*Pages 1--54 from Microsoft Word - 6218.doc* PUBLIC NOTICE Federal Communications Commission 445 12th St., S. W. Washington, D. C. 20554 1 News Media Information 202 / 418- 0500 Fax- On- Demand 202 / 418- 2830 TTY 202 / 418- 2555 Internet: http:// www. fcc. gov ftp. fcc. gov DA 01- 119 January 19, 2001 AUCTION NOTICE AND FILING REQUIREMENTS FOR FM BROADCAST CONSTRUCTION PERMITS Auction Rescheduled from February 21, 2001 to May 9, 2001 Minimum Opening Bids and Other Procedural Issues Report No. AUC- 00- 37- C (Auction No. 37) I. GENERAL INFORMATION ..................................................................................................... 4 A. Introduction .................................................................................................................... 4 B. Scheduling ...................................................................................................................... 4 C. Construction Permits to Be Auctioned ............................................................................. 4 D. Rules and Disclaimers .................................................................................................... 6 1. Relevant Authority ............................................................................................. 6 2. Prohibition of Collusion ..................................................................................... 7 3. Due Diligence .................................................................................................... 8 4. Bidder Alerts ...................................................................................................... 8 5. National Environmental Policy Act (NEPA) Requirements .................................. 9 E. Auction Specifics .......................................................................................................... 10 1. Auction Date .................................................................................................... 10 2. Auction Title .................................................................................................... 10 3. Bidding Methodology ....................................................................................... 10 4. Pre- Auction Dates and Deadlines ...................................................................... 10 5. Requirements for Participation ......................................................................... 10 6. General Contact Information ............................................................................ 10 II. SHORT- FORM (FCC FORM 175) APPLICATION REQUIREMENTS .................................. 11 A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A) ................................... 12 1 2 B. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B) ......................... 12 C. New Entrant Bidding Credit (Form 175 Exhibit C) ........................................................ 13 1. Eligibility ......................................................................................................... 13 2. Application Requirements ................................................................................. 14 3. Bidding Credits ................................................................................................ 15 D. Provisions Regarding Defaulters and Former Defaulters (FCC Form 175 Exhibit D) ..... 15 E. Other Information (FCC Form 175 Exhibits E and F) .................................................... 16 F. Maintaining Current Information in Short- Form Applications (FCC Form 175) ............. 16 III. PRE- AUCTION PROCEDURES .............................................................................................. 16 A. Auction Seminar ........................................................................................................... 16 B. Short- Form Application (FCC Form 175) — Due March 19, 2001 ................................ 17 1. Electronic Filing ............................................................................................... 17 2. Completion of the FCC Form 175 ..................................................................... 17 3. Electronic Review of FCC Form 175 ................................................................ 18 C. Application Processing and Minor Corrections .............................................................. 18 D. Upfront Payments -- Due April 16, 2001 ....................................................................... 18 1. Auction Payments by Wire Transfer ................................................................. 19 2. FCC Form 159 ................................................................................................. 19 3. Amount of Upfront Payment ............................................................................. 19 4. Applicant's Wire Transfer Information for Purposes of Refunds ........................ 20 E. Auction Registration ..................................................................................................... 20 F. Remote Electronic Bidding Software ............................................................................. 21 G. Mock Auction ............................................................................................................... 21 IV. AUCTION EVENT .................................................................................................................. 21 A. Auction Structure ......................................................................................................... 22 1. Multiple Round, Ascending Auction ................................................................. 22 2. Maximum Eligibility and Activity Rules ........................................................... 22 3. Activity Rule Waivers and Reducing Eligibility ................................................ 22 4. Auction Stopping Rules .................................................................................... 23 5. Auction Delay, Suspension, or Cancellation ...................................................... 24 B. Bidding Procedures ....................................................................................................... 25 1. Round Structure ............................................................................................... 25 2. Reserve Price or Minimum Opening Bid ........................................................... 25 3. Bid Increments and Minimum Accepted Bids .................................................... 27 4. High Bids ......................................................................................................... 27 5. Bidding ............................................................................................................ 27 6. Bid Removal and Bid Withdrawal ..................................................................... 28 7. Round Results .................................................................................................. 30 8. Auction Announcements ................................................................................... 30 2 3 9. Maintaining the Accuracy of Short- Form (FCC Form 175) Information ............ 30 V. POST- AUCTION PROCEDURES ........................................................................................... 31 A. Down Payments ............................................................................................................ 31 B. Long- Form Application ................................................................................................ 31 C. Auction Discount Voucher ............................................................................................ 31 D. Default and Disqualification ......................................................................................... 31 E. Refund of Remaining Upfront Payment Balance ............................................................ 32 VI ATTACHMENT A - Construction Permits to be Auctioned ....................................................... 34 VII. ATTACHMENT B - FCC Auction Seminar Registration Form ................................................. 42 VIII. ATTACHMENT C - Electronic Filing and Review of the FCC Form 175 .................................. 43 IX. ATTACHMENT D - Guidelines for Completion of FCC Form 175 and Exhibits ....................... 45 X. ATTACHMENT E - Auction -Specific Instructions for FCC Remittance Advice (Form 159) ..... 49 XI. ATTACHMENT F - FCC Bidding Preference/ Remote Software Order Form ............................. 51 XII. ATTACHMENT G - Accessing the FCC Network Using Windows 95/ 98 ................................. 52 XIII. ATTACHMENT H - Summary Listing of Documents (Anti- Collusion) ..................................... 59 3 4 I. GENERAL INFORMATION A. Introduction This public notice announces the procedures and minimum opening bids for the upcoming auction of certain FM Broadcast construction permits (“ Auction No. 37”). On September 25, 2000, the Mass Media Bureau (“ MMB”) and the Wireless Telecommunications Bureau (“ WTB”) (collectively, the “Bureaus”) released the Auction No. 37 Comment Public Notice, 1 seeking comment on the establishment of reserve prices and/ or minimum opening bids for Auction No. 37, in accordance with the Balanced Budget Act of 1997. 2 On September 29, 2000, the Bureaus released a second Public Notice, stating that eight additional vacant FM allotments would be included in Auction No. 37. 3 In addition, the Bureaus sought comment on procedures to be used in Auction No. 37. The Bureaus received twenty comments and three reply comments in response to the Auction No. 37 Comment Public Notice and the Auction No. 37 Additional Comment Public Notice. B. Scheduling The Auction No. 37 Comment Public Notice announced that Auction No. 37 would begin on February 21, 2001. In this public notice, the Bureaus announce the beginning date of Auction No. 37 has been rescheduled to May 9, 2001. C. Construction Permits to Be Auctioned Auction No. 37 will consist of 355 construction permits in the FM Broadcast service for stations throughout the United States and Guam. These construction permits are for vacant FM allotments, reflecting FM channels assigned to the Table of FM Allotments, 47 C. F. R. § 73.202( b), pursuant to the Commission’s established rulemaking procedures, designated for use in the indicated community. As stated in the Broadcast First Report and Order, applicants may apply for any vacant FM allotment, as specified in Attachment A; applicants specifying the same FM allotment will be considered mutually exclusive and, thus, the construction permit for the FM allotment will be awarded by competitive bidding procedures. 4 The reference coordinates for each vacant FM 1 See FM Broadcast Auction Scheduled for February 21, 2001; Comment Sought on Reserve Prices or Minimum Opening Bids and Other Auction Procedural Issues, Public Notice, DA 00- 2171 (rel. September 25, 2000) (" Auction No. 37 Comment Public Notice"). 2 Section 3002( a), Balanced Budget Act of 1997, Pub. L. 105- 33, 111 Stat. 251 (1997) (" Budget Act"); 47 U. S. C. §309( j)( 4)( F). The Commission's authority to establish a reserve price or minimum opening bid is set forth in 47 C. F. R. § 1.2104 (c) and (d). 3 See Auction of Additional FM Broadcast Construction Permits To Be Included In Auction No. 37 Scheduled For February 21, 2001, Public Notice, DA 00- 2232 (rel. September 29, 2000) (" Auction No. 37 Additional Comment Public Notice"). Because the market numbers were revised to reflect the addition of these eight vacant FM allotments, the Attachment A in the Auction No. 37 Additional Comment Public Notice superceded the Attachment A in the Auction No. 37 Comment Public Notice. 4 See Implementation of Section 309( j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, First Report and Order in MM Docket No. 97- 234, GC Docket No. 92- 52 and GEN Docket No. 90- 264, 13 FCC Rcd 15920, 15961 and 15974- 15975 (1998) (“ Broadcast First Report and Order”), on recon., Memorandum Opinion and Order, 14 FCC Rcd 8724 (1999), on further recon., Memorandum Opinion and Order, 14 FCC Rcd 14521( 1999). 4 5 allotment are also listed in Attachment A. 5 One commenter suggests that the Bureaus should treat any allotment that has only one bidder as not being mutually exclusive. 6 As stated in the Broadcast First Report and Order, all pending mutually exclusive applications for broadcast services must be resolved through a system of competitive bidding. 7 Accordingly, for a specific FM allotment, if the Commission were to receive only one FCC Form 175, Application to Participate in an FCC Auction (“ short- form application”), and, thus, mutual exclusivity would not exist for auction purposes, the auction for any such construction permit would cancel. 8 However, should two or more short form applications be tendered, specifying the same FM allotment, mutual exclusivity would exist for auction purposes. Once mutual exclusivity exists for auction purposes, statutory authority mandates that mutually exclusive construction permits be granted only by means of competitive bidding. In addition, National Public Radio requests that the Commission modify its auction procedures to permit noncommercial educational broadcast applicants to apply for a noncommercial station utilizing any of the FM allotments listed in Attachment A without having to compete in an auction. 9 However, none of the FM channels included in Auction No. 37 are reserved exclusively for noncommercial educational use or are otherwise exempt from competitive bidding procedures, if mutually exclusive applications are filed. See 47 U. S. C. § 309( j)( 1); 47 C. F. R. § 1.2102( a); Reexamination of the Comparative Standards for Noncommercial Educational Applicants, Report and Order, 15 FCC Rcd 7386, 7429- 7430 (2000). To the extent that commenters National Public Radio and the Sister Sherry Lynn Foundation, Inc. rely on pending challenges to the Commission’s statutory authority to award noncommercial educational licenses by auction, they have not shown irreparable harm or that the public interest would otherwise be served by modifying the auction procedures for Auction No. 37 or delaying the auction schedule. 10 Several commenters request that the Bureaus remove certain FM allotments from Auction No. 37 due to the pendency of rulemaking proceedings concerning the FM allotment or because of other pending challenges regarding the FM channels to be auctioned. Thunderbolt opposes the inclusion of Channel 267C3, Tiptonville, TN (FM275) until a final decision is rendered in the rulemaking proceeding in MM Docket No. 99- 196. Gradick contends that the Coosa, Georgia allotment for Channel 237A should not have been included on the FM auction list (FM71) because of the pendency of Gradick’s Application for Review challenging the staff’s cancellation of Gradick’s construction permit for WSRM- FM (File No. BPH- 900226MD), which had been authorized to operate on Channel 5 With regard to the FM service, the Commission gave applicants the opportunity to submit a set of preferred site coordinates as an alternative to the reference coordinates for the vacant FM allotment upon which they intend to bid. See Broadcast First Report and Order, 13 FCC Rcd at 15974 and note 153. Further information regarding preferred site coordinates may be found in Attachment D to this Public Notice. 6 Reddy Begley & McCormick Comments at 2. See also Christian County Network Comments at 1- 2. 