[Federal Register Volume 85, Number 19 (Wednesday, January 29, 2020)]
[Rules and Regulations]
[Pages 5147-5163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01654]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 73

[AU Docket No. 19-290; DA 19-1256; DA 19-1265]


Auction of FM Broadcast Construction Permits Scheduled for April 
28, 2020; Notice of Filing Requirements, Minimum Opening Bids, Upfront 
Payments, and Other Procedures for Auction 106; Auction 106 Freeze 
Announced for FM Minor Change Applications

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes public notices that announce the 
procedures and upfront payments amounts and minimum opening bids for 
the auction of certain FM broadcast construction permits as well as a 
temporary freeze on the filing of minor change applications for FM 
stations. The Auction 106 Procedures Public Notice summarized here is 
intended to familiarize applicants with the procedures and other 
requirements for participation in Auction 106.

DATES: Applications to participate in Auction 106 must be submitted 
before 6 p.m. Eastern Time (ET) on February 11, 2020. FM commercial and 
noncommercial educational minor change applications may not be filed 
during a period starting on January 29, 2020, and ending on February 
11, 2020. Upfront payments for Auction 106 must be received by 6 p.m. 
ET on March 20, 2020. Bidding in Auction 106 is scheduled to start on 
April 28, 2020.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Lynne 
Milne or Daniel Habif in the OEA Auctions Division at (202) 418-0660. 
For general auction questions, the Auction Hotline at (717) 338-2868. 
For FM Broadcast service questions, Lisa Scanlan, Thomas Nessinger, or 
James Bradshaw in the MB Audio Division at (202) 418-2700. To request 
materials in accessible formats (Braille, large print, electronic 
files, or audio format) for people with disabilities, send an email to 
[email protected] or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530 or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 106 
Procedures Public Notice, released on December 13, 2019, and the 
Auction 106 Freeze Public Notice, also released on December 13, 2019. 
The complete text of the Auction 106 Procedures Public Notice, 
including attachments and any related document, and the complete text 
of the Auction 106 Freeze Public Notice are available for public 
inspection and copying from 8 a.m. to 4:30 p.m. ET Monday through 
Thursday or from 8 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. These public notices and related documents also 
are available on the internet at the Commission's website: www.fcc.gov/auction/106, or by using the search function for DA 19-1256 or DA 19-
1265 on the Commission's EDOCS web page at http://www.fcc.gov/edocs/.

I. General Information

    1. Construction Permits in Auction 106. Auction 106 will offer 130 
construction permits in the FM broadcast service for 130 new FM 
allotments, including 34 construction permits that were offered but not 
sold or were defaulted upon in prior auctions. These construction 
permits are for vacant FM allotments, reflecting FM channels added to 
the Table of FM Allotments pursuant to the Commission's established 
rulemaking procedures, and assigned at the indicated communities 
specified in 47 CFR 73.202(b). Attachment A of the Auction 106 
Procedures Public Notice lists the reference coordinates for each 
vacant FM allotment offered in Auction 106. Each Auction 106 applicant 
may submit in its FCC Form 175 a set of preferred site coordinates for 
any of its selected construction permits as an alternative to the 
reference coordinates for that vacant FM allotment.
    2. The set of construction permits listed in Attachment A of the 
Auction 106 Procedures Public Notice is unchanged from the list of 
construction permits that were proposed for this auction in the Auction 
106 Comment Public Notice. Two commenters request the addition of 
specific construction permits in Auction 106. Those requests cannot be 
granted because the underlying allotments must first be added to the 
Table of Allotments through separate administrative processes. 
Likewise, a third commenter's request to delete a specific allocation 
from the Table of Allotments cannot be granted because it is beyond the 
scope of this proceeding.
    3. Pursuant to the policies established in the Broadcast 
Competitive Bidding Order, applicants may apply for any vacant FM 
allotment listed in Attachment A. If two or more \FCC Forms 175 specify 
the same FM allotment in Auction 106, mutual exclusivity exists for 
auction purposes, and that construction permit must be awarded by 
competitive bidding procedures. Once mutual exclusivity exists for 
auction purposes, even if only one applicant is qualified to bid for a 
particular construction permit in Auction 106, that applicant is 
required to submit a bid in order to obtain the construction permit.
    4. Media Bureau Freeze Public Notice. Pursuant to the Auction 106 
Freeze Announced for FM Minor Change Applications Public Notice, DA 19-
1265 (Dec. 13, 2019), the Media Bureau (MB) will not accept FM 
commercial and noncommercial educational (NCE) minor change 
applications filed during the Auction 106 short-form application (FCC 
Form 175) filing window. This freeze ensures that there will not be a 
mutual exclusivity conflict between stations proposed in an Auction 106 
Form 175 and a minor change application. Accordingly, this freeze 
promotes a more certain and speedier auction process.
    5. Auction Dates and Deadlines. The following dates and deadlines 
apply:

Auction Tutorial Available (via internet): by January 22, 2020
FCC Form 175 Initial Filing Window Opens: January 29, 2020, 12:00 noon 
ET
FCC Form 175 Initial Filing Deadline: February 11, 2020, 6:00 p.m. ET

[[Page 5148]]

Upfront Payments (via wire transfer): March 20, 2020, 6:00 p.m. ET
Mock Auction: April 24, 2020
Auction Bidding Begins: April 28, 2020

    6. Requirements for Participation. Those wishing to bid in Auction 
106 must: (1) Submit a FCC Form 175 electronically prior to 6:00 p.m. 
ET, on February 11, 2020, following the procedures set forth in 
Attachment B to the Auction 106 Procedures Public Notice, that complies 
with the Commission's competitive bidding rules and other requirements 
set forth in the Auction 106 Procedures Public Notice; (2) submit a 
sufficient upfront payment and a complete and accurate FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. ET on March 20, 2020, following 
the procedures and instructions set forth in Attachment C to the 
Auction 106 Procedures Public Notice; and (3) comply with all 
provisions outlined in the Auction 106 Procedures Public Notice and 
applicable Commission rules.

II. Applying To Participate in Auction 106

    7. Relevant Authority. Auction 106 applicants must familiarize 
themselves thoroughly with the Commission's general competitive bidding 
rules, 47 CFR pt. 1, subpart Q, as well as Commission decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Broadcasters 
should also familiarize themselves with the Commission's FM broadcast 
service competitive bidding requirements contained in 47 CFR pt. 73, as 
well as Commission orders concerning competitive bidding for broadcast 
construction permits. Applicants must also be thoroughly familiar with 
the procedures, terms and conditions contained in the Auction 106 
Procedures Public Notice and any future public notices that may be 
released in the proceeding.
    8. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in its public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction. Copies of most auctions-related Commission 
documents, including public notices, can be retrieved from the FCC 
Auctions internet site at www.fcc.gov/auctions and at the Commission's 
headquarters, Reference Information Center, located at 445 12th Street 
SW, Washington, DC 20554.
    9. General Information Regarding Short-Form Applications. An 
application to participate in Auction 106, referred to as a short-form 
application or FCC Form 175, provides information that the Commission 
uses to determine whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. The short-form application is the first part of 
the Commission's two-phased auction application process. In the first 
phase, parties desiring to participate in the auction must file a 
streamlined, short-form application in which they certify under penalty 
of perjury as to their qualifications. Eligibility to participate in 
bidding is based on the applicant's short-form application and 
certifications, and on its upfront payment.
    10. If an applicant claims eligibility for a bidding credit, the 
information provided in its FCC Form 175 will be used to determine 
whether the applicant is eligible for the claimed bidding credit. 
Applicants filing a short-form application are subject to the 
Commission's rules against prohibited communications beginning at the 
deadline for filing.
    11. An applicant bears full responsibility for submitting an 
accurate, complete and timely short-form application. Each applicant 
must certify on its FCC Form 175 under penalty of perjury that it is 
legally, technically, financially and otherwise qualified to hold a 
license. Each applicant should read carefully the instructions set 
forth in Attachment B to the Auction 106 Procedures Public Notice and 
should consult the Commission's rules to ensure that all the 
information required is included within its short-form application.
    12. Each applicant should note that submission of a short-form 
application (and any amendments thereto) constitutes a representation 
by the certifying official that he or she is an authorized 
representative of the applicant, that he or she has read the form's 
instructions and certifications, and that the contents of the 
application, its certifications, and any attachments are true and 
correct. Applicants are not permitted to make major modifications to 
their applications; such impermissible changes include a change of the 
certifying official to the application. Submission of a false 
certification to the Commission may result in penalties, including 
monetary forfeitures, license forfeitures, ineligibility to participate 
in future auctions, and/or criminal prosecution.
    13. Pursuant to 47 CFR 1.2105(a)(3), the same party may not bid on 
more than one auction application, i.e., as more than one applicant. If 
a party submits multiple FCC Forms 175 for an auction, only one 
application may be the basis for that party to become qualified to bid 
in that auction.
    14. Consistent with the Commission's general prohibition of joint 
bidding agreements, a party is generally permitted to participate in a 
Commission auction only through a single bidding entity. Accordingly, 
the filing of applications in Auction 106 by multiple entities 
controlled by the same individual or set of individuals will generally 
not be permitted.
    15. An applicant should consult the Commission's rules to ensure 
that all required information is included in its short-form 
application. To the extent the information in the Auction 106 
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 
Auction 106 and/or use the contact information provided in the Auction 
106 Procedures Public Notice to consult with Commission staff to better 
understand the information it must submit in its short-form 
application.
    16. Authorized Bidders. An applicant must designate at least one 
authorized bidder, and no more than three, in its FCC Form 175. 
According to 47 CFR 1.2105(a)2)(iii), an individual is prohibited from 
serving as an authorized bidder for more than one auction applicant. 
Accordingly, the same individual may not be listed as an authorized 
bidder in more than one FCC Form 175 in a given auction.
    17. Permit Selection. An applicant must select on its FCC Form 175 
the construction permit or permits, from the list of available permits 
in Attachment A, on which it wants to bid. An applicant must carefully 
review and verify its construction permit selections before the 
deadline for submitting the FCC Form 175, because those selections 
cannot be changed after the auction application filing deadline. The 
FCC auction bidding system will not accept bids on construction permits 
that were not selected on the applicant's FCC Form 175.
    18. Disclosure of Agreements Relating to Permits Subject to 
Auction. As required by 47 CFR 1.2105(a)(2)(viii), an applicant must 
provide in its FCC Form 175 a brief description of, and identify

