 
Auction Comment Public Notice--i.e., an individual or entity with 
positive or negative de jure or de facto control. Because entities that 
have control (either legal control or actual control) can behave in a 
coordinated fashion, entities with common controlling interests should 
not be able to participate through separate entities in the auction. 
Moreover, such an approach is simpler and is consistent with the 
Commission's approach for its spectrum auctions. As 1-800 Contacts 
itself notes, requiring a determination of actual day-to-day 
involvement (in addition to de jure control) would be subjective and 
may be difficult for other auction participants and Somos to 
definitively make. Further, unlike 1-800 Contacts, the Commission 
believes that the experimental nature of this auction supports 
consistency with the same standard that it uses in Commission auctions. 
If it uses the same standard applied in Commission auctions, 
participants in the 833 Auction can rely on any prior experience in 
Commission auctions and on Commission precedent for guidance. Thus, the 
Commission concludes that the controlling interest standard as proposed 
in the 833 Auction Comment Public Notice is preferable and therefore 
adopts the proposal.
    21. The Commission received no comments on the presumption of 
control by spouses and immediate family members proposed in the 833 
Auction Comment Public Notice. Therefore, it adopts the presumptions 
(and definitions) set forth therein, and notes that if an applicant 
wishes to rebut a presumption of control by a spouse or family member, 
it should do so in a narrative explanation to its auction application.
    22. Additionally, the Commission reiterates that any 833 Auction 
applicants that have overlapping non-controlling interests must take 
steps to prevent communicating bid information with each other. 
Specifically, applicants with overlapping non-controlling interests 
must certify they have established internal controls to preclude any 
person acting on behalf of an applicant from possessing information 
about the bids or bidding strategies of more than one applicant or 
communicating such information to another person acting on behalf of 
and possessing such information regarding another applicant. The 
Commission will include such a certification in the auction 
application.

B. Prohibition on Certain Communications and Compliance With Antitrust 
Laws

    23. Each applicant in the 833 Auction is prohibited from 
cooperating or collaborating with any other applicant with respect to 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies. Each applicant will be prohibited from 
communicating, with any other applicant in any manner, the substance of 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies (including with respect to the post-auction market 
for toll free numbers). The Commission proposed this prohibition in the 
833 Auction Comment Public Notice to reinforce existing antitrust laws, 
facilitate detection of collusive conduct, and deter anticompetitive 
behavior. The Commission received no comments on this proposal and 
therefore, for the reasons stated in proposing it, the Commission 
adopts the prohibition on certain communications for the 833 Auction.
1. Entities Subject to the Prohibition on Certain Communications
    24. For purposes of the prohibition on certain communications, an 
``applicant'' in the 833 Auction includes: (i) All controlling 
interests in the entity submitting the auction application; (ii) all 
holders of partnership and other ownership interests and any stock 
interest amounting to 10 percent or more of the entity, or outstanding 
stock, or outstanding voting stock of the entity submitting the auction 
application; (iii) all officers and directors of that entity; and (iv) 
any entity listed as a potential subscriber on whose behalf the entity 
submitting the auction application will be bidding. As in the 
Commission's spectrum auctions, in the case of a consortium, each 
member of the consortium shall be considered to have a controlling 
interest in the consortium. The Commission proposed in the 833 Auction 
Comment Public Notice to define ``applicant'' broadly for the purposes 
of the prohibition on certain communications, consistent with its 
spectrum license and universal service support auctions. One commenter, 
1-800 Contacts, supports the proposal, stating that applying the 
prohibition broadly ``will help ensure the integrity of the auction 
process.'' The Commission agrees with this assessment and adopts the 
definition of applicant for purposes of the prohibition as proposed.
2. Prohibition Applies Until Final Payment With Late Fee Deadline
    25. The prohibition on certain communications for the 833 Auction 
will begin at the deadline for submitting auction applications (i.e., 
6:00 p.m. on October 18, 2019) and will end at the deadline for winning 
bidders to submit their final payments with a late fee (i.e., 15 
business days after the winning bidders are announced).
    26. In the 833 Auction Comment Public Notice, the Commission stated 
that the prohibition on certain communications will begin at the 
auction application deadline and will end ``at the post-auction 
deadline for winning bidders to submit their final payments (which will 
be announced by Somos after bidding concludes).'' The Commission 
clarifies that, for ``final payment deadline,'' it will use the 
deadline for winning bidders to submit their final payments with a late 
fee. In the Commission's spectrum auctions, the prohibition on certain 
communications runs until the down payment deadline, and in its 
auctions for universal service support, the prohibition runs until the 
post-auction deadline for winning bidders to submit applications for 
support. For the 833 Auction, because winning bidders have neither a 
down payment nor a post-auction application requirement, the most 
analogous point is the final payment. However, the final payment in 
this auction can be made up to an additional five business days after 
the final payment deadline so long as it is submitted with a late fee. 
Since the rationale to extend the prohibited communications period 
until after bidding applies equally during the period in which an 
applicant can submit the final payment with a late fee, the Commission 
clarifies that the prohibition will run until that last deadline (i.e., 
15 business days after Somos announces the winning bidders).
3. Scope of the Prohibition on Certain Communications
    27. As proposed in the 833 Auction Comment Public Notice, an 
applicant will be prohibited from communicating, with any other 
applicant in any manner, the substance of its own, or one another's, or 
any other competing applicant's bids or bidding strategies (including 
with respect to the post-auction market for toll free numbers). In 
addition to express statements of bids and bidding strategies, the 
prohibition against communicating ``in any manner'' includes public 
disclosures as well as private communications and indirect or implicit 
communications.

[[Page 50771]]

Consequently, an applicant must take care to determine whether its 
auction-related communications may reach another applicant. The 
Commission reminds applicants that they must determine whether their 
communications with other parties are permissible once the prohibition 
begins at the deadline for submitting auction applications, even before 
the public notice identifying applicants is released.
    28. Applicants 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.
    29. As noted in the 833 Auction Comment Public Notice, the 
prohibition will not apply to all communications between or among 
applicants; it will apply only to any communications conveying, in 
whole or part, directly or indirectly, the applicant's or a competing 
applicant's bids or bidding strategy (including with respect to the 
post-auction market for toll free numbers). Thus, communications, 
including business discussions and negotiations, unrelated to the toll 
free numbers being offered in the 833 Auction and that do not convey 
information about the numbers being auctioned or bidding strategies are 
not prohibited. Moreover, not all auction-related information is 
necessarily covered by the prohibition. For example, communicating 
merely whether a party has or has not applied to participate in the 833 
Auction should not violate the prohibition. In contrast, communicating 
how a party will participate, including specific numbers or bid 
amounts, and/or whether or not a party will place bids, would convey 
bid or bidding strategies and therefore is prohibited.
    30. Although the restriction does not prohibit business discussions 
and negotiations among auction applicants that are not auction related, 
each applicant must remain vigilant not to communicate, directly or 
indirectly, information that affects, or could affect, bids or bidding 
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.
    31. The Commission also cautions applicants that bids or bidding 
strategies may be communicated outside of situations that involve one 
party subject to the prohibition communicating privately and directly 
with another such party. For example, the Commission has warned that 
prohibited ``communications concerning bids and bidding strategies may 
include communications regarding capital calls or requests for 
additional funds in support of bids or bidding strategies to the extent 
such communications convey information concerning the bids and bidding 
strategies directly or indirectly.'' Moreover, the Commission 
previously found a violation of the rule against prohibited 
communications when an applicant used the Commission's bidding system 
to disclose ``its bidding strategy in a manner that explicitly invited 
other auction participants to cooperate and collaborate . . . in 
specific markets'' and has placed auction participants on notice that 
the use of its bidding system ``to disclose market information to 
competitors will not be tolerated and will subject bidders to 
sanctions.''
    32. Likewise, when completing an auction application, each 
applicant should avoid any statements or disclosures that may violate 
the prohibition on certain communications, particularly in light of the 
limited information procedures in effect for the 833 Auction. 
Specifically, an applicant should avoid including any information in 
its auction application that might convey information regarding its 
toll free number selections, as applicable, such as referring to 
certain toll free numbers in describing agreements, including any 
information in application attachments that will be publicly available 
that may otherwise disclose the applicant's toll free number 
selections, or using applicant names that refer to numbers being 
offered.
    33. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate the prohibition on certain communications even 
though that information subsequently may be made public during later 
periods of the application or bidding processes.
4. Communicating With Third Parties
    34. The 833 Auction's prohibition on certain communications 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 
prohibition. 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 
has occurred.
    35. As Commission staff have explained in the context of the 
Broadcast Incentive Auction, in the case of an individual, the 
objective precautionary measure of a firewall is not available. As a 
result, an individual that is privy to bids or bidding information of 
more than one applicant presents a greater risk of becoming a conduit 
for a prohibited communication. The Commission will take the same 
approach to interpreting the prohibited communications rule in the 833 
Auction. Moreover, the Commission emphasizes that whether a prohibited 
communication has taken place in a given case will depend on all the 
facts pertaining to the case, including who possessed what information, 
what information was conveyed to whom, and the course of bidding in the 
auction.
    36. For purposes of the 833 Auction, the Commission prohibits 
separate applicants from designating the same individual on their 
auction applications to serve as an authorized bidder. This prevents a 
single individual with knowledge of the bidding strategies of more than 
one applicant from conveying (even unintentionally) advice to any of 
those applicants that is influenced by his or her knowledge about 
another applicant's bids or bidding strategies in violation of the 
prohibition on certain communications among auction applicants. A 
violation of the