7 See Broadcast First Report and Order, 13 FCC Rcd at 15923- 25, ¶¶ 7- 12. 8 Id. at 15950, ¶ 82. 9 National Public Radio Comments at 1- 3; See also Christian County Network Comments at 1- 2. 10 See Petition for Reconsideration of the Sister Sherry Lynn Foundation, Inc., requesting delay of the auction pending further agency and judicial review. 5 6 237A. Conner Media contends that the Ocracoke, North Carolina allotment for Channel 224C1 (FM189), should be deleted from Auction No. 37 because of a pending Application for Review in MM Docket No. 95- 88 regarding the Channel 224C1 allotment. Radio South requests the removal of Channel 263A for Macon, MS (FM160) because of the pendency of a rulemaking seeking to delete the channel from the Table of FM Allotments (MM Docket No. 97- 188). Because the above-referenced proceedings are not yet final, the FM channels are not available for auction at this time, and the FM allotments designated as FM71, FM160, FM189, and FM275 are hereby removed from Auction No. 37. A revised Attachment A, reflecting the deletion of the four referenced FM allotments, is appended to this Public Notice. Two commenters request the inclusion of additional FM channels in Auction No. 37. Ganske requests that the Commission include Channel 224C2 for Sunriver, Oregon, and Satellite requests the inclusion of Channel 239A for Big Pine Key, Florida. The rulemaking proceeding to add Channel 224C2 at Sunriver, Oregon to the Table of FM Allotments is not yet final (MM Docket No. 96- 7). Accordingly, FM Channel 224C2 at Sunriver, Oregon will not be added to the list of FM allotments for Auction No. 37. Satellite argues that the Bureaus’ failure to include recently allotted Channel 239A for Big Pine Key, Florida in Auction No. 37 will have a devastating impact on the proposed business operations of Satellite and disproportionately harm the small business. However, the effective date for the rulemaking proceeding regarding MM Docket 00- 29 precluded the timely inclusion of FM Channel 239A in Auction No. 37 and its placement on the Auction No. 37 Comment Public Notice. Nevertheless, Channel 239A, Big Pine Key, Florida will be included in a subsequent FM auction. The Auction No. 37 Comment Public Notice inadvertently included two allotments for Channel 261A at Corrigan, TX (FM 280 and FM 281) and two allotments for Channel 291A at Kerrville, TX (FM 289 and FM 290). Accordingly, duplicative listings FM 281 and FM 289 will be removed from Attachment A. D. Rules and Disclaimers 1. Relevant Authority Prospective bidders must familiarize themselves thoroughly with the Commission's rules relating to broadcast auctions, contained in Title 47, Part 73 of the Code of Federal Regulations. Prospective bidders must also be thoroughly familiar with the procedures, terms and conditions contained in this Public Notice, the Auction No. 37 Comment Public Notice, the Auction No. 37 Additional Comment Public Notice, the Broadcast First Report and Order, 11 the Broadcast Reconsideration Order, 12 and the New Entrant Bidding Credit Reconsideration Order. 13 Potential bidders must also familiarize themselves with Part 1, Subpart Q of the Commission’s rules concerning competitive bidding proceedings. 14 In particular, broadcasters should also familiarize themselves with 11 See generally Broadcast First Report and Order. 12 See Implementation of Section 309( j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, MM Docket No. 97- 234, Memorandum Opinion and Order, 14 FCC Rcd 8724 (1999) (“ Broadcast Reconsideration Order”). 13 See Implementation of Section 309( j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, MM Docket No. 97- 234, Memorandum Opinion and Order, 14 FCC Rcd 12541 (1999) (“ New Entrant Bidding Credit Reconsideration Order”). 14 See Part 1, Subpart Q of Title 47 of the Code of Federal Regulations. 6 7 the Commission’s recent amendments and clarifications to its general competitive bidding rules. 15 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 our public notices 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 Auctions 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) 314- 3070. When ordering documents from ITS, please provide the appropriate FCC number (for example, FCC 98- 194 for the Broadcast First Report and Order and FCC 99- 74 for the Broadcast Reconsideration Order). 2. Prohibition of Collusion To ensure the competitiveness of the auction process, the Commission’s rules prohibit applicants for the same market from communicating with each other during the auction about bids, bidding strategies, or settlements. 16 This prohibition begins at the short- form application filing deadline and ends at the down payment deadline after the auction. Bidders competing for construction permits in the same market are encouraged not to use the same individual as an authorized bidder. A violation of the anti- collusion rule could occur if an individual acts as the authorized bidder for two or more competing applicants, and conveys information concerning the substance of bids or bidding strategies between the bidders he or she is authorized to represent in the auction. Also, if the authorized bidders are different individuals employed by the same organization (e. g., law firm or consulting firm), a violation could similarly occur. In such a case, at a minimum, applicants should certify on their applications that precautionary steps have been taken to prevent communication between authorized bidders and that applicants and their bidding agents will comply with the anti- collusion rule. 17 However, the Bureaus caution that merely filing a certifying statement as part of an application will not outweigh specific evidence that collusive behavior has occurred, nor will it preclude the initiation of an investigation when warranted. 18 In Auction No. 37, for example, the rule would apply to any applicants bidding for the same market.( i. e., Bethel, Alaska Channel 252C3, Market FM1). Therefore, applicants that apply to bid for any FM construction permit in the same market would be precluded from communicating after filing the FCC Form 175 short- form application with any other applicant for a FM construction permit in that same market. However, 15 See Amendment of Part 1 of the Commission’s Rules — Competitive Bidding Procedures, WT Docket No. 97- 82, Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice of Proposed Rule Making, FCC 00- 274 (rel. August 14, 2000) (“ Part 1 Fifth Report and Order”). 16 See 47 C. F. R. § 1.2105( c). 17 See In re Application of Nevada Wireless for a License to Provide 800 MHz Specialized Mobile Radio Service in the Farmington, NM- CO Economic Area (EA- 155) Frequency Band A, Memorandum Opinion and Order, 13 FCC Rcd 11973, 11977, ¶ 11 (1998) (“ Nevada Wireless”). 18 See id. at 11978. 7 8 applicants may enter into bidding agreements before filing their FCC Form 175, as long as they disclose the existence of the agreement( s) in their FCC Form 175. 19 If parties agree in principle on all material terms prior to the short- form filing deadline, those parties must be identified on the short-form application under Section 1.2105( c), even if the agreement has not been reduced to writing. If the parties have not agreed in principle by the filing deadline, an applicant would not include the names of those parties on its application, and may not continue negotiations with other applicants for the same market. 20 By signing their FCC Form 175 short- form applications, applicants are certifying their compliance with Sections 1.2105( c) and 73.5002. In addition, Section 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. 21 Thus, Section 1.65 requires an auction applicant to notify the Commission of any violation of the anti- collusion rules immediately upon learning of such violation. A summary listing of documents from the Commission and the Bureaus addressing the application of the anti- collusion rules may be found in Attachment H. 3. Due Diligence Potential bidders are solely responsible for investigating and evaluating all technical and market place factors that may have a bearing on the value of the FM broadcast facilities. The FCC makes no representations or warranties about the use of this spectrum for particular services. Applicants should be aware that a FCC auction represents an opportunity to become a FCC permittee in the broadcast service, subject to certain conditions and regulations. A FCC auction does not constitute an endorsement by the FCC of any particular service, technology, or product, nor does a FCC construction permit or license constitute a guarantee of business success. Applicants should perform their individual due diligence before proceeding as they would with any new business venture. Potential bidders are strongly encouraged to conduct their own research prior to Auction No. 37 in order to determine the existence of pending proceedings that might affect their decisions regarding participation in the auction. Participants in Auction No. 37 are strongly encouraged to continue such research during the auction. 4. 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 construction permit, and not in default on any payment for Commission construction permits or licenses (including down payments) or delinquent on any non- tax debt owed to any Federal agency. 22 Prospective bidders are 19 See 47 C. F. R. § 1.2105( c). 20 See “Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules,” Public Notice, DA 95- 2244, 11 FCC Rcd 9645 (1995) (rel. October 26, 1995). 21 See 47 C. F. R. § 1.65. 22 See 47 C. F. R. § 1.2105. 8 9 reminded that submission of a false certification to the Commission is a serious matter that may result in severe penalties, including monetary forfeitures, construction permit or license revocations, exclusion from participation in future auctions, and/ or criminal prosecution. As is the case with many business investment opportunities, some unscrupulous entrepreneurs may attempt to use Auction No. 37 to deceive and defraud unsuspecting investors. Common warning signals of fraud include the following: x 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. x 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. x 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. In addition, the offering materials often include copies of actual FCC releases, or quotes from FCC personnel, giving the appearance of FCC knowledge or approval of the solicitation. 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 proposals may also call the FCC Consumer Center at (888) CALL- FCC (( 888) 225- 5322). 5. National Environmental Policy Act (NEPA) Requirements The permittee must comply with the Commission's rules regarding the National Environmental Policy Act (NEPA). 23 The construction of a broadcast facility is a federal action and the permittee must comply with the Commission's NEPA rules for each such facility. 24 See 47 C. F. R. §§ 1.1305- 1.1319. The Commission's NEPA rules require that, among other things, the permittee 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). The permittee must prepare environmental assessments for broadcast facilities 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. The permittee must also prepare environmental assessments for broadcast facilities that include high intensity white lights in residential neighborhoods or excessive radio frequency emission. 23 See Part 1, Subpart I of Title 47 of the Code of Federal Regulations. 24 See 47 C. F. R. §§ 1.1305- 1.1319. 9 10 E. Auction Specifics 1. Auction Date Auction No. 37 will begin on Wednesday, May 9, 2001. 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 construction permits. 2. Auction Title Auction No. 37 — FM Broadcast 3. Bidding Methodology The bidding methodology for Auction No. 37 will be a simultaneous, multiple- round, ascending auction. Bidding will be permitted only from remote locations, either electronically (by computer) or telephonically. 4. Pre- Auction Dates and Deadlines Auction Seminar ..................................................... March 7, 2001 Short- Form Application Filing Deadline (FCC Form 175) ..................................................... March 19, 2001; 6: 00 p. m. ET Orders for Remote Bidding Software ...................... March 19, 2001; 6: 00 p. m. ET Upfront Payments (via wire transfer) ....................... April 16, 2001; 6: 00 p. m. ET Mock Auction ......................................................... May 7, 2001 Auction Begins ........................................................ May 9, 2001 5. Requirements for Participation Those wishing to participate in the auction must: x Submit a short form application (FCC Form 175) electronically by 6: 00 p. m. ET, March 19, 2001. No other application may be substituted for the FCC Form 175. x Submit a sufficient upfront payment and a FCC Remittance Advice Form (FCC Form 159) by 6: 00 p. m. ET, April 16, 2001. x Comply with all provisions outlined in this public notice and applicable Commission rules. 6. General Contact Information GENERAL AUCTION INFORMATION General Auction Questions Seminar Registration Orders for Remote Bidding Software FCC Auctions Hotline (888) 225- 5322, Press Option #2 or direct (717) 338- 2888 Hours of service: 8 a. m. – 5: 30 p. m. ET AUCTION LEGAL INFORMATION Auctions and Industry Analysis Division 10 11 Auction Rules, Policies, Regulations Legal Branch (202) 418- 0660 LICENSING INFORMATION Rules, Policies, Regulations Licensing Issues, Engineering Issues Audio Services Division (202) 418- 2700 TECHNICAL SUPPORT Electronic Filing Assistance Software Downloading FCC Auctions Technical Support Hotline (202) 414- 1250 (Voice), (202) 414- 1255 (TTY) Hours of service: Monday – Friday, 7 a. m. to 10: 00 p. m. ET, Saturday, 8: 00 a. m. to 7: 00 p. m., ET Sunday, 12: 00 noon to 6: 00 p. m., ET PAYMENT INFORMATION Wire Transfers Refunds FCC Auctions Accounting Branch (202) 418- 1995 (202) 418- 2843 (Fax) TELEPHONIC BIDDING Will be furnished only to qualified bidders FCC COPY CONTRACTOR Additional Copies of Commission Documents International Transcription Services, Inc. 445 12 th Street, SW Room CY- B400 Washington, DC 20554 (202) 314- 3070 PRESS INFORMATION Mark Rubin (202) 418- 2924 FCC FORMS (800) 418- 3676 (outside Washington, DC) (202) 418- 3676 (in the Washington Area) http:// www. fcc. gov/ formpage. html FCC INTERNET SITES http:// www. fcc. gov/ wtb/ auctions http:// www. fcc. gov ftp:// ftp. fcc. gov II. SHORT- FORM (FCC FORM 175) APPLICATION REQUIREMENTS Guidelines for completion of the short- form (FCC Form 175) are set forth in Attachment D to this public notice. The short- form application seeks the applicant’s name and address, legal classification, status, new entrant bidding credit eligibility, identification of the construction permit( s) sought, the authorized bidders and contact persons. To participate in Auction No. 37, no other application may be substituted for the FCC Form 175. One commenter urges the Bureaus to eliminate the “ALL” box in the FCC Form 175 for this 11 12 auction. 