[Federal Register Volume 63, Number 192 (Monday, October 5, 1998)]
[Notices]
[Pages 53430-53440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26407]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-9820-B (Auction No. 20); DA 98-1796]
Auction of 156-162 MHz VHF Public Coast Station Service Licenses
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This Public Notice announces the procedures and minimum
opening bids for the upcoming 156-162 MHz VHF Public Coast Station
Service (``VHF Public Coast Service'') auction. On July 23, 1998, the
Commission released a Public Notice, seeking comment on the
establishment of reserve prices or minimum opening bids for the VHF
Public Coast Service auction, in accordance with the Balanced Budget
Act of 1997. In addition, the Commission also sought comment on a
number of procedures to be used in the VHF Public Coast Service
auction.
DATES: The auction is scheduled for December 3, 1998.
ADDRESSES: See the text of the Public Notice and attachments for
information regarding important addresses.
FOR FURTHER INFORMATION CONTACT:
Media Contact: Meribeth McCarrick, 202-418-0654.
Auctions information: Jeff Garretson, Bob Reagle, or Anne Napoli, 202-
418-0660.
VHF Public Coast Service information: Scot Stone, 202-418-0680.
SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice
released on September 4, 1998, and corrected by subsequent Public
Notices released on September 8, 1998, and September 21, 1998. The
complete text of this corrected Public Notice, including all
attachments, is available for inspection and copying during normal
business hours in the Wireless Telecommunications Bureau Reference
Center (Room 5608), 2025 M Street, NW., Washington, DC 20554, or on the
Commission's World Wide Web page, located at http://www.fcc.gov/wtb/
auctions. Copies also may be purchased from the Commission's copy
contractor, International Transcription Services, Inc. (ITS, Inc.),
1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.
Synopsis of the Public Notice
I. Introduction
The VHF Public Coast Service Licenses to Be Auctioned:
1. The Federal Communications Commission (``FCC'' or
``Commission'') will hold an auction for 42 licenses to operate in the
156-162 MHz band. These licenses encompass the United States, the
Northern Mariana Islands, Guam, American Samoa, the United States
Virgin Islands and Puerto Rico. Specifically, the licenses include: (1)
One license in each of nine geographic areas known as Maritime VHF
Public Coast Station Service Areas (``VPCs''), and (2) one license in
each of 33 geographic areas known as Inland VPCs. The licenses include
the following channels:
------------------------------------------------------------------------
Channel pairs (total kHz
available)
------------------------------------------------------------------------
(1) Maritime VPCs:
Maritime Border VPCs: VPCs 1, 5, 7......... 24, 25, 26, 27, 28, 84,
85, 86, 87, 88 (500
kHz).
Maritime Non-Border VPCs and Maritime 24, 25, 26, 27, 28, 84,
Border VPC 9: VPCs 2, 3, 4, 6, 8, 9. 85, 86, 87 (450 kHz).
(2) Inland VPCs:
[[Page 53431]]
Inland Border VPCs: VPCs 10, 11, 28, 29, 30 24, 26, 27, 28, 85, 86,
87 (350 kHz).
Inland Non-Border VPCs:
VPCs 12-15, 23-27, 33-34, 36-39, 41-42... 24, 26, 27, 28, 85, 86,
87 (350 kHz).
VPCs 16-22, 31-32, 35, 40................ 24, 26, 27, 28, 84, 86,
87 (350 kHz).
------------------------------------------------------------------------
Auction Date: The auction will commence on December 3, 1998. The
initial schedule for bidding will be announced by public notice at
least one week before the start of the auction. Unless otherwise
announced, bidding will be conducted on each business day until bidding
has stopped on all licenses.
Bidding Methodology: Simultaneous multiple round bidding. Bidding
will be permitted only from remote locations, either electronically (by
computer) or telephonically.
Pre-Auction Deadlines:
--Auction Seminar: October 20, 1998
--Short Form Application (FCC Form 175): November 2, 1998; 5:30 p.m. ET
--Upfront Payments (via wire transfer): November 16, 1998; 6:00 p.m. ET
--Orders for Remote Bidding Software: November 17, 1998; 5:30 p.m. ET
--Mock Auction: December 1, 1998
Telephone Contacts:
--FCC National Call Center: (888) CALL-FCC ((888) 225-5322). For Bidder
Information Packages, General Auction Information, and Seminar
Registration, press option #2 at the prompt. Hours: 8 a.m.-5:30 p.m.
ET.
--FCC Technical Support Hotline: (202) 414-1250 (voice), (202) 414-1255
(text telephone (TTY)); Hours of service: 8 a.m.-6 p.m. ET, Monday--
Friday; 9 a.m.-5 p.m. ET, weekend of October 31-November 1.
List of Attachments:
Attachment A--Summary of 156-162 MHz VHF Public Coast Station Licenses
to be Auctioned, Upfront Payments, Minimum Opening Bids
Attachment B--Guidelines for Completing FCC Forms 175 and 159 and
Exhibits
Attachment C--Electronic Filing and Review of FCC Form 175
Attachment D--Summary Listing of Documents from the Commission and the
Wireless Telecommunications Bureau Addressing Application of the Anti-
Collusion Rules
II. Background
2. In July 1998, the Commission restructured the licensing
framework that governs VHF Public Coast Stations. Pursuant to the Third
Report and Order and Memorandum Opinion and Order (``Public Coast Third
Report and Order''), 63 FR 40059 (July 27, 1998), site-specific
licensing has been replaced with a geographic-based system, which will
be used in the upcoming auction. This geographic-based licensing
methodology is similar to that used in other commercial mobile radio
services (``CMRS''). The geographic areas for the inland VPC licenses
were based upon Economic Areas (EAs), developed by the Bureau of
Economic Analysis of the U.S. Department of Commerce, and the
geographic areas for the maritime VPC licenses were roughly based on
U.S. Coast Guard Districts. Service and operational requirements for
VHF Public Coast Stations are contained in part 80 of the Commission's
rules.
III. Due Diligence
3. Potential bidders are reminded that there are a number of
incumbent VHF Public Coast Station licensees and Private Land Mobile
Radio (PLMR) licensees already operating in the 156-162 MHz band. Such
incumbents must be protected from harmful interference by VHF Public
Coast Station geographic area licensees in accordance with the
Commission's Rules. These limitations may restrict the ability of such
VPC geographic area licensees to use certain portions of the
electromagnetic spectrum or provide service to certain areas in their
geographic license areas.
4. In addition, potential bidders seeking licenses for geographic
areas that are near the Canadian border should be aware of agreements
between the United States and Canada that affect the assignment and use
of VHF frequencies in certain parts of maritime and inland border VPCs.
Potential bidders are solely responsible for investigating and
evaluating the degree to which these matters may affect spectrum
availability in areas where they seek maritime or inland border VPC
licenses.