[[Page 5149]]

each party to, any partnership, joint venture, consortium, or 
agreement, arrangement, or understanding of any kind relating to the FM 
construction permits being auctioned, including any agreement that 
addresses or communicates directly or indirectly bids (including 
specific prices), bidding strategies (including the specific 
construction permit(s) or license(s) 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. As defined 
in 47 CFR 1.2105(a)(4)(i), a controlling interest for purposes of this 
rule includes all individuals or entities with positive or negative de 
jure or de facto control of the applicant or licensee. The applicant 
must certify under penalty of perjury in its FCC Form 175 that it has 
described, and identified each party to, any such agreement, 
arrangement, or understanding into which it has entered. An auction 
applicant that enters into any agreement relating to the permits or 
licenses being auctioned is subject to the same disclosure obligations 
it would have for agreements existing at the FCC Form 175 filing 
deadline, and it must maintain the accuracy and completeness of the 
information in its pending auction application.
    19. The Commission's rules generally prohibit joint bidding and 
other arrangements involving auction applicants (including any party 
that controls or is controlled by, such applicants). For purposes of 
the prohibition on joint bidding arrangements, joint bidding 
arrangements include arrangements relating to the permits being 
auctioned that address or communicate, directly or indirectly, bidding 
at the auction, bidding strategies, including arrangements regarding 
price or the specific permits on which to bid, and any such 
arrangements relating to the post-auction market structure.
    20. To implement the prohibition on joint bidding arrangements, 47 
CFR 1.2105(a)(2)(viii)-(ix) require each auction applicant to certify 
in its short-form application that it has disclosed any arrangements or 
understandings of any kind relating to the licenses being auctioned to 
which it (or any party that controls or is controlled by it) is a 
party. The applicant must also certify that it (or any party that 
controls or is controlled by it) has not entered and will not enter 
into any arrangement or understanding of any kind relating directly or 
indirectly to bidding at auction with, among others, any other 
applicant.
    21. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an agreement excepted pursuant to 47 CFR 1.2105(a)(2)(ix)(A)-(C) and 
that has been disclosed in an FCC Form 175,certain discussions or 
exchanges could nonetheless touch upon impermissible subject matters, 
and compliance with the Commission's rules will not insulate a party 
from enforcement of the antitrust laws.
    22. A winning bidder will be required to disclose in its long-form 
application (FCC Form 2100, Schedule 301-FM) following the close of the 
auction the specific terms, conditions and parties involved in any 
agreement relating to the permits or licenses being auctioned into 
which it had entered prior to the time bidding closed. This applies to 
any joint venture, partnership, or other agreement, arrangement, or 
understanding of any kind entered into relating to the competitive 
bidding process, including any agreements relating to the permits being 
auctioned that address or communicate directly or indirectly bids 
(including specific prices), bidding strategies (including the specific 
permits 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.
    23. Ownership Disclosure Requirements. Each applicant must comply 
with the ownership and control disclosure requirements and provide 
information required by 47 CFR 1.2105 and 1.2112, and, where 
applicable, 47 CFR 1.2110. Specifically, in completing the FCC Form 
175, an applicant will be required to fully disclose information on the 
real party(ies)-in-interest and the ownership structure of the 
applicant, including both direct and indirect ownership interests of 
10% or more.
    24. In certain circumstances, an applicant may have previously 
filed an FCC Form 175 for a previous auction or an FCC Form 602 in 
which ownership information was disclosed. The most current ownership 
information contained in any previous FCC Form 175 or FCC Form 602 on 
file with the Commission that used the same FRN the applicant is using 
to submit its FCC Form 175 in this auction will automatically be pre-
filled into certain ownership sections on the applicant's FCC Form 175, 
if such information is in an electronic format compatible with FCC Form 
175. Each applicant must carefully review any ownership information 
automatically entered into its FCC Form 175, including any ownership 
attachments, to confirm that all information supplied on its FCC Form 
175 is complete and accurate as of the application filing deadline in 
this auction. Any information that needs to be corrected or updated 
must be changed directly in the FCC Form 175 for this auction.
    25. Foreign Ownership Disclosure Requirements. The Commission is 
required by 47 U.S.C. 310 to review foreign investment in radio station 
licenses and specific restrictions on who may hold certain types of 
radio licenses. In its FCC Form 175, an applicant must report 
citizenship or jurisdiction of formation for the applicant and for each 
disclosable interest holder (DIH). In completing the FCC Form 175, an 
applicant also will be required to certify that it is in compliance 
with the foreign ownership provisions contained in section 310 of the 
Communications Act of 1934, as amended. According to 47 CFR 
1.2105(a)(2)(vi), the Commission will accept an auction application 
certifying that a request for waiver or other relief from the 
requirements of section 310 is pending. If such a request concerning 
section 310 is pending or was granted previously, this information 
needs to be reported in an attachment to the applicant's FCC Form 175.
    26. Prohibited Communications and Compliance with Antitrust Laws. 
The rules prohibiting certain communications set forth in 47 CFR 
1.2105(c) and 73.5002(d), (e) apply to each applicant that files an FCC 
Form 175 in Auction 106. Section 1.2105(c)(1) provides that, subject to 
specified exceptions, after the deadline for filing a short-form 
application all applicants are prohibited from cooperating or 
collaborating with respect to, communicating with or disclosing, to 
each other in any manner the substance of their own, or each other's, 
or any other applicant's bids or bidding strategies (including post-
auction market structure), or discussing or negotiating settlement 
agreements, until after the down payment deadline.
    27. Entities Subject to Section 1.2105. An applicant for purposes 
of this rule includes the officers and directors of the applicant, all 
controlling interests in the entity submitting the FCC Form 175, as 
well as all holders of interests amounting to 10% or more of that 
entity. See 47 CFR 1.2105(c)(1). A party that submits an application 
becomes an applicant under the rule at the application filing deadline, 
and that status does not change based on later developments. Thus, an 
auction applicant that does not correct deficiencies in its 
application, fails to submit a timely and sufficient upfront payment, 
or does not otherwise become

[[Page 5150]]

qualified, remains an applicant for purposes of the rule and remains 
subject to the prohibition on certain communications until the 
applicable down payment deadline.
    28. Scope of Prohibition on Communications; Prohibition on Joint 
Bidding Agreements. The Commission in 2015 amended section 1.2105(c) to 
extend the prohibition on communications to cover all applicants for an 
auction regardless of whether the applicants seek permits or licenses 
in the same geographic area or market. The Commission's rules now 
prohibit any joint bidding arrangement, including arrangements relating 
to the permits being auctioned that address or communicate, directly or 
indirectly, bidding in the auction, bidding strategies, including 
arrangements regarding price or the specific permits on which to bid, 
and any such arrangements relating to the post-auction market 
structure. The revised rule provides limited exceptions for a 
communication within the scope of any arrangement consistent with the 
exclusions from the Commission's rule prohibiting joint bidding 
specified at 47 CFR 1.2105(a)(2)(ix)(A)-(C), provided such arrangement 
is disclosed on the applicant's auction application. An applicant may 
continue to communicate pursuant to any pre-existing agreements, 
arrangements, or understandings that are solely operational or that 
provide for transfer or assignment of licenses, provided that such 
agreements, arrangements or understandings are disclosed on its auction 
application and do not both relate to the permits at auction and 
address or communicate bids (including amounts), bidding strategies, or 
the particular permits or licenses on which to bid or the post-auction 
market structure.
    29. The prohibition against communicating in any manner includes 
public disclosures as well as private communications and indirect or 
implicit communications. Consequently, an applicant must take care to 
determine whether its auction-related communication may reach another 
applicant. Applicants must determine whether their communications with 
other parties are permissible under the rule once the prohibition 
begins at the deadline for submitting applications, even before the 
public notice identifying applicants is released.
    30. Parties subject to section 1.2105(c) should take special care 
in circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any applicant's 
bids or bidding strategies. Such information may be deemed to have been 
received by the applicant under certain circumstances. For example, 
Commission staff have determined 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 or director, which creates an 
apparent violation of the rule.
    31. Section 1.2105(c)(1) prohibits applicants from communicating 
with specified other parties only with respect to their own, or each 
other's, or any other applicant's bids or bidding strategies. Moreover, 
a communication conveying bids or bidding strategies (including post-
auction market structure) must also relate to the licenses being 
auctioned to be covered by the prohibition. Thus, the prohibition is 
limited in scope and does not apply to all communications between or 
among the specified parties. The Commission consistently has made clear 
that application of the rule prohibiting communications has never 
required total suspension of essential ongoing business. Entities 
subject to the prohibition may negotiate agreements during the 
prohibition period, provided that the communications involved do not 
relate both (1) to the construction permits or licenses being auctioned 
and (2) to bids or bidding strategies or post-auction market structure.
    32. Business discussions and negotiations that are unrelated to 
bidding in Auction 106 and that do not convey information about the 
bids or bidding strategies of an applicant, including the post-auction 
market structure, are not prohibited by the rule. While section 
1.2105(c) 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.
    33. Communicating with Third Parties. Section 1.2105(c) does not 
prohibit an applicant from communicating bids or bidding strategies to 
a third-party, such as a consultant or consulting firm, counsel, or 
lender. The applicant should take appropriate steps, however, to ensure 
that any third party it employs for advice pertaining to its bids or 
bidding strategies does not become a conduit for prohibited 
communications to other specified parties, as that would violate the 
rule. For example, an applicant might require a third party, such as a 
lender, to sign a non-disclosure agreement before the applicant 
communicates any information regarding bids or bidding strategy to the 
third party. Within third-party firms, separate individual employees, 
such as attorneys or auction consultants, may advise individual 
applicants on bids or bidding strategies, so long as such firms 
implement firewalls and other compliance procedures that prevent such 
individuals from communicating the bids or bidding strategies of one 
applicant to other individuals representing separate applicants. 
Although firewalls and/or other procedures should be used, their 
existence is not an absolute defense to liability if a violation of the 
rule has occurred.
    34. 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. 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.
    35. Potential applicants may discuss the short-form application or 
bids for specific permits with their counsel, consultant, or expert of 
their choice before the short-form application deadline. Furthermore, 
the same third-party individual could continue to give advice regarding 
the application after the short-form application deadline, provided 
that no information pertaining to bids or bidding strategies is 
conveyed to that individual. To the extent potential applicants can 
develop bidding instructions prior to the short-form deadline that a 
third party could implement without changes during bidding, the third 
party could follow such instructions for multiple applicants provided 
that those applicants do not communicate with the third party during 
the prohibition period.
    36. Applicants should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, an

[[Page 5151]]

