*Pages 1--8 from Microsoft Word - 47907.doc* 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 05- 1057 April 13, 2005 MULTIPLE ADDRESS SYSTEMS SPECTRUM AUCTION 31 Bidders Qualified to Participate in Auction No. 59 Report No. AUC- 05- 59- D (Auction No. 59) In this Public Notice, the Wireless Telecommunications Bureau (“ Bureau”) identifies 31 applicants found to be qualified to bid in the upcoming auction for 4,226 Multiple Address Systems (“ MAS”) licenses (“ Auction No. 59”). Bidding in Auction No. 59 is scheduled to begin on Tuesday, April 26, 2005. In addition, this Public Notice contains bidding instructions and other important information regarding Auction No. 59. Attachment A lists each of the 31 qualified bidders, their upfront payments, and their maximum eligibility in bidding units. Attachment B lists the number of licenses selected on each qualified bidder’s FCC Form 175. In previous auctions, Attachment B has listed the licenses selected in each accepted application. However, due to the large volume of licenses in Auction No. 59, lists of the licenses selected in each accepted application will be provided in electronic format only, available with this public notice at http:// wireless. fcc. gov/ auctions/ 59/. Attachment C lists those entities that submitted a short- form application but did not qualify to bid in this auction. Such entities are reminded that they remain subject to the Commission’s rules prohibiting collusion in Commission auctions notwithstanding that they did not qualify to bid in this auction. 1 Attachment D describes how to participate in the mock auction. Attachment E provides information on how to monitor the auction online and instructions for reviewing and downloading round results, as well as other material related to Auction No. 59, that will be released by the Commission during the course of the auction. In order to participate effectively in the auction, qualified bidders should again familiarize themselves with the auction rules, procedures, and other information contained in the Auction No. 59 Procedures Public Notice 2 and subsequent public notices. These public notices and other documents related to 1 See 47 C. F. R. § 1.2105( c); infra, pp. 5- 7. 2 “Multiple Address Systems Spectrum Auction Scheduled for April 26, 2005, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Auction Procedures for Auction No. 59,” Public Notice, 19 FCC Rcd 24445 (2004) (“ Auction No. 59 Procedures Public Notice”). 1 3 Auction No. 59. The telephonic bidding phone number will be supplied in the first mailing along with the confidential bidder identification number. Please note that the SecurID cards can be recycled, and we strongly encourage bidders to return the cards to the FCC. We will provide pre- addressed envelopes that bidders may use to return the cards once the auction is over. Bidding Contingency Plan. Bidders should develop comprehensive contingency plans that can be quickly implemented if bidders experience difficulty participating in the auction. While the FCC will correct any problems within Commission- controlled facilities, bidders are solely responsible for anticipating and overcoming problems such as bidder technical failures, telephone service interruptions, adverse local weather conditions, unavailability of authorized bidders, or the loss or breach of confidential security codes. In their registration materials, all qualified bidders will be supplied with a telephone number for telephonic bidding. Bidders choosing to bid telephonically are required to use this telephone number to place bids. Electronic bidders may use this telephone number as an alternate method of bidding in the event they are unable to submit their bids electronically. Telephonic bidders are reminded to allow sufficient time to bid by placing their calls well in advance of the close of a round. 3 Minimum Opening Bids. There will be a minimum opening bid for each license in Auction No. 59, calculated in accordance with the formulas previously announced. 4 The minimum opening bid amount is subject to reduction at the discretion of the Commission. The Commission will not entertain requests to lower minimum opening bids. The agency will exercise its discretion, if at all, independent of any communications from bidders. Messages and Announcements. The Commission will post pertinent auction information as messages and announcements in the FCC Automated Auction System. Bidders should routinely check for messages and announcements each time they enter the FCC Automated Auction System and should read this information carefully. Bidding Schedule. On Tuesday, April 26, 2005, there will be two rounds of bidding as follows: Bidding Period 9: 00 a. m. - 10: 30 a. m. ET Bidding Period 2: 00 p. m. - 3: 30 p. m. ET The bidding schedule for Wednesday, April 27, 2005, and continuing until further notice, will be: Bidding Period 9: 00 a. m. - 10: 00 a. m. ET Bidding Period 11: 00 a. m. - 12: 00 p. m. ET Bidding Period 1: 30 p. m. - 2: 30 p. m. ET Bidding Period 3: 30 p. m. - 4: 30 p. m. ET Round results will be provided approximately 10 minutes after the close of each round. The Commission will set the pace of the auction based upon its monitoring of the bidding and its assessment of the auction’s progress. All subsequent schedule changes will be made by announcement via the FCC Automated Auction System during the course of the auction. 3 The length of a call to place a telephonic bid may vary; please allow a minimum of 10 minutes. 4 Auction No. 59 Procedures Public Notice, 19 FCC Rcd at 24473- 74. Attachment A of the Auction No. 59 Public Notice sets forth the minimum opening bids for each license offered in Auction No. 59. 3 5 Amendments to FCC Form 175. Applicants are responsible for maintaining the accuracy and completeness of information furnished in their short- form applications, including their exhibits. 