5. Licensing information is contained in the Commission's licensing
database, which is available for inspection in the Wireless
Telecommunications Bureau's Public Reference Rooms, located at 2025 M
Street, NW, Room 5608, Washington, DC 20554, and 1270 Fairfield Road,
Gettysburg, PA 17325. In addition, potential bidders may search for
information regarding incumbent VHF Public Coast station and PLMR
licensees on the World Wide Web at http://www.fcc.gov/wtb. In
particular, information can be accessed by downloading databases by
selecting ``WTB Database Files'' (http://www.fcc.gov/wtb/
databases.html), or searching on-line by selecting ``Search WTB
Databases'' (http://gullfoss.fcc.gov:8080/cgi-bin/ws.exe/beta/genmen/
index.hts). Any telephone inquires regarding these matters should be
directed to the Technical Support Hotline at (202) 414-1250 (voice) or
(202) 414-1255 (text telephone (TTY)).
IV. The Commission Makes No Representations or Guarantees Regarding the
Accuracy or Completeness of Information That Has Been Provided by
Incumbent Licensees and Incorporated Into the Database
Potential bidders are strongly encouraged to physically inspect any
sites located in or near the geographic area for which they plan to
bid.
6. Participation: Those wishing to participate in the auction must:
--Submit a short form application (FCC Form 175) by the above-listed
deadline.
--Submit a sufficient upfront payment and an FCC Remittance Advice Form
(FCC Form 159) by the above-listed deadline.
--Comply with all provisions outlined in this Public Notice.
7. Prohibition of Collusion: To ensure the competitiveness of the
auction process, the Commission's Rules prohibit applicants for the
same geographic license area from communicating with each other during
the auction about bids, bidding strategies, or settlements. This
prohibition begins with the filing of short-form applications, and ends
on the down payment due date. In the VHF Public Coast Service auction,
for example, the rule would apply to any applicants bidding for the
same VPC. Therefore, applicants that apply to bid for ``all markets''
would be precluded from communicating with all other applicants after
filing the FCC Form 175. However, applicants may enter into bidding
agreements before filing their FCC Form 175 short-form applications, as
long as they disclose the existence of the agreement(s) in their Form
175 short-form applications. See 47 CFR
[[Page 53432]]
1.2105(c). By signing their FCC Form 175 short form applications,
applicants are certifying their compliance with Sec. 1.2105(c). In
addition, Sec. 1.65 of the Commission's Rules requires an applicant to
maintain the accuracy and completeness of information furnished in its
pending application and to notify the Commission within 30 days of any
substantial change that may be of decisional significance to that
application. See 47 CFR 1.65. Thus, Sec. 1.65 requires an auction
applicant to notify the Commission of any violation of the anti-
collusion rules upon learning of such violation. Bidders are therefore
required to make such notification to the Commission immediately upon
discovery.
8. Bidder Information Package: More complete details about this
auction are contained in a Bidder Information Package. The Commission
will provide one copy to each company free of charge. Additional copies
may be ordered at a cost of $16.00 each, including postage, payable by
Visa or Master Card, or by check payable to ``Federal Communications
Commission'' or ``FCC.'' To place an order, contact the FCC National
Call Center at (888) CALL-FCC ((888) 225-5322, press option #2 at the
prompt). Prospective bidders that have already contacted the FCC at
this number expressing an interest in this auction will receive a
Bidder Information Package in approximately four weeks, and need not
call again unless they wish to order additional copies.
9. Relevant Authority: Prospective bidders must familiarize
themselves thoroughly with the Commission's rules relating to the VHF
Public Coast Service, contained in Title 47, part 80 of the Code of
Federal Regulations, and those relating to application and auction
procedures, contained in Title 47, part 1 of the Code of Federal
Regulations.
10. Prospective bidders must also be thoroughly familiar with the
procedures, terms and conditions contained in the Public Coast Third
Report and Order, and in Sections I through III of Amendment of part 80
of the Commission's rules Concerning Maritime Communications, Second
Report and Order and Second Further Notice of Proposed Rulemaking, PR
Docket No. 92-257, RM-7956, 8031, 8352, FCC 97-217, 12 FCC Rcd 16949
(1997) 62 FR 40281 (July 28, 1997), 62 FR 37533 (July 14, 1997)
(``Public Coast Second Report and Order'').
11. The terms contained in the Commission's Rules, relevant orders,
public notices and bidder information package are not negotiable. The
Commission may amend or supplement the information contained in its
public notices or the bidder information package at any time, and will
issue public notices to convey any new or supplemental information to
bidders. It is the responsibility of all prospective bidders to remain
current with all Commission Rules and with all public notices
pertaining to this auction. Copies of most Commission documents,
including public notices, can be retrieved from the FCC Internet node
via anonymous ftp @ftp.fcc.gov or the FCC World Wide Web site at http:/
/www.fcc.gov/wtb/auctions. Additionally, documents may be obtained for
a fee by calling the Commission's copy contractor, International
Transcription Service, Inc. (ITS), at (202) 857-3800. When ordering
documents from ITS, please provide the appropriate FCC number (e.g.,
FCC 98-151 for the Public Coast Third Report and Order and FCC 97-217
for the Public Coast Second Report and Order).
12. Bidder Alerts: All applicants must certify on their FCC Form
175 applications under penalty of perjury that they are legally,
technically, financially and otherwise qualified to hold a license, and
not in default on any payment for Commission licenses (including down
payments) or delinquent on any non-tax debt owed to any Federal agency.
Prospective bidders are reminded that submission of a false
certification to the Commission is a serious matter that may result in
severe penalties, including monetary forfeitures, license revocations,
exclusion from participation in future auctions, and/or criminal
prosecution.
V. The Commission Makes No Representations or Warranties About the Use
of This Spectrum for Particular Services
Applicants should be aware that an FCC auction represents an
opportunity to become an FCC licensee in this service, subject to
certain conditions and regulations. An FCC auction does not constitute
an endorsement by the FCC of any particular services, technologies or
products, nor does an FCC license constitute a guarantee of business
success. Applicants should perform their individual due diligence
before proceeding as they would with any new business venture.
13. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use the VHF Public Coast
Service auction to deceive and defraud unsuspecting investors. Common
warning signals of fraud include the following:
--The first contact is a ``cold call'' from a telemarketer, or is made
in response to an inquiry prompted by a radio or television
infomercial.
--The offering materials used to invest in the venture appear to be
targeted at IRA funds, for example by including all documents and
papers needed for the transfer of funds maintained in IRA accounts.
--The amount of the minimum investment is less than $25,000.
--The sales representative makes verbal representations that: (a) The
Internal Revenue Service (``IRS''), Federal Trade Commission (``FTC''),
Securities and Exchange Commission (``SEC''), FCC, or other government
agency has approved the investment; (b) the investment is not subject
to state or federal securities laws; or (c) the investment will yield
unrealistically high short-term profits. The offering materials often
include copies of actual FCC releases, or quotes from FCC personnel,
giving the false appearance of FCC knowledge or approval of the
solicitation.
