*Pages 1--9 from Microsoft Word - 53232.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. 2 Minimum Opening Bid Amounts. There will be a minimum opening bid amount for each license in Auction No. 63, calculated in accordance with the formulas previously announced. 3 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. 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. On Wednesday, December 7, 2005, there will be four rounds of bidding as follows: Bidding Round 10: 00 a. m. - 11: 00 a. m. ET Bidding Round 12: 00 p. m. - 1: 00 p. m. ET Bidding Round 2: 00 p. m. - 3: 00 p. m. ET Bidding Round 4: 00 p. m. - 5: 00 p. m. ET The bidding schedule for Thursday, December 8, 2005, and continuing until further notice, will be: Bidding Round 10: 00 a. m. - 10: 20 a. m. ET Bidding Round 11: 00 a. m. - 11: 20 a. m. ET Bidding Round 12: 00 p. m. - 12: 20 p. m. ET Bidding Round 2: 00 p. m. - 2: 20 p. m. ET Bidding Round 3: 00 p. m. - 3: 20 p. m. ET Bidding Round 4: 00 p. m. - 4: 20 p. m. ET Round results will be available 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 telephone number supplied in registration mailing FCC Technical Support (all technical questions, software and hardware) (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY) FCC Auctions and Spectrum Access Division (legal questions only) (202) 418- 0660 2 The length of a call to place a telephonic bid may vary; please allow a minimum of 10 minutes. 3 Auction No. 63 Procedures Public Notice at 27- 28. Attachment A of the Auction No. 63 Procedures Public Notice sets forth the minimum opening bid amounts for each license offered in Auction No. 63. 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. 4 Applicants should amend their short- form applications within ten business days from the occurrence of a reportable change. Changes that cause a loss of or reduction in eligibility for the bidding credit must be reported immediately. Applicants must modify their FCC Form 175 electronically and submit a letter, briefly summarizing the changes, by electronic mail to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction63@ fcc. gov. Questions about changes should be directed to Brian Carter 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). 5 Major modifications (e. g., changing the licenses applied for or changing control of the applicant) will not be accepted. 6 Bidders are reminded that any changes affecting eligibility for the bidding credit, insofar as it results in the diminishment or loss of the bidding credit claimed on the FCC Form 175 application, must be clearly stated in the bidder’s amendment and in the summary letter referenced above. In such cases, the Commission will make appropriate adjustments in the bidding credit prior to the computation of any down and final payment amounts due. 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 the beginning of competitive bidding in Auction No. 63 in order to determine the existence of pending administrative or judicial proceedings, pleadings, applications or authorizations that might affect their decisions regarding participation in the auction. Participants in Auction No. 63 are strongly encouraged to continue such research during the auction. Additionally, potential bidders should perform technical analyses sufficient to assure them that, if they prevail in competitive bidding for a particular license, they will be able to build and operate facilities that will comply fully with the Commission’s technical and legal requirements. As part of their due diligence efforts, potential applicants should physically inspect any sites located in, or near, the service area for which they plan to bid. Potential bidders are reminded that there are a number of incumbent terrestrial private operational fixed point- to- point licensees in the 12.2- 12.7 GHz band which were licensed prior to MVDDS and are not entitled to protection from harmful interference caused by later MVDDS entrants in the 12. 2- 12.7 GHz band, except for public safety stations, which must be protected. MVDDS operators have the responsibility of resolving any harmful interference problems that their operations may cause to these public safety incumbent point- to- point operations in the 12.2- 12. 7 GHz band. To aid potential bidders, a 4 See 47 C. F. R. § 1.65. 5 See 47 C. F. R. § 1.2105( b). 6 Id. 4 5 list of public safety incumbents in this band is attached as Appendix I to the Second Report and Order, ET Docket No. 98- 206, released May 23, 2002. 7 Updated information on public safety incumbents in this band is available by searching the Bureau’s online licensing database, Universal Licensing System (ULS). That database may be found at: http:// wireless. fcc. gov/ uls. 8 The Commission makes no representations or guarantees regarding the accuracy or completeness of information in its databases or any third party databases, including, for example, court docketing systems. To the extent the Commission’s databases may not include all information deemed necessary or desirable by an applicant, applicants may obtain or verify such information from independent sources or assume the risk of any incompleteness or inaccuracy in said databases. Furthermore, the Commission makes no representations or guarantees regarding the accuracy or completeness of information that has been provided by incumbent licensees and incorporated into the database. Potential bidders are also reminded that MVDDS licensees must comply with the interference protection and coordination requirements set forth in Sections 101.105, 101.1421, and 101.1440 of the Commission’s rules. 