5 Applicants should amend their short- form applications within ten business days from the occurrence of a reportable change. Applicants should make modifications to their FCC Form 175 electronically and submit a letter, briefly summarizing the changes, by email to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction59@ fcc. gov. Questions about changes should be directed to Howard Davenport at (202) 418- 0660. As described in the Commission’s rules, applicants may make only minor corrections to their FCC Form 175 applications (e. g., changing an authorized bidder or a fax number). 6 Major modifications (e. g., changing the licenses applied for or changing control of the applicant) will not be accepted. 7 Due Diligence. Potential bidders are reminded that they are solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the value of the licenses being offered in this auction. The Commission makes no representations or warranties about the use of this spectrum for particular services. Potential bidders are strongly encouraged to conduct their own research prior to Auction No. 59 in order to determine the existence of pending proceedings that might affect their decisions regarding participation in the auction. Participants in Auction No. 59 are strongly encouraged to continue such research during the auction. For further details regarding due diligence, qualified bidders should refer to the Auction No. 59 Procedures Public Notice under Section I. B. 4. 8 Mock Auction. On Thursday, April 21, 2005, the Bureau will conduct a mock auction which will allow qualified bidders to familiarize themselves with the FCC Automated Auction System. Only qualified bidders will be permitted to participate in the mock auction. The Bureau will conduct this auction over the Internet, but telephonic bidding will also be available. The FCC Wide Area Network will no longer be available. Qualified bidders that wish to place bids telephonically should use the telephone number supplied in the Auction No. 59 registration materials. The mock auction will include all 4,226 Auction No. 59 licenses, and will follow the rules governing the actual auction. The mock auction will be identified as Auction No. 74. The program will assume that each bidder applied for all licenses. The program will reflect the actual upfront payment submitted by the bidder, which will determine the initial (maximum) eligibility (as measured in bidding units). The mock auction will simulate the start of the auction, and each bidder will be required to be active on 80 percent of its current bidding eligibility. If a bidder does not meet this requirement, it will have a waiver automatically applied (if the bidder has any waivers available), or its current eligibility will be permanently reduced (if the bidder has no waivers remaining), possibly eliminating the bidder from further bidding in the auction. Electronic bidders participating in the mock auction are advised to review the Bidding System User Manual provided in the second mailing. Attachment D to this Public Notice provides instructions for accessing the FCC Mock Auction site. 5 See 47 C. F. R § 1.65. 6 See 47 C. F. R. § 1.2105( b). 7 Id. 8 Auction No. 59 Public Notice, 19 FCC Rcd at 24454- 55. 5 6 The mock auction bidding schedule for Thursday, April 21, 2005, will be: Round 1 Bidding Period 9: 00 a. m. - 10: 00 a. m. ET Round 2 Bidding Period 11: 00 a. m. - 12: 00 p. m. ET Round 3 Bidding Period 1: 00 p. m. - 1: 30 p. m. ET Round 4 Bidding Period 2: 00 p. m. - 2: 30 p. m. ET Round 5 Bidding Period 3: 00 p. m. - 3: 15 p. m. ET Round 6 Bidding Period 4: 00 p. m. - 4: 15 p. m. ET Prohibition of Collusion. Applicants are reminded that Section 1.2105( c) of the Commission’s rules prohibits applicants for licenses in any of the same geographic areas from communicating with each other during the auction about bids, bidding strategies, or settlements unless they have identified each other as parties with which they have entered into agreements under Section 1.2105( a)( 2)( viii). 9 For Auction No. 59, this prohibition became effective at the short- form application filing deadline on Friday, March 4, 2005, and will end on the post- auction down payment deadline, which will be announced in a future public notice. 10 This prohibition applies to all applicants regardless of whether such applicants became qualified bidders or actually bid. 11 For purposes of this prohibition, Section 1.2105( c)( 7)( i) defines “applicant” to include all controlling interests in the entity submitting a short- form application to participate in the auction, as well as all holders of partnership and other ownership interests and any stock interest amounting to 10 percent or more of the entity, or outstanding stock, or outstanding voting stock of the entity submitting a short- form application, and all officers and directors of that entity. 12 If parties had agreed in principle on all material terms of a bidding agreement( s), those parties must have been identified on the short- form application under Section 1.2105( c), even if the agreement had not been reduced to writing. If parties had not agreed in principle by the filing deadline, an applicant should not have included the names of those parties on its application and must not have continued negotiations. 13 The Bureau has encouraged applicants competing for licenses in any of the same geographic license areas not to use the same individual as an authorized bidder. 14 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 9 47 C. F. R. § 1. 2105( a)( 2)( viii); 47 C. F. R. § 1. 2105( c)( 1). See also Amendment of Part 1 of the Commission’s Rules – Competitive Bidding Procedures, Seventh Report and Order, 16 FCC Rcd 17546 (2001) (“ Part 1 Seventh Report and Order”); Amendment of Part of the Commission’s – Competitive Bidding Procedures, Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice of Proposed Rule Making, 15 FCC Rcd 15293, 15297- 98 ¶¶ 7- 8 (2000). 