[[Page 50772]]

prohibition could also occur if the authorized bidders are different 
individuals employed by the same organization (e.g., a law firm, 
engineering firm, or consulting firm). In the latter case, at a 
minimum, applicants should certify on their applications that 
precautionary steps have been taken to prevent communications between 
authorized bidders and that the applicant and its bidders will comply 
with the prohibition on certain communications.
    37. The Commission reminds potential applicants that they may 
discuss the auction application or bids for specific toll free numbers 
with the counsel, consultant, or expert of their choice before the 
auction application deadline. Furthermore, the same third-party 
individual could continue to give advice regarding the application 
after the deadline, provided that no information pertaining to bids or 
bidding strategies, including toll free numbers selected on the auction 
application, is conveyed to that individual. To the extent potential 
applicants can develop bidding instructions prior to the application 
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.
    38. 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 prohibition, an 
applicant's statement to the press of its intent not to place bids in 
the auction could give rise to a finding of a prohibited communications 
violation.
5. Certifications Related to the Prohibition on Certain Communications
    39. When submitting its auction application, each applicant for the 
833 Auction must certify its compliance with the prohibition on certain 
communications. One commenter supports this certification. As in the 
Commission's spectrum and universal service support auctions, 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 the prohibition on 
certain communications may be subject to sanctions, including among 
other things, forfeiture and a prohibition from participating further 
in the 833 Auction and in any future Commission auctions.
6. Duty To Report Prohibited Communications
    40. Any applicant that makes or receives a communication that 
appears to violate the prohibition on certain communications must 
report such communication in writing to the Commission and Somos staff 
immediately, and in no case later than five business days after the 
communication occurs. The Commission proposed this requirement in the 
833 Auction Comment Public Notice and received no comments on the 
proposal. 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
    41. A party reporting any information or communication that appears 
to violate the prohibition on certain communications must take care to 
ensure that any report does not itself violate the prohibition. To 
minimize the risk of inadvertent dissemination of information in such 
reports, parties reporting a potential prohibited communication must 
submit a report directly to the following individuals: (1) Margaret W. 
Wiener, Chief, Auctions Division, Office of Economics and Analytics, by 
email to [email protected]; and (2) Joel Bernstein, Vice President, 
Regulatory and Public Policy, Somos, by email to [email protected].
    42. Given the potential competitive sensitivity of public 
disclosure of information in such a report, 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 use the 
contact information provided in the 833 Auction Procedures Public 
Notice to consult with Somos and Commission staff about the procedures 
for submitting such reports.
8. Additional FCC Auction Information Concerning the Prohibition on 
Certain Communications
    43. The Commission adopts its proposal in the 833 Auction Comment 
Public Notice to rely on past precedent and guidance regarding its 
rules on prohibited communications in connection with Commission 
spectrum auctions. The Commission received no comments on this 
proposal. A summary listing of documents addressing the application of 
Sec.  1.2105(c) of the Commission's rules (the rule on prohibited 
communications for Commission spectrum auctions) is available on the 
Commission's auction web page at https://www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications/.
9. Antitrust Laws
    44. Regardless of compliance with the Commission's rules, 
applicants remain subject to the antitrust laws, which are designed to 
prevent anticompetitive behavior in the marketplace. Compliance with 
the duty to report prohibited communications 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 an auction 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.
    45. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the Federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. If an applicant 
is found to have violated the antitrust laws or the Commission's rules 
in connection with its participation in the competitive bidding 
process, it may be subject to a forfeiture and may be prohibited from 
participating further in the 833 Auction and in future auctions, among 
other sanctions.

C. Restrictions on Agreements

    46. To ensure the competitiveness of the 833 Auction, the 
Commission proposed certain restrictions on agreements related to the 
toll free

[[Page 50773]]

numbers being auctioned. The 833 Auction Procedures Public Notice 
addresses the proposals raised in the 833 Auction Comment Public Notice 
to restrict agreements among auction applicants and agreements among 
RespOrgs and to disclose agreements between RespOrgs and potential 
subscribers.
1. Agreements Among Applicants
    47. The Commission adopts its proposal in the Auction 833 Comment 
Public Notice to prohibit certain agreements among applicants in the 
833 Auction (regardless of whether the applicants are RespOrgs or 
potential subscribers). The Commission received no comments on this 
proposal. The prohibition applies to any agreements, arrangements, or 
understandings of any kind to which the applicant (including any party 
that controls or is controlled by the applicant) is a party relating to 
the toll free numbers being auctioned that address or communicate 
directly or indirectly bids (including specific prices), bidding 
strategies (including the specific numbers on which to bid or not to 
bid), or the post-auction market for toll free numbers.
    48. The Commission also adopts its proposal to define ``applicant'' 
for these purposes broadly to include: All controlling interests in the 
entity submitting the auction application; all holders of partnership 
and other ownership interests and any stock interest amounting to 10 
percent or more of the entity, or outstanding stock, or outstanding 
voting stock of the entity submitting the auction application; all 
officers and directors of that entity; and any entity listed as a 
potential subscriber on whose behalf the entity submitting the auction 
application will be bidding. Although the definition of ``applicant'' 
for these purposes includes any entity listed as a potential subscriber 
on whose behalf the entity submitting the auction application will be 
bidding, the restriction does not prohibit the agreement necessary to 
provide authorization to the RespOrg applicant.
    49. This prohibition will not apply to agreements unrelated to the 
toll free numbers being offered in the 833 Auction. Business 
discussions and negotiations that are unrelated to bidding in the 833 
Auction and that do not convey information about the numbers being 
auctioned or bidding strategies are not prohibited, and thus, 
agreements reached by such communications unrelated to the toll free 
numbers being auctioned will not be prohibited.
2. Agreements Among RespOrgs
    50. The Commission prohibits auction-related agreements among 
RespOrgs even where only one of the RespOrgs is an applicant in the 833 
Auction. The Commission received no comments on the restriction 
proposed in the 833 Auction Comment Public Notice. Given RespOrgs' 
position in the toll free number market, the Commission adopts its 
proposal to prohibit any applicant RespOrg from having an agreement 
related to the toll free numbers being offered in the 833 Auction with 
a non-applicant RespOrg. Thus, any RespOrg interested in acquiring the 
rights to any of the toll free numbers being auctioned must participate 
in the auction directly.
    51. Similar to the prohibition on agreements among applicants, the 
prohibition among RespOrgs will not apply to agreements unrelated to 
the toll free numbers being offered in the 833 Auction. Because 
business discussions and negotiations that are unrelated to bidding in 
the 833 Auction and that do not convey information about the numbers 
being auctioned or bidding strategies are not prohibited, agreements 
reached by such communications unrelated to the toll free numbers being 
auctioned will not be prohibited.
    52. In addition, the prohibition on agreements among RespOrgs would 
not apply to RespOrgs that are commonly controlled. Commonly-controlled 
entities are those in which the same individual or entity either 
directly or indirectly holds a controlling interest (as determined by 
positive or negative de jure or de facto control). When RespOrgs share 
a common officer or director or control, the Commission presumes that 
bids and bid strategies will be communicated. Moreover, the Commission 
reiterates, since commonly controlled RespOrgs cannot submit multiple 
applications, if they wish to apply for the 833 Auction, they will need 
to choose one of the entities to be the applicant and disclose the 
existence of the other commonly-controlled RespOrgs in the application.
3. Agreements Between RespOrgs and Potential Subscribers
    53. Any applicant RespOrg that bids for a potential subscriber must 
acquire a letter of authorization from the potential subscriber. In the 
833 Auction Comment Public Notice, the Commission recognized the unique 
position of RespOrgs, in that they can participate in the auction both 
on their own behalf and on behalf of other entities. Thus, the 
Commission believes that the relationship between an applicant RespOrg 
and a potential subscriber for which it is applying to bid should be 
formally authorized and transparent so that it can be easily verified. 
To that end, the Commission proposed to require any applicant RespOrg 
that bids for a potential subscriber to acquire a letter of 
authorization from the potential subscriber. No comments were received 
on the proposal. Based on the need to verify the relationship, the 
Commission will require a letter of authorization that clearly 
identifies the parties (both the potential subscriber and RespOrg) and 
toll free number(s) in which the RespOrg will bid for the potential 
subscriber. That letter must be dated and signed by the potential 
subscriber. Moreover, because an applicant RespOrg bidding on behalf of 
a potential subscriber is ultimately responsible for complying with all 
post-auction requirements, it is the responsibility of the applicant 
RespOrg to ensure the authorization by the potential subscriber is 
adequate (e.g., has been signed by a person with authority to bind the 
entity).
    54. The 833 Auction Comment Public Notice also sought comment on 
whether to require any applicant RespOrg bidding on behalf of a 
potential subscriber to provide the letter of authorization as part of 
its auction application (e.g., by uploading it as an attachment) or to 
allow the applicant RespOrg to certify that it is in possession of the 
letter and be able to produce it to the Commission if requested. The 
Commission received no comments on either option. Since the upload 
process should not be burdensome and uploading the document should help 
Somos verify the relationship, the Commission will require any 
applicant RespOrg that is bidding on behalf of a potential subscriber 
to upload the letter of authorization as part of its auction 
application. The Commission directs Somos to withhold the public 
disclosure of these attachments until after the bidding, since the 
letters of authorization will contain specific information on toll free 
numbers being sought by the potential subscriber.

D. Limited Information Procedures During the Auction Process

    55. Consistent with the procedures in many recent Commission 
auctions, the Commission adopts its proposal that Somos conduct the 833 
Auction using procedures for limited information disclosure (sometimes 
also referred to as anonymous bidding). The Commission received no 
comments on its proposal to use limited information procedures.

[[Page 50774]]

Thus, the Commission directs Somos to withhold, until after the close 
of bidding and announcement of auction results, the public release of 
bidders' particular 833 number selections and any information that may 
reveal the identities of bidders placing bids and taking other bidding-
related actions. More specifically, the following information will not 
be made public until after bidding has closed: (1) The numbers that an 
applicant selects for bidding in its auction application, (2) the 
amount of any upfront payment made by or on behalf of an applicant for 
the 833 Auction, (3) any applicant's bidding eligibility, and (4) any 
other bidding-related information that might reveal the identity of the 
bidder placing a bid or the amount of the bid.
    56. Because the 833 Auction will be conducted using a single round 
of bidding, the Commission does not anticipate that there will be the 
same need for release of bidding-related actions during the auction 
that there would be in a multiple-round auction. If such circumstances 
were to arise prior to the release of non-public information and 
auction results, however, the Commission directs Somos to avoid 
releasing any information that may indicate the identity of any bidders 
taking such actions.
    57. Moreover, after receiving no comments on the proposal in the 
833 Auction Comment Public Notice to make public bidders' number 
selections, upfront payment amounts, bids, and any other bidding-
related actions and information after the close of bidding, the 
Commission adopts the proposal. The Commission believes making this 
information available to the public, after bidding is complete, will 
increase auction transparency and allow the public generally to 
evaluate the experiment in using competitive bidding as a toll free 
number assignment method.

