*Pages 1--73 from Microsoft Word - 60826.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 06- 2014 November 2, 2006 AUCTION OF 1.4 GHz BAND LICENSES SCHEDULED FOR FEBRUARY 7, 2007 Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction No. 69 AU Docket No. 06- 104 Report No. AUC- 06- 69- B (Auction No. 69) TABLE OF CONTENTS Heading Paragraph # I. GENERAL INFORMATION ................................................................................................................ 1 A. Introduction...................................................................................................................................... 1 1. Background of Proceeding ........................................................................................................ 9 2. Licenses to be Auctioned ........................................................................................................ 10 B. Rules and Disclaimers.................................................................................................................... 13 1. Relevant Authority .................................................................................................................. 13 2. Prohibition of Collusion; Compliance with Antitrust Laws.................................................... 15 3. Protection of Incumbent Government and Non- Government Operations............................... 24 a. International Coordination ................................................................................................ 29 b. Quiet Zones....................................................................................................................... 30 4. Due Diligence.......................................................................................................................... 31 5. Use of Integrated Spectrum Auction System .......................................................................... 41 6. Bidder Alerts ........................................................................................................................... 42 7. Environmental Review Requirements..................................................................................... 44 C. Auction Specifics ........................................................................................................................... 45 1. Auction Date ........................................................................................................................... 45 2. Auction Title ........................................................................................................................... 47 3. Bidding Methodology.............................................................................................................. 48 4. Pre- Auction Dates and Deadlines............................................................................................ 49 5. Requirements for Participation................................................................................................ 50 6. General Contact Information................................................................................................... 51 II. SHORT- FORM APPLICATION (FCC FORM 175) REQUIREMENTS........................................... 52 A. Preferences for Small Businesses and Others ................................................................................ 56 1. Size Standards for Bidding Credits ......................................................................................... 56 2. Tribal Lands Bidding Credit.................................................................................................... 59 3. Installment Payments .............................................................................................................. 60 1 Federal Communications Commission DA 06– 2014 2 B. License Selection ........................................................................................................................... 61 C. Disclosure of Bidding Arrangements............................................................................................. 62 D. Ownership Disclosure Requirements............................................................................................. 64 E. Bidding Credit Revenue Disclosures ............................................................................................. 66 F. Provisions Regarding Former and Current Defaulters................................................................... 71 G. Other Information .......................................................................................................................... 77 H. Minor Modifications to Short- Form Applications (FCC Form 175) ............................................. 78 I. Maintaining Current Information in Short- Form Applications (FCC Form 175).......................... 83 III. PRE- AUCTION PROCEDURES ........................................................................................................ 86 A. Auction Seminar —November 29, 2006........................................................................................ 86 B. Short- Form Application (FCC Form 175) — Due Prior to 6: 00 p. m. ET on December 11, 2006 ............................................................................................................................................... 89 C. Application Processing and Minor Corrections ............................................................................. 92 D. Upfront Payments — Due January 12, 2007 ................................................................................. 94 1. Making Auction Payments by Wire Transfer.......................................................................... 95 2. FCC Form 159......................................................................................................................... 98 3. Upfront Payments and Bidding Eligibility .............................................................................. 99 4. Applicant’s Wire Transfer Information for Purposes of Refunds of Upfront Payments....... 105 E. Auction Registration .................................................................................................................... 106 F. Remote Electronic Bidding.......................................................................................................... 110 G. Mock Auction – February 5, 2007............................................................................................... 112 IV. AUCTION EVENT............................................................................................................................ 113 A. Auction Structure......................................................................................................................... 114 1. Simultaneous Multiple Round Auction ................................................................................. 114 2. Information Available to Bidders Before and During the Auction ....................................... 118 3. Eligibility and Activity Rules................................................................................................ 124 4. Auction Stages....................................................................................................................... 128 5. Stage Transitions ................................................................................................................... 133 6. Activity Rule Waivers ........................................................................................................... 135 7. Auction Stopping Rules......................................................................................................... 140 8. Auction Delay, Suspension, or Cancellation......................................................................... 145 B. Bidding Procedures...................................................................................................................... 147 1. Round Structure..................................................................................................................... 147 2. Reserve Price and Minimum Opening Bids .......................................................................... 149 a. Reserve Price .................................................................................................................. 150 b. Minimum Opening Bids ................................................................................................. 152 3. Bid Amounts ......................................................................................................................... 158 4. Provisionally Winning Bids .................................................................................................. 163 5. Bid Removal and Bid Withdrawal ........................................................................................ 172 6. Round Results........................................................................................................................ 180 7. Auction Announcements ....................................................................................................... 182 V. POST- AUCTION PROCEDURES.................................................................................................... 183 A. Down Payments ........................................................................................................................... 183 B. Final Payments............................................................................................................................. 185 C. Long- Form Application (FCC Form 601) ................................................................................... 186 D. Ownership Disclosure Information Report (FCC Form 602) ...................................................... 188 E. Tribal Lands Bidding Credit ........................................................................................................ 189 F. Default and Disqualification ........................................................................................................ 192 G. Refund of Remaining Upfront Payment Balance ........................................................................ 195 VI. CONTACTS....................................................................................................................................... 199 ATTACHMENT A: Licenses to Be Auctioned 2 Federal Communications Commission DA 06– 2014 3 ATTACHMENT B: FCC Auction Seminar Registration Form ATTACHMENT C: Electronic Filing and Review of the Short- Form Application (FCC Form 175) ATTACHMENT D: Auction- Specific Instructions for FCC Remittance Advice (FCC Form 159) ATTACHMENT E: Formulas to Determine Minimum Acceptable Bids ATTACHMENT F: Summary Listing of Documents Addressing Application of the Anti-Collusion Rule I. GENERAL INFORMATION A. Introduction 1. By this Public Notice, the Commission announces the procedures and minimum opening bid amounts for the upcoming auction of 1.4 GHz band licenses in the paired 1392- 1395 MHz and 1432- 1435 MHz bands, and in the unpaired 1390- 1392 MHz band scheduled to begin on February 7, 2007 (Auction No. 69). 1 On August 28, 2006, in accordance with Section 309( j)( 3) of the Communications Act of 1934, as amended, 2 the Wireless Telecommunications Bureau (“ Bureau”) released a public notice seeking comment on reserve prices or minimum opening bid amounts and the procedures to be used in Auction No. 69. 3 We received two comments and no reply comments in response to the Auction No. 69 Comment Public Notice. 4 2. In the Auction No. 69 Comment Public Notice, the Bureau proposed to include all 64 1.4 GHz band licenses in a single auction using the Commission’s standard simultaneous multiple- round (“ SMR”) auction format. 5 At the same time, the Bureau sought comment on the feasibility and desirability of allocating the 1.4 GHz band licenses using the Commission’s package bidding format (“ SMR- PB”). 6 Based on the record and the particular circumstances of the auction of 1.4 GHz band licenses, the Bureau, as described in more detail below, will include all 64 1.4 GHz licenses in a single auction using the Commission’s standard SMR format, as proposed. 7 Package bidding will not be used in Auction No. 69. 8 1 This spectrum has been reallocated for non- Government use to provide fixed and mobile services, with the exception of aeronautical mobile services. See 47 C. F. R. § 27. 802. 2 47 U. S. C. § 309( j)( 3)( E)( i)( requirement to seek comment on proposed auction procedures); see also 47 U. S. C. § 309( j)( 4)( F)( authorization to prescribe reserve price or minimum bid); see also 47 C. F. R. § 1.2104( c) and (d). 3 “Auction of 1. 4 GHz Bands Licenses Scheduled for February 7, 2007; Comment Sought on Competitive Bidding Procedures For Auction No. 69,” Public Notice, 21 FCC Rcd 9494 (2006) (“ Auction No. 69 Comment Public Notice”). 4 Comments were filed by: (i) Paul Milgrom and Karen Wrege; and (ii) Itron, Inc. 5 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9497. This type of auction offers every license for bid at the same time and consists of successive bidding rounds in which eligible bidders may place bids on individual licenses. A bidder may bid on, and potentially win, any number of licenses. Bidding generally remains open on all licenses until bidding stops on every license. 6 Under the Commission’s package bidding rules, bidders would be able to place bids on any groups of licenses they wish to win together, with the result that they win either all the licenses in a group or none of them. 7 See Section IV. A. 1. “Simultaneous Multiple Round Auction,” infra. 8 See id., infra. 3 Federal Communications Commission DA 06– 2014 4 3. The Bureau also sought comment in the Auction No. 69 Comment Public Notice on whether to implement procedures that would withhold certain information on bidder interests, and bidder identities that typically has been revealed prior to and during past Commission auctions. 9 In particular, the Bureau asked commenters to indicate what factors weigh for or against limiting disclosure of bidder interests and identities, and whether the Commission should condition the use of any disclosure limits on a measure of competition in the auction. 4. For Auction No. 69, we will determine the information procedures based primarily on the eligibility ratio, a measure of likely competition in the auction. The eligibility ratio is defined as the total number of bidding units of eligibility purchased by bidders through their upfront payments, divided by the total number of bidding units for the licenses in the auction. Specifically, if the eligibility ratio equals or exceeds three, we will use the information procedures typically used in past FCC auctions, since with sufficient likely competition, the anti- competitive behavior that limited information procedures aim to deter is unlikely to be successful. 10 If the eligibility ratio is less than three, in general we will withhold certain information on bidder interests and bidder identities. However, if the eligibility ratio is less than three, the Commission reserves the discretion to use information procedures typically used in past FCC auctions if circumstances indicate that limited information procedures would not be an effective tool for deterring anti- competitive behavior. Such circumstances would occur, for example, if only two applicants became qualified to participate in the bidding, since limited information procedures would be ineffective in preventing bidders from knowing the identity of the competing bidder. 