applicant's statement to the press that it intends to stop bidding in 
an auction could give rise to a finding of a Section 1.2105 violation. 
Similarly, an FCC Form 175 applicant's public statement of intent not 
to place bids during bidding could also violate the rule.
    37. Section 1.2105(c) Certification. By electronically submitting 
its FCC Form 175, each applicant in Auction 106 certifies its 
compliance with 47 CFR 1.2105(c) and 73.5002(d). However, the mere 
filing of a certifying statement as part of an application will not 
outweigh specific evidence that a prohibited communication has 
occurred, nor will it preclude the initiation of an investigation when 
warranted. Any applicant found to have violated these communication 
prohibitions may be subject to sanctions.
    38. Duty to Report Prohibited Communications. Section 1.2105(c)(4) 
requires that any applicant that makes or receives a communication that 
appears to violate section 1.2105(c) must report such communication in 
writing to the Commission immediately, and in no case later than five 
business days after the communication occurs. Each applicant's 
obligation to report any such communication continues beyond the five-
day period after the communication is made, even if the report is not 
made within the five-day period.
    39. Procedures for Reporting Prohibited Communications. Section 
1.2105(c) requires parties to file only a single report concerning a 
prohibited communication and to file that report with Commission 
personnel expressly charged with administering the Commission's 
auctions. This rule is designed to minimize the risk of inadvertent 
dissemination of information in such reports. Any reports required by 
section 1.2105(c) must be filed consistent with the instructions set 
forth in the Auction 106 Procedures Public Notice. For Auction 106, 
such reports must be filed with the Chief of the Auctions Division, 
OEA, by the most expeditious means available. Any such report should be 
submitted by email to Margaret W. Wiener at the following email 
address: [email protected]. If you choose instead to submit a report 
in hard copy, any such report must be delivered only to: Margaret W. 
Wiener, Chief, Auctions Division, OEA, FCC, 445 12th Street SW, 
Washington, DC 20554.
    40. A party reporting any communication pursuant to sections 1.65, 
1.2105(a)(2), or 1.2105(c)(4) must take care to ensure that any report 
of a prohibited communication does not itself give rise to a violation 
of section 1.2105(c). For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that would allow such materials to be made available for 
public inspection such as submission through the FCC Office of the 
Secretary or ECFS. 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 47 CFR 0.459. Such 
parties also are encouraged to coordinate with the Auctions Division 
staff about the procedures for submitting such reports.
    41. Antitrust Laws. Applicants remain subject to the antitrust 
laws, which are designed to prevent anticompetitive behavior in the 
marketplace. Applicants should note that conduct that is permissible 
under the Commission's Rules may be prohibited by the antitrust laws. 
Compliance with the disclosure requirements of section 1.2105(c) will 
not insulate a party from enforcement of the antitrust laws. 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 in future auctions, among other sanctions. See 47 CFR 
1.2109(d).
    42. New Entrant Bidding Credit. Two commenters observed that the 
Auction 106 Comment Public Notice did not invite comments on the use of 
new entrant bidding credits in this auction, and seek confirmation that 
new entrant bidding credits will be available to eligible applicants in 
this auction. This proceeding concerning procedures for conducting this 
auction does not alter the applicability of the Commission's rules for 
broadcast auctions; thus, a new entrant bidding credit will be 
available in Auction 106.
    43. Applicants that qualify for the new entrant bidding credit, as 
specified in 47 CFR 73.5007, are eligible for a bidding credit in this 
auction that represents the amount by which a bidder's winning bid is 
discounted. The size of the new entrant bidding credit depends on the 
number of ownership interests in other media of mass communications 
that are attributable to the bidder entity and its attributable 
interest-holders. A 35% bidding credit will be given to a winner if it, 
and/or any individual or entity with an attributable interest in the 
winning bidder, has no attributable interest in any other media of mass 
communications, as defined in section 73.5008. A 25% bidding credit 
will be given to a winning bidder if it, and/or any individual or 
entity with an attributable interest in the winning bidder, has an 
attributable interest in no more than three mass media facilities, as 
defined in section 73.5008. No bidding credit will be given if any of 
the commonly owned mass media facilities serve the same area as the 
broadcast permit proposed in the auction, as defined in section 
73.5007(b), or if the winning bidder, and/or any individual or entity 
with an attributable interest in the winning bidder, has attributable 
interests in more than three mass media facilities. For purposes of 
determining whether a broadcast permit offered in this auction is in 
the same area as an applicant's existing mass media facilities, the 
coverage area of the to-be-auctioned facility is calculated using 
maximum class facilities at the allotment reference coordinates, not 
any applicant-specified preferred site coordinates. Bidding credits are 
not cumulative; qualifying applicants receive either the 25% or the 35% 
bidding credit, but not both. The interests of the applicant, and of 
any individuals or entities with an attributable interest in the 
applicant, in other media of mass communications are considered when 
determining an applicant's eligibility for the New Entrant Bidding 
Credit. Attributable interests are defined in section 73.3555 and note 
2 of that section. In Auction 106, the bidder's attributable interests 
and, thus, its maximum new entrant bidding credit eligibility are 
determined as of the short-form application filing deadline. Events 
occurring after the short-form application filing deadline, such as the 
acquisition of attributable interests in media of mass communications, 
may cause diminishment or loss of the bidding credit, and must be 
reported immediately, specifically no later than five business days 
after the change occurs. Each applicant has a duty to continuously 
maintain the accuracy of information submitted in its auction 
application.
    44. An applicant intending to divest a media interest or make any 
other ownership change, such as resignation of positional interests 
(officer or director), in order to avoid attribution

[[Page 5152]]

for purposes of qualifying for the New Entrant Bidding Credit must have 
consummated such divestment transactions or have completed such 
ownership changes by no later than the FCC Form 175 filing deadline. 
Thus, an applicant could not qualify for a bidding credit, nor upgrade 
a previously claimed bidding credit, based upon ownership or officer/
director positional changes occurring after the FCC Form 175 filing 
deadline.
    45. Under broadcast attribution rules, those entities or 
individuals with an attributable interest in a bidder include: All 
officers and directors of a corporate bidder; any owner of 5% or more 
of voting stock of a corporate bidder; all partners and limited 
partners of a partnership bidder, unless the limited partners are 
sufficiently insulated; and all members of a limited liability company, 
unless sufficiently insulated.
    46. In cases where an applicant's spouse or close family member 
holds other media interests, such interests are not automatically 
attributable to the bidder. The Commission decides attribution issues 
in this context based on certain factors traditionally considered 
relevant. See Clarification of Commission Policies Regarding Spousal 
Attribution, MM Docket No. 91-122, Policy Statement, 57 FR 8845, Mar. 
13, 1992.
    47. In the New Entrant Bidding Credit Reconsideration Order, the 
Commission attributed the media interests held by very substantial 
investors in, or creditors of, an applicant claiming new entrant 
status. Specifically, the attributable mass media interests held by an 
individual or entity with an equity and/or debt interest in an 
applicant shall be attributed to that bidder for purposes of 
determining its eligibility for the New Entrant Bidding Credit, if the 
equity and debt interests, in the aggregate, exceed 33% of the total 
asset value of the applicant, even if such an interest is non-voting. 
See 47 CFR 73.5008(c).
    48. In the Diversity Order, the Commission relaxed the equity/debt 
plus (EDP) attribution standard, to allow for higher investment 
opportunities in entities meeting the definition of eligible entities. 
An eligible entity is defined in Note 2(i) of section 73.3555. On 
September 23, 2019, the United States Court of Appeals for the Third 
Circuit issued a decision in Prometheus Radio Project v. FCC, vacating 
the Commission's eligible entity definition, and remanding those 
provisions of the Quadrennial Second Report and Order that rely on the 
eligible entity definition. As a result of this ongoing litigation, the 
relaxed EDP rule for eligible entities as the basis for the New Entrant 
Bidding Credit will be unavailable in Auction 106.
    49. Generally, media interests will be attributable for purposes of 
the New Entrant Bidding Credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. Further, any bidder asserting new entrant 
status must have de facto as well as de jure control of the entity 
claiming the bidding credit. See47 CFR 73.5007. Typically, de jure 
control is evidenced by ownership of at least 50.1% of an entity's 
voting stock or equivalent level of interest in cases where the bidder 
is not a corporate entity. De facto control is determined on a case-by-
case basis. However, attributable interests held by a winning bidder in 
existing low power television, television translator, or FM translator 
facilities will not be counted among the applicant's other mass media 
interests in determining its eligibility for a New Entrant Bidding 
Credit. A medium of mass communications is defined in Section 
73.5008(b). Full power noncommercial educational stations, on both 
reserved and non-reserved channels, are included among media of mass 
communications as defined in section 73.5008(b).
    50. Application Requirements. In addition to the ownership 
information required pursuant to sections 1.2105 and 1.2112, applicants 
seeking a New Entrant Bidding Credit are required to establish on their 
short-form applications that they satisfy the eligibility requirements 
to qualify for the bidding credit. In those cases, a certification 
under penalty of perjury must be provided in completing the short-form 
application. An applicant claiming that it qualifies for a 35% New 
Entrant Bidding Credit must certify that neither it nor any of its 
attributable interest holders have any attributable interests in any 
other media of mass communications. An applicant claiming that it 
qualifies for a 25% New Entrant Bidding Credit must certify that 
neither it nor any of its attributable interest holders has any 
attributable interests in more than three media of mass communications, 
and must identify and describe such media of mass communications.
    51. Unjust Enrichment. Applicants should note that the unjust 
enrichment provisions of 47 CFR 73.5007(c) apply to a winning bidder 
that utilizes a bidding credit and subsequently seeks to assign or 
transfer control of its license or construction permit to an entity not 
qualifying for the same level of bidding credit.
    52. Provisions regarding Former and Current Defaulters. Each 
applicant must make certifications regarding whether it is a current or 
former defaulter or delinquent. A current defaulter or delinquent is 
not eligible to participate in Auction 106. An applicant is considered 
a current defaulter or a current delinquent when it, any of its 
affiliates, any of its controlling interests, or any of the affiliates 
of its controlling interests, is in default on any payment for any 
Commission construction permit or license (including a down payment) or 
is delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for auction applications. Accordingly, each applicant 
must certify under penalty of perjury on its FCC Form 175 that the 
applicant, any of its affiliates, any of its controlling interests, and 
any of the affiliates of its controlling interests, are not in default 
on any payment for a Commission construction permit or license 
(including down payments) and that they are not delinquent on any non-
tax debt owed to any Federal agency. For purposes of making this 
certification, the term affiliate is defined in 47 CFR 1.2110 and the 
term controlling interest is defined in 47 CFR 1.2105(a)(4)(i).
    53. An applicant is considered a former defaulter or a former 
delinquent when, as of the FCC Form 175 filing deadline, it or any of 
its controlling interests has defaulted on any Commission construction 
permit or license or has been delinquent on any non-tax debt owed to 
any Federal agency, but has since remedied all such defaults and cured 
all of the outstanding non-tax delinquencies. A former defaulter or 
delinquent who has remedied all such defaults and cured all of the 
outstanding non-tax delinquencies prior to the FCC Form 175 filing 
deadline in this auction may participate so long as it is otherwise 
qualified and if the applicant makes an upfront payment that is 50% 
more than would otherwise be required. For this reason, an applicant 
must certify under penalty of perjury whether it (along with any of its 
controlling interests) has ever been in default on any payment for a 
Commission construction permit or license (including a down payment) or 
has ever been delinquent on any non-tax debt owed to any Federal 
agency, subject to the exclusions of any cured default on a Commission 
construction permit or license as well as any cured delinquency on a 
non-tax debt owed to a Federal agency described in 47 CFR 
1.2105(a)(2)(xii). For purposes of making this certification, the term