E. Responsibility for Winning Bid Payment

    58. Any 833 Auction applicant, including a RespOrg participating on 
behalf of one or more potential subscribers, assumes a binding 
obligation to pay its full winning bid amount, and is responsible for 
complying with all post-auction requirements, regardless of whether a 
potential subscriber on whose behalf the RespOrg bid fulfills its 
financial or contractual obligation to the RespOrg. While an applicant 
RespOrg may seek reimbursement from the potential subscriber for which 
it bid, the RespOrg--as the bidder in the auction--is ultimately 
responsible for full payment of any winning bid.

III. Applying To Participate in the 833 Auction

A. General Information Regarding the Auction Application

    59. Any party interested in obtaining an 833 number available 
through the auction must submit an application (FCC Form 833) to become 
qualified to bid in the 833 Auction. An application to participate in 
the 833 Auction, referred to in the 833 Auction Procedures Public 
Notice as an ``auction application,'' provides information that Somos, 
as the auctioneer, will use to determine whether the applicant is 
qualified to participate in the auction. Eligibility to participate in 
the 833 Auction is based on an applicant's auction application, 
including its certifications made under penalty of perjury, and on the 
applicant's submission of a sufficient upfront payment for the auction.
    60. A party seeking to participate in the 833 Auction must file an 
FCC Form 833 electronically via the Somos Auction System prior to 6:00 
p.m. ET on October 18, 2019, following the procedures prescribed in the 
833 Auction Procedures Public Notice and any FCC Form 833 instructions 
provided by Somos. The 833 Auction Procedures Public Notice describes 
more fully the information disclosures and certifications required in 
the auction application. An applicant that files an application to 
participate in the 833 Auction will be subject to the prohibition on 
certain communications, beginning at the deadline for filing auction 
applications--6:00 p.m. ET on October 18, 2019. The prohibition will 
end for applicants on the post-auction final payment (with late fee) 
deadline. Each applicant remains subject to the prohibition until the 
end of the prohibition period, regardless of whether or not it becomes 
qualified to bid or actually submits any bids.
    61. An applicant bears full responsibility for submitting an 
accurate, complete, and timely auction application. Each applicant must 
make a series of certifications under penalty of perjury on its FCC 
Form 833 related to the information provided in its application and its 
participation in the auction. If an applicant fails to make the 
required certifications in its FCC Form 833 by the filing deadline, its 
application will be deemed unacceptable for filing and cannot be 
corrected after the filing deadline.
    62. An applicant should note that submitting an FCC Form 833 (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 in an application may result 
in penalties, including monetary forfeitures, license forfeitures, 
ineligibility to participate in future auctions, and/or criminal 
prosecution.
    63. Applicants are cautioned that because the required information 
submitted in an FCC Form 833 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.
    64. A party may not submit more than one auction application for 
the 833 Auction. Similarly, a party can participate in the 833 Auction 
only through a single bidding entity; either it can participate 
indirectly through a RespOrg or directly by submitting its own 
application. As in Commission spectrum auctions, if a party submits 
multiple auction applications, only one application may be the basis 
for that party to become qualified to bid in the auction.
    65. After the initial auction application filing deadline, Somos 
staff will review all timely submitted applications for the 833 Auction 
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, Somos, in its capacity as auctioneer, will release 
a public notice identifying the applications as complete or incomplete, 
and 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. After review of resubmitted 
applications is complete,

[[Page 50775]]

Somos will issue a public notice identifying the applicants that are 
qualified to bid. Somos should release this notice at least five 
business days before the bidding (i.e., by December 10, 2019).
    66. The 833 Auction Procedures Public Notice provides additional 
details regarding certain information required to be submitted in the 
FCC Form 833. In addition, an applicant should consult the Commission's 
rules, the Toll Free Assignment Modernization Order, and any additional 
releases specific to the 833 Auction (including instructions on 
submitting a FCC Form 833 provided by Somos) to ensure that, in 
addition to the materials described in the 833 Auction Procedures 
Public Notice, all required information is included in its auction 
application. To the extent the information in the 833 Auction 
Procedures Public Notice does not address a potential applicant's 
specific operating structure, or if the applicant needs additional 
information or guidance concerning the following disclosure 
requirements, the applicant should review the educational materials for 
the 833 Auction and/or use the contact information provided in the 833 
Auction Procedures Public Notice to consult with Somos and Commission 
staff to better understand the information it must submit in its 
auction application.

B. 833 Auction Number Selection

    67. Each 833 Auction applicant must identify in its auction 
application any toll free number (from the list of available 833 
numbers) on which it may wish to place a bid during the auction. 
Moreover, for each number it selects, the applicant must identify the 
party (either itself or another party) for which it is bidding.
    68. The 833 Auction Comment Public Notice proposed requiring 
applicants to select the toll free numbers for which they are 
interested in bidding and, for each number, identify the party for 
which it is bidding to allow Somos to verify that a potential 
subscriber is seeking to bid based on only one application and make it 
clear to applicants that they can represent only one entity per number, 
including itself. The Commission received no comments on this proposal. 
Therefore, based for the reasons set forth in the 833 Auction Comment 
Public Notice, the Commission adopts this application requirement.
    69. The Commission also adopts its proposal to consider any change 
made to the numbers selected on an application or the party for which 
an applicant is bidding to be a major modification of the application, 
which will result in a dismissal of the application. Finalizing the 
list of potential toll free numbers and parties for which applicants 
may be bidding provides certainty in the application review and auction 
qualification process. Therefore, the Commission requires applicants to 
select the toll free numbers and identify the party for which it is 
bidding on its application by the application deadline. If qualified to 
bid in the auction, the entity will not be obligated to place a bid on 
each of the numbers selected in its application, but an entity will not 
be able to bid on any numbers that it does not select in its 
application. If a particular available toll free number is not selected 
on any auction application, it will not be available in the auction.
    70. Moreover, the Commission directs Somos to withhold from public 
disclosure the 833 toll free numbers selected by an applicant on its 
auction application until after the bidding is complete. The Commission 
received no comments on its proposal in the 833 Auction Comment Public 
Notice to make public the name of party (or parties) for which an 
applicant is bidding once Somos announces which applications are 
complete or incomplete. The Commission adopts the proposal because, 
consistent with the practice in Commission spectrum auctions, it finds 
that competition will be enhanced by withholding certain information, 
such as toll free number selections, from other applicants, while still 
providing bidders with information that will allow them to accurately 
assess the legitimacy of their auction opponents.

C. Ownership Disclosure Requirements

    71. Any party interested in participating in the 833 Auction must 
provide, in its auction application, the same level of ownership 
disclosure required in Commission spectrum auctions under Sec.  
1.2112(a) of the Commission's rules. Thus, each applicant must 
disclose: (1) The real party or parties in interest of the applicant or 
of the application; (2) any direct interest holder of 10 percent or 
greater; (3) any indirect interest holder of 10 percent or greater; and 
(4) any FCC-regulated entity or applicant for an FCC license in which 
the applicant, any real party in interest, or any direct interest 
holder of 10 percent or greater, owns 10 percent or more stock, whether 
voting or non-voting. An applicant must list all parties holding 
indirect ownership interests in the applicant as determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain that equals 10 percent or more of the 
applicant, except that if the ownership percentage for an interest in 
any link in the chain exceeds 50 percent or represents actual control, 
it shall be treated and reported as if it were a 100 percent interest.
    72. The 833 Auction Comment Public Notice proposed using the 
ownership disclosure rule used in Commission spectrum auctions. One 
commenter argued that the disclosure requirements of Sec.  1.2112(a) 
are unnecessary for the 833 Auction. Specifically, 1-800 Contacts 
argues that the 10 percent disclosure threshold for direct and indirect 
interest holders may be relevant to commercial wireless service 
auctions (because of spectrum aggregation limits) or broadcast auctions 
(because of multiple ownership, cross ownership and foreign ownership), 
but not toll free number auctions because toll free numbers have no 
such limits. 1-800 Contacts therefore argues that the proposed 
disclosure requirement is ``exceedingly burdensome, particularly on 
prospective auction participants that may be held through complex 
private investment funds.'' In lieu of such disclosure, 1-800 Contacts 
proposes that auction applicants certify that they and their 
attributable interest holders are in compliance with the Commission's 
auction rules, including the prohibition on certain communications.
    73. While 1-800 Contacts is correct that the ownership disclosure 
requirements of Sec.  1.2112 aid in the Commission's enforcement of 
certain restrictions, such as ownership limits, 1-800 Contacts fails to 
account for the fact that the 10 percent reporting requirements provide 
other benefits to the other auction participants. Responding to similar 
arguments against ownership disclosure made in the Part 1 competitive 
bidding proceeding, the Commission stated that the 10 percent reporting 
requirement ``helps competing bidders accurately assess the legitimacy 
of their auction opponents and . . . aids bidders by providing them 
with information about their auction competitors and alerting them to 
entities subject to [the Commission's] anti-collusion rules.'' Such 
reasoning applies in the 833 Auction as well. As 1-800 Contacts itself 
supports the broad application of the prohibition on certain 
communications, other auction participants rely on the ownership 
disclosure in auction applications to know with which parties they are 
prohibited from communicating. Moreover, the Commission disagrees that 
such disclosure is overly

[[Page 50776]]

burdensome. Auction applicants have provided such information in a 
variety of Commission auctions for over 20 years, and such information 
provides transparency regarding the identity of auction participants--
not only to the Commission, but also to other auction participants and 
the public generally. Thus, the Commission adopts its proposal in the 
833 Auction Comment Public Notice to require the same level of 
ownership disclosure required in Sec.  1.2112(a) of the Commission's 
rules.