11 5. In the event that the conditions described above result in the use of procedures under which certain information is withheld, we will release: (1) each bidder’s eligibility and upfront payment made prior to the start of the auction; and (2) the amounts of all gross bids for each license (including the losing bids) after each round, but not the identities of the bidders placing the bids. We believe this provides bidders with information regarding license valuations without compromising the goal of reducing the potential for anti- competitive outcomes. 6. Pursuant to these procedures, information on the license selections of auction applicants will be withheld, at least until the upfront payment deadline has passed and the Commission determines the information procedures that will be used for the auction. Therefore, to enable applicants to comply with the Commission’s anti- collusion rules, once the Bureau has conducted its initial review of applications to participate in Auction No. 69, each applicant with a short- form application to participate in a pending auction will receive a letter that lists the applicants in Auction No. 69 that have applied for licenses in any of the same geographic areas as the applicant. 12 7. The upper half of paired frequencies for 1.4 GHz band licenses, i. e., 1432- 1435 MHz, is spectrum covered by a Congressional mandate that requires that auction proceeds fund the estimated 9 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9497. 10 See Auction of Advanced Wireless Services Licenses Scheduled for June 29, 2006, Notice and Filing Requirement, Minimum Opening Bids, Upfront Payment and Other Procedures for Auction No. 66, Public Notice, 21 FCC Rcd 4562, 4565, 4600- 05 ¶¶ 4- 5, 140- 157 (2006) (“ Auction No. 66 Procedures Public Notice”). 11 We anticipate announcing the information disclosure procedures to be used at or about the time that we release a public notice announcing the applicants that are qualified to participate in the bidding. 12 The list will identify the Auction No. 69 applicant( s) by name but will not list the license selections of the Auction No. 69 applicant( s). As in past auctions, additional information regarding applicants in Auction No. 69 that is needed to comply with section 1. 2105( c), e. g., the identities of controlling interest in the applicant and of ownership interests greater than ten percent (10%), will be available through the publicly accessible on- line short- form application database. See id. 4 Federal Communications Commission DA 06– 2014 5 relocation costs of incumbent federal entities. 13 Specifically, the Commercial Spectrum Enhancement Act (“ CSEA”) established a Spectrum Relocation Fund (“ SRF”), to which the cash proceeds attributable to “eligible frequencies” in an auction of licenses involving such frequencies would be deposited. 14 In addition to requiring that specified auction proceeds be deposited in the SRF, CSEA prohibits the Commission from concluding any auction of eligible frequencies if the total cash proceeds attributable to such spectrum are less than 110 percent of the estimated relocation costs provided to the Commission by the National Telecommunications and Information Administration (“ NTIA”). 15 8. On December 27, 2005, pursuant to CSEA, NTIA notified the Commission that there are no costs associated with relocating federal operations from the 1432- 1435 MHz band. 16 Thus, the CSEA revenue requirement will not affect the Commission’s ability to conclude Auction No. 69. 1. Background of Proceeding 9. In its Report and Order, the Commission adopted service rules to govern the licensing of 27 MHz of electromagnetic spectrum in several bands including the paired 1392- 1395 MHz and 1432- 1435 MHz bands, and the unpaired 1390- 1392 MHz band. 17 The Commission provided for the assignment of the 1390- 1392 MHz band by Major Economic Areas, and the paired 1392- 1395 MHz and 1432- 1435 MHz bands by Economic Area Groups (EAGs). Further, the Commission allowed open eligibility for initial licenses assigned by geographic area licensing in the paired 1392- 1395 MHz and 1432- 1435 MHz bands and in the unpaired 1390- 1392 MHz bands, including technical standards that were consistent with the Part 27 rules and provide licensees flexibility. The Commission set a ten- year license term from the date of grant in the paired 1392- 1395 MHz and 1432- 1435 MHz bands and in the unpaired 1390- 1392 MHz bands. Licensees must demonstrate that they are providing substantial service when they file their renewal application. The Commission allowed licensees to partition and/ or disaggregate their licenses and applied the general competitive bidding rules set forth in Part 1, Subpart Q, of the Commission’s Rule to the paired 1392- 1395 MHz and 1432- 1435 MHz bands and in the unpaired 1390- 1392 MHz band. 18 13 See Commercial Spectrum Enhancement Act, Pub. L. No. 108- 494, 118 Stat. 3986, Title II (2004) (codified in various sections of Title 47 of the United States Code) (“ CSEA”), § 202 (codified at 47 U. S. C. § 923( g)( 2)). 14 Id., §§ 201- 209. Eligible frequencies comprise four bands specified in CSEA (the 216- 220 MHz, 1432- 1435 MHz, 1710- 1755 MHz and 2385- 2390 MHz bands), as well as any other band of frequencies reallocated from federal use to non- federal use after January 1, 2003, and assigned by the Commission through competitive bidding. Id., § 202. Bands of frequencies previously identified by the National Telecommunications and Information Administration in the Spectrum Reallocation Final Report, NTIA Special Publication 95- 32 (1995), are excluded. Id. 15 Id., § 203( b). CSEA also requires that, at the same time, NTIA submit for approval its estimate of relocation costs and the timelines for relocation to the Senate Committees on Appropriations, and Commerce, Science, and Transportation, the House of Representatives Committees on Appropriations and Energy and Commerce, and the Comptroller General. Unless disapproved by the Committees within 30 days, the estimate “shall be approved.” Id., § 202. 16 See letter from Michael D. Gallagher, Assistant Secretary for Communications and Information, National Telecommunications and Information Administration, US Department of Commerce, to Kevin J. Martin, Chairman, Federal Communications Commission (Dec. 27, 2005). 17 In Re Amendments to Parts 1, 2, 27 and 90 of the Commission’s Rules to License Services in the 216- 220 MHz, 1390- 1395 MHz, 1427- 1429 MHz, 1429- 1432 MHz, 1432- 1435 MHz 1670- 1675 MHz, and 2385- 2390 MHz Government Transfer Bands, Report and Order, 17 FCC Rcd 9980, 9981- 89 at ¶¶ 1- 12 (“ Part 1, 2, 7, and 90 Report and Order”) (2002). 18 Id., Parts 1, 2, 27, and 90 Report and Order at 9983- 84. (continued….) 5 Federal Communications Commission DA 06– 2014 6 2. Licenses to be Auctioned 10. Auction No. 69 will offer 64 licenses: 12 Economic Area Grouping (“ EAG”) licenses, and 52 Major Economic Area (“ MEA”) licenses. 11. The following table describes the 1.4 GHz band licenses that will be offered in Auction No. 69: Block Frequencies Bandwidth Pairing Geographic Area Type No. of Licenses A 1392- 1393.5 and 1432- 1433.5 MHz 3 MHz 2 x 1. 5 MHz EAG 6 B 1393.5- 1395 and 1433.5- 1435 MHz 3 MHz 2 x 1. 5 MHz EAG 6 1390- 1392 MHz 2 MHz unpaired MEA 52 12. A complete list of the 1.4 GHz band licenses available in Auction No. 69 is also included in Attachment A of this Public Notice. B. Rules and Disclaimers 1. Relevant Authority 13. Prospective applicants must familiarize themselves thoroughly with the Commission’s general competitive bidding rules set forth in Title 47, Part 1, of the Code of Federal Regulations, including recent amendments and clarifications; 19 rules relating to the 1.4 GHz band contained in Title 47, Part 27, of the Code of Federal Regulations; and rules relating to applications, practice and procedure contained in Title 47, Part 1, of the Code of Federal Regulations. Prospective applicants must also be thoroughly familiar with the procedures, terms and conditions (collectively, “terms”) contained in this Public Notice and the Commission’s decisions in proceedings regarding competitive bidding procedures, application requirements, and obligations of Commission licensees. 20 (Continued from previous page) 19 47 C. F. R. Part 1, Subpart Q. Prospective applicants are also encouraged to review the Commission’s decisions that establish competitive bidding rules and policies, including policies governing benefits extended to designated entities (i. e., small businesses, rural telephone companies, and businesses owned by women and minorities). See, e. g., Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, WT Docket No. 05- 211, Report and Order, 21 FCC Rcd 891 (2006) (“ CSEA/ Part 1 Report and Order”), petitions for reconsideration pending; Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, WT Docket No. 05- 211, Second Report and Order and Second Further Notice of Proposed Rulemaking, 21 FCC Rcd 4753 (2006) (“ CSEA/ Part 1 Second Report and Order and CSEA/ Part 1 Designated Entity Second FNPRM”), petitions for reconsideration pending; Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, WT Docket No. 05- 211, Order on Reconsideration of the Second Report and Order, 21 FCC Rcd 6703 (2006), petition for reconsideration pending. 20 See, e. g., Amendment of Part 1 of the Commission’s Rules — Competitive Bidding Procedures, Second Report and Order, 9 FCC Rcd 2348 (1994) (Competitive Bidding Second Report and Order); Amendment of Part 1 of the Commission’s Rules — 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 (2000) (modified by Erratum, DA 00- 2475 (rel. Nov. 3, 2000)) (“ Part 1 Fifth Report and Order”); 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”) (amending the anti- collusion rule, which is codified at 47 C. F. R. §1. 2105( c)); Amendment of Part 1 of the Commission’s Rules — Competitive Bidding Procedures, Eighth Report and Order, 17 FCC Rcd 2962 (2002) (amending Section 1.2110 of the Commission’s rules); Second Order on Reconsideration of the Fifth Report and Order, 20 FCC Rcd 1942 (2005) (“ Second Order on Reconsideration of the Fifth Report and (continued….) 6 Federal Communications Commission DA 06– 2014 7 14. 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 applicants. It is the responsibility of all applicants to remain current with all Commission rules and with all public notices pertaining to this auction. Copies of most auctions- related Commission documents, including public notices, can be retrieved from the FCC Auctions Internet site at http:// wireless. fcc. gov/ auctions. Additionally, documents are available for public inspection and copying between 8: 00 a. m. and 4: 30 p. m. Eastern Time (ET) Monday through Thursday or 8: 00 a. m. to 11: 30 a. m. ET Fridays at the FCC Reference Information Center, 445 12th Street, SW, Room CY-A257, Washington, DC 20554. Documents may also be purchased from the Commission’s duplicating contractor, Best Copy and Printing, Inc. (“ BCPI”), 445 12th Street, SW, Room CY- B402, Washington, DC 20554, 800- 378- 3160 or at http:// www. bcpiweb. com. 21 2. Prohibition of Collusion; Compliance with Antitrust Laws 15. To ensure the competitiveness of the auction process, Section 1.2105( c) of the Commission’s rules prohibit applicants competing for licenses in any of the same geographic license areas from communicating with each other about bids, bidding strategies, or settlements unless such applicants have identified each other on their short- form applications (FCC Forms 175) as parties with whom they have entered into agreements pursuant to Section 1.2105( a)( 2)( viii). 22 In Auction No. 69, the rule would apply to any applicants bidding for the same EAG or MEA. The rule would also apply to applicants bidding for licenses in overlapping EAGs and MEAs. For example, assume that one applicant applies for an EAG and a second applicant applies for a MEA covering any area within that EAG. The two entities will have applied for licenses covering the same geographic areas and would be precluded from communicating with each other under the rule. In addition, the rule would preclude applicants that apply to bid for all markets from communicating with all other applicants. Thus, applicants that have applied for the same markets (unless they have identified each other on their FCC Form 175 applications as parties with whom they have entered into agreements under Section 1.2105( a)( 2)( viii)) must affirmatively avoid all communications with or disclosures to each other that affect or have the potential to affect bids or bidding strategy, which may include communications regarding the post- auction market structure. 23 This prohibition begins at the short- form application filing deadline and ends at the down payment deadline after the auction. 24 This prohibition applies to all applicants regardless of whether such applicants become qualified bidders or actually bid. 25 (Continued from previous page) Order”) (further amending Section 1. 2110 to exempt the gross revenues of the affiliates of a rural telephone cooperative’s officers and directors from attribution to the applicant and adopting other modifications to the competitive bidding rules); CSEA/ Part 1 Report and Order. 21 When ordering documents from BCPI, please provide the appropriate FCC document number (for example, DA 06- 1016 for the Auction No. 69 Comment Public Notice, or DA 06- 2014 for this Public Notice). 22 47 C. F. R. §§ 1.2105( a)( 2)( viii), 1. 2105( c)( 1). See also Part 1 Seventh Report and Order, 16 FCC Rcd 17546 (2001); Part 1 Fifth Report and Order, 15 FCC Rcd at 15297- 98 ¶¶ 7- 8. 23 See, e. g., “Wireless Telecommunications Bureau Provides Guidance on the Anti- Collusion Rule for D, E. and F Block Bidders,” Public Notice, DA 96- 1460 (rel. August 28, 1996). 24 47 C. F. R. § 1.2105( c)( 1). 25 See, e. g., Star Wireless, LLC, Forfeiture Order, 19 FCC Rcd 18626, 18628 ¶ 4, n. 19 (EB 2004), application for review pending (collusion rule applies to applicants regardless of whether they are qualified to bid); Letter to Robert Pettit, Esquire, from Margaret W. Wiener, Chief, Auctions and Industry Analysis Division, Wireless (continued….) 7 Federal Communications Commission DA 06– 2014 8 (As described in Section IV. A. 2., below, information concerning applicants’ license selections will not be made public, at least until the upfront payment deadline has passed and the Commission determines the information procedures that will be used for the auction. Therefore, the Commission will inform each applicant by letter of the identity of each of the other applicants that has applied for any of the same geographic areas that it has selected in its short form application. 26 ) 16. For purposes of this prohibition, Section 1.2105( c)( 7)( i) defines “applicant” as including all officers and directors of the entity submitting a short- form application to participate in the auction, all controlling interests of that entity, 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. 