*Pages 1--16 from Microsoft Word - 17295* PUBLIC NOTICE Federal Communications Commission 445 12 th St., S. W. Washington, D. C. 20554 News Media Information 202 / 418- 0500 Internet: http:// www. fcc. gov TTY: 1- 888- 835- 5322 DA 02- 995 April 30, 2002 AUCTION OF LICENSES IN THE 747- 762 AND 777- 792 BANDS SCHEDULED FOR JUNE 19, 2002 ROUND RESULTS PROCESS AND RESULTS REPLICATION Report No. AUC- 02- 31- E (Auction No. 31) I. GENERAL INFORMATION By this public notice, the Wireless Telecommunications Bureau (“ Bureau”) announces the round results process and results replication procedures for the upcoming auction of licenses in the 747- 762 and 777- 792 (“ Upper 700 MHz”) bands scheduled for June 19, 2002 (“ Auction No. 31”). In the Further Modifications and Consolidated Procedures Public Notice, the Bureau noted that it would release a public notice explaining the round results process and providing information on solving and tie- breaking procedures, to enable participants and interested observers to replicate the FCC’s official round results. 1 II. ROUND RESULTS PROCESS The round results process is a sequence of administrative events that occurs after the close of a round. During this time, bid data collected during the round is processed, downloadable files are compiled, and various indicators of auction status are created. This information can be accessed by the public through the Results and the Bid Reports pages of the Auction 31 Bidding & Results System, which will be available through the Auction No. 31 website at http:// wireless. fcc. gov/ auctions/ 31/. The following subsections describe the events that transpire during the round results process. The flow diagram below depicts this process and its major components. 1 See Auction of Licenses in the 747- 762 and 777- 792 MHz Bands Scheduled for June 19, 2002; Further Modification of Package Bidding Procedures and Other Procedures for Auction No. 31; DA 02- 659, Public Notice at 32 (rel. March 19, 2002) (“ Further Modifications and Consolidated Procedures Public Notice”). 1 - 2 - A. PHASE 1 The auction- closing rule dictates that after two consecutive rounds without new bids the auction will close. The auction software performs a test to see if this condition is met. If the test of the auction-closing rule fails, the auction remains open and the round results process continues. If the auction closes, the round results process does not continue and the provisionally winning bids from the prior round will be declared the winning bids of the auction. B. SOLVER PHASE 1. Determine Provisionally Winning Bids Optimization software is used to determine the provisionally winning bids. The determination of provisionally winning bids is a multi- step process that involves solving for the maximum revenue and then choosing among any tied bid sets. 2 2. Determine Current Price Estimates Additional optimization procedures are used to obtain a current price estimate of each license in the auction. 3 The current price estimates are, in turn, used to support the calculation of the minimum acceptable bid for licenses and packages in the following round. C. PHASE 2 1. Calculate Minimum Acceptable Bids For each bidder, a minimum acceptable bid amount is calculated for each eligible license and constructed package based on the following rule: The minimum acceptable bid is the greatest of: i. The applicable minimum opening bid. ii. The bidder’s own previous high bid on the license/ package plus x%, where the Bureau will specify the value of x in each round. iii. The current price estimate of the license or package plus z%, where the Bureau will specify the value of z in each round. The current price estimate for a package will be the sum of the current price estimates of the licenses that comprise the package. 2 See Further Modifications and Consolidated Procedures Public Notice at 40- 41, and Attachments A and B to this Public Notice for descriptions of the optimizations used to determine the provisionally winning bid sets. 3 See Further Modifications and Consolidated Procedures Public Notice at 37 and at Attachment B for a complete description of the optimization mechanisms performed. 2 - 3 - After the first round of the auction, part (iii) of the minimum acceptable bid rule for a global package will always be the revenue generated by the provisionally winning bid set in the previous round plus w%, where the Bureau will specify the value of w in each round. The resulting amount will be rounded to the nearest thousand dollars. 2. Calculate Bid Increments For each minimum acceptable bid, an increment amount is calculated and rounded to the nearest thousand dollars. An increment is equal to v% of the minimum acceptable bid, where the Bureau will specify the value of v in each round. This value, in turn, is used to display the multi- increment bids a bidder can place on a license or package in the next round. 