[[Page 5153]]

controlling interest is defined in 47 CFR 1.2105(a)(4)(i).
    54. For purposes of evaluating the certifications required by 
sections 1.2105(a)(2)(xi) and (xii), non-tax debt owed to any Federal 
agency includes all amounts owed under Federal programs, including 
contributions to the Universal Service Fund, Telecommunications Relay 
Services Fund, and the North American Numbering Plan Administration, 
notwithstanding that the administrator of any such fund may not be 
considered a Federal agency under the Debt Collection Improvement Act 
of 1996. Public Law 104-134, 110 Stat. 1321 (1996).
    55. We encourage applicants to review previous guidance provided on 
default and delinquency disclosure requirements in the context of the 
auction short-form application process. Applicants also are advised to 
consult with Auctions Division staff if they have questions about 
delinquency or default disclosure requirements.
    56. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the red 
light rule, that implement its obligations under the Debt Collection 
Improvement Act of 1996, which governs the collection of debts owed to 
the United States. Under the red light rule, applications and other 
requests for benefits filed by parties that have outstanding debts owed 
to the Commission will not be processed. The Commission's adoption of 
the red light rule does not alter the applicability of any of its 
competitive bidding rules, including the provisions and certifications 
of sections 1.2105 and 1.2106, with regard to current and former 
defaults or delinquencies.
    57. The Commission's Red Light Display System, which provides 
information regarding debts currently owed to the Commission, may not 
be determinative of an auction applicant's ability to comply with the 
default and delinquency disclosure requirements of section 1.2105. 
While the red light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's lack of 
current red light status is not necessarily determinative of its 
eligibility to participate in an auction (or whether it may be subject 
to an increased upfront payment obligation). A prospective applicant in 
Auction 106 should note that any long-form application filed after the 
close of bidding will be reviewed for compliance with the Commission's 
red light rule, and such review may result in the dismissal of a 
winning bidder's long-form application. Applicants that have their 
long-form applications dismissed will be deemed to have defaulted and 
will be subject to default payments under 47 CFR 1.2104(g) and 
1.2109(c).
    58. Each applicant should carefully review all records and other 
available Federal agency databases and information sources to determine 
whether the applicant, or any of its affiliates, or any of its 
controlling interests, or any of the affiliates of its controlling 
interests, owes or was ever delinquent in the payment of non-tax debt 
owed to any Federal agency.
    59. Optional Applicant Status Identification. An applicant owned by 
members of minority groups and/or women, as defined in section 
1.2110(c)(3), or rural telephone companies, as defined in section 
1.2110(c)(4), may identify itself as such in its FCC Form 175. This 
applicant status information is optional and collected for statistical 
purposes only because it assists the Commission in monitoring the 
participation of various groups in its auctions.
    60. Noncommercial Educational Status Election. In the NCE Second 
Report and Order, the Commission held that applications for 
noncommercial educational (NCE) FM stations on non-reserved spectrum, 
filed during an FM filing window, will be returned as unacceptable for 
filing if mutually exclusive with any application for a commercial 
station. Auction applications specifying the same FM station 
construction permit are considered mutually exclusive. If an FCC Form 
175 filed during the Auction 106 filing window identifying the 
application's proposed station as NCE is mutually exclusive with any 
application filed during that window for a commercial station, the NCE 
application will be returned as unacceptable for filing. In the NCE 
Second Report and Order, the Commission determined that short-form 
applications that do not identify the facilities proposed in the FCC 
Form 175 as NCE will be considered, as a matter of law, applications 
for commercial broadcast stations. For this reason, each prospective 
applicant in this auction should consider carefully whether it wishes 
to propose NCE operation for any FM station acquired in this auction. 
This NCE election cannot be reversed after the initial application 
filing deadline.
    61. Only Minor Modifications to FCC Form 175 Allowed. After the 
initial FCC Form 175 filing deadline, an Auction 106 applicant will be 
permitted to make only minor modifications to its short-form 
application. Examples of minor changes include the deletion or addition 
of authorized bidders (to a maximum of three), revision of addresses 
and telephone numbers of the applicant, its responsible party, and its 
contact person, or change in the applicant's selected bidding option 
(electronic or telephonic). Major modifications to an FCC Form 175 
application (e.g., change of construction permit selection, change in 
required certifications, change in control of the applicant such as any 
change in ownership or control that would constitute an assignment or 
transfer of control of the applicant, claim eligibility for a higher 
percentage of bidding credit, or change of the identification of the 
application's proposed facilities as noncommercial educational) will 
not be permitted after the initial FCC Form 175 filing deadline. If an 
applicant makes a major amendment, as defined by section 1.2105(b)(2), 
the major amendment may result in disqualification of the applicant 
from participating in bidding. Even if an applicant's FCC Form 175 is 
dismissed, the applicant would remain subject to the prohibitions on 
certain communications of 47 CFR 1.2105(c) until the down payment 
deadline for this auction. Questions about FCC Form 175 amendments 
should be directed to the Auctions Division at (202) 418-0660.
    62. Maintaining Current Information in Short-Form Applications. 
Each applicant has a continuing obligation to maintain the accuracy and 
completeness of information furnished in its pending application in a 
competitive bidding proceeding. An auction applicant must furnish 
additional or corrected information to the Commission within five days 
after a significant occurrence, or amend its FCC Form 175 no more than 
five days after the applicant becomes aware of the need for the 
amendment. An applicant's obligation to make modifications to a pending 
auction application to provide additional or corrected information 
continues beyond the five-day period, even if the report is not made 
within the five-day period. Changes that cause a loss of or reduction 
in the percentage of bidding credit specified on the originally 
submitted application must be reported immediately, and no later than 
five business days after the change occurs. An applicant is obligated 
to amend its pending application even if a reported change is 
considered to be a major modification that may result in the dismissal 
of its application.
    63. Modifying an FCC Form 175. During the initial filing window, an 
applicant will be able to make any

[[Page 5154]]

necessary modifications to its FCC Form 175 in the Auction Application 
System. An applicant that has certified and submitted its FCC Form 175 
before the close of the initial filing window may continue to make 
modifications as often as necessary until the close of that window; 
however, the applicant must re-certify and re-submit its FCC Form 175 
before the close of the initial filing window to confirm and effect its 
latest application changes. After each submission, a confirmation page 
will be displayed stating the submission time and submission date.
    64. As with filing the FCC Form 175, 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 submissions 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.

III. Preparing for Bidding

    65. Due Diligence. Each potential bidder is solely responsible for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the value of the construction permit(s) it is 
seeking in this auction. The FCC makes no representations or warranties 
about the use of this spectrum or these construction permits for 
particular services. Each Applicant should be aware that an FCC auction 
represents an opportunity to become an FCC permittee in a broadcast 
service, subject to certain conditions and regulations. This includes 
the established authority of the Commission to alter the terms of 
existing licenses by rulemaking, which is equally applicable to 
licenses awarded by auction. An FCC auction does not constitute an 
endorsement by the FCC of any particular service, technology, or 
product, nor does an FCC construction permit or license constitute a 
guarantee of business success.
    66. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
Each potential bidder should perform technical analyses and/or refresh 
its previous analyses to assure itself that, should it become a winning 
bidder for any Auction 106 construction permit, it will be able to 
build and operate facilities that will fully comply with all applicable 
technical and legal requirements. Each applicant should inspect any 
prospective transmitter sites located in, or near, the service area for 
which it plans to bid, to confirm the availability of such sites, and 
to familiarize itself with the Commission's rules regarding any 
applicable federal, state or local requirements. See 47 CFR pt. 1, 
subpart I.
    67. Each applicant should continue to conduct its own research 
throughout Auction 106 to determine the existence of pending or future 
administrative or judicial proceedings that might affect its decision 
on continued participation in the auction. Each Auction 106 applicant 
is responsible for assessing the likelihood of the various possible 
outcomes and for considering the potential impact on construction 
permits available in this auction. The due diligence considerations 
mentioned in the Auction 106 Procedures Public Notice do not comprise 
an exhaustive list of steps that should be undertaken prior to 
participating in Auction 106. The burden is on the potential bidder to 
determine how much research to undertake, depending upon specific facts 
and circumstances related to its interests.
    68. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the construction permits available in Auction 106. Each 
potential bidder is responsible for undertaking research to ensure that 
any permits won in this auction will be suitable for its business plans 
and needs. Each potential bidder must undertake its own assessment of 
the relevance and importance of information gathered as part of its due 
diligence efforts.
    69. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third-party databases, including, for example, court docketing systems. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, it must 
obtain or verify such information from independent sources or assume 
the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.
    70. Bidder Education--Online Tutorial on Auction Process. An 
educational auction tutorial will be available on the Auction 106 web 
page by Tuesday, January 22, 2020. This online tutorial will provide 
information about pre-auction procedures, the FCC auction application 
system, completing short-form applications, auction conduct, the FCC 
auction bidding system, auction rules, and broadcast services rules. 
The online auction tutorial will be accessible on the Education tab of 
the Auction 106 website at www.fcc.gov/auction/106. Once posted, this 
tutorial will remain available and accessible anytime for reference in 
connection with the procedures outlined in the Auction 106 Procedures 
Public Notice.
    71. Short-Form Applications: Due Before 6:00 p.m. ET on February 
11, 2020. In addition to other requirements, in order to be eligible to 
bid in Auction 106, an applicant must first submit an FCC Form 175 
electronically via the Auction Application System, following the 
instructions set forth in Attachment B to the Auction 106 Procedures 
Public Notice. The FCC Form 175 will become available with the opening 
of the initial filing window and must be submitted prior to 6:00 p.m. 
on February 11, 2020. Late applications will not be accepted. No 
application fee is required.
    72. Applications may be filed at any time beginning at noon ET on 
January 29, 2020, until the filing window closes at 6:00 p.m. ET on 
February 11, 2020. Applicants are strongly encouraged to file early and 
are responsible for allowing adequate time for filing their 
applications. There are no limits or restrictions on the number of 
times an application can be updated or amended until the initial filing 
deadline on February 11, 2020.
    73. An applicant must always click on the CERTIFY & SUBMIT button 
on the Certify & Submit screen to successfully submit its FCC Form 175 
and any modifications; otherwise, the application or changes to the 
application will not be received or reviewed by Commission staff. 
Additional information about accessing, completing, and viewing the FCC 
Form 175 is included in Attachment B to the Auction 106 Procedures 
Public Notice. Applicants requiring technical assistance should contact 
FCC Auctions Technical Support at (877) 480-3201, option nine; (202) 
414-1250; or (202) 414-1255 (text telephony (TTY)); hours of service 
are Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET. All calls to 
Technical Support are recorded. The Commission periodically performs 
scheduled maintenance of its IT systems. During scheduled maintenance 
activities, which typically occur over the weekends, every effort is 
made to minimize any downtime to auction-related systems, including the 
auction

[[Page 5155]]