D. Disclosure of Agreements and Bidding Arrangements

    74. To the extent that an applicant may be a party to an auction-
related agreement, it must disclose the agreement on its auction 
application. Specifically, the 833 Auction Comment Public Notice 
proposed to require an applicant to provide in its auction application 
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 toll free numbers 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. 
For purposes of this disclosure, a controlling interest includes all 
individuals or entities with positive or negative de jure or de facto 
control of the applicant. The Commission received no comments on this 
proposal. Because disclosure of these arrangements provides 
transparency about the auction applicants and any parties with whom 
they have entered into agreements regarding the toll free numbers being 
offered in the auction, the Commission adopts this disclosure 
requirement. Additionally, if an applicant in the 833 Auction is a 
potential subscriber but is also bidding on behalf of another potential 
subscriber, it would need to disclose the existence of such an 
agreement. In such circumstances, the applicant would need to briefly 
describe the agreement, but must not disclose the toll free number(s) 
for which it is bidding on behalf of the other potential subscriber(s).
    75. In connection with the agreement disclosure requirement, the 
applicant must certify under penalty of perjury in its auction 
application that it has described, and identified each party to, any 
such agreements, arrangements, or understandings into which it has 
entered. An applicant that enters into any agreement relating to the 
toll free numbers being auctioned after the auction application 
deadline is subject to the same disclosure obligations it would be for 
agreements existing at the application deadline, and it must maintain 
the accuracy and completeness of the information in its pending auction 
application.
    76. For purposes of making the required agreement disclosures on 
the auction application, if parties agree in principle on all material 
terms prior to the application filing deadline, the applicant must 
provide a brief description of, and identify the other party or parties 
to, the agreement, even if the agreement has not been reduced to 
writing. However, if the parties have not agreed in principle by the 
application filing deadline, the applicant should not describe, or 
include the names of parties to, the discussions on its application.
    77. Finally, the Commission sought comment in the 833 Auction 
Comment Public Notice on the level of disclosure for auction-related 
agreements, noting that in its spectrum auctions, an applicant must 
disclose certain limited information about the agreements in their pre-
auction short-form applications (e.g., the parties to the agreement and 
a brief summary of the agreements), while winning bidders often may be 
required to provide more detailed information about the agreements in 
their post-auction long-form applications. The Commission received no 
comments on this issue. It concludes that, for the 833 Auction, it is 
sufficient to require applicants to identify the parties and provide a 
brief description of the agreement because it will provide enough 
detail to understand the arrangement without being overly burdensome on 
auction applicants. When identifying the parties to any agreement, and 
providing a brief description of such, applicants should take care to 
avoid providing any details that would indicate specific toll free 
numbers.

E. Authorized Bidders

    78. An applicant must designate at least one individual as an 
authorized bidder, and no more than three, in its auction application. 
In the Commission's spectrum auctions, the rules prohibit an individual 
from serving as an authorized bidder for more than one auction 
applicant. This restriction ensures that a single individual with 
knowledge of the bidding strategies of more than one applicant cannot 
become even an unwitting conduit of bidding information between those 
applicants in violation of the Commission's prohibition on certain 
communications among auction applicants. The Commission finds that a 
similar restriction would be serve the integrity of the 833 Auction, 
and accordingly, it prohibits an individual from serving as an 
authorized bidder for more than one auction applicant in the 833 
Auction.

F. Provisions Regarding Current Defaulters

    79. The Commission adopts its proposal in the Auction 833 Comment 
Public Notice to adhere to its practice in Commission spectrum auctions 
regarding current defaults and delinquencies and to require each 
applicant in the 833 Auction to certify that it is not currently in 
default or delinquent on a non-tax debt to the Federal Government. The 
Commission received no comments on the proposal and takes this step to 
preserve the integrity of the auction process and to ensure that 
bidders are capable of meeting their financial commitments. As is the 
Commission's practice in spectrum auctions, an applicant will be 
considered a ``current defaulter'' or ``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.
    80. Also consistent with Commission spectrum auctions, the 
applicant's status as a current defaulter will be determined as of the 
auction application deadline. After the deadline, an applicant can 
dispute the status of the debt, but as noted in the 833 Auction Comment 
Pubic Notice and consistent with the Commission's practice in spectrum 
auctions, applicants will not be able to cure the default or 
delinquency after the auction application deadline to participate in 
the auction. Thus, prospective applicants should pay any delinquent 
debts prior to the auction application deadline.
    81. In addition to the 833 Auction Procedures Public Notice, 
applicants are encouraged to review previous guidance on default and 
delinquency disclosure requirements in the context of the auction 
application process. Parties are also encouraged to consult with the 
Somos staff if they have any questions about default and delinquency 
disclosure requirements.
    82. Applicants are encouraged to check the Commission's Red Light 
Display System for information

[[Page 50777]]

regarding debts currently owed to the Commission. To access the 
Commission's Red Light Display System, go to: https://apps.fcc.gov/redlight/login.cfm. The Commission reminds each applicant, however, 
that its Red Light Display System may not be determinative of an 
auction applicant's ability to comply with the default and delinquency 
disclosure requirements (e.g., an applicant may be delinquent on a non-
tax debt to another Federal agency). Thus, an auction applicant's lack 
of current ``red light'' status is not necessarily determinative of its 
eligibility to participate in the auction. The Commission strongly 
encourages each applicant to carefully review all records and other 
available Federal agency databases and information sources to determine 
whether the applicant, or any of its affiliates, or any of its 
controlling interests, or any of the affiliates of its controlling 
interests, owes or was ever delinquent in the payment of non-tax debt 
owed to any Federal agency.

G. Additional Disclosures and Certifications

    83. In the 833 Auction Comment Public Notice, the Commission sought 
comment on whether there are other certifications that it should 
consider requiring auction applicants to make in order to become 
qualified to bid in the 833 Auction or any legal restrictions that may 
be relevant. The Commission received no comments and therefore 
concludes no further certifications are necessary.

H. Modifications to Auction Application

1. Only Minor Modifications Allowed
    84. After the initial application filing deadline, an applicant 
will be permitted to make only minor changes to its application 
consistent with the Toll Free Assignment Modernization Order. Examples 
of minor changes include the deletion or addition of authorized bidders 
(to a maximum of three), and the revision of addresses and telephone 
numbers of the applicant, its responsible party, and its contact 
person. Major modification to an auction application (e.g., change in 
toll free number selections, change in the party on whose behalf the 
applicant will be bidding, certain changes in ownership that would 
constitute an assignment or transfer of control of the applicant, 
change in applicant's legal classification that results in a change in 
control, or change in the required certifications) will not be 
permitted after the initial auction application filing deadline. If an 
amendment reporting changes is a ``major amendment,'' the major 
amendment will not be accepted and may result in the dismissal of the 
application.
2. Duty To Maintain Accuracy and Completeness of Auction Application
    85. The Commission adopts a procedure, consistent with its spectrum 
auctions, requiring each applicant in the 833 Auction to maintain the 
accuracy and completeness of information furnished in its pending 
auction application. For purposes maintaining the accuracy of the 
information in an auction application and associated attachments, the 
application remains pending until the release of a public notice 
announcing the winning bidders. 833 Auction applicants remain subject 
to the prohibition on certain communications until the post-auction 
deadline for making final payments (with a late fee) on winning bids. 
Also, consistent with the requirements for Commission spectrum 
auctions, an applicant for the 833 Auction must furnish additional or 
corrected information to Somos within five business days after a 
significant occurrence, or amend its auction application 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.
    86. An applicant's ability to modify its auction application in the 
Somos Auction System may be limited at certain times--e.g., 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. During these periods, an applicant may be able to 
view its submitted application, but will be unable to make changes. If 
an applicant needs to make other permissible minor changes to its 
auction application at any time other than during the resubmission 
filing window, it must submit a letter briefly summarizing the changes 
to its auction application via email to [email protected]. The 
email summarizing the changes must include a subject line referring to 
the 833 Auction and the name of the applicant, for example, ``Re: 
Changes to 833 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 
auction application(s) electronically in the Somos Auction System once 
it is available to applicants.
    87. As with filing the auction application, any amendment(s) to the 
application and related statements of fact must be certified by an 
authorized representative of the applicant with authority to bind the 
applicant. Applicants should note that submission of any such amendment 
or related statement of fact constitutes a representation by the person 
certifying that he or she is an authorized representative with such 
authority and that the contents of the amendment or statement of fact 
are true and correct.
    88. Questions about amendments to the auction application should be 
directed to Somos at [email protected] or (844) 439-7666.

IV. Preparing for Bidding in the 833 Auction

A. Due Diligence

    89. Each applicant has the sole responsibility for investigating 
and evaluating all technical and marketplace factors that may have a 
bearing on the value of the toll free numbers that it is seeking in the 
833 Auction. The Commission makes no representations or warranties 
about the use of the toll free numbers. Each applicant should be aware 
that the 833 Auction represents an opportunity to receive the right to 
use certain toll free numbers and that the Commission's statutory 
authority to add, modify, and eliminate rules governing numbering 
applies equally to all toll free numbers, whether acquired through the 
competitive bidding process or otherwise. In addition, the 833 Auction 
does not constitute an endorsement by the Commission of any particular 
service, technology, or product, nor does a right to use the toll free 
numbers constitute a guarantee of business success.
    90. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, the Commission strongly encourages each potential 
applicant to review all underlying Commission orders, including the 
Toll Free Assignment Modernization Order. Each potential applicant 
should perform due diligence to assure itself that, should it become a 
winning bidder for the right to use one or more 833 numbers offered in 
the auction, it will be able to comply with all financial, technical, 
and legal requirements.