3. Calculate Bidder Eligibility For each eligible bidder, current eligibility for the next round is calculated. Current eligibility is defined as the lesser of (i) the bidder’s eligibility activity 4 in the round and (ii) the reciprocal of the activity requirement (1/ activity requirement) multiplied by the bidder’s eligibility activity in the round. If the bidder’s eligibility activity does not meet its eligibility activity requirement and the bidder has a waiver available, the waiver will be automatically applied and the bidder’s current eligibility for the next round remains unchanged. If a bidder has no remaining waivers and fails to meet its eligibility activity requirement, the bidder’s current eligibility for the next round is calculated as described above. 4. Post Files for Public Download A number of files will be posted and made available for public download on the Results page of the Auction 31 Bidding & Results System and on the Results section of the Auction No. 31 website. These files contain information about all bids made in that round, the set of bids considered when determining the current provisionally winning bids, current price estimates, new minimum acceptable bids for all bidders, current provisionally winning bids, and bidder eligibility status (bidding eligibility and activity rule waivers). Section III describes the downloadable files. III. ROUND RESULTS DOWNLOADS Round results files will be available for downloading upon completion of the round results process after each round. The files will supply bidders with more complete auction data than is available in the summary tables and charts on the Results page. They are available in two formats: Microsoft ® Access database (. mdb) and text (. txt). In general, the database formatted files provide current round information necessary to verify the provisionally winning bids, while the text files contain more complete information, including data from previous rounds of the auction. They are described in detail below. A. Database Files A Microsoft ® Access database containing the data needed to verify the provisional winners for the round will be made available for download upon completion of the round results process. Additional tables provided within the database contain information to facilitate the correlation of bidder, package, and 4 We define a bidder’s eligibility activity in a round to be the greater of (i) its bidding activity in the round and (ii) the bidding units associated with the bidder’s provisionally winning bids from the prior round. See Further Modifications and Consolidated Procedures Public Notice at 29. 3 - 4 - license identification numbers to detailed information about these entities. Data is also provided to verify the selection number generated for each bid considered in the round. The tables below detail the structure of the Microsoft ® Access database and the corresponding data description for each field. The CONSIDERED_ BIDS table contains a single record for every bid that is considered in the current round. 5 Table Name: CONSIDERED_ BIDS Field Name Data Type Data Element Description bidder_ id int Bidder Identification Number bid_ id int Bid Identification Number package_ id int Package Identification Number bid_ amount double Bid Amount scaled_ bid_ amount double Bid Amount with the decimal point shifted six digits to the left (see Attachments A and B) bid_ round_ number int Bid Placement Round selection_ number float Selection Number The CONSIDERED_ BIDS_ DETAIL table contains package construction information for the packages found in the CONSIDERED_ BIDS table. This table contains a record for every license in a package. Therefore, a package constructed of five licenses is described by five records, each containing an identical package identification number (package_ id) but a different license identification number (license_ id). Table Name: CONSIDERED_ BIDS_ DETAIL Field Name Data Type Data Element Description package_ id int Package Identification Number license_ id int License Identification Number The BID_ SEED table contains a record for every bid that is considered in the current round. Each record provides the six initial seed numbers used with the Random Number Generator (see Attachment C) for the bid described by the associated bid identification number (bid_ id). Table Name: BID_ SEED Field Name Data Type Data Element Description bid_ id int Bid Identification Number seed1 int First Seed Number for Random Number Generator seed2 int Second Seed Number for Random Number Generator seed3 int Third Seed Number for Random Number Generator seed4 int Fourth Seed Number for Random Number Generator seed5 int Fifth Seed Number for Random Number Generator seed6 int Sixth Seed Number for Random Number Generator 5 When determining provisionally winning bids, all bids made in every round throughout the course of the auction (except for bids that are placed and subsequently removed during the same round) will be considered. In addition, each license is treated as having a bid placed by the FCC at some small amount less than the minimum opening bid. See Further Modifications and Consolidated Procedures Public Notice at 35- 40. 