14. Information about deceptive telemarketing investment schemes is
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National Fraud
Information Center at (800) 876-7060. Consumers who have concerns about
specific VHF Public Coast Service proposals may also call the FCC
National Call Center at (888) CALL-FCC ((888) 225-5322).
VI. National Environmental Policy Act (NEPA) Requirements
15. Licensees must comply with the Commission's rules regarding the
National Environmental Policy Act (NEPA). The construction of a
wireless antenna facility is a federal action and licensees must comply
with the Commission's NEPA rules for each wireless facility. See 47 CFR
1.1305-1.1319. The Commission's NEPA rules require that, among other
things, licensees consult with expert agencies having NEPA
responsibilities including the U.S. Fish and Wildlife Service, the
State Historic Preservation Office, the Army Corp of Engineers and the
Federal Emergency Management Agency (through the local authority with
jurisdiction over floodplains). Licensees must prepare environmental
assessments for wireless facilities that may have a significant impact
in or on wilderness areas, wildlife preserves, threatened or endangered
species or designated critical habitats, historical or
[[Page 53433]]
archaeologic sites, Indian religious sites, floodplains, and surface
features. Licensees must also prepare environmental assessments for
wireless facilities that include high intensity white lights in
residential neighborhoods or excessive radiofrequency emission.
VII. Eligibility for Very Small and Small Business Provisions
A. General Eligibility Criteria
16. As described above, this auction offers one license in each of
nine geographic areas known as Maritime VPCs, and one license in each
of 33 geographic areas known as Inland VPCs. The Commission's goal in
adopting special small business provisions is to promote and facilitate
the participation of small businesses in the VHF Public Coast Service
auction and in the provision of this and other CMRS services.
(1) Determination of Revenues
17. For purposes of determining which entities qualify as very
small businesses or small businesses, the Commission will consider the
gross revenues of the applicant, its controlling interests, and the
affiliates of the applicant and its controlling interests. Therefore,
the gross revenues of all of the above entities must be disclosed
separately and in the aggregate as Exhibit C to an applicant's FCC Form
175. The Commission does not impose specific equity requirements on
controlling interests. Once principals or entities with a controlling
interest are determined, only the revenues of those principals or
entities will be counted in determining small business eligibility. The
term ``controlling interest'' includes both de facto and de jure
control of the applicant. Typically, de jure control is evidenced by
ownership of at least 50.1 percent of an entity's voting stock. De
facto control is determined on a case-by-case basis. The following are
some common indicia of control:
--The entity constitutes or appoints more than 50 percent of the board
of directors or management committee;
--The entity has authority to appoint, promote, demote, and fire senior
executives that control the day-to-day activities of the licensee; or
--The entity plays an integral role in management decisions.
(2) Very Small or Small Business Consortiums
18. A consortium of small businesses or very small businesses is a
conglomerate organization formed as a joint venture between or among
mutually independent business firms, each of which individually
satisfies the definition of very small or small business in
Sec. 80.1252(b)(1) or (2). Thus, each consortium member must disclose
its gross revenues along with those of its affiliates, controlling
interests, and controlling interests' affiliates. The Commission notes
that although the gross revenues of the consortium members will not be
aggregated for purposes of determining eligibility for very small or
small business credits, this information must be provided to ensure
that each individual consortium member qualifies for any bidding credit
awarded to the consortium.
(3) Application Showing
19. Applicants should note that they will be required to file
supporting documentation as Exhibit C to their FCC Form 175 short form
applications to establish that they satisfy the eligibility
requirements to qualify as a very small business or small business (or
consortiums of very small or small businesses) for this auction. See 47
CFR 80.1252 and 1.2105. Specifically, for the VHF Public Coast Service
auction, applicants applying to bid as very small or small businesses
(or consortiums of very small or small businesses) will be required to
file as Exhibit C to their FCC Form 175 short form applications, all
information required under Secs. 1.2105(a) and 1.2112(a). In addition,
these applicants must disclose, separately and in the aggregate, the
gross revenues for the preceding three years of each of the following:
(1) The applicant; (2) the applicant's affiliates; (3) the applicant's
attributable investors; and (4) the affiliates of the applicant's
attributable investors. Certification that the average gross revenues
for the preceding three years do not exceed the applicable limit is not
sufficient. A statement of the total gross revenues for the preceding
three years is also insufficient. The applicant must provide a schedule
of gross revenues for each of the preceding three years, as well as a
statement of total average gross revenues for the three-year period. If
the applicant is applying as a consortium of very small or small
businesses, each consortium member must provide this information.
B. Bidding Credits
20. Qualifying VHF Public Coast Service applicants are eligible for
bidding credits. The size of a VHF Public Coast Service bidding credit
depends on the average gross revenues for the preceding three years of
the bidder and its controlling interests and affiliates:
--A bidder with average gross revenues not to exceed $15 million for
the preceding three years receives a 25 percent discount on its winning
bids for VHF Public Coast Service licenses; and,
--A bidder with average gross revenues not to exceed $3 million for the
preceding three years receives a 35 percent discount on its winning
bids for VHF Public Coast Service licenses.
21. Bidding credits are not cumulative: qualifying applicants
receive either the 25 percent or the 35 percent bidding credit, but not
both. The definitions of very small business and small business (or
consortiums of very small or small businesses) (including calculation
of gross annual revenue) are set forth in 47 CFR 80.1252(b)(1)(2) and
(5).
22. VHF Public Coast Service bidders should note that unjust
enrichment provisions apply to winning bidders that use bidding credits
and subsequently assign or transfer control of their licenses to an
entity not qualifying for the same levels of bidding credits. See 47
CFR 1.2111. Finally, VHF Public Coast Service bidders should also note
that there are no installment payment plans in the VHF Public Coast
Service auction.
VIII. Pre-Auction Procedures
A. Short-Form Application (FCC Form 175)--Due November 2, 1998
23. In order to be eligible to bid in this auction, applicants must
first submit an FCC Form 175 application. This application must be
received at the Commission by 5:30 p.m. ET on November 2, 1998. Late
applications will not be accepted.
24. There is no application fee required when filing an FCC Form
175. However, to be eligible to bid, an applicant must submit an
upfront payment.
(1) Filing Options
25. Auction applicants are strongly encouraged to file their
applications electronically in order to take full advantage of the
greater efficiencies and convenience of electronic filing, bidding and
access to bidding data. For example, electronic filing enables the
applicant to: (a) Receive interactive feedback while completing the
application; and (b) receive immediate acknowledgment that the FCC Form
175 has been submitted for filing. In addition, only those applicants
that file electronically will have the option of bidding
electronically. However, manual filing (via hard copy) is also
permitted. Please note that manual filers will not be
[[Page 53434]]
permitted to bid electronically and must bid telephonically, unless the
FCC Form 175 is amended electronically prior to the resubmission date
for incomplete or deficient applications. The following is a brief
description of each filing method.