[[Page 50778]]

    91. The Commission also strongly encourages each applicant for the 
833 Auction to continue to conduct its own research throughout the 
auction in order to determine the existence of pending or future 
administrative or judicial proceedings that might affect its 
participation in the auction. Each applicant is responsible for 
assessing the likelihood of the various possible outcomes and for 
considering the potential impact on toll free numbers available in the 
833 Auction. The due diligence considerations mentioned in the 833 
Auction Procedures Public Notice do not constitute an exhaustive list 
of steps that should be undertaken prior to participating in the 833 
Auction. The burden is on the potential applicant to determine how much 
research to undertake, depending upon the specific facts and 
circumstances related to its interests.
    92. 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 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 database.
    93. 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 toll free numbers available in the 833 Auction. Each potential 
applicant is responsible for undertaking research to ensure that any 
rights to use toll free numbers won in this auction will be suitable 
for its business plans and needs. Each potential applicant must 
undertake its own assessment of the relevance and importance of 
information gathered as part of its due diligence efforts.

B. Bidder Education

    94. The Commission directs Somos to provide detailed educational 
information to would-be participants before the opening of the auction 
application filing window on October 7, 2019. Specifically, Somos must 
provide educational materials on the pre-auction processes in advance 
of the opening of the application window, beginning with the release of 
step-by-step instructions for completing the auction application. In 
addition, the Commission directs Somos to provide an online tutorial 
covering information on application procedures (including pre-auction 
preparation, completing auction applications, and the application 
review process) and bidding procedures. The Commission further directs 
Somos to provide educational materials on the bidding process and an 
opportunity to practice the bid upload process in advance of the 
bidding.

C. Registration for Auction ID

    95. As a first step in the 833 Auction application process, an 
interested party must acquire an ``Auction ID'' from Somos, which will 
verify the potential applicant's identity. Any entity that cannot be 
verified through the Somos verification process, or is otherwise unable 
to participate in the auction directly, will have the option to 
participate in the auction through a RespOrg (i.e., the RespOrg will 
bid on its behalf and will be responsible for making final payment on 
any winning bids). The Commission proposed this registration process in 
the 833 Auction Comment Public Notice and received no comments on it. 
This registration procedure is consistent with the need to obtain an 
FCC Registration Number (FRN) to apply for Commission auctions. 
Therefore, the Commission adopts the proposal and urges interested 
parties to allow sufficient time prior to the application deadline to 
register so that, should any party encounter difficulties in the 
registration process, it would have time to make arrangements to 
alternatively participate in the auction through a RespOrg.

D. Auction Application

    96. Once Somos verifies an interested party's identity and issues 
an ``Auction ID'' to it, the entity must then submit an auction 
application (FCC Form 833) electronically via the Somos Auction System. 
Applicants must follow the FCC Form 833 instructions that Somos will 
release before the application window opens. While no application fee 
will be required, the applicant must submit a sufficient upfront 
payment to become a qualified bidder.
    97. The auction application will become available with the opening 
of the initial filing window at 12:00 noon ET on October 7, 2019 and 
must be submitted prior to 6:00 p.m. ET on October 18, 2019. Late 
applications will not be accepted. Applicants are strongly encouraged 
to file early and are responsible for allowing adequate time for filing 
their applications.

E. Application Processing and Minor Modifications

1. Public Notice of Applicant's Initial Application Status and 
Opportunity for Minor Modifications
    98. After the deadline for filing auction applications, Somos 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. After review 
of all the auction applications, Somos will issue a public notice with 
applicants' initial application status as either complete or 
incomplete. 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 auction application 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 Somos staff member who can answer questions specific to the 
application.
    99. After the initial application filing deadline on October 18, 
2019, applicants can make only minor modifications to their 
applications. Major modifications (e.g., change toll free number 
selections, change in the party on whose behalf the applicant will be 
bidding, certain changes in ownership that would constitute an 
assignment or transfer of control of the applicant, change in 
applicant's legal classification that results in a change in control, 
or change in the required certifications) 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 the ultimate 
determination of whether and to what extent the applicant is qualified 
to participate in the 833 Auction.
    100. Somos staff will communicate only with an applicant's contact 
person or certifying official, as designated on the auction 
application, unless the applicant's certifying official or contact 
person notifies Somos staff in writing that another representative is 
authorized to speak on the applicant's behalf. Authorizations may be 
sent by email to [email protected].

[[Page 50779]]

2. Public Notice of Applicant's Final Application Status After Upfront 
Payment Deadline
    101. After Somos staff review resubmitted applications, Somos will 
release a public notice identifying applicants that have become 
qualified bidders for that auction. Qualified bidders are those 
applicants with submitted auctions applications that are deemed timely 
filed and complete and who provided a sufficient upfront payment.

F. Upfront Payments

1. Amount of Upfront Payment and Bidding Eligibility
    102. Each potential bidder must provide an upfront payment in a 
specified amount for the maximum number of toll free numbers on which 
it may wish to submit a bid in the 833 Auction. An upfront payment is a 
refundable deposit made by each auction applicant to establish its 
eligibility to bid in the auction. Upfront payments protect against 
frivolous or insincere bidding and provide a source of funds from which 
to collect payments owed at the close of bidding.
    103. In the 833 Auction Comment Public Notice, the Commission 
proposed that potential bidders provide an upfront payment of $100 per 
number because it wanted to encourage only serious, qualified bidders, 
while at the same time, not discourage participation in the auction. 
The Commission received no comments on the upfront payment proposal. It 
concludes that the proposed upfront payment requirement and the 
proposed amount per toll free number will achieve the Commission's 
stated goals, and therefore, adopts the proposal. Moreover, since the 
833 Auction will serve as an experiment in using competitive bidding 
for assigning toll free numbers, the values of the auctioned numbers 
can help inform the Commission's decisions regarding upfront payment 
amounts in any future toll free number auctions.
    104. The Commission reiterates that, if a bidder's winning bids 
total less than its upfront payment, any remaining amount will be 
refunded to the bidder, minus any default payments that the bidder may 
owe. Similarly, if a bidder does not have any winning bids, it will be 
reimbursed the entirety of its upfront payment. Moreover, to become a 
qualified bidder in the 833 Auction, in addition to having a complete 
auction application, an interested party must submit a sufficient 
upfront payment. Thus, at a minimum, an applicant must submit $100 
(i.e., enough to establish eligibility to bid on at least one toll free 
number). Failure to deliver a sufficient upfront payment as instructed 
by the applicable upfront payment deadline will result in dismissal of 
the auction application and disqualification from participation in the 
auction.
2. Submitting an Upfront Payment
    105. In order to be eligible to bid in the 833 Auction, an 
applicant must submit a sufficient upfront payment to Somos before 6:00 
p.m. ET on November 27, 2019. Each applicant is responsible for 
ensuring timely submission of its upfront payment.
    106. All payments must be made in U.S. dollars.
    107. The 833 Auction Comment Public Notice proposed to require 
upfront payments of more than $300 be made via wire transfer. 
Specifically, the Commission proposed that any upfront payment in 
excess of $300 must be made through a wire transfer to Somos (or its 
payment designee), and any amounts under this threshold (i.e., $300 or 
less) can be made using an alternative payment collection process, such 
as Automated Clearing House (ACH). The Commission received no comments 
on this proposal or the threshold amount. It finds that the proposed 
approach will ensure prompt and assured transfer of funds for those who 
plan to bid on more than three toll free numbers, while the alternative 
payment process should make it easier for individuals or small entities 
that are interested in only a few toll free numbers, and therefore 
adopts its proposals. It also adopts the proposal to exclude payments 
via check or credit card, as such payment processes have increased 
risks associated with them, which would not be conducive to a timely 
auction. Thus, the Commission will require payment by wire transfer for 
any amount in excess of $300 and allow payment by ACH for $300 or less. 
Regardless of its payment method, each applicant is responsible for 
obtaining confirmation from its financial institution that its payment 
to Somos was successful.
    108. Wire Transfer Payment Information. If an applicant is 
providing its upfront payment by wire transfer, it should coordinate 
with its financial institution well ahead of the due date and allow 
sufficient time for the transfer to be initiated and completed prior to 
the deadline. The Commission has repeatedly cautioned auction 
participants about the importance of planning ahead to prepare for 
unforeseen last-minute difficulties in making payments by wire 
transfer. The following information will be needed for wire transfers:

ABA Routing Number: 021000021
Receiving Bank: JP Morgan Chase Bank, 270 Park Avenue, New York, NY 
10017
Beneficiary: Somos, Inc., Two Tower Center Boulevard, 20th Floor, East 
Brunswick, NJ 08816
Account Number: 511665892
Originating Bank Information (OBI field): (skip one space between each 
information item)
``833 AUCTIONPAY''
Applicant Auction ID Number: (same as FCC Form 833)

Payer Name: (use exact same entity or individual name as used in FCC 
Form 833)

    109. ACH Payment Information. If an applicant is providing its 
upfront payment by ACH, the following information will be needed:

ABA Routing Number: 021000021
Receiving Bank: JP Morgan Chase Bank, 270 Park Avenue, New York, NY 
10017
Beneficiary: Somos, Inc., Two Tower Center Boulevard, 20th Floor, East 
Brunswick, NJ 08816
Account Number: 511665892

G. Bidding via Somos Auction System

    110. Bidders will be able to participate in the 833 Auction over 
the internet using the Somos Auction System. Only qualified bidders are 
permitted to bid.
    111. The Commission and Somos make no warranties whatsoever, and 
shall not be deemed to have made any warranties, with respect to the 
Somos Auction System, including any implied warranties of 
merchantability or fitness for a particular purpose. In no event shall 
the Commission, Somos, or any of their 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 Somos Auction System. Moreover, 
no obligation or liability will arise out of the technical, 
programming, or other advice or service provided by Somos or the 
Commission in connection with the Somos Auction System.
    112. To the extent an issue arises with the Somos Auction System 
itself, the Commission directs Somos to take all appropriate measures 
to resolve such issues quickly and equitably. Should an issue arise 
that is outside the Somos Auction System or attributable to a bidder, 
including, but not limited to, a bidder's hardware, software, or 
internet

[[Page 50780]]

access problem that prevents the bidder from submitting a bid prior to 
the end of the bidding round, Somos (and 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 
Somos Auction System, Somos (and the Commission) shall have no 
obligation to resolve or remediate such an issue on behalf of the 
bidder. Accordingly, after the close of the bidding round, the results 
of bid processing will not be altered absent evidence of any failure in 
the Somos Auction System.