27 17. Applicants for licenses for any of the same geographic license areas must not communicate directly or indirectly about bids or bidding strategy. 28 Accordingly, such applicants 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 such applicants. Also, if the authorized bidders are different individuals employed by the same organization (e. g., law firm or engineering firm or consulting firm), a violation similarly could occur. 29 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. 30 A violation of the anti- collusion rule could occur in other contexts, such as an individual serving as an officer for two or more applicants. 31 Moreover, the Commission has found a violation of the anti- collusion rule where a bidder used the Commission’s bidding system to disclose “its bidding strategy in a manner that explicitly invited other auction participants to cooperate and collaborate in specific markets,” 32 and has placed auction participants on notice that the use of its bidding system “to disclose market information to competitors will not be tolerated and will subject bidders to sanctions.” 33 Bidders are cautioned that the Commission remains vigilant about prohibited communications taking place in other situations. For example, the Commission has warned that prohibited “communications concerning bids and bidding strategies may (Continued from previous page) Telecommunications Bureau, Federal Communications Commission, 16 FCC Rcd 10080 (WTB 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). 26 See Section IV. A. 2. “Information Available to Bidders Before and During the Auction,” infra, especially ¶ 123. 27 47 C. F. R. § 1.2105( c)( 7)( i). 28 Part 1 Seventh Report and Order, 16 FCC Rcd at 17549- 50 ¶ 6. 29 See 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 Order”). 30 Id. 31 See, e. g., Letter to Colby M. May, TCCSA, Inc., d/ b/ a Trinity Broadcasting Network, from Barbara A. Kreisman, Chief, Video Division, Media Bureau, and Margaret W. Wiener, Chief, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, 20 FCC Rcd 14648 (WTB/ MB 2005) (finding apparent violation of anti-collusion rule where applicants with mutually exclusive applications reported sharing same individual as an officer and director and reported having no bidding agreement). 32 Mercury PCS II, LLC, Notice of Apparent Liability for Forfeiture, 12 FCC Rcd 17970, 17976 ¶ 12 (1997). 33 Mercury PCS II, LLC, Memorandum Opinion and Order, 13 FCC Rcd 23755, 23760 ¶ 11 (1998). 8 Federal Communications Commission DA 06– 2014 9 include communications regarding capital calls or requests for additional funds in support of bids or bidding strategies to the extent such communications convey information concerning the bids and bidding strategies directly or indirectly.” 34 Applicants are hereby placed on notice that public disclosure of information relating to bidder interests and bidder identities that typically has been revealed prior to and during past Commission auctions, but is confidential in this auction at the time of disclosure, may violate the anti- collusion rule. 35 Bidders should use caution in their dealings with other parties, such as members of the press, financial analysts, or others who might become a conduit for the communication of prohibited bidding information. 36 18. The Commission’s rules do not prohibit applicants from entering into otherwise lawful bidding agreements before filing their short- form applications, as long as they disclose the existence of the agreement( s) in their short- form application. 37 If parties agree in principle on all material terms prior to the short- form filing deadline, each party to the agreement must identify the other party or parties to the agreement on its 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 short- form filing deadline, they should not include the names of parties to discussions on their applications, and they may not continue negotiations, discussions or communications with any other applicants after the short- form filing deadline. 38 19. By electronically submitting its short- form application, each applicant certifies its compliance with Section 1.2105( c). However, we 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. 39 The Commission has stated that it “intend[ s] to scrutinize carefully any instances in which bidding patterns suggest that collusion may be occurring.” 40 Any applicant found to have violated the anti- collusion rule may be subject to sanctions. 41 20. Applicants are also reminded that, regardless of compliance with the Commission’s rules, they remain subject to the antitrust laws, which are designed to prevent anticompetitive behavior in the 34 Implementation of Section 309( j) of the Communications Act – Competitive Bidding, PP Docket No. 93- 253, Memorandum Opinion and Order, 9 FCC Rcd 7684, 7689 ¶ 12 (1994). 35 Thus, communication by an applicant to another applicant for one or more of the same licenses of the applicant’s license selections on its short- form application, or of the fact that the applicant does or does not hold provisionally winning bids on particular licenses, may well violate the anti- collusion rule. 36 For example, where limited information disclosure procedures are in place, as in this auction, a qualified bidder’s statement to the press that it has lost bidding eligibility and stopped bidding in the auction could give rise to a finding of an anti- collusion rule violation. Cf. Wireless Telecommunications Bureau Responds to Questions About the Local Multipoint Distribution Service Auction, Public Notice, 13 FCC Rcd 341, 347- 8 (1998) (“ Public statements can give rise to collusion concerns. This has occurred in the antitrust context, where certain public statements can support other evidence which tends to indicate the existence of a conspiracy.”). 37 47 C. F. R. § 1.2105( c)( 7)( i). 38 See Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules, Public Notice, 11 FCC Rcd 9645 (1995) (“ Anti- Collusion Public Notice”). 39 Nevada Wireless Order, 13 FCC Rcd at 11978 ¶ 13. 40 Implementation of Section 309( j) of the Communications Act – Competitive Bidding, PP Docket No. 93- 253, Memorandum Opinion and Order, 9 FCC Rcd 7684, 7689 ¶ 12 (1994). 41 See 47 C. F. R. §§ 1.2105( c), 1.2107( d), and 1.2109( d). 9 Federal Communications Commission DA 06– 2014 10 marketplace. 42 Compliance with the disclosure requirements of the Commission’s anti- collusion rule will not insulate a party from enforcement of the antitrust laws. 43 For instance, a violation of the antitrust laws could arise out of actions taking place well before any party submits a short form application. 44 The Commission has cited a number of examples of potentially anticompetitive actions that would be prohibited under antitrust laws: for example, actual or potential competitors may not agree to divide territories horizontally in order to minimize competition, regardless of whether they split a market in which they both do business, or whether they merely reserve one market for one and another for the other. 45 Similarly, the Bureau has long reminded potential applicants and others that “[ e] ven where the applicant discloses parties with whom it has reached an agreement on the short- form application, thereby permitting discussions with those parties, the applicant is nevertheless subject to existing antitrust laws.” 46 To the extent the Commission becomes aware of specific allegations that may give rise to violations of the federal antitrust laws, the Commission may refer such allegations to the United States Department of Justice for investigation. 47 If an applicant is found to have violated the antitrust laws or the Commission’s rules 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, among other sanctions. 48 21. 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. 49 Thus, Section 1.65 requires an auction applicant to notify the Commission of any substantial change to the information or certifications included in its pending short- form application. Applicants are therefore required by Section 1.65 to report to the Commission any communications they have made to or received from another applicant after the short- form filing deadline that affect or have the potential to affect bids or bidding strategy unless such communications are made to or received from parties to agreements identified under Section 1.2105( a)( 2)( viii). In addition, Section 1.2105( c)( 6) provides that 42 See Amendment of Part 1 of the Commission's Rules – Competitive Bidding Procedures, WT Docket No. 97- 82, Third Further Notice of Proposed Rule Making, 14 FCC Rcd 21558, 21560 ¶ 4 and n. 4 (1999) citing Implementation of Section 309( j) of the Communications Act – Competitive Bidding, PP Docket No. 93- 253, Memorandum Opinion and Order, 9 FCC Rcd 7684, 7689 ¶ 12 (1994) (“[ W] e wish to emphasize that all applicants and their owners continue to be subject to existing antitrust laws. Applicants should note that conduct that is permissible under the Commission's Rules may be prohibited by the antitrust laws.”); Implementation of Section 309( j) of the Communications Act- Competitive Bidding, PP Docket No. 93- 253, Fourth Memorandum Opinion & Order, 9 FCC Rcd 6858, 6869 n. 134 (1994)(“[ A] pplicants will also be subject to existing antitrust laws.”). (“ Fourth Memorandum Opinion and Order”). 43 See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388 ¶ 226. See also “Justice Department Sues Three Firms Over FCC Auction Practices,” Press Release 98- 536 (DOJ Nov. 10, 1998). 44 The Commission has cited a number of examples of such anticompetitive behavior. See, e. g., Implementation of Section 309( j) of the Communications Act- Competitive Bidding, PP Docket No. 93- 253, Fourth Memorandum Opinion & Order, 9 FCC Rcd 6858 at 6869 n. 134. 45 Implementation of Section 309( j) of the Communications Act- Competitive Bidding, PP Docket No. 93- 253, Fourth Memorandum Opinion & Order, 9 FCC Rcd 6858, 6869 n. 134 (1994); see also Anti- Collusion Public Notice. 46 See Anti- Collusion Public Notice. 47 See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388 ¶ 226. 48 See 47 C. F. R. § 1.2109( d); see also Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388 ¶ 226. 49 47 C. F. R. § 1.65. 10 Federal Communications Commission DA 06– 2014 11 any applicant that makes or receives a communication prohibited by Section 1.2105( c) must report such communication to the Commission in writing immediately, and in no case later than five business days after the communication occurs. 50 22. Applicants that are winning bidders will be required to disclose in their long- form applications the specific terms, conditions, and parties involved in any bidding consortia, joint ventures, partnerships, and other arrangements entered into relating to the competitive bidding process. 51 23. A summary listing of documents issued by the Commission and the Bureau addressing the application of the anti- collusion rule may be found in Attachment F. These documents are available on the Commission’s auction anti- collusion web page. 52 3. Protection of Incumbent Government and Non- Government Operations 24. Potential applicants are advised that there are several government operations that will continue to operate in these bands. 25. The 1390- 1392 MHz Band. Radio astronomy observations may be assigned in the 1350- 1400 MHz band on an unprotected basis at the 16 radio astronomy observatories identified in the table of Footnote US311. 53 In the 1390- 1400 MHz band, government operations authorized as of March 22, 1995, at the 17 sites identified in the table of Footnote US351 will continue to operate on a fully protected basis until January 1, 2009. 54 All other government operations, except for medical telemetry (1395- 1400 MHz), will operate on a non- interference basis to authorized non- Government operations and shall not hinder implementation of any non- Government operations. 55 26. The 1392- 1395 MHz and 1432- 1435 MHz Bands. Radio astronomy observations may be assigned in the 1350- 1400 MHz band on an unprotected basis at the 16 radio astronomy observatories identified in the table of Footnote US311. In the 1390- 1400 MHz band, government operations authorized as of March 22, 1995, at the 17 sites identified in the table of Footnote US351 will continue to operate on a fully protected basis until January 1, 2009. 56 All other government operations, except for medical telemetry (1395- 1400 MHz), will operate on a non- interference basis to authorized non-Government operations and shall not hinder implementation of any non- Government operations. 57 In the 1432- 1435 MHz band, government stations in the fixed and mobile services may operate indefinitely on a primary basis at the 23 sites listed in the table of Footnote US361. 58 All other Government stations in the fixed and mobile services shall operate on a primary basis until re-accommodated in accordance with the National Defense Authorization Act of 1999. 59 50 47 C. F. R. § 1.2105( c)( 6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17555 ¶ 17. 51 47 C. F. R. § 1.2107( d). 52 http:// wireless. fcc. gov/ auctions/ anticollusion 53 47 C. F. R. § 2.106 n. US311. 54 47 C. F. R. § 2.106 n. US351. 55 See id. 56 47 C. F. R. § 2.106 n. US351. 57 See id. 58 47 C. F. R. § 2.106 n. US361. 59 See id. 11 Federal Communications Commission DA 06– 2014 12 27. Spectrum Relocation Fund. The upper half of paired frequencies for 1.4 GHz Band licenses, i. e., 1432- 1435 MHz, is spectrum covered by a Congressional mandate that requires that auction proceeds fund the estimated relocation costs of incumbent federal entities. 60 Specifically, the Commercial Spectrum Enhancement Act (“ CSEA”) established a Spectrum Relocation Fund (“ SRF”), to which the cash proceeds attributable to “eligible frequencies” in an auction of licenses involving such frequencies would be deposited. 61 28. In addition to requiring that specified auction proceeds be deposited in the SRF, CSEA prohibits the Commission from concluding any auction of eligible frequencies if the total cash proceeds attributable to such spectrum are less than 110 percent of the estimated relocation costs provided to the Commission by NTIA. 62 On December 27, 2005, pursuant to CSEA, NTIA notified the Commission that there are no costs associated with relocating federal operations from the 1432- 1435 MHz band. 63 a. International Coordination 29. Operations in the paired 1392- 1395 MHz and 1432- 1435 MHz bands, and in the unpaired 1390- 1392 MHz band must not cause harmful interference across the borders with Mexico and Canada. Until such time as agreements between the United States, Mexico and Canada become effective, the same technical restrictions at the border that are adopted for operation between geographic service areas will apply, to the extent they are not in violation of current bilateral agreements and arrangements. 64 When interim arrangements or agreements between the United States, Mexico and Canada are final and become effective, licensees in the paired 1392- 1395 MHz and 1432- 1435 MHz bands, and in the unpaired 1390- 1392 MHz band must comply with these agreements. In addition, if these agreements are modified in the future, licensees in the paired 1392- 1395 MHz and 1432- 1435 MHz bands, and in the unpaired 1390- 1392 MHz band must comply with these modifications. b. Quiet Zones 30. 1.4 GHz Band licensees must protect the radio quiet zones set forth in the Commission’s rules. 