(a) Electronic Filing
26. Applicants wishing to file electronically may generally do so
on a 24-hour basis beginning October 12, 1998. The window for filing
the FCC Form 175 electronically will remain open until 5:30 p.m. ET on
November 2, 1998. Applicants are strongly encouraged to file early, and
applicants are responsible for allowing adequate time for filing their
applications. Applicants may update or amend their electronic
applications until the filing deadline of November 2, 1998. Applicants
who file electronically must press the ``Submit Form 175'' button on
the ``Submit'' page to successfully submit their FCC Form 175s.
Information about installing and running the FCC Form 175 application
software is included in Attachment D to this Public Notice. Technical
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text
telephone (TTY)); the hours of service are 8 a.m.-6 p.m. ET, Monday-
Friday, and 9 a.m.-5 p.m. ET, the weekend of October 31-November 1.
(b) Manual Filing
27. Auction applicants will be permitted to file their FCC Form 175
applications in hard copy. When any manually filed FCC Form 175 and
175-S exceeds five pages in length, the FCC requires that all
attachments be submitted on a 3.5-inch diskette, or the entire
application be filed in a microfiche version. Manual filers must use
the August 1998 version of FCC Form 175 and FCC Form 175-S (if
necessary). Earlier versions of the FCC Form 175 will not be accepted
for filing. Copies of the FCC Form 175 can be obtained by calling the
Commission's Forms Distribution Center at (800) 418-FORM ((800) 418-
3676) (outside Washington, DC) or (202) 418-FORM ((202) 418-3676) (in
the Washington area). Copies of the FCC Form 175 can also be obtained
via Fax-On-Demand at (202) 418-0177 (the document retrieval number for
the FCC Form 175 is 000175, and 001751 for the FCC Form 175-S), or
downloaded from the Commission's World Wide Web site at http://
www.fcc.gov/formpage.html. If applicants have any questions concerning
availability of the FCC Form 175, they should call the FCC Records
Management Branch at (202) 418-0210.
28. Manual applications may be submitted by hand delivery
(including private ``overnight'' courier) or by U.S. mail (certified
mail with return receipt recommended), addressed to: FCC Form 175
Filing, Auction No. 20, Federal Communications Commission, Wireless
Telecommunications Bureau, Auctions & Industry Analysis Division, 1270
Fairfield Road, Gettysburg, PA 17325-7245. NOTE: Manual applications
delivered to any other location will not be accepted.
(2) Completion of the FCC Form 175
29. Applicants should carefully review 47 CFR 1.2105, and must
complete all items on the FCC Form 175 (and Form 175-S, if applicable).
Instructions for completing the FCC Form 175 are in Attachment B of
this Public Notice. Applicants who file electronically must press the
``Submit Form 175'' button on the ``Submit'' page to successfully
submit their FCC Form 175.
30. Failure to sign a manually filed FCC Form 175 will result in
dismissal of the application and loss of the ability to participate in
the auction. Only original signatures will be accepted for manually
filed applications.
(3) Electronic Review of FCC Form 175
The FCC Form 175 review software may be used to review and print
applicants' FCC Form 175 applications. In other words, applicants that
file electronically may review their own completed FCC Form 175.
Applicants may also view other applicants' completed FCC Form 175s
after the filing deadline has passed and the FCC has issued a public
notice explaining the status of the applications. For this reason, it
is important that applicants do not include their Taxpayer
Identification Numbers (TINs) on any Exhibits to their FCC Form 175
applications. There is a fee of $2.30 per minute for accessing this
system. See Attachment C for details.
B. Application Processing and Minor Corrections
32. After the deadline for filing the FCC Form 175 applications has
passed, the FCC will process all timely applications to determine which
are acceptable for filing, and subsequently will issue a public notice
identifying: (1) Those applications accepted for filing (including FCC
account numbers and the licenses for which they applied); (2) those
applications rejected; and (3) those applications which have minor
defects that may be corrected, and the deadline for filing such
corrected applications.
33. As described more fully in the Commission's Rules, after the
November 2, 1998, short form filing deadline, applicants may make only
minor corrections to their FCC Form 175 applications. Applicants will
not be permitted to make major modifications to their applications
(e.g., change their license selections, change the certifying official
or change control of the applicant). See 47 CFR 1.2105.
C. Upfront Payments--Due November 16, 1998
34. To be eligible to bid in the auction, applicants must submit an
upfront payment accompanied by FCC Remittance Advice Form (FCC Form
159). Manual filers must use the July 1997 version of FCC Form 159.
Electronic filers of the FCC Form 175 will have access to an electronic
version of Form 159 after completing the FCC Form 175. Earlier versions
of this form will not be accepted. Upfront payments must be received at
Mellon Bank in Pittsburgh, PA, by 6 p.m. ET on November 16, 1998.
Please note that:
--All payments must be made in U.S. dollars.
--All payments must be made by wire transfer.
--Upfront payments for Auction No. 20 go to a lockbox number different
from the ones used in previous FCC auctions, and different from the
lockbox number to be used for post-auction payments.
--Failure to deliver the upfront payment by the November 16, 1998
deadline will result in dismissal of the application and
disqualification from participation in the auction.
(1) Making Auction Payments by Wire Transfer
35. Wire transfer payments must be received by 6 p.m. ET on
November 16, 1998. To avoid untimely payments, applicants should
discuss arrangements (including bank closing schedules) with their
banker several days before they plan to make the wire transfer, and
allow sufficient time for the transfer to be initiated and completed
before the deadline. Applicants will need the following information:
ABA Routing Number: 043000261.
Receiving Bank: Mellon Pittsburgh.
BNF: FCC/AC 911-6878.
OBI Field: (Skip one space between each information item)
``Auctionpay''.
Taxpayer Identification no. (Same as FCC Form 159, block 26).
Payment Type Code (Enter ``APWU'').
Fcc Code 1 (Same as FCC Form 159, block 23A: ``20'').
[[Page 53435]]
Payer Name (Same as FCC Form 159, block 2).
Lockbox No.: #358400
Note: The BNF and Lockbox number are specific to the upfront
payments for this auction; do not use BNF or Lockbox numbers from
previous auctions.
36. Applicants must fax a completed FCC Form 159 to Mellon Bank at
(412) 236-5702 at least one hour before placing the order for the wire
transfer (but on the same business day). On the cover sheet of the fax,
write ``Wire Transfer--Auction Payment for Auction Event No. 20.''
Bidders may confirm receipt of their upfront payment at Mellon Bank by
contacting their sending financial institution.
(2) FCC Form 159
37. Each upfront payment must be accompanied by a completed FCC
Remittance Advice Form (FCC Form 159). Proper completion of FCC Form
159 is critical to ensuring correct credit of upfront payments.
Detailed instructions for completion of FCC Form 159 are included in
Attachment B to this Public Notice and will also be included in the
Bidder Information Package.
(3) Amount of Upfront Payment
38. The following upfront payment amounts will apply in the VHF
Public Coast Service auction. For Maritime VPC licenses, an upfront
payment of $.0007 * MHz * Pop (rounded up to the next dollar and with a
minimum upfront payment of $2,500); and for Inland VPC licenses, an
upfront payment of $.0075 * MHz * Pop (rounded up to the next dollar
and with a minimum upfront payment of $2,500).