25 The Bureaus agree. In certain previous auctions, an ALL box was included in the section of the FCC Form 175 in which the applicant specified the markets it sought to pursue. The capability to select the ALL box originated in the context of, and for was designed for use in, wireless auctions. Use of an ALL box, however, is inappropriate in the broadcast context and accordingly, an ALL box will not be included in the FCC Form 175 for use in Auction No. 37. A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A) The Commission indicated in the Broadcast First Report and Order that, for purposes of determining eligibility to participate in a broadcast auction, the uniform Part 1 ownership standards would apply. Therefore, in completing FCC Form 175, all applicants will be required to file an “Exhibit A” and provide information required by Sections 1.2105 and 1.2112 of the Commission’s rules, thus providing a full and complete statement of the ownership of the bidding entity. The ownership disclosure standards for the short- form are set forth in Section 1.2112 of the Commission’s rules. 26 B. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B) Applicants will be required to identify on their short- form applications any parties with whom they have entered into any consortium arrangements, joint ventures, partnerships or other agreements or understandings which relate in any way to the construction permits being auctioned, including any agreements relating to post- auction market structure. See 47 C. F. R. §§ 1.2105( a)( 2)( viii) and 1.2105( c)( 1). Applicants will also be required to certify on their short- form applications that they have not entered into any explicit or implicit agreements, arrangements or understandings of any kind with any parties, other than those identified, regarding the amount of their bids, bidding strategies, or the particular construction permits on which they will or will not bid. See 47 C. F. R. § 1.2105( a)( 2)( ix). As discussed above, if an applicant has had discussions, but has not reached a joint bidding agreement by the short- form deadline, it would not include the names of parties to the discussions on its applications and may not continue discussions with applicants for the same market after the deadline. 27 Where applicants have entered into consortia or joint bidding arrangements, applicants must submit an “Exhibit B” to the FCC Form 175. A party holding a non- controlling, attributable interest in one applicant will be permitted to acquire an ownership interest in, form a consortium with, or enter into a joint bidding arrangement with other applicants for construction permits in the same market provided that (i) the attributable interest holder certifies that it has not and will not communicate with any party concerning the bids or 25 Reddy Begley & McCormick Comments at 2. 26 Section 73. 5002 of the Commission’s rules specifies the bidding procedures, certification requirements and the anti- collusion rules applicable to mutually exclusive applications for commercial broadcast services subject to auction. Subsection (b) of that rule requires the timely submission of short- form applications, along with all required certifications, information and exhibits pursuant to the provisions of 47 C. F. R. § 1.2105 (a). Section 1.2105, in turn, requires the disclosure on the short form of applicant ownership information as set forth in Section 1.2112. Note that both of the aforementioned Part 1 rule sections were revised in the Part 1 Fifth Report and Order. 27 See Section 1.B. 2, supra. 12 13 bidding strategies of more than one of the applicants in which it holds an attributable interest, or with which it has formed a consortium or entered into a joint bidding arrangement; and (ii) the arrangements do not result in a change in control of any of the applicants. 28 While the anti- collusion rules do not prohibit non- auction related business negotiations among auction applicants, bidders are reminded that certain discussions or exchanges could touch upon impermissible subject matters because they may convey pricing information and bidding strategies. Such subject areas include, but are not limited to, issues such as management, sales, local marketing agreements, rebroadcast agreements, and other transactional agreements. C. New Entrant Bidding Credit (Form 175 Exhibit C) To fulfill its obligations under Section 309( j) and further its long- standing commitment to the diversification of broadcast facility ownership, the Commission adopted a tiered New Entrant Bidding Credit for broadcast auction applicants with no, or very few, other media interests. 1. Eligibility The interests of the bidder, and of any individuals or entities with an attributable interest in the bidder, in other media of mass communications shall be considered when determining a bidder's eligibility for the New Entrant Bidding Credit. The bidder's attributable interests shall be determined as of the short- form (FCC Form 175) filing deadline – March 19, 2001. Bidders intending to divest a media interest or make any other ownership changes, such as resignation of positional interests, in order to avoid attribution 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 short- form filing deadline – March 19, 2001. 29 Under traditional broadcast attribution rules, those entities or individuals with an attributable interest in a bidder include: x all officers and directors of a corporate bidder; x any owner of 5 percent or more of the voting stock of a corporate bidder; x all partners and limited partners of a partnership bidder, unless the limited partners are sufficiently insulated; and x all members of a limited liability company, unless sufficiently insulated. 30 In cases where a bidder’s spouse or close family member holds other media interests, such interests are not automatically attributable to the bidder. The Commission decides attribution issues 28 See 47 C. F. R. § 1.2105( c)( 4)( i), (ii). 29 The fact that, on March 19, 2001, a bidder has a pending or granted application to assign or transfer control of a media interest shall not be sufficient to avoid attribution. Bidders must have consummated the transaction by March 19, 2001 to avoid attribution. 30 See 47 C. F. R. § 73.3555 Note 2. 13 14 in this context based on certain factors traditionally considered relevant. 31 Bidders should note that the mass media attribution rules were recently revised. 32 Bidders are also reminded that, by the New Entrant Bidding Credit Reconsideration Order, the Commission further refined the eligibility standards for the New Entrant Bidding Credit, judging it appropriate to attribute the media interests held by very substantial investors in, or creditors of, a bidder claiming new entrant status. Specifically, the attributable mass media interests held by an individual or entity with an equity and/ or debt interest in a bidder 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 percent of the total asset value of the bidder, even if such an interest is non- voting. 33 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. 34 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 bidders' other mass media interests in determining its eligibility for a New Entrant Bidding Credit. 35 A medium of mass communications is defined in 47 C. F. R § 73.5008 (b). 2. Application Requirements In addition to the ownership information required on Exhibit A, applicants are required to file supporting documentation on Exhibit C to their FCC Form 175 short- form applications to establish that they satisfy the eligibility requirements to qualify for a New Entrant Bidding Credit. 36 In those cases where a New Entrant Bidding Credit is being sought, a certification under penalty of perjury must be set forth in Exhibit C. An applicant claiming that it qualifies for a 35 percent new entrant bidding credit must certify under penalty of perjury 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 percent new entrant bidding credit must certify under penalty of perjury that neither it nor any of its attributable interest holders have any attributable interests in more than three media of mass communications, and must identify and describe such media of mass communications. 31 See Clarification of Commission Policies Regarding Spousal Attribution, 7 FCC Rcd 1920 (1992). 32 See Review of the Commission’s Regulations Governing Attribution of Broadcast and Cable/ MDS Interests, Report and Order, MM Docket No. 94- 150, 14 FCC Rcd 12559 (1999) (prior history omitted). 33 See 47 C. F. R. § 73.5008. 34 Further, any bidder asserting new entrant status must have de facto as well as de jure control of the entity claiming the bidding credit. 47 C. F. R. § 73.5007. Typically, de jure control is evidenced by ownership of at least 50. 1 percent 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. 35 Broadcast Reconsideration Order at ¶ 75. 36 See 47 C. F. R. § 1.2105. 14 15 3. Bidding Credits Applicants that qualify for the New Entrant Bidding Credit, as set forth in 47 C. F. R. § 73.5007, are eligible for a bidding credit that represents the amount by which a bidder's winning bid is discounted. The size of a 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: x A 35 percent 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 no attributable interest in any other media of mass communications, as defined in 47 C. F. R. § 73.5008; x A 25 percent 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 47 C. F. R. § 73. 5008; x No bidding credit will be given if any of the commonly owned mass media facilities serve the same area as the proposed broadcast station, as defined in 47 C. F. R. § 73.5007, 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. Bidding credits are not cumulative; qualifying applicants receive either the 25 percent or the 35 percent bidding credit, but not both. Attributable interests are defined in 47 C. F. R. § 73.3555 and Note 2 of that section. Bidders should note that unjust enrichment provisions 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. 37 Summit contends that the Commission should make allowances for small businesses to participate in auctions, such as partial payment provisions of the established minimum opening bid, or the submission of a accountant or bank report attesting to fund availability. 38 However, as recognized by the Commission in the broadcast competitive bidding rulemaking proceeding, in the Broadcast First Report and Order, the Broadcast Reconsideration Order and the New Entrant Bidding Credit Reconsideration Order, the designated entity provision adopted and specified for use in broadcast auctions - the New Entrant Bidding Credit - is particularly suitable to promote opportunity for participation in competitive bidding for construction permits in broadcast auctions. The addition of further provisions would be inappropriate at this time. D. Provisions Regarding Defaulters and Former Defaulters (Form 175 Exhibit D) Each applicant must certify on its FCC Form 175 application that it is not in default on any Commission licenses and that it is not delinquent on any non- tax debt owed to any Federal agency. 39 In addition, each applicant must attach to its FCC Form 175 application a statement made under 37 See 47 C. F. R. § 73.5007( c). 38 Summit Media Broadcasting Comments at 1. 39 47 C. F. R. § 1.2105( a)( 2)( x). 15 16 penalty of perjury indicating whether or not the applicant, or any of the applicant’s controlling interests or their affiliates, as defined by Section 1. 2110 of the Commission’s rules, as recently amended in the Part 1 Fifth Report and Order, has ever been in default on any Commission licenses or has ever been delinquent on any non- tax debt owed to any federal agency. 40 Applicants must include this statement as Exhibit D of the FCC Form 175. If any of an applicant’s controlling interests holders or their affiliates, as defined by Section 1. 2110 of the Commission’s rules, have ever been in default on any Commission license or have ever been delinquent on any non- tax debt owed to any Federal agency, the applicant must include such information as part of the same attached statement. 41 Prospective bidders are reminded that the statement must be made under penalty of perjury and, further, 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. “Former defaulters” — i. e., applicants, including their attributable interest holders, that in the past have defaulted on any Commission licenses or been delinquent on any non- tax debt owed to any Federal agency, but that have since remedied all such defaults and cured all of their outstanding non-tax delinquencies — are eligible to bid in Auction No. 37, provided that they are otherwise qualified. However, former defaulters are required to pay upfront payments that are fifty percent more than the normal upfront payment amounts. 42 E. Other Information (FCC Form 175 Exhibits E and F) Applicants owned by minorities or women, as defined in 47 C. F. R. § 1.2110( b)( 2), may attach an exhibit (Exhibit E) regarding this status. This applicant status information is collected for statistical purposes only and assists the Commission in monitoring the participation of “designated entities” in its auctions. Applicants wishing to submit additional information may do so on Exhibit F (Miscellaneous Information) to the FCC Form 175. F. Maintaining Current Information in Short- Form Applications (FCC Form 175) Applicants have an obligation under 47 C. F. R. §1. 65, to maintain the completeness and accuracy of information in their short- form applications. Amendments reporting substantial changes of possible decisional significance in information contained in FCC Form 175 applications, as defined by 47 C. F. R. § 1.2105( b)( 2), will not be accepted and may in some instances result in the dismissal of the FCC Form 175 application. III. PRE- AUCTION PROCEDURES A. Auction Seminar On March 7, 2001 the FCC will sponsor a free seminar for Auction No. 37 at the Federal Communications Commission, located at 445 12 th Street, S. W., Washington, D. C. The seminar will provide attendees with information about pre- auction procedures, conduct of the auction, FCC 40 47 C. F. R. § 1.2105( a)( 2)( xi). 41 See Part 1 Fifth Report and Order, ¶ 42. 42 47 C. F. R. § 1.2106( a). 16 17 remote bidding software, and the broadcast service and auction rules. The seminar will also provide an opportunity for prospective bidders to ask questions of FCC staff. To register, complete the registration form included as Attachment B of this public notice and submit it by Monday, March 5, 2001. Registrations are accepted on a first- come, first- served basis. B. Short- Form Application (FCC Form 175) — Due March 19, 2001 In order to be eligible to bid in this auction, applicants must first submit a FCC Form 175 application. This application must be submitted electronically beginning at 12: 00 noon ET on March 7, 2001 and must be received at the Commission no later than 6: 00 p. m. ET on March 19, 2001. Late applications will not be accepted. 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. See Part III. D, infra. Pursuant to procedures established in the Broadcast First Report and Order, the Mass Media Bureau will impose a temporary freeze on the filing of FM minor modification applications during the period that FCC Form 175 applications may be filed for FM Auction No. 37. 43 A separate public notice will be released in this regard. 1. Electronic Filing Applicants must file their FCC Form 175 applications electronically. 