4 - 5 - The BIDDER_ ID_ MAP table contains a record for every registered bidder for the auction. Each record associates the bidder identification number with a company name. 5 - 6 - Table Name: BIDDER_ ID_ MAP Field Name Data Type Data Element Description bidder_ id int Bidder Identification Number company_ name char( 50) Company Name The LICENSE_ ID_ MAP table contains a single record for every license in the auction. Each record contains relevant license detail descriptions for the associated license identification number. Table Name: LICENSE_ ID_ MAP Field Name Data Type Data Element Description license_ id int License Identification Number description char( 30) License Description service_ code char( 2) License Service Code market char( 6) License Market frequency_ block char( 2) License Frequency Block sub_ market int License Sub Market The Microsoft ® Access database is named “auction31Rnd#. mdb”, where # indicates the round of the auction. To facilitate the download of a potentially large database, the file will be compressed within a similarly named Zip file, “auction31Rnd#. zip.” B. Text Files A collection of tab- delimited text files will be made available for public download. These files supplement the data made available in the downloadable .mdb file with more extensive and detailed auction data. Each text file will be named auction#_ rnd# xx. txt, where auction# is the number of the auction (i. e., 31), rnd#, is the round number, and xx is an abbreviated file descriptor. Specific file names are included in the table definitions below. 1. All Bids File This file includes all bids considered in the determination of the round’s provisionally winning bids, which are, every bid by every bidder throughout the auction and a set of FCC bids on each license for a thousand dollars less than the applicable minimum opening bid. This file contains one row for each license of each package. Therefore, the file contains multiple rows and some duplicated data for packages with multiple licenses. Bids placed but removed within a round will not be included in this file. The table below contains information on the column header, data type, and data description for each column within the file. 6 - 7 - File Names: 31_ rnd# ab. txt (All Bids)/ 31_ rnd# cb. txt (Current Round Bids)/ 31_ rnd# pw. txt (Provisionally Winning Bids) Column Header Data Type Data Description round int Round in which this bid was placed fcc_ account_ num char( 10) Bidder- held FCC account number company char( 50) Company Name of the bidder package_ id numeric( 10) Unique package identifier license_ desc char( 30) Description of the license service_ code char( 2) Identifies type of service (spectrum) offered market char( 6) Identifies the geographic region of the license freq_ block_ num char( 2) Identifies the block of frequency of the license sub_ market int Identifies a portion of a market being offered bid_ amt int Bid Amount of bid bid_ type char( 1) Identifies the type of bid: B= new bid; L= renewed non- winning bid; W= renewed winning bid; A= last and best bid; 2. Current Round Bids File This file includes only those bids placed in the current round. The file will be in the same format as the All Bids file so that bidders are able to append their All Bids file from the previous round with the contents of the Current Round Bids file to create a file that includes all bids made by all bidders. This may save bidders time in downloading data between rounds compared with downloading the All Bids file after each round. The Current Round Bids file contains one row for each license of each package. See table above for file specifications. 