H. Fraud Alert

    113. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use the 833 Auction 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.
    114. Information about deceptive telemarketing investment schemes 
is available from the FCC as well as the FTC and SEC. Additional 
sources of information for potential bidders and investors may be 
obtained from the following sources:

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

    115. 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.

V. Bidding in the 833 Auction

A. Auction Design

    116. The Commission decided in the Toll Free Assignment 
Modernization Order that the 833 Auction will be conducted as a single 
round, sealed-bid auction. All numbers will be available simultaneously 
for bidding during the round, with the winning bid for each number 
determined solely by bids for that number, independent of the bids for 
any other number. Moreover, the Commission also chose to use a Vickrey 
auction, in which the amount paid by the winning bidder is determined 
by the second-highest bid. Therefore, in the 833 Auction, the winning 
bidder for each 833 number will be the bidder that submits the highest 
bid and it will pay the second-highest bid amount for that number.
    117. In the event that a toll free number receives only one bid, 
the right to use the toll free number will be awarded to the bidder 
submitting the sole bid and the bidder will not be required to pay 
anything to acquire the rights to the toll free number because there 
was no second-highest bid. The Commission proposed this procedure in 
the 833 Auction Comment Public Notice and received no comments on it. 
Because it is consistent with using a Vickrey auction, the Commission 
adopts the proposed procedure for any number in the 833 Auction that 
receives only one bid. The fact that the winning bidder in this 
scenario will not be required to pay anything to acquire the rights to 
the toll free number does not relieve the obligation to pay any other 
fees, including regulatory fees to the Commission.
    118. To provide for the possibility of tied bids, the Commission 
directs Somos to assign a pseudo-random number to each bid for each 
toll free number submitted to the 833 Auction. In the event that a toll 
free number receives two or more tied bids for the highest amount, the 
winning bidder will be the one with the highest pseudo-random number 
among the bidders that submitted the tied highest bids. The Commission 
proposed in the 833 Auction Comment Public Notice using the pseudo-
random number to break tied bids and received no comments on it. It 
also received no comments on the proposal that, in the case of tied 
bids, the second highest bid amount to be paid by the winning bidder 
would be the same amount as the winning's placed bid (i.e., the tied 
bid amount). The Commission finds these adopted procedures consistent 
with the Vickrey auction design and therefore adopts them as proposed.

B. Auction Structure

1. Bidding Format and Period
    119. The format for the 833 Auction will consist of one bidding 
round. As noted in the 833 Auction Comment Public Notice, the single 
round will occur on one day and the Commission anticipates that the 
round will be open for several hours. The Commission received no 
comments on the bidding format or bidding period. It directs Somos, in 
consultation with the Commission, to announce the actual start and 
finish time of the bidding round at least one week before the start of 
the auction (i.e., by December 10, 2019). This approach should provide 
certainty to the bidders, while providing Somos with flexibility to 
adjust the bidding depending on the number of qualified bidders.
    120. In the 833 Auction Comment Public Notice, the Commission 
recognized that, because this auction could involve large numbers of 
bids and the round will be open for several hours, it does not expect 
that telephone bidding will available in the 833 Auction. The 
Commission received no comments on this procedure. In the absence of 
objection and for ease of auction efficiency, the Commission directs 
Somos to conduct bidding via the internet. While Somos should have 
telephonic support available to help bidders, the bids must be 
submitted online. Therefore, bidders are strongly encouraged to 
formulate back-up contingencies to make sure they can submit their bids 
online during the bidding round.
2. Information Relating to Auction Delay, Suspension, or Cancellation
    121. The Commission adopts the proposal in the 833 Auction Comment 
Public Notice that, by public notice or by announcement during the 
auction, the Commission, or Somos in consultation with the Commission, 
may delay or suspend the auction in the event of a natural disaster, 
technical failures, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. In such cases, the Commission directs Somos to consult with 
Commission staff about resuming, rescheduling, or canceling the auction

[[Page 50781]]

in its entirety. If the bidding is delayed or suspended, the Commission 
may direct Somos to resume the auction starting from the beginning of 
the scheduled bidding round or for a shorter period, or cancel the 
auction in its entirety. The Commission will exercise this authority 
solely at its discretion.

C. Bidding Procedures

1. Bidding Eligibility
    122. To be eligible to bid in the 833 Auction, an applicant must 
submit a sufficient and timely upfront payment. The amount of the 
applicant's upfront payment will determine its bidding eligibility--
i.e., a qualified bidder may submit only the number of bids reflected 
in its upfront payment. To help illustrate this point: If an applicant 
were to select 50 numbers on its application but submits an upfront 
payment of only $1,000, it would be able to place bids on only 10 
numbers (based on an upfront payment of $100 per number).
    123. If a qualified bidder attempts to place more bids than its 
bidding eligibility allows, its entire bid submission will be rejected 
and the bidder will be given a warning and an opportunity to fix its 
bids and re-submit. Neither Somos nor the Commission, however, are 
responsible for bids submitted in which the bidder has exceeded its 
bidding eligibility. Thus, bidders are strongly encouraged submit their 
bids well before the end of the single round to account for any issues 
that may arise.
2. Bid Amounts
    124. The Commission adopts the proposal in the 833 Auction Comment 
Public Notice to allow bids only in whole dollar amounts. The 
Commission directs Somos to provide more detailed instructions on how 
qualified bidders should submit bids and an opportunity to practice the 
bid upload process. Bidders are encouraged to become familiar with the 
process well in advance of the bidding round.
3. Bid Removal
    125. A bidder will have the ability to remove any bid(s) that it 
has placed before the end of the round. The Commission directs Somos to 
provide specific instructions on how a bidder may do this. If a bidder 
removes any bid that it has placed before the end of the round, it will 
not be considered. Once the single round of bidding closes, a bidder 
may no longer remove, or otherwise withdraw, any of its bids.

VI. Post-Auction Procedures

A. Public Notice Announcing Winning Bidders

    126. In the Toll Free Assignment Modernization Order, the 
Commission stated that, once the bidding concluded, it would release a 
public notice identifying the winning bidders and establishing the 
deadline for making final payment for winning bids. The Commission also 
stated in the Toll Free Assignment Modernization Order that the public 
notice would also explain how unsold inventory will be assigned after 
the 833 Auction.
    127. In the 833 Auction Comment Public Notice, the Commission 
included, among the various duties that Somos, as the auctioneer, will 
perform, the task of announcing the winning bidders. Because Somos will 
be the entity that will accept and process the bids for the 833 
Auction, the Commission reiterates that Somos will announce the winning 
bids.
    128. As for any toll free number offered in the 833 Auction that 
(i) was not selected on any auction application, (ii) did not receive a 
bid, or (iii) received one or more bids but the winning bidder 
defaulted, the Commission will issue a decision on how it will assign 
such numbers once it reviews the complete results of the 833 Auction. 
Two commenters advocate, in the case of defaulted bids, that the 
Commission offer the toll free number to the second highest bidder. The 
Commission defers until after the auction any decision on how to handle 
any numbers offered in the 833 Auction with no bid or where the winning 
bidder defaulted. Once the Commission has all the information available 
on the 833 Auction experiment, it can better assess how to handle these 
numbers.

B. Final Payments

    129. Each winning bidder must submit the full payment for its 
winning bid(s) within 10 business days following release of the public 
notice announcing the winning bidders. Similar to the final payment 
procedures in Commission spectrum auctions, the Commission will allow a 
winning bidder to make its final payment within five additional 
business days after the applicable deadline, provided it also pays a 
late fee of 5 percent of the winning bid. The Commission also adopts 
the proposal in the 833 Auction Comment Public Notice that a winning 
bidder will declared in default and subject to the applicable default 
payment if it misses the final payment deadline and also fails to remit 
the required payment (plus the applicable late fee) by the end of the 
late payment period.
    130. Like upfront payments, final payments must be made in U.S. 
dollars and will be submitted to Somos. Moreover, the Commission adopts 
the proposal in the 833 Auction Comment Public Notice to require final 
payments in excess of $300 to be made through a wire transfer to Somos 
(or its payment designee) and any amounts under this threshold (i.e., 
$300 or less) can be made using ACH. Winning bidders can also use a 
wire transfer to submit final payments of $300 or less, but also have 
the option to use ACH. As with allowing ACH for upfront payments below 
a certain threshold, this alternative payment process should make it 
easier for individuals or small entities that are the winning bidders 
for only a few toll free numbers, while ensuring prompt and assured 
payment of funds for those who had winning bids that exceed the $300 
threshold. Moreover, as noted in the 833 Auction Comment Public Notice, 
the Commission proposed to specifically exclude payments via check or 
credit card, as such payment processes have increased risks associated 
with them, which may not be conducive to a timely post-auction process. 
For these reasons, the Commission adopts the proposal and only allows 
winning bidders to use ACH as an alternative to wire transfers for 
their final payments.

C. Refunds

    131. The Commission directs Somos to return any refunds of upfront 
payments (minus any final payments and any default payments) within 10 
business days after the late final payment deadline (i.e., within 25 
business days of the public notice announcing winning bidders). All 
refunds of upfront payment balances will be returned to the payer of 
record unless the payer submits written authorization to Somos 
instructing otherwise.