44 For Auction No. 37, applications may generally be filed at any time beginning at 12: 00 noon ET on March 7, 2001, until 6: 00 p. m. ET on March 19, 2001. Applicants are strongly encouraged to file early and are responsible for allowing adequate time for filing their applications. Applicants may update or amend their electronic applications multiple times until the filing deadline on March 19, 2001. Applicants must press the “Submit Form 175” button on the “Submit” page of the electronic form to successfully submit their FCC Form 175. Any form that is not submitted will not be reviewed by the FCC. Information about accessing the FCC Form 175 is included in Attachment C. Technical support is available at (202) 414- 1250 (voice) or (202) 414- 1255 (text telephone (TTY)); the hours of service are Monday through Friday, from 7: 00 a. m. to 10: 00 p. m. ET, Saturday, from 8: 00 a. m. to 7: 00 p. m. ET, and Sunday, from 12: 00 noon to 6: 00 p. m. ET. In order to provide better service to the public, all calls to the hotline are recorded. 2. Completion of the FCC Form 175 Applicants should carefully review 47 C. F. R. § 1.2105, and must complete all items on the FCC Form 175. Instructions for completing the FCC Form 175 are in Attachment D of this public notice. Applicants are encouraged to begin preparing the required attachments for FCC Form 175 prior to submitting the form. Attachments C and D to this public notice provide information on the 43 See Broadcast First Report and Order, 13 FCC Rcd at 15989, ¶ 177. The temporary freeze on FM minor modification applications eliminates potential mutual exclusivity with applications submitted by FM auction applicants during the FM Auction No. 37 filing window. 44 See 47 C. F. R. § 1.2105( a). 17 18 required attachments and appropriate formats. 3. Electronic Review of FCC Form 175 The FCC Form 175 electronic review software may be used to review and print applicants’ FCC Form 175 information. 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 no fee for accessing this system. See Attachment C for details on accessing the review system. C. Application Processing and Minor Corrections After the deadline for filing the FCC Form 175 applications has passed, the FCC will process all timely submitted 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 construction permits 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. As described more fully in the Commission’s rules, after the March 19, 2001 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 construction permit selections, change the certifying official, change control of the applicant, or change New Entrant Bidding Credit eligibility). 45 See 47 C. F. R. §§ 1.2105 and 73.5002( c). Permissible minor changes include, for example, deletion and addition of authorized bidders (to a maximum of three) and revision of exhibits. Applicants should make these changes on- line, and submit a letter to Louis Sigalos, Deputy Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12th Street, SW, Suite 4- A668, Washington, DC 20554, briefly summarizing the changes. Questions about other changes should be directed to Ken Burnley of the Auctions and Industry Analysis Division at (202) 418- 0660. D. Upfront Payments — Due April 16, 2001 In order to be eligible to bid in the auction, applicants must submit an upfront payment accompanied by a FCC Remittance Advice Form (FCC Form 159). After completing the FCC Form 175, filers will have access to an electronic version of the FCC Form 159 that can be printed and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must be received at Mellon Bank by 6: 00 p. m. ET on April 16, 2001. Please note that: x All payments must be made in U. S. dollars; x All payments must be made by wire transfer; 45 See 47 C. F. R. § 1.2105; see also Two Way Radio of Carolina, Inc., Memorandum, Opinion and Order, 14 FCC Rcd 12035 (1999). 18 19 x Upfront payments for Auction No. 37 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; x Failure to deliver the upfront payment by the April 16, 2001, deadline will result in dismissal of the application and disqualification from participation in the auction. 1. Auction Payments by Wire Transfer Wire transfer payments must be received by 6: 00 p. m. ET on April 16, 2001. 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/ ACCOUNT# 910- 1211 OBI Field: (Skip one space between each information item) “AUCTIONPAY” TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26) PAYMENT TYPE CODE (enter “A37U”) FCC CODE 1 (same as FCC Form 159, block 23A: “37”) PAYER NAME (same as FCC Form 159, block 2) LOCKBOX NO. # 358435 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. Applicants must fax a completed FCC Form 159 to Mellon Bank at (412) 209- 6045 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. 37.” Bidders should confirm the timely transmission and receipt of their upfront payment at Mellon Bank by contacting their sending financial institution. 2. FCC Form 159 A completed FCC Remittance Advice Form (FCC Form 159) must be faxed to Mellon Bank to accompany each upfront payment. 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 E to this public notice. An electronic version of the FCC Form 159 is available after filing the FCC Form 175. The FCC Form 159 must be completed electronically and must be filed with Mellon Bank via facsimile. 3. Amount of Upfront Payment The Bureaus have delegated authority to determine an appropriate upfront payment for the 19 20 FM construction permits being auctioned, taking into account such factors as the efficiency of the auction process and the potential value of the spectrum. 46 In the Auction No. 37 Comment Public Notice, the Bureaus proposed upfront payments for Auction No. 37. Based on commenters’ concerns that the upfront payment amounts proposed may deter actual auction participation or result in unsold construction permits, the Bureaus have modified the upfront payment, as well as the minimum opening bid amounts. See generally, Section IV. B. 2, infra. Any auction applicant that has previously been in default on any Commission license or has previously been delinquent on any non-tax debt owed to any Federal agency must submit an upfront payment equal to 50 percent more than that set for each particular construction permit. See 47 C. F. R. § 1.2106. 4. Applicant's Wire Transfer Information for Purposes of Refunds The Commission will use wire transfers for all Auction No. 37 refunds. To ensure that refunds of upfront payments are processed in an expeditious manner, the Commission is requesting that all pertinent information as listed below be supplied to the FCC. Applicants can provide the information electronically during the initial short form filing window after the form has been submitted. Wire Transfer Instructions can also be manually faxed to the FCC, Financial Operations Center, Auctions Accounting Group, ATTN: Tim Dates or Gail Glasser, at (202) 418- 2843 by March 19, 2001. Should the payer fail to submit the requested information, the refund will be returned to the original payer. For additional information, please call (202) 418- 1995. Name of Bank ABA Number Contact and Phone Number Account Number to Credit Name of Account Holder Correspondent Bank (if applicable) ABA Number Account Number Tax ID 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.) Eligibility for refunds is discussed in Section V. E., infra. E. Auction Registration 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 short- form applications have been accepted for filing and that have timely submitted an upfront payment. 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 46 See Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Proceeding, WT Docket No. 97- 82, Order, Memorandum Opinion and Order and Notice of Proposed Rule Making, 12 FCC Rcd 5686, 5697- 5698, ¶ 16 (1997). See also Broadcast First Report and Order, 13 FCC Rcd at 15967- 68 ¶¶ 127- 128. 20 21 person at the contact address listed in the short- form application. 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 Thursday, May 3, 2001, should contact the Auctions Hotline at (717) 338- 2888. 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 445 12 th Street, S. W., Washington, D. C. 20554. Only an authorized representative or certifying official, as designated on an applicant's short- form application, may appear in person with two forms of identification (one of which must be a photo identification) in order to receive replacement codes. Qualified bidders requiring replacement codes must call technical support prior to arriving at the FCC to arrange preparation of new codes. F. Remote Electronic Bidding Software Qualified bidders are allowed to bid electronically or by telephone. If choosing to bid electronically, each bidder must purchase their own copy of the remote electronic bidding software. Electronic bids will only be accepted from those applicants purchasing the software. However, the software may be copied by the applicant for use by its authorized bidders at different locations. The price of the FCC’s remote bidding software is $175.00 and must be ordered by Monday, March 19, 2001. Credit cards will not be charged, and likewise, money orders and personal checked received will not be deposited, until qualified bidders are determined and the software is mailed. For security purposes, the software is only mailed to the contact person at the contact address listed on the short-form application. Please note that auction software is tailored to a specific auction, so software from prior auctions will not work for Auction No. 37. If bidding telephonically, the telephonic bidding phone number will be supplied in the first Federal Express mailing of confidential login codes. Qualified bidders that do not purchase the software may only bid telephonically. To indicate your bidding preference, an FCC Bidding Preference/ Remote Software Order Form can be accessed when submitting the submitting the FCC Form 175. Bidders should complete this form electronically, print it out and faxed to (717) 338- 2850. A manual copy of this form is also included as Attachment F in this public notice. G. Mock Auction All qualified bidders will be eligible to participate in a mock auction on Monday, May 7, 2001. The mock auction will enable applicants to become familiar with the 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. IV. AUCTION EVENT The first round of bidding for Auction No. 37 will begin on Wednesday, May 9, 2001. The initial bidding schedule will be announced in the public notice listing the qualified bidders, which is released approximately 10 days before the start of the auction. 21 22 A. Auction Structure 1. Multiple Round, Ascending Auction In the Auction No. 37 Comment Public Notice, we proposed to award the construction permits for FM Broadcast stations in a simultaneous, multiple- round, ascending auction. 47 We received no comments on this issue. We therefore conclude that it is operationally feasible and appropriate to auction the construction permits using this auction design. Unless otherwise announced, bids will be accepted on all construction permits in successive rounds of bidding. 2. Maximum Eligibility and Activity Rules In the Auction No. 37 Comment Public Notice, we proposed that the amount of the upfront payment submitted by a bidder would determine the initial maximum eligibility (as measured in bidding units) for each bidder. 48 No comments were received concerning the eligibility rule. For Auction No. 37, we will adopt the maximum eligibility proposal for Auction No. 37. The amount of the upfront payment submitted by a bidder determines the initial maximum eligibility (in bidding units) for each bidder. Note again that the upfront payments are not attributed to specific construction permits, 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 be permitted to bid. As there is no provision for increasing a bidder’s maximum eligibility during the course of an auction, prospective bidders are cautioned to calculate their upfront payments carefully. The total upfront payment does not define the total dollars a bidder may bid on any given construction permit. In addition, we received no comments on our proposal for a single stage auction. Therefore, 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 100 percent of their maximum 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 on which the bidder is active. A bidder is considered active on a construction permit in the current round if it is either the high bidder at the end of the previous round and does not withdraw the high bid in the current round, or if it submits an acceptable bid in the current round. Failure to maintain the requisite activity level will result in the use of an activity rule waiver, if any remain, or a permanent reduction in the bidder’s bidding eligibility to bring them into compliance with the activity rule. 3. Activity Rule Waivers and Reducing Eligibility In the Auction No. 37 Comment Public Notice, we proposed that each bidder in the auction would be provided five activity rule waivers that may be used in any round during the course of the 47 Auction No. 37 Comment Public Notice at 2- 3. 48 Id. 22 23 auction. 49 We received no comments on this issue. Based upon our experience in previous auctions, we adopt our proposal and 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 construction permit. We are satisfied that our practice of providing five waivers over the course of the auction provides a sufficient number of waivers and maximum flexibility to the bidders, while safeguarding the integrity of the auction. 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. 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. 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 Stopping Rules For Auction No. 37, the Bureau proposed to employ a simultaneous stopping rule. 50 Under this rule, bidding will remain open on all construction permits until bidding stops on every construction permit. The auction will close for all construction permits when one round passes during which no bidder submits a new acceptable bid on any construction permit, a withdrawal, or applies a proactive waiver. After the first such round, bidding closes simultaneously on all construction permits. The Bureau also sought comment on a modified version of the stopping rule. The modified version of the stopping rule would close the auction after the first round in which no bidder submits a proactive waiver, a withdrawal, or a new bid on a construction permit when it is not the standing high bidder. Thus, absent any other bidding activity, a bidder placing a new bid on a construction permit for which it is the standing high bidder would not keep the auction open under this modified stopping 49 Id. at 3. 50 Id. at 7. 23 24 rule. Wild West and Dominant support us on these issues. 51 The Bureau further proposed retaining the discretion to keep an auction open even if no new acceptable bids or proactive waivers are submitted and no previous high bids are withdrawn in a round. 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). In addition, we proposed that the Bureau reserve the right to declare that the auction will end after a specified number of additional rounds (“ special stopping rule”). If the Bureau invokes this special stopping rule, it will accept bids in the final round( s) only for construction permits on which the high bid increased in at least one of the preceding specified number of rounds. We proposed to exercise this option only in 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. 