application system. However, there are occasions when auction-related 
systems may be temporarily unavailable.
    74. Public Notice of Applicant's Initial Application Status and 
Opportunity for Minor Modifications. After the deadline for filing 
auction applications, Commission staff will review all timely submitted 
applications to determine whether each applicant has complied with the 
application requirements and provided all information concerning its 
qualifications for bidding. Commission staff will issue a public notice 
with applicants' initial application status identifying (1) those that 
are complete; (2) those that are rejected; or (3) those that are 
incomplete or deficient because of minor defects that may be corrected. 
The public notice will include the deadline for resubmitting corrected 
applications, and a paper copy will be sent by overnight delivery to 
the contact address listed in the FCC Form 175 for each applicant. In 
addition, each applicant with an incomplete application will be sent 
information on the nature of the deficiencies in its application, along 
with the name and phone number of a Commission staff member who can 
answer questions specific to the application.
    75. Non-mutually exclusive applications will be listed in a 
subsequent public notice to be released by the Office of Economics and 
Analytics (OEA) and MB. Such applications will not proceed to auction, 
but will proceed in accordance with instructions set forth in that 
public notice. All mutually exclusive applications will be considered 
under the relevant procedures for conflict resolution. Mutually 
exclusive applications proposing commercial stations will proceed to 
auction.
    76. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the FCC Form 
175, unless the applicant's certifying official or contact person 
notifies the Commission in writing that applicant's counsel or other 
representative is authorized to speak on its behalf. Authorizations may 
be sent by email to [email protected].
    77. Public Notice of Applicant's Final Application Status After 
Upfront Payment Deadline. After review of resubmitted applications for 
Auction 106 and consideration of upfront payments, Commission staff 
will release a public notice identifying applicants that have become 
qualified bidders. A Qualified Bidders Public Notice will be issued 
before bidding in the auction begins. Qualified bidders are those 
applicants with submitted FCC Form 175 applications that are deemed 
timely filed and complete, and which have made a timely and sufficient 
upfront payment.
    78. Upfront Payments. In addition to other requirements, to be 
eligible to bid in this auction, a sufficient upfront payment and a 
complete and accurate FCC Remittance Advice Form (FCC Form 159, 
February 2003 edition) must be submitted before 6:00 p.m. ET on March 
20, 2020, following the procedures described in the Auction 106 
Procedures Public Notice and the instructions in its Attachment C. 
After completing its short-form application, an applicant will have 
access to an electronic version of the FCC Form 159. This FCC Form 159 
can be printed and the completed form must be sent by fax to the FCC at 
(202) 418-2843, or by email to [email protected].
    79. Making Upfront Payments by Wire Transfer. All upfront payments 
must be made by wire transfer. An applicant must initiate the wire 
transfer through its bank, authorizing the bank to wire funds from the 
applicant's account to the Commission's account at the U.S. Treasury. 
No other payment method is acceptable. The Commission will not accept 
checks, credit cards, or automated clearing house (ACH) payments. All 
payments must be made in U.S. dollars. Upfront payments for Auction 106 
go to a U.S. Treasury account number different from the accounts used 
in previous FCC auctions. The beneficiary account number is specific to 
the upfront payments for Auction 106. Do not use a beneficiary account 
number from a previous auction. Wire transfer information is specified 
in the Making Upfront Payments by Wire Transfer section of the Auction 
106 Procedures Public Notice.
    80. Each applicant is responsible for ensuring timely submission of 
its upfront payment and for timely filing of an accurate and complete 
Form 159. To avoid untimely payments, an applicant should discuss 
arrangements and deadlines with its financial institution (including 
that financial institution's specific wire transfer requirements) 
several days before it plans to make the wire transfer, and well ahead 
of the due date, as well as allow sufficient time for the wire transfer 
to be initiated and completed prior to the deadline. The Commission 
repeatedly has cautioned auction participants about the importance of 
planning ahead to prepare for unforeseen last-minute difficulties in 
making payments by wire transfer. Each applicant is responsible for 
obtaining confirmation from its financial institution that its wire 
transfer to U.S. Treasury was successful and from Commission staff that 
its upfront payment was timely received and that it was deposited into 
the proper account. To receive confirmation from Commission staff, 
contact Scott Radcliffe of the Office of Managing Director's Revenue & 
Receivables Operations Group/Auctions at (202) 418-7518, or Theresa 
Meeks at (202) 418-2945.
    81. Failure to deliver a sufficient upfront payment by the March 
20, 2020 deadline will result in dismissal of the short-form 
application and disqualification from participation in the auction.
    82. Completing and Submitting FCC Form 159. An accurate and 
complete Form 159 (February 2003 edition) must be sent to the FCC to 
accompany each upfront payment. At least one hour before placing the 
order for the wire transfer (but on the same business day), applicants 
must fax a completed Form 159 to the FCC at (202) 418-2843. On the fax 
cover sheet, write: Wire Transfer--Auction Payment for Auction 106. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to [email protected].
    83. Upfront Payments and Bidding Eligibility. In the Auction 106 
Comment Public Notice, an upfront payment amount was proposed for each 
construction permit, taking into account various factors related to the 
efficiency of the auction process and the potential value of similar 
construction permits, and comment was sought on the proposed upfront 
payment amounts.
    84. A commenter suggests that we reduce to zero the upfront 
payments for certain allotments. This comment fails to recognize that 
the refundable upfront payments not only establish each qualified 
bidder's bidding eligibility and ensure that the pace of bidding is 
managed appropriately, but the upfront payments also protect against 
frivolous or insincere bidding and provide the Commission with a source 
of funds from which to collect payments owed at the close of the 
bidding. For these reasons, this proposal was rejected and the upfront 
payment amounts specified for those allotments were retained. The 
upfront payment amounts proposed in the Auction 106 Comment Public 
Notice are unchanged from those proposed, and the specific upfront 
payment amounts and bidding units for each construction permit are set 
forth in Attachment A of the Auction 106 Procedures Public Notice.
    85. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the construction permits on which it will bid. 
It was

[[Page 5156]]

proposed in the Auction 106 Comment Public Notice that the amount of 
the upfront payment would determine a bidder's initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
place bids in any single round. Under that proposal, in order to bid on 
a particular construction permit, a qualified bidder must have selected 
the construction permit on its FCC Form 175 and must have a current 
eligibility level that meets or exceeds the number of bidding units 
assigned to that construction permit. At a minimum, therefore, an 
applicant's total upfront payment must be enough to establish 
eligibility to bid on at least one of the construction permits selected 
on its FCC Form 175, or else the applicant will not be qualified to 
participate in the auction. An applicant does not have to make an 
upfront payment to cover all construction permits the applicant 
selected on its FCC Form 175, but only enough to cover the maximum 
number of bidding units that are associated with construction permits 
on which the applicant wishes to place bids and hold provisionally 
winning bids in any given round. Provisionally winning bids are bids 
that would become final winning bids if the auction were to close after 
the given round. The total upfront payment does not affect the total 
dollar amount the bidder may bid on any given construction permit. No 
comments on this proposal were submitted, and it is adopted. Each 
applicant's upfront payment amount will determine that bidder's initial 
bidding eligibility.
    86. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that number of 
bidding units. To make this calculation, an applicant should add 
together the bidding units for all construction permits on which it 
seeks to be active in any given round. Applicants should check their 
calculations carefully, as there is no provision for increasing a 
bidder's eligibility after the upfront payment deadline.
    87. An applicant that is a former defaulter must pay an upfront 
payment 50% greater than that required of an applicant that is not a 
former defaulter. Defaults and delinquencies of the applicant itself 
and its controlling interests are included. If an applicant is a former 
defaulter, it must calculate its upfront payment for all of its 
selected construction permits by multiplying the number of bidding 
units on which it wishes to be active by 1.5. To calculate the number 
of bidding units to assign to former defaulters, the Commission will 
divide the upfront payment received by 1.5 and round the result up to 
the nearest bidding unit.
    88. If a former defaulter fails to submit a sufficient upfront 
payment to establish eligibility to bid on at least one of the 
construction permits selected in its FCC Form 175, the applicant will 
not be eligible to participate in bidding in the auction. That 
applicant will retain its status as an Auction 106 applicant and will 
remain subject to 47 CFR 1.2105(c), 73.5002(d), (e).
    89. Auction Registration. All qualified bidders for Auction 106 are 
automatically registered for the auction. Registration materials will 
be distributed prior to the auction by overnight mail. The mailing will 
be sent only to the contact person at the contact address listed in the 
FCC Form 175 and will include the SecurID[supreg] tokens that will be 
required to place bids, the web address and instructions for accessing 
and logging in to the auction bidding system, an FCC assigned username 
(User ID) for each authorized bidder, and the Auction Bidder Line phone 
number.
    90. Qualified bidders that do not receive this registration mailing 
will not be able to submit bids. Therefore, if this mailing is not 
received by the contact representative for a qualified bidder by noon 
on Wednesday, April 22, 2020, call the Auctions Hotline at (717) 338-
2868. Receipt of this registration mailing is critical to participating 
in the auction, and each qualified bidder is responsible for ensuring 
it has received all of the registration materials.
    91. If SecurID[supreg] tokens are lost or damaged, only an 
authorized bidder, the contact person, or the certifying official on 
the applicant's FCC Form 175 may request replacements. To request 
replacement of these items, call the Auction Bidder Line at the 
telephone number provided in the registration materials or the Auctions 
Hotline at (717) 338-2868.
    92. Remote Electronic Bidding via the FCC Auction Bidding System. 
The Commission will conduct this auction remotely over the internet, 
and telephonic bidding will be available as well. There will be no on-
site bidding during Auction 106. Only qualified bidders are permitted 
to bid. Each authorized bidder must have its own SecurID[supreg] token, 
which the Commission will provide at no charge. Each qualified bidder 
with one authorized bidder will be issued two SecurID[supreg] tokens, 
while qualified bidders with two or three authorized bidders will be 
issued three tokens. For security purposes, the SecurID[supreg] tokens, 
bidding system web address, FCC assigned username, and the telephonic 
bidding telephone number are only mailed to the contact person at the 
contact address listed on the FCC Form 175. Each SecurID[supreg] token 
is tailored to a specific auction. SecurID[supreg] tokens issued for 
other auctions or obtained from a source other than the FCC will not 
work for Auction 106.
    93. The Commission makes no warranties whatsoever with respect to 
the FCC auction application system and the auction bidding system. In 
no event shall the Commission, or any of its officers, employees, or 
agents, be liable for any damages whatsoever (including, but not 
limited to, loss of business profits, business interruption, loss of 
business information, or any other loss) arising out of or relating to 
the existence, furnishing, functioning, or use of the FCC auction 
systems that are accessible to qualified bidders in connection with 
this auction. Moreover, no obligation or liability will arise out of 
the Commission's technical, programming, or other advice or service 
provided in connection with the FCC auction systems.
    94. To the extent an issue arises with the auction bidding system 
itself, the Commission will take all appropriate measures to resolve 
such issues quickly and equitably. The Commission periodically performs 
scheduled maintenance of its IT systems which typically occur over the 
weekends. Every effort is made to minimize any downtime to auction-
related systems, including the Commission's bidding system. However, 
there are occasions when auction-related systems may be temporarily 
unavailable.
    95. Should an issue arise that is outside the auction bidding 
system or attributable to a bidder, including, but not limited to, a 
bidder's hardware, software, or internet access problem that prevents 
the bidder from submitting a bid prior to the end of a round, the 
Commission shall have no obligation to resolve or remedy such an issue 
on behalf of the bidder. Similarly, if an issue arises due to bidder 
error using the auction bidding system, the Commission shall have no 
obligation to resolve or remedy such an issue on behalf of the bidder. 
After the close of a bidding round, the results of bid processing will 
not be altered absent evidence of any failure in the auction bidding 
system.
    96. Mock Auction. All qualified bidders will be eligible to 
participate in a mock auction on Friday, April 24, 2020. The mock 
auction will enable bidders to become familiar with the FCC

[[Page 5157]]

auction bidding system prior to the auction. Bidders are strongly 
encouraged to participate in the mock auction. Details will be 
announced by public notice.
    97. Fraud Alert. Some unscrupulous entrepreneurs may attempt to use 
Auction 106 to deceive and defraud unsuspecting investors. Information 
about deceptive telemarketing investment schemes is available from the 
FCC, FTC, and SEC. Information for potential bidders and investors may 
be obtained from the following sources: (1) The FCC's Consumer Call 
Center at (888) 225-5322 or by visiting www.fcc.gov/general/frauds-scams-and-alerts-guides; (2) the FTC at (877) FTC-HELP ((877) 382-4357) 
or by visiting www.consumer.ftc.gov/articles/0238-investment-risks; or 
(3) the SEC at (202) 942-7040 or by visiting www.sec.gov/investor. 
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.
    98. Environmental Review Requirements. Permittees or licensees must 
comply with the Commission's rules for environmental review under the 
National Environmental Policy Act, the National Historic Preservation 
Act, and other federal environmental statutes. The construction of a 
broadcast facility is a federal action, and the permittee or licensee 
must comply with the Commission's environmental rules for each such 
facility. These environmental rules require, among other things, that 
the permittee or licensee consult with expert agencies having 
environmental responsibilities, including the U.S. Fish and Wildlife 
Service, the State Historic Preservation Office, the U.S. Army Corps of 
Engineers, and the Federal Emergency Management Agency (through the 
local authority with jurisdiction over floodplains). In assessing the 
effect of facility construction on historic properties, the permittee 
or licensee must follow the provisions of the FCC's Nationwide 
Programmatic Agreement Regarding the Section 106 National Historic 
Preservation Act Review Process. The permittee or licensee must prepare 
environmental assessments for any facility that may have a significant 
impact in or on wilderness areas, wildlife preserves, threatened or 
endangered species, or designated critical habitats, historical or 
archaeological sites, Indian religious sites, floodplains, and surface 
features. In addition, the permittee or licensee must prepare 
environmental assessments for facilities that include high intensity 
white lights in residential neighborhoods or excessive radio frequency 
emission.