D. Auction Default Payments

    132. If a winning bidder fails to make full payment on its bid or 
otherwise defaults for any reason, it will be subject to a default 
payment of 35 percent of the defaulted bid. In the Toll Free Assignment 
Modernization Order, the Commission stated that it expected that the 
procedures for handling defaults be modeled on those used in the 
Commission's spectrum auctions, but would defer the decision until the 
pre-auction process. In the 833 Auction Comment Public Notice, the 
Commission proposed basing the default payment for the 833 Auction

[[Page 50782]]

only on a percentage of the defaulted amount, since the Commission has 
not yet decided if there will be a subsequent auction of toll free 
numbers. Specifically, the 833 Auction Comment Public Notice proposed a 
default payment of 35 percent of the defaulted bid, noting that the 
default percentage is higher than in most of Commission spectrum 
auctions to compensate for the absence of a deficiency portion of the 
default payment. The Commission received no comments on the proposed 
default procedures or percentage. Because the proposed procedure should 
sufficiently discourage insincere bidding and default, the Commission 
adopts both the proposed default procedure and default percentage. 
Moreover, if a default 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 forfeiture of their 
upfront payment and institution of proceedings to revoke any existing 
FCC authorizations held by the applicant.

E. Reserving Toll Free Numbers/Declaring a RespOrg

    133. Any potential subscriber that directly participates in the 833 
Auction and is a winning bidder must work with a RespOrg after the 
auction to reserve a number in the Toll Free Database in accordance 
with Sec.  52.101 of the Commission's rules. The Commission adopts the 
proposal in the 833 Auction Comment Public Notice to require such 
declaration within 15 business days after the public notice announcing 
the winning bidders. If a winning bidder experiences problems working 
with RespOrgs such that it would be unable through no fault of its own 
to meet this deadline, it could report the problems to Somos, which 
will hold the number while these issues are resolved, and request 
waiver of the 15 business day deadline, consistent with the 
Commission's existing waiver standard.

F. Secondary Market Considerations

    134. The secondary market, allowing the sale of numbers assigned 
during the 833 Auction, is a key component of the auction and the 
Commission's overall toll free assignment modernization efforts. As the 
Commission explained in the Toll Free Assignment Modernization Order, a 
secondary market ``promotes the efficient operation of an auction'' 
and, consistent with its goal of promoting a market-based approach to 
toll free number assignment, helps ensure that numbers are assigned to 
those parties who can most efficiently use them. The Commission thus 
adopts procedures to allow for a secondary market for those 833 toll 
free numbers assigned via competitive bidding.
    135. To evaluate the operation of this new secondary market, and 
consistent with the requirement established in the Toll Free Assignment 
Modernization Order, the Commission directs Somos to collect and 
maintain information on the parties involved in the secondary market 
transactions and make that information available to the Commission. 
Based on the proposal in the 833 Auction Comment Public Notice, and the 
comments filed in the record, the Commission determines that RespOrgs 
must submit the information specified below about the parties involved 
in post-auction secondary market transactions involving their 
subscribers to Somos within 60 days of the RespOrg's actual knowledge 
of the transaction. This requirement will be included in Somos's 
tariff.
    136. As an initial matter, the Commission permits parties to 
acquire and transfer the rights to use all numbers that were assigned 
via the 833 Auction. Two commenters argue that only 833 numbers that 
receive multiple bids at auction should be able to be bought and sold 
in the secondary market. Only one commenter explains the rationale for 
this argument: CenturyLink claims that the Commission should limit the 
secondary market in this way because, by allowing every auctioned 
number to be transferred on the secondary market, the Commission would 
``afford[ ] a special status and related reporting requirements to 
numbers based on competitive interest that was fleeting and not 
demonstrated at the auction.'' But CenturyLink misunderstands why the 
Commission chose to liberalize its secondary market rules for numbers 
assigned at auction in the first place. The Commission created an 
exception to the secondary market rules for numbers assigned via 
competitive bidding to ``promote[ ] the efficient operation of an 
auction'' because it ``allows subscribers to purchase or sell numbers 
in response to the outcome of the auction, and limits pre-auction costs 
associated with estimating which--and how many--numbers a bidder may 
win.'' The proposed limitation would create uncertainty for prospective 
bidders about whether they will be able to transfer in the secondary 
market a given number on which they wish to bid and therefore it would 
frustrate this purpose. The Commission finds no reason to limit the 
ability of parties to buy and sell numbers in the secondary market 
beyond what was set forth in the Toll Free Assignment Modernization 
Order.
    137. Consistent with the proposal in the 833 Auction Comment Public 
Notice, the Commission directs Somos to collect information regarding 
secondary market transactions. Specifically, the Commission directs 
Somos to collect contact information of both parties to a transaction 
including (i) name, (ii) address, (iii) email address, and (iv) phone 
number. This information will allow the Commission to fully evaluate 
the operation of the secondary market and will promote certainty and 
combat fraud in the marketplace by keeping track of change of title, 
both of which are important components to this toll free number auction 
experiment. The Commission does not, however, require Somos to collect 
information on the sale date and price. After reviewing the record, the 
Commission is persuaded by commenters who argue that subscribers may be 
hesitant to share sensitive business information such as the sale 
price, and it is not the Commission's intent with the reporting 
requirement to impede the robust operation of the secondary market. One 
commenter contends that the 833 Auction Comment Public Notice, as it 
relates to the data collection and reporting obligation, ``leaves some 
basic definitional problems unresolved.'' This obligation extends to 
transactions which would violate the Commission's brokering rule but 
are allowed by the exception for numbers assigned via competitive 
bidding. Put differently, covered transactions are those which result 
in the reassignment of an 833 number from one subscriber to another, 
bypassing the spare pool, which would have violated the Commission's 
prior first-come, first-served rule.
    138. The Toll Free Assignment Modernization Order established a 
requirement that RespOrgs report the required secondary market 
transaction information to Somos. To implement this requirement and 
incentivize RespOrgs to provide this information promptly, the 833 
Auction Comment Public Notice proposed that RespOrgs must submit this 
information to Somos within 60 days of a transaction, against the 
penalty of denying access to the Toll Free Database until the 
information is reported, which would be included in the Somos tariff. 
The Commission adopts this proposal, with the modification based on the 
record that a RespOrg has 60 days from the time it has actual knowledge 
of the transaction within which to report the required information. The 
Commission further

[[Page 50783]]

adopts the proposal to allow a RespOrg to withhold service from a 
subscriber until it receives the necessary information. Finally, the 
Commission clarifies that, in the case of a transfer of a number that 
is also accompanied by a change of RespOrg, this obligation only 
applies to the RespOrg providing service to the purchasing subscriber.
    139. The Commission is convinced by RespOrg commenters that they 
may not have reason to know of a secondary market transaction by one of 
their subscribers in all instances. To address this concern, the 
Commission provides RespOrgs 60 days from the date of actual knowledge 
of a transaction to report the information noted above about the 
secondary market transaction, rather than 60 days from the date of the 
transaction itself. This change in when the reporting obligation is 
triggered will avoid a situation in which a RespOrg is denied access to 
the Toll Free Database for a transaction of which it is unaware. The 
Commission nonetheless expects RespOrgs to exercise due diligence in 
monitoring secondary market transactions involving their subscribers.
    140. RespOrg commenters argue that this requirement places too 
large of a burden on RespOrgs because the penalty for non-reporting is 
too harsh. The Commission disagrees. The Commission believes that the 
actual knowledge standard adopted reasonably moderates the penalty; the 
penalty is not triggered until a RespOrg has actual knowledge of a 
secondary market transaction for 60 days yet nonetheless fails to meet 
its obligation to report the transaction. In such a situation, the 
Commission finds the penalty appropriate, given its interest in 
tracking and analyzing the secondary market in toll free numbers during 
this experiment. The Commission also concludes that the actual 
knowledge standard negates the need for Somos to provide RespOrgs a 30-
day cure period prior to imposing the penalty; the cure period was a 
response to the concern that RespOrgs may not know that a secondary 
market transaction occurred, which is obviated by the adoption of an 
actual knowledge standard. Further, the penalty for non-reporting is 
removed when a RespOrg provides Somos with the necessary transaction 
information. The Commission declines to go further and place an 
affirmative obligation on subscribers to report secondary market 
transaction information to Somos, as some commenters suggest, because 
such an obligation was not contemplated in the Toll Free Assignment 
Modernization Order. And because the Commission does not find this 
obligation to be overly burdensome for RespOrgs, it declines to adopt 
alternative approaches suggested in the record.

VII. Procedural Matters

A. Paperwork Reduction Act

    141. This document implements the information collections adopted 
in the Toll Free Assignment Modernization Order and contains additional 
information collection(s) subject to the Paperwork Reduction Act of 
1995 (PRA), Public Law 104-13. The Commission is currently seeking PRA 
approval for information collections related to the auction application 
process and the secondary market. In the present document, and its 
related information collection, the Commission requires the following 
information from potential bidders: (1) Applicant contact and other 
details; (2) direct ownership interests; (3) indirect ownership 
interests; (4) real parties in interests; (5) FCC-regulated entities or 
applicants for a FCC license in which the applicant, any real party in 
interest, or any direct interest holder of 10 percent or greater owns 
10 percent or more stock; (7) whether the applicant is bidding on 
behalf of other entities; (8) disclosure of any allowable bidding 
arrangements; (9) the toll free numbers on which the applicant wishes 
to bid; and (10) any other exhibits or documentation the applicant 
deems necessary to apply to bid in the auction. Without this collected 
information, neither the Commission nor Somos (on the Commission's 
behalf) can hold the 833 Auction, nor can potential bidders participate 
in it.
    142. In addition, with respect to post auction secondary market 
transactions, Somos will collect contact information on the 
Commission's behalf from parties to secondary market transactions. This 
information will allow the Commission to fully evaluate the operation 
of the secondary market, which is an important component to this toll 
free number auction experiment.

B. Congressional Review Act

    143. The Commission will send a copy of the 833 Auction Procedures 
Public Notice, including the Supplemental Final Regulatory Flexibility 
Analysis, in a report to Congress and the Government Accountability 
Office pursuant to the Congressional Review Act.