52 Before exercising this option, the Bureau is likely to attempt to increase the pace of the auction by, for example, increasing the number of bidding rounds per day, and/ or adjusting the amount of the minimum bid increments for construction permits. We adopt all of the above proposals concerning the auction stopping rules. Auction No. 37 will begin under the simultaneous stopping rule, and the Bureau will retain the discretion to invoke the other versions of the stopping rule. Adoption of these rules, we believe, is most appropriate for Auction No. 37 because our experience in prior auctions demonstrates that the stopping rules balance the interests of administrative efficiency and maximum bidder participation. 5. Auction Delay, Suspension, or Cancellation In the Auction No. 37 Comment Public Notice, we proposed that, 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. 53 Because this approach has proven effective in resolving exigent circumstances in previous auctions, we will adopt our proposed auction cancellation rules. 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 their 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. We emphasize 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 51 Wild West Comments at 2; Dominant at 2. 52 Auction No. 37 Comment Public Notice at 7. 53 Id. at 4. 24 25 in which bidders may wish to apply their activity rule waivers. B. Bidding Procedures 1. Round Structure The initial bidding schedule will be announced in the public notice listing the qualified bidders, which is released approximately 10 days before the start of the auction. This public notice 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. Multiple bidding rounds may be conducted in a given day. Details regarding round result formats and locations will also be included in the above public notice. 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 Background. The Balanced Budget Act of 1997 calls upon the Commission to prescribe methods by which a reasonable reserve price will be required or a minimum opening bid established when FCC licenses or construction permits are subject to auction (i. e., because they are mutually exclusive), unless the Commission determines that a reserve price or minimum opening bid is not in the public interest. 54 Congress has enacted a presumption that unless the Commission determines otherwise, minimum opening bids or reserve prices are in the public interest. 55 In conformity with this mandate, the Commission has directed the Bureaus to seek comment on the use of a minimum opening bid and/ or reserve price prior to the start of each auction. 56 This is consistent with policy applied in earlier spectrum auctions, including the Closed Broadcast Auctions Nos. 25 and 27. In the Auction No. 37 Comment Public Notice, the Bureaus proposed to establish minimum opening bids for Auction No. 37, reasoning that a minimum opening bid, successfully used in other broadcast auctions, is a valuable bidding tool, effectively regulating the pace of the auction. 57 Specifically, a minimum opening bid was proposed for each FM allotment listed in Attachment A. The minimum opening bid was determined by taking into account various factors relating to the 54 Balanced Budget Act, see note 2, supra. 55 Section 3002( F) of the Budget Act directs the Commission to "prescribe methods by which a reasonable reserve price will be required, or a minimum bid established, to obtain any license or permit being assigned pursuant to the competitive bidding, unless the Commission determines that such a reserve price or minimum bid is not in the public interest." 56 See Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Procedures, WT Docket No. 97- 82, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd at 141, 455- 456 (1998) (" Part 1 Third Report and Order"). See also Broadcast First Report and Order, 13 FCC Rcd at 15971, ¶ 134. The Commission has concluded that either or both of these mechanisms may be employed for auctions and has delegated the requisite authority to make determinations regarding the appropriateness of employing either or both 57 Auction No. 37 Comment Public Notice at 5. 25 26 efficiency of the auction and the potential value of the spectrum, including the type of service and class of facility offered, market size, population covered by the proposed FM broadcast facility, industry cash flow data, and recent broadcast transactions. Based on our experience in using minimum opening bids in other auctions, we believe that minimum opening bids speed the course of the auction and ensure that valuable assets are not sold for nominal prices, without unduly interfering with the efficient awarding of construction permits. 58 Several commenters asserted that the minimum opening bids and/ or upfront payments identified in Attachment A of the Auction No. 37 Additional Comment Public Notice are excessive and seek reductions thereof. In general, most commenters claim that the minimum opening bids, as well as the upfront payments, may not accurately reflect the value of the proposed FM construction permits, as determined by class of facility, market size and anticipated population coverage, and that many of the proposals are not consistent with the minimum opening bids and upfront payments for similar facilities auctioned in Auction No. 25. Specifically, Ingram seeks to reduce the minimum opening bid for Channel 295C3, Franklin, LA (FM135); Wild West contends that the minimum opening bid for Channel 234A, Goldsmith, TX (FM286) should be reduced; Summit believes that the minimum opening bids proposed for Channel 288A, Richwood, WV (FM339) and Channel 264A Arnoldsburg, WV (FM337) should be reduced; Oakley suggests the upfront payment for Channel 244A, Byrdstown, TN (FM274) be reduced; Native asserts that the proposed upfront payment for channel 272C Kaunakakai, Hawaii (FM78) is excessive, considering the impact that the unique geography of Hawaii has on signal coverage, and requests that the amount be reduced. Fitzgerald contends that the minimum opening bids are much higher than the current or future values for the FM allotments, and states that many of the construction permits will go unapplied for if the minimum opening bids are not lowered. He suggests that, with few exceptions, the minimum opening bids and upfront payments should be $2,500 per 5,000 persons within the 70 dBu contour of each of the proposed allotments. Specifically, Fitzgerald suggests reducing the minimum opening bids and upfront payments for FM15 (Flagstaff, AZ Channel 279C3); FM16 (Mohave Valley, AZ Channel 240A); FM17 (Munds Park, AZ Channel 291A); FM 19 (Pima, AZ Channel 296A); FM23 (Wellton, AZ Channel 240A); FM24 (Yarnell, AZ Channel 258A); FM227 (Cal- Nev- Ari, NV Channel 285A); FM236 (Canaserga, NY Channel 246A); FM240 (Narrowsburg, NY Channel 275A); FM245 (Windsor, NY Channel 294A); and FM262 (Liberty, PA Channel 298A). In general, Western Slope submits that several of the proposed minimum opening bids will result in unsold construction permits and are out of line with the class of the facility offered and the market size and population covered by the proposed facilities. Specifically, Western Slope seeks the reduction of minimum opening bids for FM42 (Bayfield, CO Channel 223A); FM44 (Carbondale, CO Channel 244A); FM55 (New Castle, CO Channel 233A); and FM56 (Palisade, CO Channel 253C3). Without specifying a particular FM allotment, Olson asserts that the minimum opening bids, in general, are too high. Dominant believes that the minimum opening bids should not exceed $2,500, thus allowing small businessmen an opportunity to participate in the FM auction. After careful consideration of the concerns raised by commenters, we have adjusted the minimum opening bids and upfront payments to reduce the possibility of unsold construction permits and the likelihood that excessive minimum opening bid and upfront payment amounts could discourage auction participation. We believe the modified minimum opening bids and upfront payments remain sufficient to deter insincere bidding. The revised minimum opening bids and upfront 58 See 47 U. S. C. 309( j)( 3)( C). 26 27 payment amounts are reflected on Attachment A to this Public Notice. 3. Bid Increments and Minimum Accepted Bids In the Auction No. 37 Comment Public Notice, we proposed to apply a minimum bid increment of 10 percent. 59 We further proposed to retain the discretion to change the minimum bid increment if circumstances so dictate. 60 Wild West supports us on this issue. 61 We adopt the proposal contained in the Auction No. 37 Comment Public Notice. Once there is a standing high bid on the construction permit, there will be a bid increment associated with that bid indicating the minimum amount by which the bid on that permit can be raised. For Auction No. 37, we will use a flat, across- the- board increment of 10 percent to calculate the minimum bid increment. The Bureaus retain the discretion to compute the minimum bid increment through other methodologies if it determines circumstances so dictate. Advanced notice of the Bureau’s decision to do so will be announced via the Automated Auction System. 4. High Bids Each bid will be date- and time- stamped when it is entered into the FCC computer system. In the event of tie high bids (identical gross bid amounts) for a construction permit during a round, the earliest of the tied bids will be the standing high bid at the end of the round. 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 During a bidding round, a bidder may submit bids for as many construction permits as it wishes (subject to its eligibility), 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 construction permit 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 reflects the latest time the bid was submitted. Please note that all bidding will take place remotely either through the automated bidding software or by telephonic bidding. (Telephonic bid assistants are required to use a script when entering bids placed by telephone. Telephonic bidders are therefore reminded to allow sufficient time to bid by placing their calls well in advance of the close of a round. Normally, four to five minutes are necessary to complete a bid submission.) There will be no on- site bidding during Auction No. 37. A bidder’s ability to bid on specific construction permits in the first round of the auction is determined by two factors: (1) the construction permits applied for on FCC Form 175; and (2) the 59 Auction No. 37 Comment Public Notice at 6. 60 Id. 61 Wild West at 2. 27 28 upfront payment amount deposited. The bid submission screens will be tailored for each bidder to include only those construction permits 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 construction permits. 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 strongly encouraged to download and print bid confirmations after they submit their bids. The bid entry screen of the automated auction system software for Auction No. 37 allows bidders to place multiple increment bids. Specifically, high bids may be increased 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 construction permit. The bidding software will display the bid increment for each construction permit. To place a bid on a construction permit, the bidder must increase the standing high bid by one to nine times the bid increment. This is done by entering a whole number between 1 and 9 in the bid increment multiplier (Bid Mult) field in the software. 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. For any construction permit on which the FCC is designated as the high bidder (i. e., a construction permit 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 construction permit, and bidders should enter “1” in the Bid Mult field. Note that in this case, 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 In the Auction No. 37 Comment Public Notice, we proposed bid removal and bid withdrawal rules. 62 With respect to bid withdrawals, we proposed limiting each bidder to withdrawals in no more than two rounds during the course of the auction. The two rounds in which withdrawals are utilized, we proposed, would be at the bidder’s discretion. We received no comments on this issue. In previous auctions, we have detected bidder conduct that, arguably, may have constituted 62 Auction No. 37 Comment Public Notice at 6. 28 29 strategic bidding through the use of bid withdrawals. While we continue to recognize the important role that bid withdrawals play in an auction, we conclude that, for Auction No. 37, adoption of a limit on their use to two rounds is the most appropriate outcome. By doing so we believe we strike a reasonable compromise that will allow bidders to use withdrawals. Our decision on this issue is based upon our experience in prior auctions, particularly the PCS D, E and F block auctions, and 800 MHz SMR auction, and is in no way a reflection of our view regarding the likelihood of any speculation or “gaming” in this auction. 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 during the auction will still be subject to the bid withdrawal payments specified in 47 C. F. R. § 1. 2104( g). Bidders should note that abuse of the Commission’s bid withdrawal procedures could result in the denial of the ability to bid on construction permits. If a high bid is withdrawn, the construction permit 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. 63 The Commission will serve as a “place holder” on the construction permit until a new acceptable bid is submitted on that construction permit. Procedures. 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. Removing a bid will affect a bidder's activity for the round in which it is removed, i. e., a bid that is subsequently removed does not count toward the bidder’s activity requirement. This procedure, on which we received no comments, will enhance bidder flexibility during the auction. Therefore, we will adopt these procedures for Auction No. 37. Once a round closes, a bidder may no longer remove a bid. However, in later rounds, 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 during the auction is subject to the bid withdrawal payments specified in 47 C. F. R. § 1.2104( g). The procedure for withdrawing a bid and receiving a withdrawal confirmation is essentially the same as the bidding procedure described in “High Bids,” Part IV. B. 4., supra. Calculation. Generally, the Commission imposes payments on bidders that withdraw high bids during the course of an auction. 64 If a bidder withdraws its bid and there is no higher bid in the same or subsequent auction( s), the bidder that withdrew its bid is responsible for the difference between its withdrawn bid and the net high bid in the same or subsequent auction( s). In the case of multiple bid withdrawals on a single construction permit, within the same or subsequent auctions( s), the payment for each bid withdrawal will be calculated based on the sequence of bid withdrawals and the amounts withdrawn. No withdrawal payment will be assessed for a withdrawn bid if either the subsequent winning bid or any of the intervening subsequent withdrawn bids, in either the same or subsequent auctions( s), equals or exceeds that withdrawn bid. Thus, a bidder that withdraws a bid 63 The Bureau retains the discretion to lower the minimum acceptable bid on such construction permits in the next round or in later rounds. 64 See 47 C. F. R. §§ 1.2104( g), 1.2109. 29 30 will not be responsible for any withdrawal payments if there is a subsequent higher bid in the same or subsequent auction( s). This policy allows bidder to most efficiently allocate their resources as well as to evaluate their bidding strategies and business plans during an auction while, at the same time, maintaining the integrity of the auction process. The Bureau retains the discretion to scrutinize multiple bid withdrawals on a single construction permit for evidence of anti- competitive strategic behavior and take appropriate action when deemed necessary. In the Part 1 Fifth Report and Order, the Commission modified Section 1.2104( g)( 1) of the rules regarding assessments of interim bid withdrawal payments. 