IV. Bidding

A. Auction Structure

    99. Simultaneous Multiple Round Auction. In the Auction 106 Comment 
Public Notice, it was proposed to auction all construction permits 
listed in Attachment A of the Auction 106 Procedures Public Notice in a 
single auction using the Commission's standard simultaneous multiple-
round auction format. This type of auction offers every construction 
permit for bid at the same time and consists of successive bidding 
rounds in which qualified bidders may place bids on individual 
construction permits. No comment was received for this proposal, and 
this proposal is adopted. Unless otherwise announced, bids will be 
accepted on all construction permits in each round of the auction until 
bidding stops on every construction permit.
    100. FCC Auction Bidding System. The Commission will conduct this 
auction over the internet using the FCC auction bidding system. 
Qualified bidders are permitted to bid electronically via the internet 
or by telephone using the telephonic bidding option. For this reason, 
each applicant should indicate its bidding preference, electronic or 
telephonic, on its FCC Form 175. Telephonic bid assistants are required 
to use a script when entering bids placed by telephone. Telephonic 
bidders must allow sufficient time to bid by placing their calls well 
in advance of the close of a round. The length of a call to place a 
telephonic bid may vary; please allow a minimum of ten minutes. All 
such telephone calls are recorded.
    101. An Auction 106 bidder's ability to bid on specific 
construction permits is determined by two factors: (1) The construction 
permits selected by that applicant in its FCC Form 175 and (2) the 
bidder's bidding eligibility measured in bidding units. The FCC auction 
bidding system will allow bidders to submit bids on only those 
construction permits the bidder selected on its FCC Form 175.
    102. In order to access the bidding function of the FCC auction 
bidding system, bidders must be logged in during a bidding round using 
the passcode generated by the SecurID[supreg] token and a personal 
identification number (PIN) created by the bidder. Bidders are strongly 
encouraged to print a round summary for each round after they have 
completed all of their activity for that round.
    103. Round Structure. The initial schedule of bidding rounds will 
be announced in the public notice listing the qualified bidders in the 
auction, which is released at least one week before bidding in the 
auction starts. Each bidding round is followed by the release of round 
results. Multiple bidding rounds may be conducted each day. Moreover, 
unless otherwise announced, bidding on all construction permits will be 
conducted on each business day until bidding has stopped on all 
construction permits.
    104. Commission staff retain the discretion to change the bidding 
schedule in order to foster an auction pace that reasonably balances 
speed with the bidders' need to study round results and adjust their 
bidding strategies. Commission staff may change the amount of time for 
the bidding rounds, the amount of time between rounds, or the number of 
rounds per day, depending upon bidding activity and other factors, by 
prior announcement.
    105. Eligibility and Activity Rules. Upfront payments will 
determine initial (maximum) bidding eligibility (as measured in bidding 
units) for Auction 106. The amount of the upfront payment submitted by 
a bidder determines initial bidding eligibility, the maximum number of 
bidding units on which a bidder may be active. Each construction permit 
is assigned a specific number of bidding units listed in Attachment A 
to the Auction 106 Procedures Public Notice. Bidding units assigned to 
each construction permit do not change as prices rise during the 
auction. Upfront payments are not attributed to specific construction 
permits. Rather, a bidder may place bids on any of the construction 
permits selected on its FCC Form 175 as long as the total number of 
bidding units associated with those construction permits does not 
exceed the bidder's current eligibility. Eligibility cannot be 
increased during the auction; it can only remain the same or decrease. 
In calculating its upfront payment amount, an applicant must determine 
the maximum number of bidding units it may wish to bid on or hold 
provisionally winning bids on in any single round, and submit an 
upfront payment amount covering that total number of bidding units. At 
a minimum, an applicant's upfront payment must cover the bidding units 
for at least one of the construction permits it selected on its FCC 
Form 175. The total upfront payment does not affect the total dollar 
amount a bidder may bid on any given construction permit.

[[Page 5158]]

    106. An activity rule requires bidders to bid actively throughout 
the auction, rather than wait until late in the auction before 
participating. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction. A bidder's activity level in a round is the sum of the 
bidding units associated with construction permits covered by the 
bidder's new bids in the current round and provisionally winning bids 
from the previous round. Provisionally winning bids are bids that would 
become final winning bids if the auction were to close after the given 
round.
    107. The minimum required activity is expressed as a percentage of 
the bidder's current eligibility, and it increases by stage as the 
auction progresses. Failure to maintain the requisite activity level 
will result in the use of an activity rule waiver, if any remain, or a 
reduction in the bidder's eligibility, possibly curtaining or 
eliminating the bidder's ability to place additional bids in the 
auction.
    108. To provide bidders with flexibility to pursue backup 
strategies if they so desire, a more flexible activity requirement is 
adopted than that proposed in the Auction 106 Comment Public Notice for 
this auction of well over 100 permits in which applicants are not 
limited in their permit selections and may seek to implement backup 
plans as price information is made available during bidding rounds. 
Initially two activity requirements are adopted: An 80% requirement for 
the beginning of the auction and a 95% requirement that will be used 
later in the auction.
    109. Auction Stages. Auction 106 will be conducted in at least two 
stages as described below. A bidder desiring to maintain its current 
bidding eligibility will be required to be active on construction 
permits representing at least 80% of its current eligibility during 
each round of Stage One, and on at least 95% of its current bidding 
eligibility in Stage Two.
    110. Stage One: During the first stage of the auction, a bidder 
desiring to maintain its current bidding eligibility will be required 
to be active on construction permits representing at least 80% of its 
current bidding eligibility in each bidding round. Failure to maintain 
the required activity level will result in the use of an activity rule 
waiver or, if the bidder has no activity rule waivers remaining, a 
reduction in the bidder's bidding eligibility in the next round. During 
Stage One, reduced eligibility for the next round will be calculated by 
multiplying the bidder's current round activity (the sum of bidding 
units of the bidder's provisionally winning bids and bids during the 
current round) by five-fourths (\5/4\).
    111. Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current bidding eligibility is required to be 
active on 95% of its current bidding eligibility. Failure to maintain 
the required activity level will result in the use of an activity rule 
waiver or, if the bidder has no activity rule waivers remaining, a 
reduction in the bidder's bidding eligibility in the next round. During 
Stage Two, reduced eligibility for the next round will be calculated by 
multiplying the bidder's current round activity (the sum of bidding 
units of the bidder's provisionally winning bids and bids during the 
current round) by twenty-nineteenths (20/19).
    Since activity requirements increase in Stage Two, bidders must 
carefully check their activity during the first round following a stage 
transition to ensure that they are meeting the increased activity 
requirement. This is especially critical for bidders that have 
provisionally winning bids and do not plan to submit new bids. In past 
auctions, some bidders have inadvertently lost bidding eligibility or 
used an activity rule waiver because they did not re-verify their 
activity status at stage transitions. Bidders may check their activity 
against the required activity level by logging into the FCC auction 
bidding system. Prior to any move from Stage One to Stage Two, bidders 
will be alerted during the auction by announcement in the auction 
bidding system.
    112. Stage Transitions. The auction will advance from Stage One to 
Stage Two after Commission staff consider a variety of measures of 
auction activity, including, but not limited to, the percentages of 
construction permits (as measured in bidding units) on which there are 
new bids, the number of new bids, and the increase in revenue.
    113. The auction will start in Stage One. The stage of the auction 
does not affect the auction stopping rules; the auction may conclude in 
Stage One. Commission staff will regulate the pace of the auction by 
announcement in the auction bidding system.
    114. Commission staff retain the discretion to change the activity 
requirements during the auction as circumstances warrant, and also have 
other mechanisms to influence the speed of the auction. For example, 
there may be no transition to Stage Two if the auction is progressing 
satisfactorily under the Stage One activity requirement, or there may 
be a transition to Stage Two with an activity requirement that is 
higher or lower than 95%, or add an additional stage with a higher 
activity requirement. This determination will be based on a variety of 
measures of auction activity, including, but not limited to, the number 
of new bids and the percentages of construction permits (as measured in 
bidding units) on which there are new bids.
    115. If Commission staff implement a stage with an activity 
requirement other than 80% or 95%, a bidder's reduced eligibility for 
the next round will be calculated by multiplying that bidder's current 
round activity by the reciprocal of the activity requirement. For 
example, if there is a 98% activity requirement, the bidder's current 
round activity would be multiplied by 50/49; if there is a 100 percent 
activity requirement, the bidder's current round activity would become 
its bidding eligibility (current round activity would be multiplied by 
\1/1\).
    116. Activity Rule Waivers. Each qualified bidder in the auction 
will be provided with three activity rule waivers, which are 
principally a mechanism for a bidder to avoid the loss of bidding 
eligibility in the event that exigent circumstances prevent it from 
bidding in a particular round. Use of an activity rule waiver preserves 
the bidders eligibility despite its activity in the current round being 
below the required minimum activity level. An activity rule waiver 
applies to an entire round of bidding, not to a particular construction 
permit. A bidder may use an activity rule waiver in any round of the 
auction as long as the bidder has not used all of its waivers.
    117. The FCC auction bidding system will assume that a bidder that 
does not meet the activity requirement would prefer to use an activity 
rule waiver (if available) rather than lose bidding eligibility. 
Therefore, the system will automatically apply a waiver at the end of 
any bidding round in which a bidder's activity level is below the 
minimum required unless (1) the bidder has no activity rule waiver 
remaining or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, therefore meeting the activity 
requirement. If a bidder has no waivers remaining and does not satisfy 
the required activity level, the bidder's current eligibility will be 
permanently reduced, possibly curtailing or eliminating its ability to 
place additional bids in the auction.
    118. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity

[[Page 5159]]

rule waiver. If so, the bidder must affirmatively override the 
automatic waiver mechanism during the bidding round by using the reduce 
eligibility function in the FCC auction bidding system. The bidder's 
eligibility would be permanently reduced to bring it into compliance 
with the activity rule. Reducing eligibility is an irreversible action; 
once eligibility has been reduced, a bidder cannot regain its lost 
bidding eligibility.
    119. A bidder may apply an activity rule waiver proactively as a 
means to keep the auction open without placing a bid. If a bidder 
proactively applies an activity rule waiver during a bidding round in 
which no bids are placed, the auction will remain open and the bidder's 
eligibility will be preserved. An automatic waiver applied by the FCC 
auction bidding system in a round in which there is no new bid or a 
proactive waiver will not keep the auction open.
    120. Auction Stopping Rules. For Auction 106, a simultaneous 
stopping rule approach was proposed, which means all construction 
permits remain available for bidding until bidding stops on every 
construction permit. Specifically, bidding will close on all 
construction permits after the first round in which no bidder submits 
any new bid or applies a proactive waiver.
    121. Comment was sought on alternative versions of the simultaneous 
stopping rule for Auction 106: Option 1. The auction would close for 
all construction permits after the first round in which no bidder 
applies a proactive waiver or places any new bid on a construction 
permit on which it is not the provisionally winning bidder. Thus, 
absent any other bidding activity, a bidder placing a new bid on a 
construction permit for which it is the provisionally winning bidder 
would not keep the auction open under this modified stopping rule. 
Option 2. The auction would close for all construction permits after 
the first round in which no bidder applies a waiver or places any new 
bid on any construction permit that already has a provisionally winning 
bid. Thus, absent any other bidding activity, a bidder placing a new 
bid on an FCC-held construction permit (a construction permit that does 
not have a provisionally winning bid) would not keep the auction open 
under this modified stopping rule. Option 3. The auction would close 
using a modified version of the simultaneous stopping rule that 
combines Option 1 and Option 2. Option 4. The auction would close after 
a specified number of additional rounds (special stopping rule) to be 
announced in advance in the FCC auction bidding system. If this special 
stopping rule is invoked, bids will be accepted in the specified final 
round(s), after which the auction will close. Option 5. The auction 
would remain open even if no bidder places any new bids or applies a 
waiver. In this event, the effect will be the same as if a bidder had 
applied a waiver. Thus, the activity rule will apply as usual, and a 
bidder with insufficient activity will either lose bidding eligibility 
or use a waiver.
    122. These proposed options will be exercised only in certain 
circumstances, for example, where the auction is proceeding unusually 
slowly or quickly, there is minimal overall bidding activity, or it 
appears likely that the auction will not close within a reasonable 
period of time or will close prematurely. Before exercising these 
options, Commission staff may attempt to change the pace of bidding in 
the auction. For example, the number of bidding rounds per day and/or 
the minimum acceptable bids may change. Commission staff retain the 
discretion to exercise any of these options with or without prior 
announcement during the auction.
    123. Auction Delay, Suspension, or Cancellation. By public notice 
or by announcement through the FCC auction bidding system, Commission 
staff may delay, suspend, or cancel bidding in the auction in the event 
of natural disaster, technical obstacle, network interruption, 
administrative or weather necessity, evidence of an auction security 
breach or unlawful bidding activity, or for any other reason that 
affects the fair and efficient conduct of competitive bidding.
    124. In such cases, Commission staff, in their sole discretion, may 
elect to resume the auction starting from the beginning of the current 
round or from some previous round, or cancel the auction in its 
entirety. This authority will be exercised solely at the discretion of 
Commission staff, and not as a substitute for situations in which 
bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

    125. Bid Amounts. In each round of Auction 106 a qualified bidder 
will be able to place a bid on a given construction permit in any of up 
to nine different amounts if a bidder has sufficient eligibility to 
place a bid on the particular construction permit. The FCC auction 
bidding system interface will list the nine acceptable bid amounts for 
each construction permit.
    126. No comments were received on the proposal to use a minimum 
acceptable bid increment percentage of 10% to calculate the first of 
the acceptable bid amounts. This means that the minimum acceptable bid 
amount for a construction permit will be approximately 10% greater than 
the provisionally winning bid amount for the construction permit. No 
comments were received on the proposal to use an additional bid 
increment percentage of 5% to calculate the eight additional acceptable 
bid amounts. Therefore, the auction will begin with a minimum 
acceptable bid increment percentage of 10% and an additional bid 
increment percentage of 5%.
    127. In Auction 106, the minimum acceptable bid amount for a 
construction permit will be equal to its minimum opening bid amount 
until there is a provisionally winning bid for the construction permit. 
After there is a provisionally winning bid for a construction permit, 
the minimum acceptable bid amount will be calculated by multiplying the 
provisionally winning bid amount by one plus the minimum acceptable bid 
percentage--i.e., provisionally winning bid amount * 1.10, rounded.
    128. In Auction 106, the FCC auction bidding system will calculate 
the eight additional bid amounts by multiplying the minimum acceptable 
bid amount by the additional bid increment percentage of 5%, and that 
result (rounded) is the additional increment amount. The first 
additional acceptable bid amount equals the minimum acceptable bid 
amount plus the additional increment amount. The second additional 
acceptable bid amount equals the minimum acceptable bid amount plus two 
times the additional increment amount; the third additional acceptable 
bid amount is the minimum acceptable bid amount plus three times the 
additional increment amount; etc. Because the additional bid increment 
percentage is 5%, the calculation of the additional increment amount is 
(minimum acceptable bid amount) * (0.05), rounded. The first additional 
acceptable bid amount equals (minimum acceptable bid amount) + 
(additional increment amount); the second additional acceptable bid 
amount equals (minimum acceptable bid amount) + (2*(additional 
increment amount)); the third additional acceptable bid amount equals 
(minimum acceptable bid amount) + (3*(additional increment amount)); 
etc.
    129. The result of the calculation of a minimum acceptable bid 
increment and the result of the calculation of each additional bid 
increment is subject to a minimum of $100. Any results above $10,000 
will be rounded to the nearest $1,000, results below $10,000 but above 
$1,000 will be rounded to the nearest

[[Page 5160]]

$100, while results below $1,000 will be rounded to the nearest $10.
    130. Commission staff retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid increment 
percentage, the additional bid increment percentage, and the number of 
acceptable bid amounts, with the discretion to do so on a construction 
permit-by-construction permit basis, as well as to retain the 
discretion to limit (a) the amount by which a minimum acceptable bid 
for a construction permit may increase compared with the corresponding 
provisionally winning bid, and (b) the amount by which an additional 
bid amount may increase compared with the immediately preceding 
acceptable bid amount. For example, Commission staff could set a $1,000 
limit on increases in minimum acceptable bid amounts over provisionally 
winning bids. Thus, if calculating a minimum acceptable bid using the 
minimum acceptable bid increment percentage results in a minimum 
acceptable bid amount that is $1,200 higher than the provisionally 
winning bid on a construction permit, the minimum acceptable bid amount 
would instead be capped at $1,000 above the provisionally winning bid. 
If we exercise this discretion, we will alert bidders by announcement 
in the FCC auction bidding system during the auction.
    131. Provisionally Winning Bids. In Auction 106, the FCC auction 
bidding system at the end of each bidding round will determine a 
provisionally winning bid for each construction permit based on the 
highest bid amount received for that permit. A provisionally winning 
bid will remain the provisionally winning bid until there is a higher 
bid on the same construction permit at the close of a subsequent round. 
Provisionally winning bids at the end of the auction become the winning 
bids. Provisionally winning bids count toward activity for purposes of 
the activity requirement.
    132. A pseudo-random number generator will be used to select a 
single provisionally winning bid in the event that identical high bid 
amounts are submitted on a construction permit in a given round (i.e., 
tied bids). The FCC auction bidding system will assign a pseudo-random 
number to each bid upon submission. The tied bid with the highest 
pseudo-random number wins the tiebreaker, and becomes the provisionally 
winning bid. The remaining bidders, as well as the provisionally 
winning bidder, can submit higher bids in subsequent rounds. However, 
if the auction were to close with no other bids being placed, the 
winning bidder would be the one that placed the provisionally winning 
bid. If the construction permit receives any bids in a subsequent 
round, the provisionally winning bid again will be determined by the 
highest bid amount received for the construction permit.
    133. Bid Removal and Bid Withdrawal. Each qualified bidder has the 
option of removing any bids placed in a round provided that such bids 
are removed before the close of that bidding round. By removing a bid 
within a round, a bidder effectively unsubmits the bid. A bidder 
removing a bid placed in the same round is not subject to withdrawal 
payments. Removing a bid will affect a bidder's activity because a 
removed bid no longer counts toward bidding activity for the round. 
Once a round closes, a bidder may no longer remove a bid.
    134. Bidders are prohibited from withdrawing any bid after close of 
the round in which that bid was placed. Bidders are cautioned to select 
bid amounts carefully because no bid withdrawals will be allowed, even 
if a bid was mistakenly or erroneously made.
    135. Bidding Results. Bids placed during a round will not be made 
public until the conclusion of that round. After a round closes, 
Commission staff will compile reports of all bids placed, current 
provisionally winning bids, new minimum acceptable bid amounts for the 
following round, whether the construction permit is FCC-held, and 
bidder eligibility status (bidding eligibility and activity rule 
waiver), and post the reports for public access.
    136. Auction Announcements. Commission staff will use auction 
announcements to report necessary information to bidders, such as 
schedule changes. All auction announcements will be available by 
clicking a link in the FCC auction bidding system.

V. Post-Auction Procedures

    137. Shortly after bidding has closed, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
final payments, and long-form applications (FCC Forms 2100, Schedule 
301-FM).
    138. Down Payments. As required by 47 CFR 1.2107(b), within ten 
business days after release of the auction closing public notice, each 
winning bidder must submit sufficient funds (in addition to its upfront 
payment) to bring its total amount of money on deposit with the 
Commission for Auction 106 to 20% of the net amount of its winning 
bid(s) (gross bid(s) less any applicable new entrant bidding 
credit(s)).
    139. Final Payments. As required by section 1.2109(a), each winning 
bidder will be required to submit the balance of the net amount for 
each of its winning bids within ten business days after the applicable 
deadline for submitting down payments.
    140. Long-Form Applications. Within 30 days following the close of 
bidding and notification to the winning bidders, unless a longer period 
is specified by public notice, winning bidders must electronically 
submit a properly completed long-form application (FCC Form 2100, 
Schedule 301-FM, Commercial FM Station Construction Permit 
Application), and required exhibits for each construction permit won 
through Auction 106. A winning bidder in a commercial broadcast 
spectrum auction is required to submit an application filing fee with 
its post-auction long-form application. Winning bidders claiming new 
entrant status must include an exhibit demonstrating their eligibility 
for the bidding credit. Further instructions on these and other filing 
requirements will be provided to winning bidders in the auction closing 
public notice.
    141. Default and Disqualification. Any winning bidder that defaults 
or is disqualified after the close of the auction (i.e., fails to remit 
the required down payment within the prescribed period of time, fails 
to submit a timely long-form application, fails to make a full and 
timely final payment, or is otherwise disqualified) is liable for a 
default payment as described in 47 CFR 1.2104(g)(2). This default 
payment consists of a deficiency payment, equal to the difference 
between the amount of the Auction 106 bidder's winning bid and the 
amount of the winning bid the next time a construction permit covering 
the same spectrum is won in an auction, plus an additional payment 
equal to a percentage of the defaulter's bid or of the subsequent 
winning bid, whichever is less. An additional payment for defaults in 
Auction 106 under 47 CFR 1.2104(g)(2) will be assessed at 20% of the 
applicable bid.
    142. In the event of a default, the Commission has the discretion 
to re-auction the construction permit or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the Commission may 
declare the applicant and its principals ineligible to bid in future 
auctions, and may take any other action that it deems necessary, 
including

[[Page 5161]]

institution of proceedings to revoke any existing authorizations held 
by the applicant.
    143. Refund of Remaining Upfront Payment Balance. All refunds of 
upfront payment balances will be returned to the payer of record as 
identified on the FCC Form 159 unless the payer submits written 
authorization instructing otherwise. This written authorization must 
comply with the refund instructions provided in the Auction 106 
Procedures Public Notice.