65 Licensees are cautioned that they must receive the appropriate approvals directly from the relevant quiet zone entity prior to operating within the areas described in the Commission’s rules. 66 60 See Commercial Spectrum Enhancement Act, Pub. L. No. 108- 494, 118 Stat. 3986, Title II (2004) (codified in various sections of Title 47 of the United States Code) (“ CSEA”), § 202 (codified at 47 U. S. C. § 923( g)( 2)). 61 Id., §§ 201- 209. Eligible frequencies comprise four bands specified in CSEA (the 216- 220 MHz, 1432- 1435 MHz, 1710- 1755 MHz and 2385- 2390 MHz bands), as well as any other band of frequencies reallocated from federal use to non- federal use after January 1, 2003, and assigned by the Commission through competitive bidding. Id., § 202. Bands of frequencies previously identified by the National Telecommunications and Information Administration in the Spectrum Reallocation Final Report, NTIA Special Publication 95- 32 (1995), are excluded. Id. 62 Id., § 203( b). CSEA also requires that, at the same time, NTIA submit for approval its estimate of relocation costs and the timelines for relocation to the Senate Committees on Appropriations, and Commerce, Science, and Transportation, the House of Representatives Committees on Appropriations and Energy and Commerce, and the Comptroller General. Unless disapproved by the Committees within 30 days, the estimate “shall be approved.” Id., § 202. 63 See letter from Michael D. Gallagher, Assistant Secretary for Communications and Information, National Telecommunications and Information Administration, US Department of Commerce, to Kevin J. Martin, Chairman, Federal Communications Commission (Dec. 27, 2005). 64 Current agreements and coordination arrangements between the United States and Canada or Mexico may be found on the Commission’s website under http:// www. fcc. gov/ ib/ sand/ agree/ welcome. html. 65 See 47 C. F. R. § 1.924. 12 Federal Communications Commission DA 06– 2014 13 4. Due Diligence 31. We caution potential applicants formulating their bidding strategies to investigate and consider the extent to which 1.4 GHz band frequencies are occupied. Applicants and their investors should also understand that Commission rules and requirements place limitations on the ability of 1.4 GHz band licensees to use this spectrum. As stated above, government and non- government incumbent operations in the 1.4 GHz band must be protected. These limitations may restrict the ability of 1.4 GHz band geographic area licensees to use certain portions of the electromagnetic spectrum or provide service to certain areas in their geographic license areas. Bidders should become familiar with the status of these operations, applicable Commission rules, orders and any pending proceedings related to the service, in order to make reasoned, appropriate decisions about their participation in Auction No. 69 and their bidding strategy. 32. 1.4 GHz Band licensees must comply with the pertinent rule sections set forth in 47 C. F. R. Part 27. Also, potential bidders should be aware that as part of the 2007 World Radio Communications Conference, WRC- 07, NTIA has proposed more stringent out- of- band emission limits than presently specified in Section 27.53( i) of the Commission’s rules in the bands 1350- 1400 MHz and 1427- 1452. 67 The potential for stricter emission limits could impact the operations in these bands. 33. 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 1.4 GHz band licenses in this auction. The FCC makes no representations or warranties about the use of this spectrum for particular services. Applicants should be aware that an FCC auction represents an opportunity to become an FCC licensee in the 1.4 GHz band subject to certain conditions and regulations. An FCC auction does not constitute an endorsement by the FCC of any particular service, technology, or product, nor does an FCC license constitute a guarantee of business success. Applicants should perform their individual due diligence before proceeding as they would with any new business venture. 34. Potential bidders are strongly encouraged to conduct their own research prior to the beginning of bidding in Auction No. 69 in order to determine the existence of any pending administrative or judicial proceedings that might affect their decision regarding participation in the auction. Participants in Auction No. 69 are strongly encouraged to continue such research throughout the auction. In addition, potential bidders should perform technical analyses sufficient to assure themselves that, should they prevail in competitive bidding for a specific license, they will be able to build and operate facilities that will fully comply with the Commission's technical and legal requirements. 35. Applicants should also be aware that certain pending and future proceedings, including applications (including those for modification), petitions for rulemaking, requests for special temporary authority, waiver requests, petitions to deny, petitions for reconsideration, informal oppositions, and applications for review, before the Commission may relate to particular applicants or incumbent licensees or the licenses available in Auction No. 69. In addition, pending and future judicial proceedings may relate to particular applicants or incumbent licensees, or the licenses available in Auction No. 69. Prospective bidders are responsible for assessing the likelihood of the various possible outcomes, and considering their potential impact on spectrum licenses available in this auction. (Continued from previous page) 66 See id. 67 See “FCC Seeks Comment on Recommendations Approved by the Advisory Committee for the 2007 World Radiocommunication Conference,” Public Notice, 21 FCC Rcd 4859 (2006). 13 Federal Communications Commission DA 06– 2014 14 36. Applicants should perform due diligence to identify and consider all proceedings that may affect the spectrum licenses being auctioned and that could have an impact on the availability of spectrum for Auction No. 69. In addition, although the Commission may continue to act on various pending applications, informal objections, petitions, and other requests for Commission relief, some of these matters may not be resolved by the beginning of bidding in the auction. 37. Applicants are solely responsible for identifying associated risks and for investigating and evaluating the degree to which such matters may affect their ability to bid on, otherwise acquire, or make use of licenses available in Auction No. 69. 38. Applicants may obtain information about non- Federal Government incumbent licenses that may have an effect on availability of licenses in Auction No. 69 through the Bureau’s licensing databases on the World Wide Web at http:// wireless. fcc. gov/ uls. 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 Universal Licensing System (“ 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. 39. 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 its databases. 40. Potential applicants are strongly encouraged to physically inspect any prospective sites located in, or near, the service area for which they plan to bid, and also to familiarize themselves with the environmental review obligations described below in Section I. B. 7. 5. Use of Integrated Spectrum Auction System 41. The Commission will make available a browser- based bidding system to allow bidders to participate in Auction No. 69 over the Internet using the Commission’s Integrated Spectrum Auction System (“ ISAS” or “FCC Auction System”). The Commission makes no warranty whatsoever with respect to the FCC Auction System. In no event shall the Commission, or any of its officers, employees or agents, be liable for any damages whatsoever (including, but not limited to, loss of business profits, business interruption, loss of business information, or any other loss) arising out of or relating to the existence, furnishing, functioning or use of the FCC Auction System that is accessible to qualified bidders in connection with this auction. Moreover, no obligation or liability will arise out of the Commission’s technical, programming or other advice or service provided in connection with the FCC Auction System. 6. Bidder Alerts 42. As is the case with many business investment opportunities, some unscrupulous entrepreneurs may attempt to use Auction No. 69 to deceive and defraud unsuspecting investors. Common warning signals of fraud include the following: 14 Federal Communications Commission DA 06– 2014 17 6. General Contact Information 51. General Contact Information Table GENERAL AUCTION INFORMATION FCC Auctions Hotline General Auction Questions (888) 225- 5322, option two; Seminar Registration or (717) 338- 2868 Hours of service: 8: 00 a. m. – 5: 30 p. m. ET, Monday through Friday AUCTION LEGAL INFORMATION Auctions and Spectrum Access Division Auction Rules, Policies, Regulations (202) 418- 0660 LICENSING INFORMATION Mobility Division Service Rules, Policies, Regulations Licensing Issues, Engineering Issues Due Diligence, Incumbency Issues (202) 418- 0620 TECHNICAL SUPPORT FCC Auctions Technical Support Hotline Electronic Filing (877) 480- 3201, option nine; or (202) 414- 1250 FCC Auction System (202) 414- 1255 (TTY) Hours of service: 8: 00 a. m. – 6: 00 p. m. ET, Monday through Friday PAYMENT INFORMATION FCC Auctions Accounting Branch Wire Transfers (202) 418- 0578 Refunds (202) 418- 2843 (Fax) AUCTION BIDDER LINE Will be furnished only to qualified bidders FCC COPY CONTRACTOR Best Copy and Printing, Inc Additional Copies of 445 12th Street, SW, Room CY- B402 Commission Documents Washington, DC 20554 (800) 378- 3160 http:// www. bcpiweb. com PRESS INFORMATION Chelsea Fallon (202) 418- 7991 FCC FORMS (800) 418- 3676 (outside Washington, DC) (202) 418- 3676 (in the Washington area) http:// www. fcc. gov/ formpage. html ACCESSIBLE FORMATS Consumer and Governmental Affairs Bureau Braille, large print, electronic files, or (202) 418- 0530 or (202) 418- 0432 (TTY) audio format for people with disabilities fcc504@ fcc. gov FCC INTERNET SITES http:// www. fcc. gov http:// wireless. fcc. gov/ auctions http:// wireless. fcc. gov/ uls 17 Federal Communications Commission DA 06– 2014 18 II. SHORT- FORM APPLICATION (FCC FORM 175) REQUIREMENTS 52. An application to participate in an FCC auction, referred to as a short- form application or FCC Form 175, provides information used in determining whether the applicant is legally, technically, and financially qualified to participate in Commission auctions for licenses or permits. 74 The short-form application is the first part of the Commission’s two- phased auction application process. In the first phase of this process, parties desiring to participate in the auction file streamlined, short- form applications in which they certify under penalty of perjury as to their qualifications. 75 Eligibility to participate in bidding is based on the applicants' short- form applications and certifications as well as their upfront payments, explained below. 76 In the second phase of the process, winning bidders file a more comprehensive long- form application. 77 53. Entities seeking licenses available in Auction No. 69 must file a short- form application electronically via the FCC Auction System prior to 6: 00 p. m. ET on December 11, 2006, following the procedures prescribed in Attachment C to this Public Notice. If an applicant claims eligibility for a bidding credit, the information provided in its FCC Form 175 will be used in determining whether the applicant is eligible for the claimed bidding credit. Applicants bear full responsibility for submitting accurate, complete and timely short- form applications. All applicants must certify on their short- form applications under penalty of perjury that they are legally, technically, financially and otherwise qualified to hold a license. 78 Applicants should read the instructions set forth in Attachment C to this Public Notice carefully and should consult the Commission’s rules to ensure that, in addition to the materials described below, all the information that is required under the Commission’s rules is included with their short- form applications. 54. An entity may not submit more than one short- form application for a single auction. In the event that a party submits multiple short- form applications, only one application will be accepted for filing. 55. Applicants also should note that submission of a short- form application constitutes a representation by the certifying official that he or she is an authorized representative of the applicant, that he or she has read the form’s instructions and certifications, and that the contents of the application, its certifications, and any attachments are true and correct. Applicants are not permitted to make major modifications to their applications; such impermissible changes include a change of the certifying official to the application. 79 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. 74 See 47 C. F. R. § 1.2105. 75 See id.; Competitive Bidding Second Report and Order, 9 FCC Rcd at 2376 ¶ 163. 76 See Section III. D. “Upfront Payments – Due January 12, 2007,” infra. 77 See 47 C. F. R. § 1.2107. 78 See 47 C. F. R. § 1.2105( a)( 2)( v). 79 See 47 C. F. R. § 1.2105( b). 18 Federal Communications Commission DA 06– 2014 20 3. Installment Payments 60. Installment payment plans will not be available in Auction No. 69. B. License Selection 61. In Auction No. 69, applicants must select the licenses on which they want to bid from the “Eligible Licenses” list. In Auction No. 69, FCC Form 175 will include a filtering mechanism that allows an applicant to filter the available licenses. The applicant will make selections for one or more of the filter criteria and the system will produce a list of licenses satisfying the specified criteria. The applicant may select all the licenses in the customized list or select individual licenses from the list. Applicants also will be able to select licenses from one customized list and then create additional customized lists to select additional licenses. There will be no opportunity to change license selection after the short- form filing deadline. 87 It is critically important that an applicant confirm its license selections before submitting its short- form application because the FCC Auction System will not accept bids on licenses that an applicant has not selected on its FCC Form 175. C. Disclosure of Bidding Arrangements 62. Applicants will be required to identify in their short- form applications all parties with whom they have entered into any agreements, arrangements, or understandings of any kind relating to the licenses being auctioned, including any agreements relating to post- auction market structure. 88 Applicants also will be required to certify under penalty of perjury in their short- form applications that they have not entered and will not enter into any explicit or implicit agreements, arrangements or understandings of any kind with any parties, other than those identified in the application, regarding the amount of their bids, bidding strategies, or the particular licenses on which they will or will not bid. 89 If an applicant has had discussions, but has not reached a joint bidding agreement by the short- form application filing deadline, it would not include the names of parties to the discussions on its application and may not continue such discussions with any applicants after the deadline. 