65 As amended, Section 1.2104( g)( 1) provides that in instances in which bids have been withdrawn on a construction permit that is not won in the same auction, the Commission will assess an interim withdrawal payment equal to 3 percent of the amount of the bid withdrawals. The 3 percent interim payment will be applied toward any final bid withdrawal payment that will be assessed at the close of the subsequent auction of the construction permit. Assessing an interim bid withdrawal payment ensures that the Commission receives a minimal withdrawal payment pending assessment of any final withdrawal payment. The Part 1 Fifth Report and Order provides specific examples showing application of the bid withdrawal payment rule. 66 7. Round Results Bids placed during a round will not be published until the conclusion of that bidding period. After a round closes, the Commission 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. Reports reflecting bidders' identities and FCC account numbers for Auction No. 37 will be available before and during the auction. Thus, bidders will know in advance of this auction the identities of the bidders against which they are bidding. 8. Auction Announcements The FCC will use auction announcements to announce items such as schedule changes. All FCC auction announcements will be available on the FCC remote electronic bidding system, as well as on the Internet. 9. Maintaining the Accuracy of Short- Form (FCC Form 175) Information As noted in Part II. A. supra, 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 certain revision of exhibits. Filers must make these changes on- line, and submit a letter summarizing the changes to: Louis Sigalos, Deputy Chief, Auctions and Industry Analysis Division Wireless Telecommunications Bureau Federal Communications Commission, 65 See Part 1 Fifth Report and Order, ¶ 15; 47 C. F. R. § 1.2104( g)( 1). 66 See Part 1 Fifth Report and Order, ¶ 15. 30 31 445 12 th Street, S. W., Room 4- A668, Washington, D. C. 20554 A separate copy of the letter should be mailed to Kenneth Burnley, Auctions and Industry Analysis Division, 4- B524, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12 th Street, S. W., Washington, D. C. 20554. Questions about other changes should be directed to Kenneth Burnley at (202) 418- 0660. V. POST- AUCTION PROCEDURES A. Down Payments After bidding has ended, the Commission will issue a public notice declaring the auction closed, identifying the winning bids and bidders for each construction permit, and listing bid withdrawal payments due. 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 United States Government to 20 percent of its net winning bid (actual bids less any applicable bidding credit). See 47 C. F. R. §§ 1.2107( b) and 73.5003. In addition, by the same deadline all bidders must pay any withdrawn bid amounts due under 47 C. F. R. § 1.2104( g), as discussed in “Bid Removal and Bid Withdrawal,” Part IV. B. 6. supra. (Upfront payments are applied first to satisfy any withdrawn bid liability, before being applied toward down payments.) B. Long- Form Application Within thirty days following the release of the FM auction closing public notice, winning bidders must submit a properly completed Form 301, Application for FM Construction Permit, and required exhibits, for each construction permit won through Auction No. 37. Winning bidders claiming new entrant status must include an exhibit demonstrating their eligibility for the bidding credit. See 47 C. F. R. §§ 1.2112( b) and 73.5005. Further filing instructions will be provided to auction winners at the close of the auction. C. Auction Discount Voucher On June 8, 2000, the Commission awarded Qualcomm, Inc. a transferable Auction Discount Voucher in the amount of $125,273,878.00. 67 This Auction Discount Voucher may be used by Qualcomm or its transferee, in whole or in part, to adjust a winning bid in any spectrum auction prior to June 8, 2003, subject to terms and conditions set forth in the Commission’s Order. D. Default and Disqualification 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 67 See Qualcomm Incorporated Petition for Declaratory Ruling Giving Effect to the Mandate of the District of Columbia Circuit Court of Appeals, Order, FCC 00- 189 (rel. June 8, 2000). 31 32 described in 47 C. F. R. § 1.2104( g)( 2). In such event the Commission may re- auction the construction permit or offer it to the next highest bidder (in descending order) at their final bid. See 47 C. F. R. § 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 or construction permits held by the applicant. See 47 C. F. R. § 1.2109( d). E. Refund of Remaining Upfront Payment Balance All applicants that submitted upfront payments but were not the winning bidder for a construction permit in Auction No. 37 may be entitled to a refund of their 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. 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. If you have completed the refund instructions electronically, then only a written request for the refund is necessary. If not, the request must also include wire transfer instructions and a Taxpayer Identification Number (“ TIN”). Send refund request to: Federal Communications Commission Financial Operations Center Auctions Accounting Group Gail Glasser 445 12th Street, S. W., Room 1- A824 Washington, D. C. 20554 Bidders are encouraged to file their refund information electronically using the refund information portion of the FCC Form 175, but bidders can also fax their information to the Auctions Accounting Group at (202) 418- 2843. Once the information has been approved, a refund will be sent to the party identified in the refund information. NOTE: Refund processing generally takes up to two weeks to complete. Bidders with questions about refunds should contact Tim Dates or Gail Glasser at (202) 418- 1995. Media Contact: Mark Rubin at (202) 418- 2924 Auctions and Industry Analysis Division: Kenneth Burnley, Attorney, Auctions Legal Branch at (202) 418- 0660 Jeff Crooks, Analyst, Auctions Operations Branch at (202) 418- 0660 Barbara Sibert, Project Manager, Auctions Operations Branch at (717) 338- 2888 Audio Services Division: Lisa Scanlan at (202) 418- 2700 32 33 - FCC – 33 34 VI ATTACHMENT A Construction Permits to be Auctioned (Place holder for Excel file Attachment A) 34 - 42 - VII. ATTACHMENT B FCC AUCTION SEMINAR REGISTRATION FORM Auction No. 37 The FCC will sponsor a one- day seminar for the FM Broadcast Auction applicants. The seminar is free of charge and will provide information about pre- auction procedures, radio service and auction rules, conduct of the auction, and the FCC remote bidding software. A maximum of two representatives from each company may attend on a reservation basis. Additional representatives may attend on a first- come, first- served basis until room capacity is filled. Additional seating may be available on a stand- by basis the day of the seminar. The seminar will be held: Wednesday, March 7, 2001 Federal Communications Commission 445 12 th Street S. W. Washington, DC 20554 Registration: 9: 30 a. m. - 10: 00 a. m. Seminar: 10: 00 a. m. – 2: 00 p. m. If hotel accommodations are needed Please contact 1- 888- 225- 5322 (option #2) for a list of hotels in the area ********************************** To register, complete the form below and return by mail or fax to be received no later than Monday, March 5, 2001 to: FCC Auction 37 Auctions Operations Branch 1270 Fairfield Road Gettysburg, PA 17325- 7245 FAX: 717- 338- 2850 Phone: 717- 338- 2888 I/ We will attend the Auction No. 37 Seminar, scheduled for Wednesday, March 7, 2001. Name of attendee: _____________________________________________________ Name of attendee: _____________________________________________________ Company name: ______________________________________________________ Phone: __________________________ Fax: ______________________________ 35 43 VIII. ATTACHMENT C ELECTRONIC FILING AND REVIEW OF THE FCC FORM 175 Applicants must submit their FCC Form 175 applications electronically, using either the FCC Auctions System page on the Internet or the FCC Wide- Area Network. The FCC Wide- Area Network will generally be available 24 hours per day. FCC Form 175 applications must be submitted and confirmed by 6: 00 p. m. ET on Monday, March 19, 2001. Late applications or unconfirmed submissions of electronic data will not be accepted. Applicants must press the SUBMIT Application button on the Submission page to successfully submit their FCC Form 175. The electronic filing process consists of an initial filing period and a resubmission period to make minor corrections. During each filing period, submitted applications may be updated and amended multiple times until the filing deadline. A. Software Requirements Applicants will need to meet the following minimum software requirements: x Web Browser, either of the following: i Netscape Communicator 4. 05 or higher i Microsoft Internet Explorer 4. 0 or higher x PDF Viewer: Adobe Acrobat Reader 4. 0 or higher (available at http:// www. adobe. com) x If you wish to use the download feature in on the Search Results page, you will need a .tar file extraction utility, e. g., Winzip (available at http:// www. winzip. com) or Pkzip for Windows (available at http:// www. pkware. com/ shareware). B. Submitting FCC Form 175 Applications You can submit FCC Form 175 applications electronically via the Internet. Start your web browser and point it to either http:// wtbwww27.fcc. gov/ form175/ (primary location) or http:// wtbwww28.fcc. gov/ form175/ (secondary location) to obtain the Form 175 Homepage. Note: If you have problems with the Internet, you may submit FCC Form 175 applications via the FCC Wide- Area Network, using Dial- Up Networking. For details, refer to the Accessing the FCC Network to File FCC Form 175 Attachment G. 1. Logging On The Form 175 Homepage has a Form 175 Logon area at the top right. This area provides fields that let you identify yourself to the system before submitting a Form 175 application. Once you have logged on, you can click the Submit an Application link to obtain the Profile page for the auction. 2. Uploading Attachments When uploading attachments from the Form 175 Attachments page, applicants may use a variety of file formats-- including Word 2000 or earlier, WordPerfect 6.x or earlier, Adobe PDF, and ASCII text -- and should verify that the files contain all exhibit information. Also note the following about files to be uploaded: 36 44 x Graphics files (e. g., .bmp, .tiff, .jpg) and spreadsheets (e. g., Excel, Lotus) are not supported, x Word processing files that are uploaded may not contain graphic images. x Do not include punctuation marks (e. g., ? . – ,) in the name of a file to be uploaded. The FCC system will not be able to convert that file. x Do not upload a password- protected file. The FCC system will not be able to open it or convert it. The system converts each uploaded attachment to PDF format. (The conversion process generally completes within 30 minutes.) Until the system has converted your file to PDF format, the description field shows Not Yet Available. Repeat this procedure for each additional attachment you want to add. When you have finished adding attachments, click the Continue to CERTIFICATION button to obtain the Certification page. If you are unable to read this file after it has been converted, please do the following: 1. Re- upload the attachment. 2. If the file still has not been converted properly, then simplify the formatting of the file. For example, if you are using a Table structure in a WordPerfect document, remove the Table structure and leave the contents of the table, then re- upload the attachment. After you have successfully re- uploaded an attachment, please delete the old, unreadable attachment files using their Delete links. 3. Completing the Submission Procedure Applicants must press the SUBMIT Application button on the Submission page to successfully submit their FCC Form 175. Pressing SUBMIT Application produces a Submission Confirmation page showing the assigned FCC Account Number. During each filing period, submitted applications may be updated and amended multiple times until the filing deadline. C. Reviewing FCC Form 175 Applications Once the FCC has completed the 175 Review process, you can view FCC Form 175 applications electronically by searching for them in the FCC database. Start your web browser and point it to either http:// wtbwww27.fcc. gov/ form175/ (primary location) or http:// wtbwww28.fcc. gov/ form175/ (secondary location). Click the SEARCH link at the top of the page. When the Form 175 Search page appears, select the search criteria you want and then click the Submit button. D. Help For technical assistance with installing or using FCC software, contact the FCC Technical Support Hotline at (202) 414- 1250 (V) or (202) 414- 1255 (TTY). The FCC Technical Support Hotline is generally available Monday through Friday from 7 a. m. to 10 p. m. ET, Saturday from 8 a. m. to 7 p. m. ET, and Sunday from 12 noon to 6 p. m. ET. All calls to the FCC Technical Support Hotline are recorded. 37 45 IX. ATTACHMENT D GUIDELINES FOR COMPLETION OF FCC FORM 175 AND EXHIBITS A. FCC Form 175 Because of the significance of the FCC Form 175 application to the auction, applicants should especially note the following: Applicant Name: Name given is used as your bidder name in the auction. Applicant Address: Applicants must submit a street address (not a Post Office box number), suitable for mail or private parcel delivery. Applicant Classification: Applicants must indicate their legal classification. The FCC Form 175 requires the applicant to classify itself as an individual, joint venture, partnership, trust, corporation, consortium, association, limited liability company (LLC) or government entity. Applicant Status: Applicants are requested to indicate their status as a rural telephone company, minority-owned business and/ or women- owned business, so that the FCC can monitor its performance in promoting economic opportunities for these designated entities. Contact person/ address: If the Commission wishes to communicate with the applicant by telephone or fax, those communications will be directed to the contact person identified on the FCC Form 175. Space is provided for an address, telephone number, fax number, and e- mail address. All written communication and registration information will be directed to the applicant’s contact person at the address specified on the FCC Form 175. Applicants must provide a street address; no P. O. Box addresses may be used. Authorized Bidders: Applicants must list the name( s) of the person( s) (no more than three) authorized to represent them at the auction. Only those individuals listed on the FCC Form 175 will be authorized to place or withdraw bids for the applicant during the auction. Bidding Credit Eligibility: Applicants that qualify for the New Entrant Bidding Credit must select the applicable bidding credit (25 percent or 35 percent) in the bidding credit eligibility item on the Form 175. Applicants are advised that this is the sole opportunity to select “New Entrant” status and claim a bidding credit level (if applicable). There is no opportunity to change the election once the initial short- form filing deadline passes on March 19, 2001. Licenses/ Construction Permits: Applicants should select all construction permit preferences for vacant FM allotments on which they want to be eligible to bid in the auction. Be advised that there is no opportunity to change this list once the short- form filing deadline passes. The FCC auction system will not accept bids on construction permits for which an applicant has not applied on its FCC Form 175. The reference coordinates are also displayed for each listed FM allotment. As an alternative, applicants may replace the reference coordinates with a set of preferred site coordinates. 