10 47 C. F. R. § 1.2105( c)( 1). 11 See, e. g., Letter to Robert Pettit, Esquire, from Margaret W. Wiener, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal Communications Commission, 16 FCC Rcd 10080 (WTB 2000) (declining to except an applicant’s controlling interest from coverage by the anti- collusion rule, even though the applicant never made an upfront payment for the auction and was not listed as a qualified bidder); Star Wireless, LLC, Forfeiture Order, 19 FCC Rcd 18626 (EB 2004) (imposing forfeiture in the amount of $100, 000 for violation of the anti- collusion rule); Northeast Communications of Wisconsin, LLC, Forfeiture Order, 19 FCC Rcd 18635 (EB 2004) (imposing forfeiture in the amount of $100, 000 for violation of the anti- collusion rule, even though the applicant never made an upfront payment for the auction and was not listed as a qualified bidder). 12 47 C. F. R. § 1.2105( c)( 7)( i). 13 See “Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules,” Public Notice, 11 FCC Rcd 9645 (WTB 1995). 14 See Auction No. 59 Procedures Public Notice, 19 FCC Rcd at 24452- 53. 6 7 authorized to represent in the auction. A violation could similarly occur if the authorized bidders are different individuals employed by the same organization (e. g., law firm or consulting firm). In such a case, at a minimum, applicants should take precautionary steps to prevent communication between authorized bidders. 15 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. 16 Thus, Section 1.65 requires auction applicants that engage in communications of bids or bidding strategies that result in a bidding agreement, arrangement, or understanding not already identified on their short- form applications to promptly disclose any such agreement, arrangement or understanding to the Commission by amending their pending applications. In addition, Section 1.2105( c)( 6) requires all auction applicants to report prohibited discussions or disclosures regarding bids or bidding strategy to the Commission in writing immediately but in no case later than five business days after the communication occurs, even if the communication does not result in an agreement or understanding regarding bids or bidding strategy that must be reported under Section 1.65. 17 Applicants that are winning bidders will be required to disclose in their long- form applications the specific terms, conditions, and parties involved in all bidding consortia, joint ventures, partnerships, and other arrangements entered into relating to the competitive bidding process. 18 Any applicant found to have violated the anti- collusion rule may be subject to sanctions. 19 In addition, applicants are reminded that they are subject to the antitrust laws, which are designed to prevent anti- competitive behavior in the marketplace. If an applicant is found to have violated the antitrust laws in connection with its participation in the competitive bidding process, it may be subject to forfeiture of its upfront payment, down payment, or full bid amount and may be prohibited from participating in future auctions. 20 Submission of Auction No. 59- related Filings: As noted above, applicants seeking to amend their short- form applications during the auction should make modifications to their FCC Form 175 electronically and submit a letter, briefly summarizing the changes, by email to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction59@ fcc. gov. Parties wishing to submit requests, complaints, or other information concerning Auction No. 59 should also send a copy by email to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction59@ fcc. gov, in addition to following other procedures prescribed by the Commission’s rules. The Commission occasionally receives complaints regarding certain bidders and requests to suspend bidding during an auction. While the Commission reserves the right to take appropriate action during an auction, to preserve the integrity of the auction process, it is generally our practice to address any such allegations only after the winning bidders have submitted their 15 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). 16 47 C. F. R. § 1.65. 17 47 C. F. R. §§ 1.65, 1. 2105( c)( 6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17555 ¶ 17. 18 See 47 C. F. R. § 1.2107( d). 19 See 47 C. F. R. §§ 1.2105( c), 1.2107( d), and 1.2109( d). 20 See 47 C. F. R. § 1.2109( d). 7 8 long- form applications, when there is greater opportunity for investigation of such allegations, if warranted. Finally, parties wishing to make suggestions concerning Auction No. 59 or future auctions are encouraged to present such ideas using the suggestion feature of the FCC Automated Auction System. (As mentioned above, this feature is not an appropriate mechanism for posing questions that need a timely response.) Commission staff always takes suggestions into consideration, but may not provide an individualized response. Long- Form Applications. Applicants that claim eligibility to receive a small or very small business bidding credit should be aware that, following the auction, they will be subject to more extensive reporting requirements contained in the Commission’s Part 1 ownership disclosure rule. 21 In addition, applicants with foreign ownership interests will be required to comply with 47 U. S. C. § 310( b) at the long- form application stage. For additional information regarding this Public Notice, please contact the following staff in the Auctions and Spectrum Access Division: For general auction questions: Debbie Smith, Roy Knowles or Barbara Sibert at (717) 338- 2888 For legal questions: Howard Davenport at (202) 418- 0660 For technical questions about software or hardware, please contact FCC Technical Support at (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY). - FCC - 21 See 47 C. F. R. § 1.2112( b)( 2). 8