3. Minimum Acceptable Bids File This file includes a row for all licenses applied for and every package that was bid on by each respective bidder. Packages that have been constructed but not bid on in any round are not included in this report. The table below contains information on the column header, data type, and data description for each column in the file. File Name: 31_ rnd# mb. txt Column Header Data Type Data Description round_ num int Identifies the round for which the minimum acceptable bid value applies fcc_ account_ num char( 10) Bidder- held FCC account number company char( 50) Company Name of the bidder Package_ id numeric( 10) Unique package identifier min_ acceptable_ bid_ amt int Minimum acceptable bid amount gap_ method int Rule method used to determine minimum acceptable bid 7 - 8 - 4. Auction Summary File This file includes round summary statistics. Each row of the file contains the statistics for each round in the auction. The table below contains information on the column header, data type, and data description for each column in the file. File Name: 31_ rnd# as. txt Column Header Data Type Data Description round_ num int Round number of auction summary num_ elig_ bidders int Number of bidders still eligible in auction fcc_ owned_ licenses int Number of FCC owned licenses new_ bids int Number of new bids in the round gross_ rev_ dollars int Gross Revenue for the round net_ rev_ dollars int Net Revenue for the round net_ rev_ pctg int Percentage of Net Revenue increase in the round 5. Auction Parameters File This file includes the parameters for the auction. Each row of the file contains the parameters for each round in the auction. The table below contains information on the column header, data type, and data description for each column in the file. File Name: 31_ rnd# ap. txt Column Header Data Type Data Description round_ num int Round number of auction summary required_ activity float Fraction of current eligibility a bidder must be active on without risk of eligibility reduction or eligibility activity waiver usage. min_ bid_ pctg_ x float Fraction of previous high bid to be applied in rule (ii) of minimum acceptable bid calculations min_ bid_ pctg_ w float Fraction of Gross Revenue to be applied in rule (iii) of minimum acceptable bid calculations for global bids min_ bid_ pctg_ z float Fraction of current price estimate to be applied in rule (iii) of minimum acceptable bid calculations min_ bid_ incr_ pctg_ v float Fraction of minimum acceptable bid to be used as bid increment weight_ factor float Exponential smoothing weight factor used when determining current price estimates 6. Bidder Summary File This file includes summary information for bidders and contains one row per qualified bidder. The table below contains information on the column header, data type, and data description for each column in the file. 8 - 12 - selection sum). If such a case exists, the round results process will generate all such sets and assign each a random number. The set with the largest associated random number will be the set of provisionally winning bids. If this unlikely event occurs, the set of bids that are found when the OPL Script has been executed may not be the provisionally winning bids for the round but will be a set of bids that produces both the maximum revenue and the maximum selection sum. V. POINT OF CONTACT For questions regarding round results, download files, and reproducing the provisionally winning bids contact Karen Wrege at (202) 418- 0660. 12 - 14 - The objective function finds a set of bids that maximize the sum of the bid amounts while simultaneously satisfying the constraints. Thus, the result  is the maximum revenue obtainable for this round. Note that in order to avoid numerical difficulties in the selection sum problem, bid amounts are “scaled” by shifting the decimal place six units to the left. 11 Thus, the value of  will be scaled similarly. Bidders will be provided with both the scaled and unscaled bid amounts in the Microsoft ® Access database. For details on why scaling is important in the selection sum problem, see Attachment B. 11 No accuracy is lost in altering the data in this manner since the shift results in no loss of significant digits. 14 - 16 - VIII. ATTACHMENT C C Code for the Random Number Generator #define norm 1.0842021724855052e- 19 #define m1 9223372036854769163 #define m2 9223372036854754679 #define a12 1754669720 #define q12 5256471877 #define r12 251304723 #define a13n 3182104042 #define q13 2898513661 #define r13 394451401 #define a21 31387477935 #define q21 293855150 #define r21 143639429 #define a23n 6199136374 #define q23 1487847900 #define r23 985240079 long long s10, s11, s12, s20, s21, s22; double MRG63k3a () { long long h, p12, p13, p21, p23; /* Component 1 */ h = s10 / q13; p13 = a13n * (s10 - h * q13) - h * r13; h = s11 / q12; p12 = a12 * (s11 - h * q12) - h * r12; if (p13 < 0) p13 += m1; if (p12 < 0) p12 += m1 - p13; else p12 -= p13; if (p12 < 0) p12 += m1; s10 = s11; s11 = s12; s12 = p12; /* Component 2 */ h = s20 / q23; p23 = a23n * (s20 - h * q23) - h * r23; h = s22 / q21; p21 = a21 * (s22 - h * q21) - h * r21; if (p23 < 0) p23 += m2; if (p21 < 0) p21 += m2 - p23; else p21 -= p23; if (p21 < 0) p21 += m2; s20 = s21; s21 = s22; s22 = p21; /* Combination */ if (p12 > p21) return (( p12 - p21) * norm); else return (( p12 - p21 + m1) * norm); } 16