C. Supplemental Final Regulatory Flexibility Analysis

    144. As required by the Regulatory Flexibility Act of 1980 (RFA), 
an Initial Regulatory Flexibility Analysis was incorporated in the 
Notice of Proposed Rulemaking in the Toll Free Assignment Modernization 
Order, 82 FR 47669, Oct. 13, 2017, pursuant to which the 833 Auction 
will be conducted. A Supplemental Initial Regulatory Flexibility 
Analysis (Supplemental IRFA) was incorporated in the 833 Auction 
Comment Public Notice. The Commission sought written public comments on 
the Supplemental IRFA. No comments were filed addressing the 
Supplemental IRFA. A Final Regulatory Flexibility Analysis (FRFA) was 
also incorporated in the Toll Free Assignment Modernization Order. The 
Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) 
in the 833 Auction Procedures Public Notice supplements the FRFA to 
reflect the actions taken in the 833 Auction Procedures Public Notice 
and conforms to the RFA.
    145. Need for, and Objectives of, the Public Notice. The 833 
Auction Procedures Public Notice implements the auction procedures to 
be used by the Commission and Somos for competitive bidding in the 833 
Auction for certain toll free numbers in the 833 code. The procedures 
adopted for the 833 Auction seek to balance three goals: (1) Promoting 
competition in the auction; (2) avoiding undue burdens on the 
applicants; and (3) assigning the 833 toll free numbers as 
expeditiously as possible. Moreover, the 833 Auction Procedures Public 
Notice provides an overview of the procedures, auction dates and 
deadlines, requirements for participants, terms and conditions 
governing the 833 Auction and the post-auction requirements and payment 
processes.
    146. To promote an efficient and fair administration of the 
competitive bidding process that will benefit all 833 Auction 
participants, including small entities, the Commission adopts the 
following procedures:
     Allow potential subscribers to participate in the 833 
Auction either through a RespOrg that will bid on all the numbers in 
which the subscriber is interested in acquiring, or by submitting its 
own application and bidding for all the numbers in which it is 
interested;
     require each applicant in the 833 Auction to certify that 
(1) if it is bidding on its own behalf, it is also not participating in 
the auction through another entity and/or, if it is bidding on behalf 
of potential subscribers that it is not aware that the potential 
subscriber(s) are participating through another applicant; and (2) it, 
or any commonly-controlled entity, is not submitting multiple 
applications in the 833 Auction, utilizing the Commission's definitions 
for control adopted for

[[Page 50784]]

similar purposes in its spectrum auctions;
     prohibit each applicant in the 833 Auction from 
cooperating or collaborating with any other applicant with respect to 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies, and will be prohibited from communicating with any 
other applicant in any manner the substance of its own, or one 
another's, or any other competing applicant's bids or bidding 
strategies (including the post-auction market for toll free numbers);
     prohibit certain agreements between applicants (whether 
the applicants are RespOrgs or potential subscribers) in the 833 
Auction, and certain auction-related agreements among RespOrgs even 
where only one of the RespOrgs is an applicant in the 833 Auction;
     require any applicant RespOrg that bids for a potential 
subscriber to acquire a letter of authorization from the potential 
subscriber;
     require applicants to first acquire an ``Auction ID'' from 
Somos, which will verify the potential applicant's identity, and if any 
entity cannot be verified through the Somos verification process, it 
must then participate through a RespOrg;
     require each applicant, on its auction application, (1) 
identify each number on which it wishes to be able to bid and, for each 
number, the party (either itself or another entity) for which it is 
bidding, (2) provide the same level of ownership disclosure required in 
Commission auctions, (3) disclose any auction-related agreement, and 
(4) certify that it is not currently in default or delinquent on a non-
tax debt to the Federal Government;
     for determining the winning bidder on tied bids for a toll 
free number, use a pseudorandom number assigned to each bid, and for 
only one bid received for a toll free number, assign the sole bidder 
the number and require no payment;
     conduct the 833 Auction using procedures for limited 
information disclosure;
     require potential bidders provide an upfront payment of 
$100 per number, and treat all funds that a RespOrg submits as an 
upfront payment in the auction (regardless of whether the funds came 
from the RespOrg or a potential subscriber for which the RespOrg is 
bidding) as the upfront payment of the RespOrg that will be used to 
offset the final payment obligation for any winning bids of the 
RespOrg;
     establish a default payment of 35 percent of the defaulted 
bid;
     require full payment within 10 business days following 
release of the public notice of the winning bids, or full payment plus 
a 5 percent late fee, within five additional business days;
     require any potential subscriber that directly 
participates in the 833 Auction and is a winning bidder to declare its 
intent to work with a specific RespOrg within 15 business days 
following release of the public notice of winning bids; and
     require Somos to collect additional information on 
secondary markets and require RespOrgs submit all required data about 
post-auction secondary market transactions within 60 days of the 
RespOrg's knowledge of a transaction.
    147. Summary of Significant Issues Raised by Public Comments in 
Response to Supplemental IRFA. There were no comments filed that 
addressed the procedures and policies proposed in the Supplemental 
IRFA.
    148. 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 proposed procedures in the 833 Auction Comment Public Notice.
    149. Description and Estimate of the Number of Small Entities to 
Which the Procedures Will Apply. The RFA directs agencies to provide a 
description of, and, where feasible, an estimate of the number of small 
entities that may be affected by the procedures adopted herein. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.''
    150. As noted above, FRFA was incorporated in the Toll Free 
Assignment Modernization Order. In that analysis, the Commission 
described in detail the small entities that might be significantly 
affected. In the 833 Auction Procedures Public Notice, the Commission 
incorporates by reference the descriptions and estimates of the number 
of small entities from the previous FRFA in the Toll Free Assignment 
Modernization Order in WC Docket No. 17-192.
    151. 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. 
Parties desiring to participate in the 833 Auction must file an 
application in which they certify under penalty of perjury as to their 
qualifications. Eligibility to participate in bidding is based on an 
applicant's auction application and certifications, as well as its 
upfront payment. The Commission decided in the Toll Free Assignment 
Modernization Order that it will not require applicants to submit a 
long-form application after the conclusion of the 833 Auction, given 
the lack of need to verify winning bidders' qualifications in this 
context and to limit the administrative burden on bidders, including 
small business entities.
    152. The 833 Auction Procedures Public Notice provides instructions 
for each 833 Auction applicant to maintain the accuracy of its 
respective auction application electronically using the Somos Auction 
System and/or by direct communication with Somos. More specifically, 
small entities and other 833 Auction applicants will be qualified to 
bid in the auction only if they comply with the following: (1) 
Submission of an auction application (FCC Form 833) that is timely and 
is found to be substantially complete; and (2) timely submission of a 
sufficient upfront payment. An applicant whose application is found to 
contain deficiencies will have a limited opportunity during a 
resubmission window to bring its application into compliance with 
procedures set forth in the 833 Auction Procedures Public Notice.
    153. In the second phase of the process, there are additional 
compliance requirements for winning bidders. As with other winning 
bidders, any small entity that is a winning bidder will be required to 
submit the full payment for its winning bid(s) within 10 business days 
following release of the public notice announcing the winning bidders, 
or within 15 business days following release of the public notice 
announcing the winning bidders provided it also pays a late fee of 5 
percent of the winning bid.
    154. Steps Taken to Minimize the Significant Economic Impact on 
Small

[[Page 50785]]

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 proposed approach, 
which may include the following four alternatives (among others): ``(1) 
the establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities.''
    155. The Commission believes that the steps described below to 
facilitate participation in 833 Auction will result in both operational 
and administrative cost savings for small entities and other auction 
participants. For example, assigning toll free numbers through 
competitive bidding will benefit smaller entities rather than the prior 
first-come first-served basis which favored larger, more sophisticated 
entities that had invested in obtaining enhanced connectivity to the 
Toll Free Database. Moreover, the Commission also elected to allow 
potential subscribers, many of which are smaller entities, the choice 
between participating directly in the auction or indirectly through a 
RespOrg. In addition, the Commission created an alternative payment 
mechanism that will be available for both upfront and final payments, 
in which applicants can submit payments via ACH instead of wire 
transfer if the payments are below a $300 threshold. The Commission 
believes such measures will benefit small entities, who may be 
interested in only acquiring one or perhaps a few toll free numbers.
    156. The procedures adopted in the 833 Auction Procedures Public 
Notice to facilitate participation in the 833 Auction will result in 
both operational and administrative cost savings for small entities and 
other auction participants. In light of the numerous resources that 
will be available from the Commission and Somos at no cost, the 
processes and procedures adopted in the 833 Auction Procedures Public 
Notice should result in minimal economic impact on small entities. For 
example, prior to the auction, small entities and other auction 
participants may seek clarification of or guidance on complying with 
application procedures, reporting requirements, and the bidding system. 
Small entities as well as other auction participants will be able to 
avail themselves of (1) a web-based, interactive online tutorial to 
familiarize themselves with auction procedures, filing requirements, 
bidding procedures, and other matters related to the 833 Auction and 
(2) a telephone hotline to assist with issues such as access to or 
navigation within the auction application system. The Commission and 
Somos also make copies of Commission decisions available to the public 
without charge, providing a low-cost mechanism for small businesses to 
conduct research prior to and throughout the auction. In addition, 
Somos will post public notices on its website, making this information 
easily accessible and without charge to benefit all 833 Auction 
applicants, including small businesses. These steps are made available 
to facilitate participation in the 833 Auction by all eligible bidders 
and may result in significant cost savings for small business entities 
who utilize these alternatives. Moreover, the adoption of bidding 
procedures in advance of the auctions is designed to ensure that the 
833 Auction will be administered predictably and fairly for all 
participants, including small businesses.
    157. The Commission will send a copy of the 833 Auction Procedures 
Public Notice, including the Supplemental FRFA, to the Chief Counsel 
for Advocacy of the SBA. A copy of the 833 Auction Procedures Public 
Notice (or summary thereof) will also be published in the Federal 
Register.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2019-20526 Filed 9-25-19; 8:45 am]
 BILLING CODE 6712-01-P