9 Sections 101.105, 101.1421, and 101.1440 establish standards for protection of co-primary NGSO FSS earth stations, incumbent and adjacent area licensees and co- primary DBS earth stations. MVDDS shall be licensed on a non- harmful interference co- primary basis to existing DBS operations and on a co- primary basis with NGSO FSS stations in this band. MVDDS licensees must also protect and/ or develop sharing agreements with neighboring licensees. MVDDS systems in the United States within 56 km (35 miles) of the Canadian and Mexican border will be granted conditional licenses, until final international agreements are approved. MVDDS systems may not cause harmful interference to stations in Canada or Mexico. 10 No stations are allowed within 5 miles of the borders. Potential bidders are also reminded that certain applications (including those for modification), petitions for rulemaking, requests for special temporary authority (“ STA”), waiver requests, petitions to deny, petitions for reconsideration, and applications for review may be pending before the Commission and relate to particular applicants or incumbent licensees. In addition, certain judicial proceedings that may relate to particular applicants or incumbent licensees or the licenses available in Auction No. 63 may be commenced, may be pending, or may be subject to further review. We note that resolution of these 7 See 47 C. F. R. § 101. 1421( c). See also Amendment of Parts 2 and 25 of the Commission's Rules to Permit Operation of NGSO FSS Systems Co- Frequency with GSO and Terrestrial Systems in the Ku- Band Frequency Range; Amendment of the Commission's Rules to Authorize Subsidiary Terrestrial Use of the 12. 2- 12.7 GHz Band by Direct Broadcast Satellite Licensees and Their Affiliates; and Applications of Broadwave USA, PDC Broadband Corporation, and Satellite Receivers, Ltd. to Provide A Fixed Service in the 12. 2- 12. 7 GHz Band, ET Docket No. 98- 206, Memorandum Opinion and Order and Second Report and Order, 17 FCC Rcd 9614 (2002) (“ Second Report and Order”). 8 Applicants may query the database online and download a copy of their search results if desired. Detailed instructions on using License Search (including frequency searches and the GeoSearch capability) and downloading query results are available online by selecting the “?” button at the upper right- hand corner of the License Search screen or by going to the ULS support site at http:// esupport. fcc. gov/ licensing. htm. Applicants should direct questions regarding the ULS search capabilities to the FCC ULS Technical Support hotline at (877) 480- 3201, option two. The hotline is available to assist with questions Monday through Friday, from 8: 00 a. m. to 7: 00 p. m. ET. In order to provide better service to the public, all calls to the hotline are recorded. A demonstration of how to search ULS may be viewed in the archived webcast of the bidder’s seminar for this auction, which may be found at: http:// wireless. fcc. gov/ auctions/ default. htm? job= auction_ seminar& id= 63 (Auction 63 Seminar, “Overview of MVDDS Rules and Due Diligence,” held on September 28, 2005). 9 47 C. F. R. § 101.105 (interference protection criteria), 47 C. F. R. § 101.1421 (coordination of adjacent area MVDDS stations and incumbent public safety POFS stations), and 47 C. F. R. § 101.1440 (MVDDS protection of DBS). 10 47 C. F. R. § 101. 147( p), § 101. 1423, and §§ 1. 928( f)( 1) and (2). 5 6 matters could have an impact on the availability of spectrum in Auction No. 63. Some of these matters (whether before the Commission or the courts) may not be resolved by the time of the auction. 11 Each potential bidder is solely responsible for identifying associated risks and for investigating and evaluating the degree to which such matters may affect the bidder’s ability to bid on, otherwise acquire, or make use of licenses available in Auction No. 63. For further details regarding due diligence, qualified bidders should refer to the Auction No. 63 Procedures Public Notice under Section I. B. 4. 12 Applicants should note that Section 101.1412 of the Commission’s rules provides certain eligibility restrictions for cable operators. 13 Specifically, no cable operator, nor any entity owning an attributable interest in a cable operator, shall have an attributable interest in an MVDDS license if such cable operator’s service area significantly overlaps the MVDDS license area. 14 Mock Auction. On Monday, December 5, 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. 