90 63. After the filing of short- form applications, the Commission’s rules do not prohibit a party holding a non- controlling, attributable interest in one applicant from acquiring an ownership interest in or entering into a joint bidding arrangement with other applicants provided that (i) the attributable interest holder certifies that it has not and will not communicate with any party concerning the bids or bidding strategies of more than one of the applicants in which it holds an attributable interest, or with which it has entered into a joint bidding arrangement; and (ii) the arrangements do not result in a change in control of any of the applicants. 91 While the anti- collusion rules do not prohibit non- auction-related business negotiations among auction applicants, applicants are reminded that certain discussions or exchanges could touch upon impermissible subject matters because they may convey pricing information and bidding strategies. 92 Further, as discussed above, compliance with the disclosure requirements of the Commission’s anti- collusion rule will not insulate a party from enforcement of the antitrust laws. 93 87 47 C. F. R. § 1.2105( b)( 2). 88 47 C. F. R. § 1. 2105( a)( 2)( viii), (c)( 1). 89 47 C. F. R. § 1.2105( a)( 2)( ix). 90 See Section I. B. 2 “Prohibition of Collusion; Compliance with Antitrust Laws,” supra. 91 47 C. F. R. § 1.2105( c)( 4)( i), (ii). 92 See Section I. B. 2 “Prohibition of Collusion; Compliance with Antitrust Laws,” supra. 93 See id. 20 Federal Communications Commission DA 06– 2014 21 D. Ownership Disclosure Requirements 64. All applicants must comply with the uniform Part 1 ownership disclosure standards and provide information required by Sections 1.2105 and 1.2112 of the Commission’s rules. 94 Specifically, in completing the short- form application, applicants will be required to fully disclose information on the real party or parties- in- interest and ownership structure of the applicant. The ownership disclosure standards for the short form are prescribed in Sections 1.2105 and 1.2112 of the Commission’s rules. 95 Each applicant is responsible for information submitted in its short- form application being complete and accurate. 65. An applicant’s most current ownership information on file with the Commission, if in an electronic format compatible with the short- form application (FCC Form 175) (such as information submitted in an on- line FCC Form 602 or in an FCC Form 175 filed for a previous auction using ISAS) will automatically be entered into the applicant’s short- form application. Applicants are responsible for ensuring that the information submitted in their FCC Form 175 for Auction No. 69 is complete and accurate. Accordingly, applicants should carefully review any information automatically entered to confirm that it is complete and accurate as of the deadline for filing the short- form application. Applicants can update any information that was entered automatically and needs to be changed directly in the short- form application. E. Bidding Credit Revenue Disclosures 66. To determine which applicants qualify for bidding credits as small businesses or very small businesses, the Commission considers the gross revenues of the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests. 96 Therefore, entities applying to bid as small businesses or very small businesses (or consortia of small businesses or very small businesses) will be required to disclose on their FCC Form 175 short- form applications the gross revenues of each of the following for the preceding three years: (1) the applicant, (2) its affiliates, (3) its controlling interests, and (4) the affiliates of its controlling interests. 97 Certification that the average annual gross revenues of such entities and individuals for the preceding three years do not exceed the applicable limit is not sufficient. In order to comply with the Commission’s disclosure requirements for bidding credit eligibility, an applicant must provide separately for itself, its affiliates, its controlling interests, and the affiliates of its controlling interests, the gross revenues for each of the preceding three years. If the applicant is applying as a consortium of small businesses or very small businesses, this information must be provided for each consortium member. 67. Controlling interests of an applicant include individuals and entities with either de facto or de jure control of the applicant. Typically, ownership of at least 50.1 percent of an entity’s voting stock evidences de jure control. De facto control is determined on a case- by- case basis. 98 The following are some common indicia of de facto control: 94 47 C. F. R. § 1. 2105 requires the disclosure on the short- form application of the applicant’s ownership information as set forth in 47 C. F. R. §§ 1.2105 and 1.2112. 95 See id. 96 § 1. 2110( b); see also Part 1 Fifth Report and Order, 15 FCC Rcd at 15323- 27 ¶¶ 59- 67. 97 § 1. 2110( b). 98 For further guidance on the issue of de facto control, see the Commission’s affiliation rule at 47 C. F. R. §1. 2110( b)( 5); see also Intermountain Microwave, 12 FCC 2d. 559, 560 (1963), and Application of Baker Creek Communications, L. P., for Authority to Construct and Operate Local Multipoint Distribution Services in Multiple Basic Trading Areas, Memorandum Opinion and Order, 13 FCC Rcd 18709 (1998). 21 Federal Communications Commission DA 06– 2014 23 F. Provisions Regarding Former and Current Defaulters 71. Each applicant must state under penalty of perjury on its short- form application whether or not the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests, as defined by Section 1.2110, 107 have ever been in default on any Commission licenses or have ever been delinquent on any non- tax debt owed to any Federal agency. 108 In addition, each applicant must certify under penalty of perjury on its short- form application that as of the short- form filing deadline, the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests, as defined by Section 1.2110, are not in default on any payment for Commission licenses (including down payments) and that they are not delinquent on any non- tax debt owed to any Federal agency. 109 Prospective applicants are reminded that 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. 72. “Former defaulters” — i. e., applicants, including any of their affiliates, any of their controlling interests, or any of the affiliates of its controlling interests, 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. 69, provided that they are otherwise qualified. However, as discussed in Section III. D. 3., infra, former defaulters are required to pay upfront payments that are fifty percent more than the normal upfront payment amounts. 110 73. “Current defaulters” — i. e., applicants, including any of their affiliates, any of their controlling interests, or any of the affiliates of their controlling interests, that are in default on any payment for any Commission licenses (including down payments) or are delinquent on any non- tax debt owed to any Federal agency as of the filing deadline for applications to participate in this auction – are not eligible to bid in Auction No. 69. 111 74. Applicants are encouraged to review the Bureau’s previous guidance on default and delinquency disclosure requirements in the context of the short- form application process. 112 For example, it has been determined that to the extent that Commission rules permit late payment of regulatory or application fees accompanied by late fees, such debts will become delinquent for purposes (Continued from previous page) Commission’s rules to understand how the members of the consortia will apply for a license in the event they are winning bidders. 107 47 C. F. R. § 1.2110. 108 47 C. F. R. § 1.2105( a)( 2)( xi); Part 1 Fifth Report and Order, 15 FCC Rcd at 15317 ¶ 42 and n. 142. 109 47 C. F. R. § 1.2105( a)( 2)( x); Part 1 Fifth Report and Order, 15 FCC Rcd at 15317 ¶ 42. 110 47 C. F. R. § 1.2106( a). 111 See 47 C. F. R. §§ 1.2105( a)( 2)( x) and 1. 2105( b)( 1); see Part 1 Fifth Report and Order, 15 FCC Rcd at 15317 ¶ 42 and n. 142 (“ If any one of an applicant’s controlling interests or their affiliates… is in default on any Commission licenses or is delinquent on any non- tax debt owed to any Federal agency at the time the applicant files it[ s] FCC Form 175, the applicant will not be able to make the certification required by Section 1. 2105( a)( 2)( x)… and will not be eligible to participate in Commission auctions.”) 112 See “WTB Reminds Prospective Broadband PCS Spectrum Auction Applicants of Default and Delinquency Disclosure Requirements,” Public Notice, 19 FCC Rcd 21920 (2004) (“ Auction Default Disclosure Public Notice”). This public notice may be found at http:// wireless. fcc. gov/ auctions/ 58/. 23 Federal Communications Commission DA 06– 2014 24 of Sections 1.2105( a) and 1. 2106( a) only after the expiration of a final payment deadline. 113 Therefore, with respect to regulatory or application fees, the provisions of Sections 1.2105( a) and 1.2106( a) regarding default and delinquency in connection with competitive bidding are limited to circumstances in which the relevant party has not complied with a final Commission payment deadline. 114 75. The Commission considers outstanding debts owed to the United States Government, in any amount, to be a serious matter. The Commission adopted rules, including a provision referred to as the "red light rule," that implement the Commission's obligations under the Debt Collection Improvement Act of 1996, which governs the collection of claims owed to the United States. 115 Under the red light rule, the Commission will not process applications and other requests for benefits filed by parties that have outstanding debts owed to the Commission. In the same rulemaking order, the Commission explicitly declared, however, that the Commission's competitive bidding rules "are not affected" by the red light rule. 116 As a consequence, the Commission's adoption of the red light rule does not alter the applicability of any of the Commission's competitive bidding rules, including the provisions and certifications of Sections 1.2105 and 1.2106, with regard to current and former defaults or delinquencies. Applicants are reminded, however, that the Commission’s Red Light Display System, which provides information regarding debts owed to the Commission, may not be determinative of an auction applicant’s ability to comply with the default and delinquency disclosure requirements of section 1.2105. 117 Thus, while the red light rule ultimately may prevent the processing of long- form applications by auction winners, an auction applicant’s “red light” status is not necessarily determinative of its eligibility to participate in this auction or of its upfront payment obligation. 76. Prospective applicants in Auction No. 69 should note that any long- form applications filed after the close of competitive bidding will be reviewed for compliance with the Commission’s red light rule, 118 and such review may result in the dismissal of a winning bidder's long- form application. 119 113 See Letter to Cheryl A. Tritt, Esq., Morrison and Foerster, LLP, from Margaret Wiener, Chief, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, 19 FCC Rcd 22907 (2004) (clarifying the term “debt” or “non- tax debt” as referenced in 47 C. F. R. §§ 1. 2105( a) and 1. 2106( a)). This letter may be found at: http:// wireless. fcc. gov/ auctions/ 58/. 114 Even where Commission rules expressly permit late payment, subject to payment of an additional late fee, and do not impose a final payment deadline, the Commission may in some cases issue a demand for payment by a date certain. See 47 C. F. R. § 1.1164( a). Failure to comply with the terms of a particular demand letter in the time period provided may render the subject debt delinquent, notwithstanding rules generally permitting late payment. 115 Amendment of Parts 0 and 1 of the Commission's Rules; Implementation of the Debt Collection Improvement Act of 1996 and Adoption of Rules Governing Applications or Requests for Benefits by Delinquent Debtors, MD Docket No. 02- 339, Report and Order, 19 FCC Rcd 6540 (2004) (implementing Pub. L. No. 104- 134, 110 Stat. 1321, 1358 (1996)) (“ Debt Collection Report and Order”). 116 Debt Collection Report and Order, 19 FCC Rcd at 6541 n. 11. Footnote 11 specifically mentions 47 C. F. R. § 1.2105( a)( 2)( x) and (xi). 117 See Auction Default Disclosure Public Notice, 19 FCC Rcd at 21920 (addressing relationship between Commission’s Red Light Display System and FCC Form 175 default and delinquency disclosure requirements for auction applicants). 118 See Debt Collection Report and Order, 19 FCC Rcd 6540. See also 47 C. F. R. § 1. 1112. 119 Applicants that have their long- form applications dismissed will be deemed to have defaulted and will be subject to default payments under 47 C. F. R. §§ 1. 2104( g) and 1.2109( c). 24 Federal Communications Commission DA 06– 2014 25 G. Other Information 77. Applicants owned by member of minority groups and/ or women, as defined in Section 1.2110( c)( 3), 120 may identify themselves in filling out their short- form applications 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. 121 H. Minor Modifications to Short- Form Applications (FCC Form 175) 78. As of the deadline for filing short- form applications (FCC Forms 175) at 6: 00 p. m. ET on December 11, 2006, applicants are permitted to make only minor changes to their applications. Applicants are not permitted to make major modifications to their applications (e. g., change their license selections, change control of the applicant, change the certifying official, or claim eligibility for a higher bidding credit). 122 Permissible minor changes include, for example, deletion and addition of authorized bidders (to a maximum of three) and revision of addresses and telephone numbers of the applicants and their contact persons. 79. Any application amendment and related statements of fact must be certified by: (1) the applicant, if the applicant is an individual, (2) one of the partners if the applicant is a partnership, (3) an officer, director, or duly authorized employee, if the applicant is a corporation, (4) by a member who is an officer, if the applicant is an unincorporated association, (5) the trustee if the applicant is an amateur radio service club, or (6) a duly elected or appointed official who is authorized to make such certifications under the laws of the applicable jurisdiction, if the applicant is a governmental entity. 123 80. An applicant must make permissible minor changes to its short- form application, as such changes are defined by Section 1.2105( b), electronically, using the FCC Auction System. Applicants must click on the SUBMIT button in the FCC Auction System for the changes to be submitted and considered by the Commission. After the revised application has been submitted, a confirmation page will be displayed that states the submission time and date, along with a unique file number. 