39. Upfront payments are not attributed to specific licenses, but
instead will be translated to bidding units to define the bidder's
maximum bidding eligibility. The amount of the upfront payment will be
translated into bidding units on a one-to-one basis, e.g., a $25,000
upfront payment provides the bidder with 25,000 bidding units. The
total upfront payment defines the maximum amount of bidding units on
which the applicant will be permitted to bid (including standing high
bids) in any single round of bidding. Thus, an applicant does not have
to make an upfront payment to cover all licenses for which the
applicant has applied, but rather to cover the maximum number of
bidding units associated with licenses the bidder wishes to place bids
on and hold high bids on at any given time. In order to be able to
place a bid on a license, in addition to having specified that license
on the FCC Form 175, a bidder must have an eligibility level that meets
or exceeds the number of bidding units assigned to that license. At a
minimum, an applicant's total upfront payment must be enough to
establish eligibility to bid on at least one of the licenses applied
for on the FCC Form 175, or else the applicant will not be eligible to
participate in the auction.
40. In calculating the upfront payment amount, an applicant should
determine the maximum number of bidding units it may wish to bid on in
any single round, and submit an upfront payment covering that number of
bidding units. Bidders should check their calculations carefully as
there is no provision for increasing a bidder's maximum eligibility
after the upfront payment deadline.
Note: An applicant may, on its FCC Form 175, apply for every
license being offered, but its actual bidding in any round will be
limited by the bidding units reflected in its upfront payment.
(4) Applicant's Wire Transfer Information for Purposes of Refunds
41. The Commission will use wire transfers for all Auction No. 20
refunds. To avoid delays in processing refunds, applicants should
include wire transfer instructions with any refund request they file;
they may also provide this information in advance by faxing it to the
FCC Billings and Collections Branch, ATTN: Linwood Jenkins or Geoffrey
Idika, at (202) 418-2843. Please include the following information:
Name of Bank
ABA Number
Account Number to Credit
Correspondent Bank (if applicable)
ABA Number
Account Number
Contact and Phone Number
(Applicants should also note that implementation of the Debt Collection
Improvement Act of 1996 requires the FCC to obtain a Taxpayer
Identification Number (TIN) before it can disburse refunds.)
D. Auction Registration
42. Approximately ten days before the auction, the FCC will issue a
public notice announcing all qualified bidders for the auction.
Qualified bidders are those applicants whose FCC Form 175 applications
have been accepted for filing and that have timely submitted upfront
payments sufficient to make them eligible to bid on at least one of the
licenses for which they applied.
43. All qualified bidders are automatically registered for the
auction. Registration materials will be distributed prior to the
auction by two separate overnight mailings, each containing part of the
confidential identification codes required to place bids. These
mailings will be sent only to the contact person at the applicant
address listed in the FCC Form 175.
44. Applicants that do not receive both registration mailings will
not be able to submit bids. Therefore, any qualified applicant that has
not received both mailings by noon on Wednesday, November 25, 1998
should contact the FCC National Call Center at (888) CALL-FCC ((888)
225-5322, press option #2 at the prompt). Receipt of both registration
mailings is critical to participating in the auction and each applicant
is responsible for ensuring it has received all of the registration
material. Qualified bidders should note that lost login codes,
passwords or bidder identification numbers can be replaced only by
appearing in person at the FCC Auction Headquarters located at 2
Massachusetts Avenue, NE, Washington, DC 20002. Only an authorized
representative or certifying official, as designated on an applicant's
FCC Form 175, may appear in person with two forms of identification
(one of which must be a photo identification) in order to receive
replacement codes.
E. Remote Electronic Bidding Software
45. Qualified bidders that file or amend the FCC Form 175
electronically are allowed to bid electronically, but must purchase
remote electronic bidding software for $175.00 by November 17, 1998.
(Auction software is tailored to a specific auction, so software from
prior auctions will not work for Auction No. 20.) A software order form
is included in the Bidder Information Package.
F. Auction Seminar
46. On October 20, 1998, the FCC will sponsor a seminar for the VHF
Public Coast Service auction in Washington, DC. The seminar will
provide attendees with information about pre-auction procedures,
conduct of the auction, FCC remote bidding software, and the VHF Public
Coast service and auction rules.
47. To register, complete the registration form to be included in
the upcoming Bidder Information Package. The registration form will
include details about the time and location of the seminar.
Registrations are accepted on a first-come, first-served basis.
G. Mock Auction
48. All applicants whose FCC Form 175 and 175-S have been accepted
for filing will be eligible to participate in a mock auction beginning
December 1, 1998. The mock auction will enable applicants to become
familiar with the
[[Page 53436]]
electronic software prior to the auction. Free demonstration software
will be available for use in the mock auction. Participation by all
bidders is strongly recommended. Details will be announced by public
notice.
IX. Auction Event
49. The first round of the auction will begin on December 3, 1998.
The initial round schedule will be announced in a Public Notice listing
the qualified bidders, to be released approximately 10 days before the
start of the auction.
A. Auction Structure
(1) Simultaneous Multiple Round Auction
50. The 42 VHF Public Coast Service licenses, including Maritime
and Inland VPC licenses, will be awarded through a single, simultaneous
multiple round auction. Unless otherwise announced, bids will be
accepted on all licenses in each auction round.
(2) Maximum Eligibility and Activity Rules
51. For the VHF Public Coast Service auction, the amount of the
upfront payment submitted by a bidder determines the initial maximum
eligibility (in bidding units) for each bidder. Upfront payments are
not attributed to specific licenses, but instead will be translated
into bidding units to define a bidder's initial maximum eligibility.
The total upfront payment defines the maximum number of bidding units
on which the applicant will initially be permitted to bid. The
Commission notes that there is no provision for increasing a bidder's
maximum eligibility during the course of an auction.
52. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction, rather than wait until the end before
participating. Bidders are required to be active on a specific
percentage of their maximum eligibility during each round of the
auction.
53. A bidder is considered active on a license in the current round
if it is either the high bidder at the end of the previous bidding
round and does not withdraw the high bid in the current round, or if it
submits an acceptable bid in the current round. A bidder's activity
level in a round is the sum of the bidding units associated with
licenses on which the bidder is active. The minimum required activity
level is expressed as a percentage of the bidder's maximum bidding
eligibility, and increases as the auction progresses.
(3) Activity Rule Waivers and Reducing Eligibility
54. Each bidder will be provided five activity rule waivers that
may be used in any round during the course of the auction. Use of an
activity rule waiver preserves the bidder's current bidding eligibility
despite the bidder's activity in the current round being below the
required minimum level. An activity rule waiver applies to an entire
round of bidding and not to a particular license.