38 46 B. Exhibits and Attachments In addition to the FCC Form 175 itself, applicants must submit additional information required by the FCC's rules. If attachments are not uploaded, the FCC Form 175 application submission process cannot be completed. Although the FCC does not require a particular format for this information, it has developed the following guidelines that will facilitate the processing of short- form applications. The FCC encourages applicants to submit this information using the following format. If you find that an attachment has not converted properly to Adobe PDF format, take the following steps: 1) Delete the failed attachment; 2) Simplify the formatting of the file. For example, if using a Table structure in a WordPerfect document, remove the Table structure leaving the contents of the table, re- save the document; and 3) Re- upload the attachment. Exhibit A -- Applicant Identity and Ownership Information: Section 73.5002 of the broadcast competitive bidding procedural rules specifies the bidding procedures, certification requirements, and anti- collusion rules applicable to applications for commercial broadcast services that are subject to auction. Subsection (b) of that rule requires the timely submission of short- form applications along with all required certifications, information and exhibits pursuant to the provisions of 47 C. F. R. § 1.2105( a) and any Commission public notices. Section 1.2105, in turn, requires the disclosure on the short- form of applicant ownership information, as set forth in Section 1.2112. Specifically, 47 C. F. R. § 1.2105( a)( 2)( ii) requires each applicant to fully disclose the real party or parties- in- interest, and the addresses and citizenship of the parties, in an exhibit to its FCC Form 175 application. In addition, the Section 1.2112 ownership disclosure requirements include, inter alia, a listing of FCC- licensed entities and a description of each such entity’s relationship to the applicant and the applicant’s real parties- in- interest. Furthermore, each applicant applying for a New Entrant Bidding Credit must provide detailed ownership information for itself and its attributable interest holders, as defined by Section 73.3555 of the Commission's rules and by Note 2 to that Section. Regardless of whether a New Entrant Bidding Credit is being sought, all applicants must provide the above- mentioned identification and ownership information. Exhibit B -- Agreements with Other Parties/ Joint Bidding Arrangements: Applicants must attach an exhibit identifying all parties with whom they have entered into any agreements, arrangements or understandings of any kind that relate to the construction permits being auctioned, including any agreements relating to the post- auction market structure. See 47 C. F. R. § 1.2105( a)( 2)( viii). Certification (4) to the FCC Form 175 requires the applicant to certify that it will not enter into any explicit or implicit agreements or understandings of any kind with parties not identified in the application regarding bid amounts, bidding strategies, or the particular licenses the applicant will or will not bid. See 45 C. F. R. § 1.2105( a)( 2)( ix). Except to the extent provided in 47 C. F. R. § 73.5002 (d), the prohibition of collusion set forth in 47 C. F. R. § 1.2105 (c) becomes effective upon the filing of short- form applications. To prevent collusion, the Commission's Rules generally prohibit communication among applicants for the same mutually exclusive construction permits or licenses between the initial short- form application filing deadline and the down payment deadline for construction permits/ licenses won, when such communication concern bids, bidding strategies, or settlements. 47 C. F. R. § 1.2105( c). Exhibit C -- Status as a New Entrant Bidding Credit Recipient: An applicant claiming that it qualifies for a 35 percent new entrant bidding credit must provide a certification, under penalty of perjury, that neither it nor any of its attributable interest holders have any attributable interests in any other media of mass 39 47 communications, as defined in 47 C. F. R. § 73.5008. An applicant claiming that it qualifies for a 25 percent new entrant bidding credit must provide a certification, under penalty of perjury, that neither it nor any of its attributable interest holders have attributable interests in more than three media of mass communications, as defined in 47 C. F. R. § 73.5008. In addition, applicants claiming a 25 percent credit shall identify and describe such media of mass communications. See 47 C. F. R. §§ 73.5007 and 73.5008. Exhibit D -- Defaulters and Former Defaulters Information: Each applicant must attach an Exhibit certifying that it is not in default on any Commission construction permits or licenses and that it is not delinquent on any non- tax debt owed to any Federal agency. Each applicant must also attach a statement made under penalty of perjury indicating whether or not the applicant has ever been in default on any Commission construction permit or license, or has ever been delinquent on any non- tax debt owed to any Federal agency. Exhibit E -- Information Requested of Designated Entities: Applicants owned by minorities or women, as defined in 47 C. F. R. § 1.2110( b)( 2), or that are rural telephone companies, as defined in 47 C. F. R. § 1.2110( b)( 3), may attach an exhibit regarding this status. This information will assist the Commission in monitoring the participation of these "designated entities" in its auctions. Exhibit F – Miscellaneous Information: Applicants wishing to submit additional information may do so in Exhibit E. NOTE: Applicants should not list their TIN numbers on any Exhibits to their FCC Form 175s. Certifications: Applicants should carefully read the list of certifications on the FCC Form 175. These certifications help to ensure a fair and competitive auction and require, among other things, disclosure to the Commission of certain information on applicant ownership and agreements or arrangements concerning the auction. Submission of an FCC Form 175 application constitutes a representation by the certifying official that he or she is an authorized representative of the applicant, has read the form's instructions and certifications, and that the contents of the application and its attachments are true and correct. 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. Completeness: Applicants must submit all information required by the FCC Form 175 and by applicable rules. Failure to submit required information by the resubmission date will result in dismissal of the application and inability to participate in the auction. See 47 C. F. R. § 1.2105( b). NOTE: Applicants must press the “Submit Form 175” button on the “Submit” page to successfully submit their FCC Form 175. Continuing Accuracy: Each applicant is responsible for the continuing accuracy and completeness of information furnished in the FCC Form 175 and its exhibits. See 47 C. F. R. § 1.65. Applicants are reminded that they consent to be audited in the certification section of the FCC Form 175 (see certification item number 6). Applicants are reminded that all information required in connection with applications to participate in spectrum auctions is necessary to determine the applicants' qualifications, and as such will be available for public inspection. Required proprietary information may be redacted, or confidentiality may be requested, following the procedures set forth in 47 C. F. R. § 0.459. Such requests must be submitted in writing to Louis Sigalos, Deputy Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12 th Street, S. W., Room 4- A668, Washington, D. C. 20554 (with a separate copy mailed to Ken Burnley, Legal Branch, Auctions and Industry Analysis Division), in which case the applicant must indicate in Exhibit F that it has filed a confidentiality request. Because the required information bears on applicants' qualifications, the FCC envisions that 40 48 confidentiality requests will not be routinely granted. Waivers: Applicants requesting waiver of any rules must submit a statement of reasons sufficient to justify the waiver sought. See 47 C. F. R. § 1.3. 41 49 X. ATTACHMENT E AUCTION- SPECIFIC INSTRUCTIONS FOR FCC REMITTANCE ADVICE (FCC FORM 159) Upfront Payments The following information supplements the standard instructions for FCC Form 159, and is provided to help ensure correct completion of FCC Form 159 for upfront payments for Auction No. 37. Applicants need to complete FCC Form 159 carefully, since: x Mistakes may affect their bidding eligibility; and x Lack of consistency between information set forth in FCC Form 159, FCC Form 175, long- form application, and correspondence about an application may cause processing delays. Therefore appropriate cross- references between the FCC Form 159 Remittance Advice and the FCC Form 175 Short Form Application are described below: Block Number Required Information 1 LOCKBOX # - Enter "358435" 2 Payer Name - Enter the name of the person or company making the payment. If the applicant itself is the payer, this entry would be the same as FCC Form 175. 3 Total Amount Paid - Enter the amount of the upfront payment associated with the FCC Form 159. 4- 8 Street Address, City, State, ZIP Code - Enter the street mailing address (not Post Office box number) where mail should be sent to the payer. If the applicant is the payer, these entries would be the same as FCC Form 175, blocks 2 through 5. 9 Daytime Telephone Number - Enter the telephone number of a person knowledgeable about this upfront payment. 10 Country Code - For addresses outside the United States, enter the appropriate postal country code (available from the Mailing Requirements Department of the U. S. Postal Service). 20A Payment Type Code - Enter "A37U" 21A Quantity - Enter the number "1" 22A Amount Due - Enter the total upfront payment due. 42 50 23A FCC Code 1 - Enter the number "37" (indicating Auction No. 37). 26 Applicant TIN - Same as FCC Form 175, block 7. NOTES: x Do not use Remittance Advice (Continuation Sheet), FCC Form 159- C, for upfront payments. x If applicant is different from the payer, complete blocks 11 through 18 for the applicant, using the same information shown on FCC Form 175. Otherwise leave them blank. x Since credit card payments will not be accepted for this auction, leave this area blank. Winning Bidder Requirements, Down Payments and Final Payments Specific information regarding the down payment and final payment will be included in a post- auction public notice announcing the winning bidder. 43 - 51 - XI. ATTACHMENT F FCC BIDDING PREFERENCE/ REMOTE SOFTWARE ORDER FORM Auction No. 37 All qualified applicants who plan to participate in this auction must complete the form below. Each qualified applicant choosing to bid electronically must purchase their own FCC Remote Bidding Software. Electronic bids will only be accepted from those applicants purchasing the software. However, the software may be copied by the applicant for use by its authorized bidders at different locations. The price of the FCC Remote Bidding Software is $175.00, which includes a user manual and shipping costs. (Since bidding software is tailored to a specific auction, previous versions will not work for Auction No. 37.) For security purposes, the software is only mailed to the contact person at the contract address listed on the FCC Form 175. Completed forms should be printed and either faxed or mailed to the address below, ensuring receipt by no later than 6: 00 p. m. ET on Monday, March 19, 2001. FCC BIDDING PREFERENCE (Auction No. 37) Auction Operations Branch 1270 Fairfield Rd. Gettysburg, PA 17325- 7245 FAX: 717- 338- 2850 Auction Applicant: _______________________________________________________ FCC Assigned Account No. ______________________ Contact Phone: _____________ Contact Name:___________________________________________________________ Contact Address: _________________________________________________________ Contact City: ___________________________ Contact State: ____________________ Contact Zip: ____________________________ Contact Fax: ____________________ Bidding Preference: ____ Electronic ____ Telephonic If planning to bid electronically, please complete the following: Type: ____ 3.5 Diskette ____ CD- Rom Payment of $175.00 US by: ____ Check (payable to FCC) ____ Mastercard ____ Visa Credit card number ______________________________ Expiration date ____________ Name on card ____________________________________________________________ Authorized signature ______________________________________ Date ___________ 44 - 52 - XII. ATTACHMENT G ACCESSING THE FCC NETWORK TO FILE FCC FORM 175 This attachment describes how to access the FCC Network from a system that is running the Microsoft Windows 95 or Microsoft Windows 98 operating system. This involves configuring dial- up network access and then performing the dial- up procedure. Note: Dial- up access to the FCC Network is not required to submit or review FCC Form 175 applications. You can perform those functions from the Internet, by pointing your web browser to either http:// wtbwww27.fcc. gov/ form175/ (primary location) or http:// wtbwww28.fcc. gov/ form175/ (secondary location). For more details, refer to the Electronic Filing and Review of the FCC Form 175 Attachment C. A. Conventions The instructions in this section use the following typographical conventions: bold Represents objects on the screen that you click with the mouse pointer, including buttons, Internet links, icons, tabs, menu items (e. g., Cancel button, Auctions link, Save option in the File menu). italic Represents field names or areas of a screen (e. g., Applicant field, Selected Licenses area of a screen). bold italic Represents characters that you must type exactly as they appear in the instructions. For example, if you are instructed to type http:// wtbwww27.fcc. gov/ form175/, you should type all of the characters shown in bold italic exactly as they are printed. B. Minimum Hardware and Software Requirements Applicants will need to meet the following minimum hardware and software requirements: 1. Minimum Hardware Requirements x CPU: Intel Pentium x RAM: 32 MB (more recommended if you have multiple applications open) x Modem: 28.8 Kbps Hayes compatible modem or faster (recommend 56.6 Kbps) x Monitor: VGA or above x Mouse or other pointing device 45 - 53 - 2. Minimum Software Requirements x Operating System: Microsoft Windows 95 or 98 x Web Browser, either of the following: i Netscape Communicator 4.05 or higher i Microsoft Internet Explorer 4. 