81. In addition, an applicant should submit a letter briefly summarizing the changes and subsequently update their short- form applications in ISAS as soon as possible. Note: After the filing window has closed, the auction system will not permit applicants to make certain changes, such as legal classification, and bidding credit. Any letter describing changes to an applicant’s short- form application should be submitted by electronic mail to the following address: auction69@ fcc. gov. The electronic mail summarizing the changes must include a subject or caption referring to Auction No. 69 and the name of the applicant (e. g., “RE: Changes to Auction No. 69 Short- Form Application of ABC Corp.”). The Bureau requests that parties format any attachments to electronic mail as Adobe ® Acrobat ® (pdf) or Microsoft ® Word documents. Questions about short- form application (FCC Form 175) amendments should be directed to Howard Davenport of the Auctions and Spectrum Access Division at (202) 418- 0660. 82. Applicants must not submit application- specific material through the Commission’s Electronic Comment Filing System (ECFS), which was used for submitting comments regarding Auction No. 69 procedures. 120 47 C. F. R. § 1.2110( c)( 3). 121 Designated entities are defined as small businesses, businesses owned by members of minority groups and/ or women, and rural telephone companies. See 47 C. F. R. § 1.2110( a). 122 See 47 C. F. R. § 1.2105( b). 123 See 47 C. F. R. § 1.917. 25 Federal Communications Commission DA 06– 2014 26 I. Maintaining Current Information in Short- Form Applications (FCC Form 175) 83. 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. 124 Changes that cause a loss of or reduction in eligibility for a bidding credit must be reported immediately. If an amendment reporting substantial changes is a “major amendment” as defined by 47 C. F. R. § 1. 2105, the major amendment will not be accepted and may result in the dismissal of the short- form application. 125 84. As noted in Section II. H., after the short- form filing deadline, applicants may make only minor changes to their FCC Form 175 applications, for example, deletion and addition of authorized bidders (to a maximum of three). Applicants must click on the SUBMIT button in the FCC Auction System for the changes to be submitted and considered by the Commission. In addition, applicants must submit a letter, briefly summarizing the changes, by electronic mail at the following address: auction69@ fcc. gov. The electronic mail summarizing the changes must include a subject or caption referring to Auction No. 69 and the name of the applicant. The Bureau requests that parties format any attachments to electronic mail as Adobe ® Acrobat ® (pdf) or Microsoft ® Word documents. 85. Applicants must not submit application- specific material through ECFS into the record of the proceeding concerning Auction No. 69 procedures. III. PRE- AUCTION PROCEDURES A. Auction Seminar —November 29, 2006 86. On Wednesday, November 29, 2006, the FCC will sponsor a free seminar for parties interested in participating in Auction No. 69 at the FCC headquarters, located at 445 12 th Street, SW, Washington, DC. The seminar will provide attendees with information about pre- auction procedures, completing FCC Form 175, auction conduct, the FCC Auction System, auction rules, and the 1.4 GHz band rules. The seminar will also provide an opportunity for prospective bidders to ask questions of FCC staff concerning the auction, auction procedures, filing requirements and other matters related to this auction. 87. To register, please provide the information listed on Attachment B by Monday, November 27, 2006. Registrations are accepted on a first- come, first- served basis. 88. For individuals who are unable to attend, an Audio/ Video webcast of this seminar will be available from the FCC’s Auction No. 69 web page at http:// wireless. fcc. gov/ auctions/ 69/. Select the “Auction Seminar” link. The seminar webcast will be archived for future viewing, and will be available for viewing on a 24/ 7 basis once it is posted on the Auction No. 69 web page. B. Short- Form Application (FCC Form 175) — Due Prior to 6: 00 p. m. ET on December 11, 2006 89. In order to be eligible to bid in this auction, applicants must first submit an FCC Form 175 application electronically via the FCC Auction System. 126 This application must be received at the Commission prior to 6: 00 p. m. ET on December 11, 2006. Late applications will not be accepted. 124 47 C. F. R. § 1.65. 125 See 47 C. F. R. § 1.2105( b)( 2). 126 47 C. F. R. § 12105( a). 26 Federal Communications Commission DA 06– 2014 27 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. 127 90. Applications may generally be filed at any time beginning at noon ET on November 29, 2006, and the filing window will close at 6: 00 p. m. ET on December 11, 2006. Applicants are strongly encouraged to file early and are responsible for allowing adequate time for filing their applications. Applicants may update or amend their applications multiple times until the filing deadline on December 11, 2006. 91. Applicants must always click on the SUBMIT button on the Certify & Submit screen of the electronic form to successfully submit their FCC Form 175’s or modifications. Any form that is not submitted will not be reviewed by the FCC. Information about accessing, completing, and viewing the FCC Form 175 is included in Attachment C. FCC Auctions Technical Support is available at (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (text telephone (TTY)); hours of service are Monday through Friday, from 8: 00 a. m. to 6: 00 p. m. ET. In order to provide better service to the public, all calls to Technical Support are recorded. C. Application Processing and Minor Corrections 92. 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; (2) those applications rejected; and (3) those applications which have minor defects that may be corrected, and the deadline for resubmitting corrected applications. 93. As described more fully in the Commission’s rules, after the December 11, 2006, 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 license selections, change control of the applicant, change certifying official, or claim eligibility for a higher bidding credit). 128 D. Upfront Payments — Due January 12, 2007 94. In order to be eligible to bid in the auction, applicants must submit an upfront payment accompanied by an 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 sent by facsimile to Mellon Bank in Pittsburgh, PA. All upfront payments must be received in the proper account at Mellon Bank by 6: 00 p. m. ET on January 12, 2007. 1. Making Auction Payments by Wire Transfer 95. Wire transfer payments must be received by 6: 00 p. m. ET on January 12, 2007. 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 500 Ross St. 127 See Section III. D. “Upfront Payments — Due January 12, 2007,” infra. 128 47 C. F. R. § 1.2105( b); see also Two Way Radio of Carolina, Inc., Memorandum Opinion and Order, 14 FCC Rcd 12035 (1999). 27 Federal Communications Commission DA 06– 2014 29 3. Upfront Payments and Bidding Eligibility 99. In the Part 1 Order, the Commission delegated to the Bureau the authority and discretion to determine appropriate upfront payment( s) for each auction. 130 In addition, in the Part 1 Fifth Report and Order, the Commission ordered that applicants that are former defaulters be required to pay upfront payments 50 percent greater than non- former defaulters. 131 For purposes of this calculation, the “applicant” includes the applicant itself, its affiliates, its controlling interests, and affiliates of its controlling interests, as defined by Section 1.2110 of the Commission’s rules. 132 100. In the Auction No. 69 Comment Public Notice, we proposed that the amount of the upfront payment would determine a bidder’s initial bidding eligibility, the maximum number of bidding units on which a bidder may place bids. 133 In order to bid on a license, otherwise qualified bidders that selected that license on Form 175 must have a current eligibility level that meets or exceeds the number of bidding units assigned to that license. At a minimum, therefore, an applicant’s total upfront payment must be enough to establish eligibility to bid on at least one of the licenses selected on its Form 175, or else the applicant will not be eligible to participate in the auction. An applicant does not have to make an upfront payment to cover all licenses the applicant selected on its Form 175, but rather to cover the maximum number of bidding units that are associated with licenses on which the bidder wishes to place bids and hold provisionally winning bids at any given time. 134 101. In the Auction No. 69 Comment Public Notice, the Bureau proposed to calculate upfront payments for Auction No. 69 on a license- by- license basis using the following formula: $0.005 * MHz * License Area Population with a minimum of $1,000 per license. 135 The Bureau set forth the specific upfront payments and bidding units for each license in Attachment A of the Auction No. 69 Comment Public Notice and sought comment on this proposal. The Bureau received no comments in response to the proposed upfront payments. The specific upfront payments and bidding units for each license are set forth in Attachment A of this public notice. 102. Upfront payments help deter frivolous or insincere bidding. In addition, upfront payments provide the Commission with a source of funds in the event that the bidder incurs liability during the auction. Applicants must make upfront payments sufficient to obtain bidding eligibility on the licenses on which they will bid. 103. In calculating its upfront payment amount, an applicant should determine the maximum number of bidding units on which it may wish to be active (bid on or hold provisionally winning bids 130 Amendment of Part 1 of the Commission’s Rules — Competitive Bidding Proceeding, Order, Memorandum Opinion and Order and Notice of Proposed Rule Making, 12 FCC Rcd 5686, 5697- 98 ¶ 16 (1997) (“ Part 1 Order”). 131 Part 1 Fifth Report and Order, 15 FCC Rcd at 15316- 17 ¶¶ 40- 42; 47 C. F. R. § 1.2106( a); see Section II. F. “Provisions Regarding Former and Current Defaulters,” supra. 132 47 C. F. R. § 1.2110( c). 133 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9499. 134 Provisionally winning bids are bids that would become final winning bids if the auction were to close after the given round. See Section IV. B. 4. “Provisionally Winning Bids,” infra. 135 All population figures are from the 2000 U. S. Census, U. S. Department of Commerce, Bureau of the Census. See Census 2000 Summary File 1 (SF1) and July 3, 2001, News Releases covering the U. S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Results are rounded using our standard rounding procedure: results above $10,000 are rounded to the nearest $1, 000; results below $10, 000 but above $1, 000 are rounded to the nearest $100; and results below $1, 000 are rounded to the nearest $10. 29 Federal Communications Commission DA 06– 2014 30 on) in any single round, and submit an upfront payment amount covering that number of bidding units. 136 In order to make this calculation, an applicant should add together the upfront payments for all licenses on which it seeks to be active in any given round. Applicants should check their calculations carefully, as there is no provision for increasing a bidder’s eligibility after the upfront payment deadline. Example: Upfront Payments and Bidding Flexibility Market Number Market Name Bidding Units Upfront Payment EAG001- A Northeast 661,000 $661, 000 EAG005- B Central/ Mountain 740,000 $740, 000 If a bidder wishes to bid on both licenses in a round, it must have selected both on its FCC Form 175 and purchased at least 1,401,000 bidding units (661,000 + 740,000). If a bidder only wishes to bid on one, but not both, purchasing 740,000 bidding units would meet the requirement for either license. The bidder would be able to bid on either license, but not both at the same time. If the bidder purchased only 661,000 bidding units, it would have enough eligibility for the Northeast license but not for the Central/ Mountain license. 104. “Former defaulters” should calculate their upfront payment for all licenses by multiplying the number of bidding units on which they wish to be active by 1.5. 137 In order to calculate the number of bidding units to assign to former defaulters, the Commission will divide the upfront payment received by 1.5 and round the result up to the nearest bidding unit. If a “former defaulter” fails to submit a sufficient upfront payment to establish eligibility to bid on at least one of the licenses applied for on its Form 175, the applicant will not be eligible to participate in the auction. 4. Applicant’s Wire Transfer Information for Purposes of Refunds of Upfront Payments 105. To ensure that refunds of upfront payments are processed in an expeditious manner, the Commission is requesting that all pertinent information listed below be supplied to the FCC. Applicants can provide the information electronically during the initial short- form application filing window after the form has been submitted. (Applicants are reminded that information submitted as part of an FCC Form 175 will be available to the public; for that reason, wire transfer information should not be included in an FCC Form 175.) Wire Transfer Instructions can also be manually sent by facsimile to the FCC, Financial Operations Center, Auctions Accounting Group, ATTN: Gail Glasser, at (202) 418- 2843. All refunds will be returned to the payer of record as identified on the FCC Form 159 unless the payer submits written authorization instructing otherwise. For additional information, please call Gail Glasser at (202) 418- 0578. Name of Bank ABA Number 136 In some cases a qualified bidder's maximum eligibility may be less than the amount of its upfront payment because the qualified bidder has either previously been in default on a Commission license or delinquent on non- tax debt owed to a Federal agency (see 47 C. F. R. section 1.2106( a)), or has submitted an upfront payment that exceeds the total amount of bidding units associated with the licenses it selected on its FCC Form 175 application. 137 47 C. F. R. § 1.2106( a). 30 Federal Communications Commission DA 06– 2014 31 Address of Bank Contact and Phone Number Account Number to Credit Name of Account Holder FCC Registration Number (FRN) Taxpayer Identification Number (see below) Correspondent Bank (if applicable) ABA Number Account 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. 138 ) Eligibility for refunds is discussed in Section V. G., below. E. Auction Registration 106. 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 FCC Form 175 applications have been accepted for filing and have timely submitted upfront payments sufficient to make them eligible to bid. 107. All qualified bidders are automatically registered for the auction. Registration materials will be distributed prior to the auction by overnight mail. The mailing will be sent only to the contact person at the contact address listed in the FCC Form 175 and will include the SecurID® cards that will be required to place bids, the Integrated Spectrum Auction System (ISAS) Bidder’s Guide, and the Auction Bidder Line phone number. 108. Qualified bidders that do not receive this registration mailing will not be able to submit bids. Therefore, any qualified bidder that has not received this mailing by noon on Thursday, February 1, 2007, should call (717) 338- 2868. Receipt of this registration mailing is critical to participating in the auction, and each applicant is responsible for ensuring it has received all of the registration material. 