55. The FCC auction system assumes that bidders with insufficient
activity would prefer to use an activity rule waiver (if available)
rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver (known as an ``automatic waiver'') at the
end of any round where a bidder's activity level is below the minimum
required unless: (1) There are no activity rule waivers available; or
(2) the bidder overrides the automatic application of a waiver by
reducing eligibility, thereby meeting the minimum requirements.
56. A bidder with insufficient activity that wants to reduce its
bidding eligibility rather than use an activity rule waiver must
affirmatively override the automatic waiver mechanism during the round
by using the reduce eligibility function in the software. In this case,
the bidder's eligibility is permanently reduced to bring the bidder
into compliance with the activity rules. Once eligibility has been
reduced, a bidder will not be permitted to regain its lost bidding
eligibility.
57. Finally, a bidder may proactively use an activity rule waiver
as a means to keep the auction open without placing a bid. If a bidder
submits a proactive waiver (using the proactive waiver function in the
bidding software) during a round in which no bids are submitted, the
auction will remain open and the bidder's eligibility will be
preserved. An automatic waiver invoked in a round in which there are no
new valid bids or withdrawals will not keep the auction open.
(4) Auction Stages
58. The VHF Public Coast Service auction will be composed of three
stages, each defined by an increasing activity rule. Below are the
proposed activity levels for each stage of the auction. The FCC
reserves the discretion to further alter the activity percentages
before and/or during the auction.
59. Stage One: In each round of the first stage of the auction, a
bidder desiring to maintain its current eligibility is required to be
active on licenses encompassing at least 80 percent of its current
bidding eligibility. Failure to maintain the requisite activity level
will result in a reduction in the bidder's bidding eligibility in the
next round of bidding (unless an activity rule waiver is used). During
Stage One, reduced eligibility for the next round will be calculated by
multiplying the current round activity by five-fourths (\5/4\).
60. Stage Two: In each round of the second stage, a bidder desiring
to maintain its current eligibility is required to be active on 90
percent of its current bidding eligibility. During Stage Two, reduced
eligibility for the next round will be calculated by multiplying the
current round activity by ten-ninths (\10/9\).
61. Stage Three: In each round of the third stage, a bidder
desiring to maintain its current eligibility is required to be active
on 98 percent of its current bidding eligibility. In this final stage,
reduced eligibility for the next round will be calculated by
multiplying the current round activity by fifty-fortyninths (\50/49\).
CAUTION: Since activity requirements increase in each auction stage,
bidders must carefully check their current activity during the bidding
round of the first round following a stage transition. This is
especially critical for bidders that have standing high 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 reverify their activity status at stage
transitions. Bidders may check their activity against the required
minimum activity level by using the bidding software's bidding module.
(5) Stage Transitions
62. The auction will start in Stage One. Under the FCC's general
guidelines it will advance to the next stage (i.e., from Stage One to
Stage Two, and from Stage Two to Stage Three) when, in each of three
consecutive rounds of bidding, the high bid has increased on 10 percent
or less of the licenses being auctioned (as measured in bidding units).
However, the Bureau will retain the discretion to regulate the pace of
the auction by announcement. This determination will be based on a
variety of measures of bidder activity, including, but not limited to,
the auction activity level, the percentages of licenses (as measured in
bidding units) on which there are new bids, the number of new bids, and
the percentage increase in revenue.
[[Page 53437]]
(6) Auction Stopping Rules
63. Barring extraordinary circumstances, bidding will remain open
on all licenses until bidding stops on every license. Thus, the auction
will close for all licenses when one round passes during which no
bidder submits a new acceptable bid on any license, applies a proactive
waiver, or withdraws a previous high bid.
64. The Bureau retains the discretion, however, to keep an auction
open even if no new acceptable bids or proactive waivers are submitted,
and no previous high bids are withdrawn. In this event, the effect will
be the same as if a bidder had submitted a proactive waiver. Thus, the
activity rule will apply as usual, and a bidder with insufficient
activity will either lose bidding eligibility or use an activity rule
waiver (if it has any left).
65. Further, in its discretion, the Bureau reserves the right to
declare that the auction will end after a specified number of
additional rounds (``special stopping rule''). If the FCC invokes this
special stopping rule, it will accept bids in the final round(s) only
for licenses on which the high bid increased in at least one of the
preceding specified number of rounds. The FCC intends to exercise this
option only in extreme circumstances, such as where the auction is
proceeding very slowly, where there is minimal overall bidding
activity, or where it appears likely that the auction will not close
within a reasonable period of time. Before exercising this option, the
FCC is likely to attempt to increase the pace of the auction by, for
example, moving the auction into the next stage (where bidders would be
required to maintain a higher level of bidding activity), increasing
the number of bidding rounds per day, and/or increasing the amount of
the minimum bid increments for the limited number of licenses where
there is still a high level of bidding activity.
(7) Auction Delay, Suspension, or Cancellation
66. By public notice or by announcement during the auction, the
Bureau may delay, suspend or cancel the auction in the event of natural
disaster, technical obstacle, evidence of an auction security breach,
unlawful bidding activity, administrative or weather necessity, or for
any other reason that affects the fair and competitive conduct of
competitive bidding. In such cases, the Bureau, in its sole discretion,
may elect to: resume the auction starting from the beginning of the
current round; resume the auction starting from some previous round; or
cancel the auction in its entirety. Network interruption may cause the
Bureau to delay or suspend the auction. The Commission emphasizes that
exercise of this authority is solely within the discretion of the
Bureau, and its use is not intended to be a substitute for situations
in which bidders may wish to apply their activity rule waivers.
B. Bidding Procedures
(1) Round Structure
67. The initial bidding schedule will be announced by public notice
at least one week before the start of the auction, and will be included
in the registration mailings. The round structure for each bidding
round contains a single bidding round followed by the release of the
round results.
68. The FCC has 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. The FCC may increase or decrease the amount of time for the
bidding rounds and review periods, or the number of rounds per day,
depending upon the bidding activity level and other factors.
(2) Reserve Price or Minimum Opening Bid
69. The Commission adopts minimum opening bids for each of the
licenses in the VHF Public Coast Service auction that are reducible at
the discretion of the Bureau. During the course of the auction, the
Bureau will not entertain any bidder requests to reduce the minimum
opening bid on specific licenses. The formulae for calculating minimum
opening bids is as follows:
1. Maritime VPC Licenses: $.001 * MHz * Pop (rounded up to the next
dollar) with a minimum of no less than $2,500 per license.
2. Inland VPC Licenses: $.011 * MHz * Pop (rounded up to the next
dollar) with a minimum of no less than $2,500 per license.
(3) Minimum Accepted Bids
70. Once there is a standing high bid on a license, a bid increment
will be applied to that license to establish a minimum acceptable bid
for the following round. For the VHF Public Coast Service auction, the
Commission will utilize, as described immediately below, an exponential
smoothing methodology to calculate minimum bid increments. The Bureau
retains the discretion to change the minimum bid increment if it
determines that circumstances so dictate. The exponential smoothing
methodology has been used in previous auctions.
