*Pages 1--7 from Microsoft Word - 50138.doc* 3 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 Bid Amounts. There will be a minimum opening bid amount for each license in Auction No. 60, 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 bid amounts. 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 announcements in the FCC Auction System. Bidders should routinely check for announcements each time they enter the FCC Auction System and should read this information carefully. Bidding Schedule. The bidding schedule for Wednesday, July 20, 2005, and continuing until further notice, will be: Bidding Round 10: 00 a. m. - 11: 00 a. m. ET Bidding Round 12: 30 p. m. - 1: 30 p. m. ET Bidding Round 3: 00 p. m. - 4: 00 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 Auction System during the course of the auction. Bidder Questions during the Auction. FCC auction staff and technical support staff will be available during the auction to answer questions from authorized bidders. Bidders should identify themselves as a bidder with a time- sensitive auction question when calling. Help can be obtained through the following options: FCC Auction Bidder Line (telephonic bidding, auction conduct questions) Use Auction Bidder Line phone number supplied in registration mailing FCC Technical Support Hotline (all technical questions, software and hardware) (877) 480- 3201, option nine; or (202) 414- 1250 FCC Auctions and Spectrum Access Division (legal questions only) (202) 418- 0660 3 The length of a call to place a telephonic bid may vary; please allow a minimum of 10 minutes. 4 Auction No. 60 Procedures Public Notice, 20 FCC Rcd at 6149- 50. Attachment A of the Auction No. 60 Public Notice sets forth the minimum opening bid amounts for each license offered in Auction No. 60. 3 4 The FCC Auction System includes a function for bidders to submit suggestions to the FCC, but this is not an appropriate mechanism for asking questions that may need a timely response, such as questions about auction procedures or other issues. Such questions should be asked via one of the above telephone options. Monitoring Round Results. The Integrated Spectrum Auction System (ISAS) Bidder’s Guide (included in the registration material) provides instructions for reviewing and downloading round results. Amendments to FCC Form 175. Applicants are responsible for maintaining the accuracy and completeness of information furnished in their short- form applications, including their attachments. 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: auction60@ 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. 60 in order to determine the existence of pending proceedings that might affect their decisions regarding participation in the auction. Participants in Auction No. 60 are strongly encouraged to continue such research during the auction. For further details regarding due diligence, qualified bidders should refer to the Auction No. 60 Procedures Public Notice under Section I. B. 4 8 and Auction No. 60 Due Diligence Announcement for the Upcoming Auction of Licenses in the Lower 700 MHz Band Scheduled for July 20, 2005, Public Notice, DA 05- 1554 (June 3, 2005). Mock Auction. On Monday, July 18, 2005, the Bureau will conduct a mock auction which will allow qualified bidders to familiarize themselves with the FCC 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. Qualified bidders that wish to place bids telephonically should use the telephone number supplied in the Auction No. 60 registration materials. The mock auction can be accessed at: http:// auctiondemo. fcc. gov. The mock auction will include all five Auction No. 60 licenses, and will follow the rules governing the actual auction. The mock auction will be identified as Mock Auction No. 60. The FCC Auction System will assume that each bidder applied for all licenses. The FCC Auction System 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 5 See 47 C. F. R § 1.65. 6 See 47 C. F. R. § 1.2105( b). 7 Id. 8 Auction No. 60 Public Notice, 20 FCC Rcd at 6129- 30. 4 5 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 Integrated Spectrum Auction System (ISAS) Bidder’s Guide provided in the registration material. The mock auction bidding schedule for Monday, July 18, 2005, will be: Round 1 9: 00 a. m. - 10: 00 a. m. ET Round 2 11: 00 a. m. - 12: 00 p. m. ET Round 3 1: 00 p. m. - 1: 30 p. m. ET Round 4 2: 00 p. m. - 2: 30 p. m. ET Round 5 3: 00 p. m. - 3: 15 p. m. ET Round 6 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. 60, this prohibition became effective at the short- form application filing deadline on Friday, June 3, 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 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). 5 6 Bidders competing for licenses for any of the same designated markets must not communicate indirectly about bids or bidding strategy. 14 Accordingly, the Bureau encourages applicants competing for licenses in any of the same geographic license areas not to use the same individual as an authorized bidder. 15 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. 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. 16 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. 17 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. 18 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. 19 Any applicant found to have violated the anti- collusion rule may be subject to sanctions. 20 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. 21 Submission of Auction No. 60- 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: auction60@ fcc. gov. 14 Part 1 Seventh Report and Order, 16 FCC Rcd at 17549- 50 ¶ 6. 15 See Auction No. 60 Procedures Public Notice, 20 FCC Rcd at 6125. 16 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). 17 47 C. F. R. § 1.65. 18 47 C. F. R. §§ 1.65, 1. 2105( c)( 6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17555 ¶ 17. 19 See 47 C. F. R. § 1.2107( d). 20 See 47 C. F. R. §§ 1.2105( c), 1.2107( d), and 1.2109( d). 21 See 47 C. F. R. § 1.2109( d). 6 7 Parties wishing to submit requests, complaints, or other information concerning Auction No. 60 should also send a copy by email to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction60@ 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 long- form applications, when there is greater opportunity for investigation of such allegations, if warranted. Finally, parties wishing to make suggestions concerning Auction No. 60 or future auctions are encouraged to present such ideas using the suggestion feature of the FCC 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 an entrepreneur, 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. 22 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: Roy Knowles or Lisa Stover 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 - 22 See 47 C. F. R. § 1.2112( b)( 2). 7