109. In the event that SecurID ® cards are lost or damaged, only a person who has been designated as an authorized bidder, the contact person, or the certifying official on the applicant’s short-form application may request replacement registration material. Qualified bidders requiring the replacement of these items must call Technical Support at (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY). F. Remote Electronic Bidding 110. The Commission will conduct this auction over the Internet, and telephonic bidding will be available as well. Qualified bidders are permitted to bid electronically and telephonically. Each applicant should indicate its bidding preference – electronic or telephonic – on the FCC Form 175. In either case, each authorized bidder must have its own SecurID ® card, which the FCC will provide at no charge. Each applicant with one authorized bidder will be issued two SecurID cards, while applicants with two or three authorized bidders will be issued three cards. For security purposes, the SecurID ® cards, the telephonic bidding telephone number, and the Integrated Spectrum Auction System (ISAS) Bidder’s Guide are only mailed to the contact person at the contact address listed on the FCC Form 175. Please note that each SecurID ® card is tailored to a specific auction; therefore, 138 47 C. F. R. § 1.1910. 31 Federal Communications Commission DA 06– 2014 32 SecurID ® cards issued for other auctions or obtained from a source other than the FCC will not work for Auction No. 69. 111. Please note that the SecurID ® cards can be recycled, and we 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 closed. G. Mock Auction – February 5, 2007 112. All qualified bidders will be eligible to participate in a mock auction on Monday, February 5, 2007. The mock auction will enable applicants to become familiar with the FCC Auction System prior to the auction. Participation by all bidders is strongly recommended. Details will be announced by public notice. IV. AUCTION EVENT 113. The first round of bidding for Auction No. 69 will begin on Wednesday, February 7, 2007. The initial bidding schedule will be announced in a public notice listing the qualified bidders, which is to be released approximately 10 days before the start of the auction. A. Auction Structure 1. Simultaneous Multiple Round Auction 114. In the Auction No. 69 Comment Public Notice, we proposed to auction all 1.4 GHz bands licenses in a single auction using the Commission’s standard simultaneous multiple- round (“ SMR”) auction format. 139 This type of auction offers every license for bid at the same time and consists of successive bidding rounds in which eligible bidders may place bids on individual licenses. A bidder may bid on, and potentially win, any number of licenses. Typically, bidding remains open on all licenses until bidding stops on every license, unless a modified stopping rule is invoked. 115. We also sought comment on using a simultaneous multiple- round with package bidding (“ SMR- PB”) format for Auction No. 69. While Itron, Inc. (“ Itron”) advocated in its brief comments that we employ package bidding because bidders likely will wish to aggregate licenses to put together nationwide coverage or coverage of substantial parts of the country, we note that the SMR format addresses such a need to aggregate spectrum licenses. 140 We do not believe that the circumstances of Auction No. 69 present significant conflicting complementarities that could weigh more strongly in favor of package bidding. 141 116. Paul Milgrom and Karen Wrege filed comments suggesting that package bidding be used and recommending modifications to the SMR- PB format as programmed in the FCC Auction System, noting that the current package bidding format may be too complex. 142 As discussed above, we are not persuaded that the economic characteristics of the 1.4 GHz Band weigh in favor of package bidding and therefore, we will not use an SMR- PB format for Auction No. 69. As a result, we do not address the specifics of the SMR- PB format at this time. 139 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9497. 140 Itron, Inc. comments at 2. 141 See, e. g., Auction of Advanced Wireless Services Licenses Scheduled for June 29, 2006; Comment Sought on Reserve Prices or Minimum Opening Bids and Other Procedures,” Public Notice, 21 FCC Rcd 794, 797- 8 (2006) (“ Auction No. 66 Comment Public Notice”). 142 Paul Milgrom and Karen Wrege comments at 2. 32 Federal Communications Commission DA 06– 2014 33 117. We conclude that our standard SMR auction format will meet the needs of bidders in Auction No. 69, and we adopt our proposal to use a simultaneous multiple- round auction format without package bidding. Unless otherwise announced, bids will be accepted on all licenses in each round of the auction until bidding stops on every license. This approach, we believe, allows bidders to take advantage of synergies that exist among licenses. 2. Information Available to Bidders Before and During the Auction 118. In the Auction No. 69 Comment Public Notice, we sought comment on whether to implement procedures that would limit the disclosure of information on bidder interests and identities relative to the information procedures that have typically been used for Commission auctions. In that connection, we sought comment on whether technological considerations or the likely level of competition in Auction No. 69 weigh in favor of or against limiting the disclosure of information on bidder interests and identities relative to most past Commission spectrum auctions, or whether the Commission should condition the implementation of such limits on a measure of the competitiveness of the auction, such as the eligibility ratio or a modified version of the eligibility ratio. 143 We received no comments on this issue. 119. Although the Commission has the option to limit the availability of information on an auction- by- auction basis, in the past, the Commission generally has elected not to limit such information. 144 However, as discussed by the Commission in connection with Auction No. 66, there are potential harms as well as benefits from publicly revealing all information during the auction process. 145 The potential harms from anti- competitive behavior facilitated by the release of certain information are likely to be greater when the auction is less competitive – that is, when the number of bidders and the level of upfront payments are relatively low compared to the number of licenses offered. Therefore, for Auction No. 69, we will use limited information procedures if it appears likely that the competitiveness of the auction will be low, and if we believe that limited information procedures will be effective in making anti- competitive behavior less likely to be successful. Alternatively, if we determine that the auction is likely to be sufficiently competitive, and therefore, that the risk of successful collusion is low, we will make available bidding information that we typically have made available in previous Commission auctions. 120. Specifically, we will estimate the likely level of competition in the auction by considering the eligibility ratio, defined as the total number of bidding units of eligibility purchased by bidders through their upfront payments divided by the total number of bidding units for the licenses in the auction. If the eligibility ratio equals or exceeds three, we will use the information procedures typically used in past FCC auctions. If the eligibility ratio is less than three, in general we will withhold certain information on bidder interests and bidder identities. 121. However, if the eligibility ratio is less than three, we reserve the discretion to use information procedures typically used in past FCC auctions if circumstances indicate that limited information procedures would be not be an effective tool for deterring anti- competitive behavior. For example, if only two applicants become qualified to participate in the bidding, limited information procedures would be ineffective in preventing bidders from knowing the identity of the competing bidder and, therefore, limited information procedures would not serve to deter attempts at signaling and retaliatory bidding behavior. We anticipate announcing the information disclosure procedures to be 143 Auction No. 69 Comment Public Notice at 9497. 144 Auction No. 66 Procedures Public Notice at¶¶ 140- 157; see also Auction No. 66 Comment Public Notice at 6- 7. 145 See Auction No. 66 Comment Public Notice, 21 FCC Rcd at 799- 800. 33 Federal Communications Commission DA 06– 2014 34 used at or about the time that we release a public notice announcing the applicants that are qualified to participate in the bidding. 122. If it is determined that limited information procedures will be used, we will make available prior to the auction the total eligibility level for the auction as well as the eligibility of each bidder, but will not identify bidders’ license selections. After each round of bidding, the amounts of each bid placed will be made available, but not the identities of the bidders. This information will give bidders an indication of demand for the licenses, so that bidders and their investors will be able to assess whether their bids are likely to be consistent with the valuations of other bidders, mitigating fear of the winner’s curse. In addition, after each round bidders logged in to the FCC Auction System will be able to access reports indicating whether their own bids are provisionally winning. 123. Other Issues. We do not believe that the information disclosure procedures established for this auction will interfere with the administration of or compliance with the Commission’s anti-collusion rule. Section 1.2105( c)( 1) of the Commission’s rules provides that after the short- form application filing deadline, all applicants for licenses in any of the same geographic license areas are prohibited from disclosing to each other in any manner the substance of bids or bidding strategies until after the down payment deadline, subject to specified exceptions. 146 In past auctions, each applicant’s selection of licenses has been publicly available through the Commission’s on- line short- form application database. In Auction No. 69, however, the Commission will not disclose information regarding license selection at least until the upfront payment deadline has passed and the Commission determines the information disclosure procedures to be used for the auction. As in the past, the Commission will disclose the other portions of applicants’ short- form applications, through its on- line database and certain application- based information through public notices. Thus, even without information regarding license selection, applicants would be able to comply with Section 1.2105( c) by not disclosing bids or bidding strategies to any other applicants in the auction. This approach, however, could inhibit otherwise lawful communications with applicants for licenses in other geographic license areas, which the Commission’s rule permits. 147 Consequently, the Bureau will notify separately each applicant with short- form applications to participate in a pending auction, including but not limited to Auction No. 69, whether applicants in Auction No. 69 have applied for licenses in any of the same geographic areas as that applicant. Specifically, after the Bureau conducts its initial review of applications to participate in Auction No. 69, each applicant with a short- form application to participate in a pending auction will receive a letter that lists the applicants in Auction No. 69 that have applied for licenses in any of the same geographic areas as the applicant. The list will identify the Auction No. 69 applicant( s) by name but will not list the license selections of the Auction No. 69 applicant( s). As in past auctions, additional information regarding applicants in Auction No. 69 that is needed to comply with Section 1.2105( c), e. g., the identities of controlling interest in the applicant and ownership interests greater than ten percent (10%), will be available through the publicly accessible on- line short-form application database. 148 146 47 C. F. R. § 1.2105( c)( 1). 147 As discussed at greater length elsewhere in this Public Notice, other laws may prohibit particular communications regarding bids and bidding strategies. Nothing in the Commission’s rules or procedures insulates applicants against liability for violating such laws, e. g., applicable anti- trust laws. 148 For purposes of Section 1.2105( c), the term applicant includes all controlling interests, all parties with ownership interests greater than ten percent (10%) and all officers and directors of the applicant. 47 C. F. R. § 1.2105( c)( 7). 34 Federal Communications Commission DA 06– 2014 35 3. Eligibility and Activity Rules 124. In the Auction No. 69 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. 149 We received no comments on this issue. 125. We adopt the proposed use of upfront payments to determine initial (maximum) eligibility (as measured in bidding units) for Auction No. 69. The amount of the upfront payment submitted by a bidder determines initial bidding eligibility, the maximum number of bidding units on which a bidder may be active. As noted earlier, each license is assigned a specific number of bidding units equal to the upfront payment listed in Attachment A on a bidding unit per dollar basis. Bidding units for a given license do not change as prices rise during the auction. A bidder’s upfront payment is not attributed to specific licenses. Rather, a bidder may place bids on any of the licenses selected on its FCC Form 175 as long as the total number of bidding units associated with those licenses does not exceed its current eligibility. Eligibility cannot be increased during the auction; it can only remain the same or decrease. Thus, in calculating its upfront payment amount, an applicant must determine the maximum number of bidding units it may wish to bid on or hold provisionally winning bids on in any single round, and submit an upfront payment amount covering that total number of bidding units. The total upfront payment does not affect the total dollar amount a bidder may bid on any given license. 126. In order to ensure that an auction closes within a reasonable period of time, an activity rule requires bidders to bid actively throughout the auction, rather than wait until late in the auction before participating. Bidders are required to be active on a specific percentage of their current bidding eligibility during each round of the auction. 127. A bidder’s activity level in a round is the sum of the bidding units associated with licenses on which the bidder is active. A bidder is considered active on a license in the current round if it is either the provisionally winning bidder at the end of the previous bidding round and does not withdraw the provisionally winning bid in the current round, or if it submits a bid in the current round (see “Bid Amounts” in Section IV. B. 3, below). The minimum required activity is expressed as a percentage of the bidder’s current eligibility, and increases by stage as the auction progresses. Because these procedures have proven successful in maintaining the pace of previous auctions (as set forth under “Auction Stages” in Section IV. A. 4 and “Stage Transitions” in Section IV. A. 5, below), we adopt them for Auction No. 69. Failure to maintain the requisite activity level will result in the use of an activity rule waiver, if any remain, or a reduction in the bidder’s eligibility, possibly curtailing or eliminating the bidder’s ability to place bids in the auction. 