Exponential Smoothing
71. The exponential smoothing formula calculates the bid increment
based on a weighted average of the activity received on each license in
the current and all previous rounds. This methodology will tailor the
bid increment for each license based on activity, rather than setting a
global increment for all licenses. For every license that receives a
bid, the bid increment for the next round for that license will be
established as a percentage increment that is determined using the
exponential smoothing formula.
72. Using exponential smoothing, the calculation of the percentage
bid increment for each license will be based on an activity index,
which is calculated as the weighted average of the current activity and
the activity index from the previous round. The activity index at the
start of the auction (round 0) will be set at 0. The current activity
index is equal to a weighting factor times the number of new bids
received on the license in the current bidding period plus one minus
the weighting factor times the activity index from the previous round.
The activity index is then used to calculate a percentage increment by
multiplying a minimum percentage increment by one plus the activity
index with that result being subject to a maximum percentage increment.
The Commission will initially set the weighting factor at 0.5, the
minimum percentage increment at 0.1, and the maximum percentage
increment at 0.2. Equations
Ai=(C * Bi) + ( (1-C) * Ai-1)
Ii=smaller of ( (1 + Ai) * N) and M
Where,
Ai=activity index for the current round (round i)
C=activity weight factor
Bi=number of bids in the current round (round i)
Ai-1=activity index from previous round (round i-1),
A0 is 0
Ii=percentage bid increment for the current round (round i)
N=minimum percentage increment
M=maximum percentage increment
Under the exponential smoothing methodology, once a bid has been
received on a license, the minimum acceptable bid for that license in
the following round will be the new high bid plus the dollar amount
associated with the percentage increment (variable Ii from
above times the high bid). This result will be rounded to the nearest
thousand if it is over 10,000 or to the nearest hundred if it is under
10,000.
[[Page 53438]]
Examples
License 1
C=0.5, N=0.1, M=0.2
Round 1 (2 New Bids, High Bid = $1,000,000)
1. Calculation of percentage increment using exponential smoothing:
A1=(0.5 * 2) + (0.5 * 0)=1
The smaller of I1=(1 + 1) * 0.1=0.2 or 0.2 (the maximum
percentage increment)
2. Minimum bid increment using the percentage increment (I1
from above) 0.2 * $1,000,000=$200,000
3. Minimum acceptable bid for round 2=1,200,000
Round 2 (3 New Bids, High Bid = $2,000,000)
1. Calculation of percentage increment using exponential smoothing:
A2=(0.5 * 3) + (0.5 * 1)=2
The smaller of I2=(1 + 2) * 0.1=0.3 or 0.2 (the maximum
percentage increment)
2. Minimum bid increment using the percentage increment is
(I2 from above) 0.2 * $2,000,000=$400,000
3. Minimum acceptable bid for round 3 = $2,400,000
Round 3 (1 New Bid, High Bid = $2,400,000)
1. Calculation of percentage increment using exponential smoothing:
A3=(0.5 * 1) + (0.5 * 2)=1.5
The smaller of I3=(1 + 1.5) * 0.1=0.25 or 0.2 (the
maximum percentage increment)
2. Minimum bid increment using the percentage increment (I3
from above) 0.2 * $2,400,000=$480,000
3. Minimum acceptable bid for round 4 = $2,880,000
(4) High Bids
73. Each bid will be date-and time-stamped when it is entered into
the computer system. In the event of tie bids, the Commission will
identify the high bidder on the basis of the order in which bids are
received by the Commission, starting with the earliest bid. The bidding
software allows bidders to make multiple submissions in a round. As
each bid is individually date and time-stamped according to when it was
submitted, bids submitted by a bidder earlier in a round will have an
earlier date-and time-stamp than bids submitted later in a round.
(5) Bidding
74. During a bidding round, a bidder may submit bids for as many
licenses for which it is eligible, as well as withdraw high bids from
previous bidding rounds, remove bids placed in the same bidding round,
or permanently reduce eligibility. Bidders also have the option of
making multiple submissions and withdrawals in each bidding round. If a
bidder submits multiple bids for a single license in the same round,
the system takes the last bid entered as that bidder's bid for the
round, and the date-and time-stamp of that bid reflect the latest time
the bid was submitted.
75. Please note that all bidding will take place either through the
automated bidding software or by telephonic bidding. (Telephonic bid
assistants are required to use a script when handling bids placed by
telephone. Telephonic bidders are therefore reminded to allow
sufficient time to bid, by placing their calls well in advance of the
close of a round, because four to five minutes are necessary to
complete a bid submission.) There will be no on-site bidding during
Auction No. 20.
76. A bidder's ability to bid on specific licenses in the first
round of the auction is determined by two factors: (1) the licenses
applied for on FCC Form 175; and (2) the upfront payment amount
deposited. The bid submission screens will be tailored for each bidder
to include only those licenses for which the bidder applied on its FCC
Form 175. A bidder also has the option to further tailor its bid
submission screens to call up specified groups of licenses.
77. The bidding software requires each bidder to login to the FCC
auction system during the bidding round using the FCC account number,
bidder identification number, and the confidential security codes
provided in the registration materials. Bidders are encouraged to
download and print bid confirmations after they submit their bids.
78. The bid entry screen of the Automated Auction System software
for the VHF Public Coast Service auction allows bidders to place
multiple increment bids which will let bidders increase high bids from
one to nine bid increments. A single bid increment is defined as the
difference between the standing high bid and the minimum acceptable bid
for a license. To place a bid on a license, the bidder must enter a
whole number between 1 and 9 in the bid increment multiplier (Bid Mult)
field. This value will determine the amount of the bid (Amount Bid) by
multiplying the bid increment multiplier by the bid increment and
adding the result to the high bid amount according to the following
formula:
Amount Bid = High Bid + (Bid Mult * Bid Increment)
Thus, bidders may place a bid that exceeds the standing high bid by
between one and nine times the bid increment. For example, to bid the
minimum acceptable bid, which is equal to one bid increment, a bidder
will enter ``1'' in the bid increment multiplier column and press
submit.
79. For any license on which the FCC is designated as the high
bidder (i.e., a license that has not yet received a bid in the auction
or where the high bid was withdrawn and a new bid has not yet been
placed), bidders will be limited to bidding only the minimum acceptable
bid. In both of these cases no increment exists for the licenses, and
bidders should enter ``1'' in the Bid Mult field. Note that any whole
number between 1 and 9 entered in the multiplier column will result in
a bid value at the minimum acceptable bid amount. Finally, bidders are
cautioned in entering numbers in the Bid Mult field because, as
explained in the following section, a high bidder that withdraws its
standing high bid from a previous round, even if mistakenly or
erroneously made, is subject to bid withdrawal payments.
(6) Bid Removal and Bid Withdrawal
80. Before the close of a bidding round, a bidder has the option of
removing any bids placed in that round. By using the remove bid
function in the software, a bidder may effectively ``unsubmit'' any bid
placed within that round. 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 for the round in which it is removed. This
procedure will enhance bidder flexibility and, the Commission believes,
may serve to expedite the course of the auction.