63 registration materials. The mock auction can be accessed at: http:// auctions. fcc. gov. Alternatively, you may also use http:// auctions2. fcc. gov. The mock auction will include all 22 Auction No. 63 licenses, and will follow the rules governing the actual auction. The mock auction will be identified as Mock Auction No. 74. 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 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, December 5, 2005, will be: Round 1 10: 00 a. m. - 11: 00 a. m. ET Round 2 12: 00 p. m. - 12: 30 p. m. ET Round 3 1: 30 p. m. - 2: 00 p. m. ET Round 4 3: 00 p. m. - 3: 15 p. m. ET Round 5 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 about bids, bidding strategies, or settlements unless they have identified each other as parties with which 11 See, e. g., International Bureau Seeks Comment on Proposals to Permit Reducing Orbital Spacings Between U. S. Direct Broadcast Satellites, Public Notice, 18 FCC Rcd 25683 (2003). 12 Auction No. 63 Procedures Public Notice at 6- 7. 13 47 C. F. R § 101.1412; see also Second Report and Order at ¶¶ 159- 170. 14 47 C. F. R § 101.1412( a). 6 7 they have entered into agreements under Section 1.2105( a)( 2)( viii). 15 For Auction No. 63, this prohibition became effective at the short- form application filing deadline on Friday, October 7, 2005, and will end on the post- auction down payment deadline, which will be announced in a future public notice. 16 This prohibition applies to all applicants regardless of whether such applicants became qualified bidders or actually bid. 17 The prohibition continues until the down payment deadline regardless of whether a winning bidder needs to make an additional payment by the down payment deadline. 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. 18 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 or communications prohibited by the anti- collusion rule. 19 Bidders competing for licenses for any of the same designated markets must not communicate indirectly about bids or bidding strategy. 20 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. 21 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. 22 However, the Bureau cautions that merely filing a certifying statement as part of the short- form application will not outweigh specific evidence that 15 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”); 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). 16 47 C. F. R. § 1.2105( c)( 1). 17 See, e. g., 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); Letter to Robert Pettit, Esq., from Margaret W. Wiener, 16 FCC Rcd 10080 (Auctions Div. 2000) (declining to exempt 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). 18 47 C. F. R. § 1.2105( c)( 7)( i). 19 See “Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules,” Public Notice, 11 FCC Rcd 9645 (WTB 1995). 20 Part 1 Seventh Report and Order, 16 FCC Rcd at 17549- 50 ¶ 6. 21 See Auction No. 63 Procedures Public Notice, 20 FCC Rcd at 13333. 22 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). 7 8 collusive behavior has occurred, nor will it preclude the initiation of an investigation when warranted. 23 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. 24 Thus, Section 1.65 requires auction applicants that engage in a communication of bids or bidding strategies that results 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 any prohibited discussion or disclosure 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. 25 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. 26 Any applicant found to have violated the anti- collusion rule may be subject to sanctions. 27 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. 28 Submission of Auction No. 63- 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: auction63@ fcc. gov. Parties wishing to submit requests, complaints, or other information concerning Auction No. 63 should also send a copy by electronic mail to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction63@ 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. 63 or future auctions are encouraged to present such ideas using the suggestion feature of the FCC Auction System. (As mentioned above, this 23 Id., 13 FCC Rcd at 11978 ¶ 13. 24 47 C. F. R. § 1.65. 25 47 C. F. R. §§ 1.65, 1. 2105( c)( 6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17555 ¶ 17. 26 See 47 C. F. R. § 1.2107( d). 27 See 47 C. F. R. §§ 1.2105( c), 1.2107( d), and 1.2109( d). 28 See 47 C. F. R. § 1.2109( d). 8 9 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. Within ten business days after release of the auction closing notice, winning bidders must electronically submit a properly completed long- form application (FCC Form 601) for each license won through Auction No. 63. Applicants that claim eligibility to receive a very small business, small business, or entrepreneur 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. 29 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. Further filing instructions will be provided to auction winners at the close of the auction. 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: Brian Carter 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 - 29 See 47 C. F. R. § 1.2112( b)( 2). 9