VI. Procedural Matters

    144. Paperwork Reduction Act. The Office of Management and Budget 
(OMB) has approved the information collections in the Application to 
Participate in an FCC Auction, FCC Form 175. The Auction 106 Procedures 
Public Notice does not contain new or modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. Therefore, it does not contain any new or modified 
information burden for small business concerns with fewer than 25 
employees pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198. See 44 U.S.C. 3506(c)(4).
    145. Congressional Review Act. The Commission will submit the 
Auction 106 Procedures Public Notice to the Administrator of OMB's 
Office of Information and Regulatory Affairs for concurrence as to 
whether these procedures are major or non-major under the Congressional 
Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the 
Auction 106 Procedures Public Notice in a report to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, 5 U.S.C. 801(a)(1)(A).
    146. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 5 
U.S.C. 601-612, the Commission prepared Initial Regulatory Flexibility 
Analyses (IRFAs) in connection with the Broadcast Competitive Bidding 
Notice of Proposed Rulemaking (NPRM), and other Commission NPRMs 
(collectively Competitive Bidding NPRMs) pursuant to which Auction 106 
will be conducted. Final Regulatory Flexibility Analyses (FRFAs) 
likewise were prepared in the Broadcast Competitive Bidding Order and 
other Commission orders (collectively Competitive Bidding Orders) 
pursuant to which Auction 106 will be conducted. In this proceeding, a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Auction 106 Comment Public Notice, 84 FR 
59605, Nov. 5, 2019. The Commission sought written public comment on 
the proposals in the Auction 106 Comment Public Notice, including 
comments on the Supplemental IRFA. This Supplemental Final Regulatory 
Flexibility Analysis (Supplemental FRFA) supplements the FRFAs in the 
Competitive Bidding Orders to reflect the actions taken in the Auction 
106 Procedures Public Notice and conforms to the RFA.
    147. Need for, and Objectives of, the Public Notice. The procedures 
for the conduct of Auction 106 as described in the Auction 106 
Procedures Public Notice implement the Commission's competitive bidding 
rules, which have been adopted by the Commission in multiple notice-
and-comment rulemaking proceedings. More specifically, the Auction 106 
Procedures Public Notice provides an overview of the procedures, terms 
and conditions governing Auction 106 and the post-auction application 
and payment processes, as well as setting the minimum opening bid 
amount for each of the FM broadcast construction permits that are 
subject to being assigned by competitive bidding.
    148. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 106 participants, including 
small businesses, the Auction 106 Procedures Public Notice announces 
the following procedures: (1) Use of a simultaneous multiple-round 
auction format, consisting of sequential bidding rounds with a 
simultaneous procedure; (2) a specific upfront payment amount for each 
construction permit; (3) a specific minimum opening bid amount for each 
construction permit; (4) a specific number of bidding units for each 
construction permit; (5) a bidder's initial bidding eligibility will be 
based on the amount of that bidder's upfront payment; (6) a two-stage 
auction with an activity requirement in which a bidder is required to 
be active on 80% of its bidding eligibility in stage one and 95% of its 
bidding eligibility in stage two; (7) provision of three activity 
waivers for each qualified bidder to allow it to preserve bidding 
eligibility during the course of the auction; (8) use of minimum 
acceptable bid amounts and additional acceptable increments, along with 
the methodology for calculating such amounts; (9) a procedure for 
breaking ties if identical high bid amounts are submitted on one permit 
in a given round; (10) a prohibition on bid withdrawals; and (11) 
establishment of an additional default payment percentage of 20% of the 
applicable bid under 47 CFR 1.2104(g)(2) in the event that a winning 
bidder defaults or is disqualified after the auction.
    149. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
addressed the procedures and policies proposed in the Supplemental 
IFRA.
    150. 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, 5 U.S.C. 604(a)(3). The Chief Counsel did not file any 
comments in response to the procedures that were proposed in the 
Auction 106 Comment Public Notice.
    151. 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 rules adopted herein. 5 U.S.C. 
604(a)(3). The RFA generally defines the term small entity as having 
the same meaning as the terms small business, small organization, and 
small governmental jurisdiction. 5 U.S.C. 601(6). In addition, the term 
small business has the same meaning as the term small business concern 
under the Small Business Act. 5 U.S.C. 601(3). 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, 15 U.S.C. 632(a)(1), (a)(2)(A).
    152. The specific competitive bidding procedures and minimum 
opening bid amounts described in the Auction 106 Procedures Public 
Notice will affect all applicants participating in Auction 106. The 
number of entities that may apply to participate in Auction 106 is 
unknown. Based on the number of applicants in prior FM auctions, the 
estimate is that the number of applicants for Auction 106 may range 
from approximately 175 to 260. This estimate is based on the number of 
applicants who filed short-form applications to participate in previous 
auctions of FM construction permits held to date, an average of 1.98 
short-form applications were filed per construction permit offered, 
with a median of 1.365 applications per permit. The actual number of 
applicants for Auction 106 could vary significantly

[[Page 5162]]

as any individual's or entity's decision to participate may be affected 
by a number of factors beyond the Commission's knowledge.
    153. Radio Stations. This Economic Census category comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public. Programming may originate in their own studio, 
from an affiliated network, or from external sources. The SBA has 
established a small business size standard for this category as firms 
having $41.5 million or less in annual receipts. Economic Census data 
for 2012 shows that 2,849 radio station firms operated during that 
year. Of that number, 2,806 firms operated with annual receipts of less 
than $25 million per year, 17 with annual receipts between $25 million 
and $49,999,999 and 26 with annual receipts of $50 million or more. 
Therefore, based on the SBA's size standard, the majority of such 
entities are small entities.
    154. According to Commission staff review of the BIA/Kelsey, LLC's 
Media Access Pro Radio Database as of September 17, 2019, about 11,033 
(or about 99.95%) of 11,039 commercial radio stations had revenues of 
$41.5 million or less and thus qualify as small entities under the SBA 
definition. The SBA size standard data does not enable us to make a 
meaningful estimate of the number of small entities who may participate 
in Auction 106.
    155. Also, in assessing whether a business entity qualifies as 
small under the SBA definition, business control affiliations must be 
included. Our estimate therefore likely overstates the number of small 
entities that might be affected by this auction because the revenue 
figure on which it is based does not include or aggregate revenues from 
affiliated companies. Moreover, the definition of small business also 
requires that an entity not be dominant in its field of operation and 
that the entity be independently owned and operated. The estimate of 
small businesses to which Auction 106 competitive bidding rules may 
apply does not exclude any radio station from the definition of a small 
business on these bases and is therefore over-inclusive to that extent. 
Furthermore, it is not possible at this time to define or quantify the 
criteria that would establish whether a specific radio station is 
dominant in its field of operation. In addition, it is difficult to 
assess these criteria in the context of media entities and therefore 
these estimates of small businesses to which they apply may be over-
inclusive to this extent.
    156. It is not possible to accurately develop an estimate of how 
many of the entities in this auction would be small businesses based on 
the number of small entities that applied to participate in prior 
broadcast auctions because that information is not collected from 
applicants for broadcast auctions in which bidding credits are not 
based on an applicant's size (as is the case in auctions of licenses 
for wireless services).
    157. According to the SBA, a radio station is a small business 
concern if it has annual revenue of $41.5 million or less. Based on 
Commission staff review of the BIA/Kelsey, LLC's Media Access Pro Radio 
Database, 6,739 (99.91%) of 6,745 FM radio stations fall at or under 
that revenue threshold. Accordingly, based on this data, it is 
estimated that the majority of Auction 106 applicants would likely meet 
the SBA's definition of a small business concern.
    158. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission has designed 
the auction application process itself to minimize reporting and 
compliance requirements for applicants, including small business 
applicants. For all spectrum auctions, in the first part of the 
Commission's two-phased application process, parties desiring to 
participate in an auction file streamlined, short-form applications in 
which they certify under penalty of perjury as to their qualifications. 
Eligibility to participate in bidding is based on an applicant's short-
form application and certifications, as well as its upfront payment. In 
the second phase of the auction application process, there are 
additional compliance requirements for winning bidders.
    159. Auction 106 applicants, including small entities, will become 
qualified to bid in Auction 106 only if they comply with the following: 
(1) Submission of a short-form application that is timely and is found 
to be substantially complete, and (2) timely submission of a sufficient 
upfront payment for at least one of the construction permits that the 
applicant selected on its FCC Form 175, accompanied by a complete and 
accurate FCC Form 159.
    160. In accordance with the terms of 47 CFR 1.2105(b)(2), an 
applicant whose application is found to contain deficiencies will have 
a limited opportunity to bring their application into compliance with 
the Commission's competitive bidding rules during a resubmission 
window. In addition, each Auction 106 applicant must maintain the 
accuracy of its previously filed short-form application electronically 
using the FCC auction application system.
    161. In the second phase of the process, there are additional 
compliance requirements only applicable to winning bidders. As with 
other winning bidders, any small entity that is a winning bidder will 
be required to comply with the terms of the following rules, among 
others: (1) 47 CFR 1.2107(b) by submitting as a down payment within 10 
business days of release of the auction closing public notice 
sufficient funds (in addition to its upfront payment) to bring its 
total amount of money on deposit with the Commission for Auction 106 to 
20% of the net amount of its winning bids; and (2) 47 CFR 1.2109(a) by 
submitting within 10 business days after the down payment deadline the 
balance of the amount for each of its winning bids; and (3) 47 CFR 
73.5005(a) by electronically filing a properly completed long-form 
application (FCC Form 2100, Schedule 301-FM, Commercial FM Station 
Construction Permit Application) and required exhibits for each 
construction permit won through Auction 106, within 30 days following 
release of a closing public notice for Auction 106, unless a longer 
period is specified by public notice.
    162. Further, as required by 47 CFR 1.2105(c), reports concerning a 
prohibited communication must be filed with the Chief of the Auctions 
Division, as detailed in the Auction 106 Procedures Public Notice.
    163. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its 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. See 5 U.S.C. 603(c)(1)-(4).
    164. OEA and MB anticipate that the steps taken to make numerous 
resources available to small entities and other auction participants at 
no cost should minimize any economic impact of the auction processes 
and procedures on small entities and should result in both

[[Page 5163]]

operational and administrative cost savings for small entities and 
other auction participants. For example, prior to the beginning of 
bidding in this auction, the Commission will hold a mock auction to 
allow qualified bidders the opportunity to familiarize themselves with 
both the processes and systems that will be utilized in Auction 106. 
During the auction, participants will be able to access and participate 
in bidding via the internet using a web-based system, or 
telephonically, providing two cost effective methods of participation 
and avoiding the cost of travel for in-person participation. Further, 
small entities as well as other auction participants will be able to 
avail themselves of a telephone hotline for assistance with auction 
processes and procedures as well as a technical support telephone 
hotline to assist with issues such as access to or navigation within 
the electronic FCC Form 175 and use of the FCC's auction bidding 
system. In addition, all auction participants, including small business 
entities, will have access to various other sources of information and 
databases through the Commission that will aid in both their 
understanding and participation in the process. These resources, 
coupled with the description and communication of the bidding 
procedures before bidding begins in Auction 106, should ensure that the 
auction will be administered predictably, efficiently and fairly, thus 
providing certainty for small entities as well as other auction 
participants.
    165. Notice to SBA. The Commission will send a copy of the Auction 
106 Procedures Public Notice, including this Supplemental FRFA, to the 
Chief Counsel for Advocacy of the SBA.

Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2020-01654 Filed 1-28-20; 8:45 am]
BILLING CODE 6712-01-P