81. Once a round closes, a bidder may no longer remove a bid.
However, in the next round, a bidder may withdraw standing high bids
from previous rounds using the withdraw bid function (assuming that the
bidder has not exhausted its withdrawal allowance). A high bidder that
withdraws its standing high bid from a previous round is subject to the
bid withdrawal payments specified in 47 CFR 1.2104(g) and 1.2109.
82. In previous auctions, the Commission detected bidder conduct
that, arguably, may have constituted strategic bidding through the use
of bid withdrawals. While the Commission continues to recognize the
important role that bid withdrawals play in an auction, i.e., reducing
risk associated with efforts to secure various geographic area licenses
in combination, the
[[Page 53439]]
Commission concludes that, for the VHF Public Coast Service auction,
adoption of a limit on their use to two rounds is the most appropriate
outcome. By doing so the Commission believes it strikes a reasonable
compromise that will allow bidders to use withdrawals. The Commission's
decision on this issue is based upon its experience in prior auctions,
particularly the PCS D, E and F block auction, 800 MHz SIR auction, and
LADS auction, and is in no way a reflection of its view regarding the
likelihood of any speculation or ``gaming'' in the VHF Public Coast
Service auction.
83. The Bureau will therefore limit the number of rounds in which
bidders may place withdrawals to two rounds. These rounds will be at
the bidder's discretion and there will be no limit on the number of
bids that may be withdrawn in either of these rounds. Withdrawals will
still be subject to the bid withdrawal payments specified in 47 CFR
1.2104(g), and 1.2109. Bidders should note that abuse of the
Commission's bid withdrawal procedures could result in the denial of
the ability to bid on a market.
84. If a high bid is withdrawn, the license will be offered in the
next round at the second highest bid price, which may be less than, or
equal to, in the case of tie bids, the amount of the withdrawn bid,
without any bid increment. The FCC will serve as a ``place holder'' on
the license until a new acceptable bid is submitted on that license.
85. Generally, a bidder that withdraws a standing high bid during
the course of an auction will be subject to a payment equal to the
lower of: (1) The difference between the net withdrawn bid and the
subsequent net winning bid; or (2) the difference between the gross
withdrawn bid and the subsequent gross winning bid for that license.
See 47 CFR 1.2104(g), and 1.2109. No withdrawal payment will be
assessed if the subsequent winning bid exceeds the withdrawn bid.
(7) Round Results
86. The bids placed during a round are not published until the
conclusion of that bidding period. After a round closes, the FCC will
compile reports of all bids placed, bids withdrawn, current high bids,
new minimum accepted bids, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access.
87. Reports reflecting bidders' identities and bidder
identification numbers for Auction No. 20 will be available before and
during the auction. Thus, bidders will know in advance the identities
of the bidders against which they are bidding.
(8) Auction Announcements
88. The FCC will use auction announcements to announce items such
as schedule changes and stage transitions. All FCC auction
announcements will be available on the FCC remote electronic bidding
system, as well as the Internet and the FCC Bulletin Board System.
(9) Other Matters
89. After the short-form filing deadline, applicants may make only
minor changes to their FCC Form 175 applications. For example,
permissible minor changes include deletion and addition of authorized
bidders (to a maximum of three) and revision of exhibits. Filers should
make these changes on-line, and submit a letter to Amy Zoslov, Chief,
Auctions and Industry Analysis Division, Wireless Telecommunications
Bureau, Federal Communications Commission, 2025 M Street, NW., Room
5202, Washington, DC 20554 (and mail a separate copy to Anne Napoli,
Auctions and Industry Analysis Division), briefly summarizing the
changes. Questions about other changes should be directed to Anne
Napoli of the FCC Auctions and Industry Analysis Division at (202) 418-
0660.
X. Post-Auction Procedures
A. Down Payments and Withdrawn Bid Payments
90. After bidding has ended, the Commission will issue a public
notice declaring the auction closed, identifying the winning bids and
bidders for each license, and listing withdrawn bid payments due.
91. Within ten business days after release of the auction closing
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 Government to 20 percent of its net winning bids (actual bids
less any applicable bidding credits). See 47 CFR 1.2107(b). In
addition, by the same deadline all bidders must pay any withdrawn bid
amounts due under 47 CFR 1.2104(g). Upfront payments are applied first
to satisfy any withdrawn bid liability, before being applied toward
down payments.
B. Long-Form Application
92. Within ten business days after release of the auction closing
notice, winning bidders must submit a properly completed long-form
application and required exhibits for each VHF Public Coast Service
license won through the auction. Winning bidders that are small
businesses or very small businesses must include an exhibit
demonstrating their eligibility for bidding credits. See 47 CFR
1.2112(b). Further filing instructions will be provided to auction
winners at the close of the auction.
C. Default and Disqualification
93. Any high 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 full payment, or is otherwise
disqualified) will be subject to the payments described in 47 CFR
1.2104(g)(2). In such event the Commission may re-auction the license
or offer it to the next highest bidders (in descending order) at their
final bids. See 47 CFR 1.2109(b) and (c). In addition, if a default or
disqualification involves gross misconduct, misrepresentation, or bad
faith by an applicant, the Commission may declare the applicant and its
principals ineligible to bid in future auctions, and may take any other
action that it deems necessary, including institution of proceedings to
revoke any existing licenses held by the applicant. See 47 CFR
1.2109(d).
D. Refund of Remaining Upfront Payment Balance
94. All applicants that submitted upfront payments but were not
winning bidders for a VHF Public Coast Service license may be entitled
to a refund of their remaining upfront payment balance after the
conclusion of the auction. No refund will be made unless there are
excess funds on deposit from that applicant after any applicable bid
withdrawal payments have been paid.
95. Bidders that drop out of the auction completely may be eligible
for a refund of their upfront payments before the close of the auction.
However, bidders that reduce their eligibility and remain in the
auction are not eligible for partial refunds of upfront payments until
the close of the auction. Qualified bidders that have exhausted all of
their activity rule waivers, have no remaining bidding eligibility, and
have not withdrawn a high bid during the auction must submit a written
refund request which includes wire transfer instructions, a Taxpayer
Identification Number (``TIN''), and a copy of their bidding
eligibility screen print, to: Federal Communications Commission,
Billings and Collections Branch, Attn: Regina Dorsey or Linwood
Jenkins, 1919 M Street, NW., Room 452, Washington, D.C. 20554.
[[Page 53440]]
96. Bidders can also fax their request to the Billings and
Collections Branch at (202) 418-2843. Once the request has been
approved, a refund will be sent to the address provided on the FCC Form
159. Refund processing generally takes up to two weeks to complete.
Questions about refunds should be directed to Linwood Jenkins or
Geoffrey Idika at (202) 418-1995.
Federal Communications Commission.
Amy J. Zoslov,
Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau.
[FR Doc. 98-26407 Filed 10-1-98; 8:45 am]
BILLING CODE 6712-01-P