0 or higher x PDF Viewer: Adobe Acrobat Reader 4.0 or higher (available at http:// www. adobe. com) x If you wish to use the download feature in on the Search Results page, you will need a .tar file extraction utility, e. g., Winzip (available at http:// www. winzip. com) or Pkzip for Windows (available at http:// www. pkware. com/ download. html). C. Accessing the FCC Network to Submit FCC Form 175 Applications The following section provides the instructions for configuring the dial- up network access in preparation for submitting FCC Form 175 applications. The subsequent section gives the dial- up procedure. 1. Configuring Dial- Up Networking 1. To start dial- up networking: a. Click the Windows 95/ 98 Start button. b. Click the Programs option to display the Programs menu. c. Click the Accessories option to display the Accessories menu. d. In Windows 95, click Dial- Up Networking. In Windows 98, click Communications, then Dial- Up Networking. If Dial- Up Networking is not an option on your Accessories menu, you should install it from your Windows 95/ 98 CD or diskettes. 2. When the Dial- Up Networking window appears, double- click the Make New Connection icon. The Make New Connection window appears. 3. Type FCC Auctions 800# in the field titled Type a name for the computer you are dialing. 4. In Windows 95, click the down arrow at the right of the Select a modem field and select your modem from the menu of available modems. 46 - 54 - In Windows 98, click the down arrow at the right of the Select a device field and select your modem from the menu of available devices. If your modem does not appear on this list, you must install your modem driver according to the modem manufacturer installation procedures, which are usually described in your modem’s user manual. 5. Click the Next button. 6. Type 800 and 378- 7435 in the Area Code and Telephone Number fields, respectively. If you need to dial 9 or some other digit to get an outside line, include that digit in the Area Code field. For example, you might type 9, 1 800 in this field. 7. Verify that the correct country is selected in the Country code field. If necessary, click the down arrow at the right of the Country code field and select the appropriate country from the menu of available countries. 8. Click the Next button. 9. Click the Finish button. An icon labeled FCC Auctions 800# appears in the Dial- Up Networking window. 10. Verify that properties are configured correctly before attempting a dial- up session. Put the mouse pointer on the icon and click the right mouse button to display a menu. Click Properties from the menu. 11. Click the Configure button. Click the Options tab at the top of the Properties window. 12. In the Connection control area of the Options tab, verify that neither option is selected. If either option is selected, click the check box at the left of the option to deselect it. Then click OK. 13. In Windows 95, click the Server Type... button. In Windows 98, click the Server Types tab at the top of the Properties window. 14. In the Advanced Options area, verify that only Enable software compression is selected. If it is not selected, click the check box at the left of the option to select it. If either of the other options is selected, click the check box to deselect it. 15. In the Allowed Network Protocols area, verify that only TCP/ IP is selected. If it is not selected, click the check box at the left of the option to select it. If either of the other options is selected, click the check box to deselect it. 47 - 55 - 16. Click the TCP/ IP Settings button. On the TCP/ IP Settings window, select Server assigned IP addresses at the top and select Specify name server addresses midway down the window. 17. Type 165.135.241.149 as the Primary DNS and 165.135.79.95 as the Secondary DNS. Ensure that these two options are checked: x Use IP header compression x Use default gateway or remote network 18. Click OK on the TCP/ IP Settings window and the Server Type window. 19. Close the Dial- Up Networking window. 20. a. Click the Windows 95/ 98 Start button, then click the Settings option to display the Settings menu. b. Click Control Panel and then double- click the Network icon. c. Highlight the TCP/ IP Protocol and click Properties. If there are multiple TCP/ IP protocols, highlight TCP/ IP --> Dial- Up Adapter and click Properties. In a Windows 98 environment, a confirmation dialog appears. Read the information on the dialog, then click the OK button. d. Click the DNS Configuration tab and then click the Enable DNS radio button at the top. e. Type bidder in the Host box and type fcc. gov in the Domain box. Note: You are limited to three DNS entries. If you already have three DNS entries, you must delete two of them before performing the next two steps. To do this, click the first entry you want to delete and click the Remove button. Then click the second entry you want to delete and click the Remove button again. f. Type 165.135.241.149 in the DNS Server Search Order box and click the Add button. g. Type 165.135.79.95 in the DNS Server Search Order box and click Add again. h. Click OK on the TCP/ IP Properties windows, then click OK on the Network windows. If you are prompted to restart your computer, click Yes to restart, then begin the Dial- Up Procedure. 48 - 56 - 2. Dial- Up Procedure 1. If the Dial- Up Networking window is not currently open, do the following: a. Click the Windows 95/ 98 Start button. b. Click the Programs option to display the Programs menu. c. Click the Accessories option to display the Accessories menu. d. In Windows 95, click Dial- Up Networking In Windows 98, click Communications, then Dial- Up Networking. The Dial- Up Networking window appears. 2. In the Dial- Up Networking window, double- click the FCC Auctions 800# icon. 3. Click the Connect button on the window. Do not enter User name or Password. The Connection window appears, indicating the status of your connection as your modem dials into the system. This window must remain running during your dial- up session. You may minimize the window, if you wish. If your modem fails to establish a connection, please see the Troubleshooting section. D. Submitting FCC Form 175 Applications After you have connected to the FCC Network, start your web browser and point it to either http:// wtbwww27.fcc. gov/ form175/ (primary location) or http:// wtbwww28.fcc. gov/ form175/ (secondary location) to obtain the Form 175 Homepage. For more details refer to the attachment titled Electronic Filing and Review of the FCC Form 175. E. Removing the Dial- Up Networking Service Once you have finished using the dial- up networking service, you can remove it from your computer, as follows: 1. Click the Windows 95/ 98 Start button, then click the Settings option to display the Settings menu. 2. Click Control Panel and then double- click the Network icon. 3. Highlight the TCP/ IP Protocol and click Properties. If there are multiple TCP/ IP protocols, highlight TCP/ IP --> Dial- Up Adapter and click Properties. In a Windows 98 environment, a confirmation dialog appears. Read the information on the dialog, then click the OK button. 4. Click the DNS Configuration tab. 49 - 57 - 5. Click the DNS Server Search Order box containing 165.135.241.149 to select it, then click the Remove button. 6. Similarly, click the DNS Server Search Order box containing 165.135.79.95 to select it, then click the Remove button. 7. Click OK on the TCP/ IP Properties windows, then click OK on the Network windows. 8. If you are prompted to restart your computer, click Yes to restart. 9. Remove the FCC Auctions 800# icon from your desktop. That is, click the icon with your right mouse button and then click the Delete option in the pull- down menu. F. Troubleshooting Following are solutions to problems you may encounter using Dial- Up Networking. 1. Modem does not respond 1. Confirm that all physical connections for the modem are present. 2. Confirm that the phone line is active by connecting it to a telephone and checking for a dial-tone. 3. Confirm that the correct modem driver is installed for your modem. 2. Modem dials but does not connect 1. Confirm that the number the modem is dialing is correct. 2. Confirm that the modem prefix, if any, is correct. 3. Try again. If the problem persists, call the FCC Technical Support Hotline for an alternate number. 3. Modem dials and connects, but nothing appears when you enter the Location in the Web browser 1. Verify the Dial- Up Networking settings specified in the Configuring Dial- Up Networking section. 2. Confirm that your Web browser is not using proxies: 50 - 58 - a) On your browser, click the Preferences option in the Edit menu. b) In the Category area at the left, double- click Advanced. c) Click the Advanced structure’s Proxies option. d) Click the radio button labeled Direct connection to the Internet. e) Click the OK button at the bottom of the window. 4. Receive an Internal Server error in the Web browser 1. Confirm that the Location is set to http:// wtbwww27.fcc. gov/ form175/ or http:// wtbwww28.fcc. gov/ form175/ 2. On your browser, click the Preferences option in the Edit menu. In the Category area at the left, double- click Advanced. In the area at the top, confirm that Enable Java and Enable JavaScript are selected. In the Cookies area, confirm that Accept all cookies is selected. G. Help For technical assistance with installing or using FCC software, contact the FCC Technical Support Hotline at (202) 414- 1250 (V) or (202) 414- 1255 (TTY). The FCC Technical Support Hotline is generally available Monday through Friday from 7 a. m. to 10 p. m. ET, Saturday from 8 a. m. to 7 p. m. ET, and Sunday from 12 noon to 6 p. m. ET. All calls to the FCC Technical Support Hotline are recorded. 51 - 59 - XIII. ATTACHMENT H SUMMARY LISTING OF DOCUMENTS FROM THE COMMISSION AND THE WIRELESS TELECOMMUNICATIONS BUREAU ADDRESSING APPLICATION OF THE ANTI- COLLUSION RULES All of the following documents can be found at FCC web site: http:// www. fcc. gov/ wtb/ auctions/ collusio/ collusio. html Commission Decisions: Second Report and Order in PP Docket No. 93- 253, FCC 94- 61, 9 FCC Rcd. 2348, 2386- 2388 (1994), paragraphs 221- 226. Fifth Report and Order in PP Docket No. 93- 253, FCC 94- 178, 9 FCC Rcd. 5532, 5570- 5571 (1994), paragraphs 91- 92. Fourth Memorandum Opinion and Order in PP Docket No. 93- 253, FCC 94- 264, 9 FCC Rcd. 6858, 6866- 6869 (1994), paragraphs 47- 60. Second Memorandum Opinion and Order in PP Docket No. 93- 253, FCC 94- 215, 9 FCC Rcd. 7245, 7253- 7255 (1994), paragraphs 48- 55. Memorandum Opinion and Order in PP Docket No. 93- 253, FCC 94- 295, 9 FCC Rcd. 7684, 7687- 7689 (1994), paragraphs 8- 12. In re Commercial Realty St. Pete, Notice of Apparent Liability for Forfeiture, 10 FCC Rcd. 4277 (1995), In re Commercial Realty St. Pete, Memorandum Opinion and Order, 11 FCC Rcd. 15374 (1996). In re Applications of Mercury PCS II, LLC, Notice of Apparent Liability for Forfeiture, 12 FCC Rcd. 17970 (1997) (petition for partial reconsideration pending). Amendment of Part 1 of the Commission's Rules -- Competitive Bidding Procedures, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, 4660- 4685 MHz, WT Docket No. 97- 82, ET Docket No. 94- 32, FCC 97- 413, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd. 374, 463- 469 (1997), paragraphs 155- 166. In re Application of US West Communications, Inc., Notice of Apparent Liability for Forfeiture, FCC 98- 41 (March 16, 1998). In re Application of Western PCS BTA I Corporation, Notice of Apparent Liability for Forfeiture, FCC 98- 42 (March 16, 1998). Wireless Telecommunications Bureau Decisions: Amendment of Parts 21 and 74 of the Commission's Rules with Regard to Filing Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service, Order, 11 FCC Rcd. 9655 (Wireless Tel. Bur. 1995). 52 - 60 - In re Applications of GWI PCS, Inc. For Authority to Construct and Operate Broadband PCS Systems Operating on Frequency Block C, Memorandum Opinion and Order, 12 FCC Rcd. 6441 (Wireless Tel. Bur. 1997). In re Applications of Mercury PCS II, LLC, For Facilities in the Broadband Personal Communications Services in the D, E, and F Blocks, Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd. 18093 (Wireless Tel. Bur. 1997). In the Matter of Applications of High Plains Wireless, L. P., For Authority to Construct and Operate Broadband PCS Systems on Frequency Blocks D, E, and F, Memorandum Opinion and Order, 12 FCC Rcd. 19627 (Wireless Tel. Bur. 1997). In the Matter of Applications of Mercury PCS II, LLC, For Authority to Construct and Operate Broadband PCS Systems on Frequency Blocks D, E, and F, Memorandum Opinion and Order, 13 FCC Rcd. 5756 (Wireless Tel. Bur. 1997). Public Notices: "Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules," Public Notice, 11 FCC Rcd. 9645 (1995). "FCC Staff Clarifies Application of Anti- Collusion Rule to Broadband PCS 'C' Block Reauction," Public Notice, 11 FCC Rcd. 7031 (1996). "Wireless Telecommunications Bureau Provides Guidance on the Anti- Collusion Rule for D, E and F Block Bidders," Public Notice, 11 FCC Rcd. 10134 (1996). Letters from the Office of General Counsel and the Wireless Telecommunications Bureau: Letter to Gary M. Epstein and James H. Barker from William E. Kennard, General Counsel, Federal Communications Commission (released October 25, 1994). Letter to Alan F. Ciamporcero from William E Kennard, General Counsel, Federal Communications Commission (released October 25, 1996). Letter to R. Michael Senkowski from Rosalind K. Allen, Acting Chief, Commercial Radio Division, Wireless Telecommunications Bureau (released December 1, 1994). Letter to Leonard J. Kennedy from Rosalind K. Allen, Acting Chief, Commercial Radio Division, Wireless Telecommunications Bureau (released December 14, 1994). Letter to Jonathan D. Blake and Robert J. Rini from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, DA 95- 2404 (released November 28, 1995). Letter to Mark Grady from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, 11 FCC Rcd. 10895 (1996). Letter to David L. Nace from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, 11 FCC Rcd. 11363 (1996). Letter to Elliott J. Greenwald from Christopher J. Wright, General Counsel, Federal Communications 53 - 61 - Commission (released April 6, 1998). Letter to Robert Petit, Wiley Rein & Felding from Margaret W. Wiener, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, DA 00- 2905. Civil Actions Initiated by U. S. Department of Justice: U. S. v. Omnipoint Corp., Proposed Final Judgements and Competitive Impact Statements, Department of Justice, 63 FR 65228 (November 25, 1998). "Justice Department Sues Three Firms Over FCC Auction Practices," Press Release, U. S. Department of Justice (November 10, 1998). Complaint, U. S. v. Omnipoint Corp., No. 1: 98CV02750 (D. D. C. November 10, 1998). Complaint, U. S. v. Mercury PCS II, L. L C., No. 1: 98CV02751 (D. D. C. November 10, 1998). Complaint, U. S. v. 21st Century Bidding Corp., No. 1: 98CV02752 (D. D. C. November 10, 1998). Miscellaneous: Many of these documents can be retrieved from the following Commission web site: http:// www. fcc. gov/ wtb/ auctions/ collusio/ collusio. html These documents may be located by using our search engine (select the link "search"). All of these documents can be ordered in hard copy for a fee from the Commission’s contractor, International Transcription Service, Inc. at (202) 314- 3070. Documents retrieved from the FCC web site are available in various formats. In order to review a document in its entirety, including footnotes, it is necessary to access the document in WordPerfect, MS Word, or Acrobat Reader. 54