150 4. Auction Stages 128. In the Auction No. 69 Comment Public Notice, we proposed to conduct the auction in two stages and employ an activity rule. We further proposed that, in each round of Stage One, a bidder desiring to maintain its current bidding eligibility would be required to be active on licenses representing at least 80 percent of its current bidding eligibility. 151 Finally, we proposed that in each round of Stage Two, a bidder desiring to maintain its current bidding eligibility would be required to be active on at least 95 percent of its current bidding eligibility. We received no comments on this proposal. 149 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9499. 150 See supra Section IV. A. 6. “Activity Rule Waivers.” 151 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9500. 35 Federal Communications Commission DA 06– 2014 36 129. We adopt our proposals for the activity rules and stages. Below are the activity levels for each stage of the auction. The Bureau reserves the discretion to further alter the activity percentages before and/ or during the auction. 130. Stage One: During the first stage of the auction, a bidder desiring to maintain its current bidding eligibility will be required to be active on licenses representing at least 80 percent of its current bidding eligibility in each bidding round. Failure to maintain the required activity level will result in a reduction in the bidder’s bidding eligibility in the next round of bidding unless an activity rule waiver is used. During Stage One, reduced eligibility for the next round will be calculated by multiplying the bidder’s current round activity (the sum of bidding units of the bidder’s provisionally winning bids and bids during the current round) by five- fourths (5/ 4). 131. Stage Two: During the second stage of the auction, a bidder desiring to maintain its current bidding eligibility is required to be active on 95 percent of its current bidding eligibility. Failure to maintain the required activity level will result in a reduction in the bidder’s bidding eligibility in the next round of bidding unless an activity rule waiver is used. During Stage Two, reduced eligibility for the next round will be calculated by multiplying the bidder’s current round activity (the sum of bidding units of the bidder’s provisionally winning bids and bids during the current round) by twenty-nineteenths (20/ 19). CAUTION: Since activity requirements increase in Stage Two, bidders must carefully check their activity during the first round following a stage transition to ensure that they are meeting the increased activity requirement. This is especially critical for bidders that have provisionally winning bids and do not plan to submit new bids. In past auctions, some bidders have inadvertently lost bidding eligibility or used an activity rule waiver because they did not re- verify their activity status at stage transitions. Bidders may check their activity against the required activity level by logging into the FCC Auction System. 132. Because the foregoing procedures have proven successful in maintaining the proper pace in previous auctions, we adopt them for Auction No. 69. 5. Stage Transitions 133. In the Auction No. 69 Comment Public Notice, we proposed that the auction would generally advance to the next stage (i. e., from Stage One to Stage Two) when the auction activity level, as measured by the percentage of bidding units receiving new provisionally winning bids, is approximately 20 percent or lower for three consecutive rounds of bidding. 152 We further proposed that the Bureau would retain the discretion to change stages unilaterally by announcement during the auction. This determination, we proposed, would be based on a variety of measures of bidder activity, including, but not limited to, the auction activity level, the percentages of licenses (as measured in bidding units) on which there are new bids, the number of new bids, and the percentage increase in revenue. 153 We receive no comments on this issue. 134. We adopt our proposal. Thus, the auction will start in Stage One and will generally advance to Stage Two when, in each of three consecutive rounds of bidding, the provisionally winning bids have been placed on 20 percent or less of the licenses being auctioned (as measured in bidding units). 154 In addition, the Bureau will retain the discretion to regulate the pace of the auction by 152 The percentage of bidding units receiving new provisionally winning bids is reported as the “Stage Transition Percentage” on the Results tab of the FCC Auction System. 153 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9500. 154 The stage of the auction does not affect the auction stopping rules; the auction may conclude in Stage One. See Section IV. A. 7. “Auction Stopping Rules,” infra. 36 Federal Communications Commission DA 06– 2014 37 announcement. This determination will be based on a variety of measures of bidder activity, including, but not limited to, the auction activity level, the percentages of licenses (as measured in bidding units) on which there are new bids, 155 the number of new bids, and the percentage increase in revenue. We believe that these stage transition rules, having proven successful in prior auctions, are appropriate for use in Auction No. 69. 6. Activity Rule Waivers 135. In the Auction No. 69 Comment Public Notice, we proposed that each bidder in the auction be provided with three activity rule waivers. 156 We received no comments on this issue. Therefore, we adopt our proposal that each bidder be provided three activity rule waivers. We are satisfied that providing three waivers over the course of the auction will give bidders a sufficient number of waivers and flexibility, while also safeguarding the integrity of the auction. 136. Bidders may use an activity rule waiver 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 activity level. An activity rule waiver applies to an entire round of bidding and not to a particular license. Activity rule waivers can be either applied proactively by the bidder (a “proactive waiver”) or applied automatically by the FCC Auction System (an “automatic waiver”) and are principally a mechanism for auction participants to avoid the loss of bidding eligibility in the event that exigent circumstances prevent them from placing a bid in a particular round. 137. The FCC Auction System assumes that bidders with insufficient activity would prefer to apply an activity rule waiver (if available) rather than lose bidding eligibility. Therefore, the system will automatically apply a waiver at the end of any bidding 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. If a bidder has no waivers remaining and does not satisfy the activity requirement, the FCC Auction System will permanently reduce the bidder’s eligibility, possibly curtailing or eliminating the bidder’s ability to place additional bids in the auction. 138. 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 bidding round by using the “reduce eligibility” function in the FCC Auction System. In this case, the bidder’s eligibility is permanently reduced to bring the bidder into compliance with the activity rules as described in “Auction Stages” (see Section IV. A. 4 above). Once eligibility has been reduced, a bidder will not be permitted to regain its lost bidding eligibility even if the round has not yet closed. 139. Finally, a bidder may apply an activity rule waiver proactively as a means to keep the auction open without placing a bid. If a bidder proactively applies an activity waiver (using the “apply waiver” function in the FCC Auction System) during a bidding round in which no bids or withdrawals are submitted, the auction will remain open and the bidder’s eligibility will be preserved. However, an automatic waiver applied by the FCC Auction System in a round in which there are no new bids, withdrawals, or proactive waivers will not keep the auction open. A bidder cannot submit a proactive waiver after submitting a bid in a round, and submitting a proactive waiver will preclude a bidder from placing any bids in that round. Note: Applying a waiver is irreversible; once a proactive waiver is submitted that waiver cannot be unsubmitted, even if the round has not yet closed. 155 When monitoring activity for determining when to change stages, we may consider the percentage of bidding units of the licenses receiving new provisionally winning bids, excluding any FCC- held licenses. 156 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9500- 01. 37 Federal Communications Commission DA 06– 2014 38 7. Auction Stopping Rules 140. For Auction No. 69, the Bureau proposed to employ a simultaneous stopping rule approach. 157 The Bureau also sought comment on a modified version of the simultaneous stopping rule (“ modified stopping rule”). The modified stopping rule would close the auction for all licenses after the first round in which no bidder applies a waiver, places a withdrawal, or submits any new bids on any license on which it is not the provisionally winning bidder. Thus, absent any other bidding activity, a bidder placing a new bid on a license for which it is the provisionally winning bidder would not keep the auction open under this modified stopping rule. 141. The Bureau further proposed retaining the discretion to keep the auction open even if no new bids or proactive waivers are submitted and no provisionally winning bids are withdrawn in a round. In this event, the effect will be the same as if a bidder had applied a waiver. Thus, the activity rule will apply as usual, and a bidder with insufficient activity will either use an activity rule waiver (if it has any left) or lose bidding eligibility. 142. 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 specified final round( s) and the auction will close. 143. We proposed to exercise these options 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. 158 We noted that before exercising these options, 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 increasing the amount of the minimum bid increments for the limited number of licenses where there is still a high level of bidding activity. 144. We believe that the proposed stopping rules are appropriate for Auction No. 69, because our experience in prior auctions demonstrates that these stopping rules balance interests of administrative efficiency and maximum bidder participation. We received no comments concerning the auction stopping rules, therefore we adopt the proposals made in the Auction No. 69 Comment Public Notice. Auction No. 69 will begin under the simultaneous stopping rule approach, and the Bureau will retain the discretion to employ the other versions of the stopping rule. Moreover, the Bureau will retain the discretion to use the modified stopping rule with or without prior announcement during the auction. 8. Auction Delay, Suspension, or Cancellation 145. In the Auction No. 69 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 conduct of competitive bidding. 159 We received no comment on this issue. 146. Because our approach to notification of delay during an auction has proven effective in resolving exigent circumstances in previous auctions, we adopt our proposed rules regarding auction delay, suspension, or cancellation. 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 157 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9498. 158 Id. 159 Id., 21 FCC Rcd at 9498- 99. 38 Federal Communications Commission DA 06– 2014 39 Bureau, in its 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 in which bidders may wish to apply their activity rule waivers. B. Bidding Procedures 1. Round Structure 147. The initial schedule of bidding rounds will be announced in the public notice listing the qualified bidders, which is released approximately 10 days before the start of the auction. Each bidding round is followed by the release of round results. Multiple bidding rounds may be conducted in a given day. Details regarding round results formats and locations will also be included in the qualified bidders public notice. 148. The Bureau 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 Bureau 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 and Minimum Opening Bids 149. Section 309( j) of the Communications Act of 1934, as amended, calls upon the Commission to prescribe methods by which a reasonable reserve price will be required or a minimum opening bid established when applications for FCC licenses 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. 160 Consistent with this mandate, the Commission directed the Bureau to seek comment on the use of a minimum opening bid and/ or reserve price prior to the start of each auction. 161 Among other factors, the Bureau must consider the amount of spectrum being auctioned, levels of incumbency, the availability of technology to provide service, the size of the geographic service areas, the extent of interference with other spectrum bands, and any other relevant factors that could have an impact on the spectrum being auctioned. 162 The Commission concluded that the Bureau should have the discretion to employ either or both of these mechanisms for future auctions. 163 a. Reserve Price 150. Congress recently required the Commission to revise existing regulations regarding reserve prices for auctions involving “eligible frequencies” subject to CSEA. CSEA defines “eligible frequencies” as including frequencies from 1432- 1435 MHz. 164 Thus, twelve 1.4 GHz band licenses authorize use of frequencies half of which are subject to CSEA requirements. 165 In CSEA, Congress 160 47 U. S. C. § 309( j)( 4)( F). 161 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 375, 455- 456 ¶ 141 (1997) (“ Part 1 Third Report and Order”). 162 Id. 163 Id. 164 CSEA, § 202. 165 See Section I. A. “Introduction,” supra. 39 Federal Communications Commission DA 06– 2014 40 directed the Commission to make revisions that would prescribe methods by which the total cash proceeds from any auction of licenses authorizing use of eligible frequencies shall equal at least 110 percent of the total estimated relocation costs provided to the Commission pursuant to CSEA. 166 Accordingly, the Commission recently revised its reserve price rule. 167 151. CSEA also imposes other related requirements regarding the proceeds from an auction involving eligible frequencies. Pursuant to CSEA, the total cash proceeds “attributable to” eligible spectrum must be at least 110 percent of the total estimated relocation costs before the Commission may conclude the auction. 168 If this condition is not met, CSEA requires that the Commission shall cancel the auction. 169 Finally, in CSEA, Congress also directed that “[ c] ash proceeds attributable to the auction of any eligible frequencies . . . shall be deposited in the Spectrum Relocation Fund” created by CSEA. 170 Pursuant to CSEA, on December 27, 2005, NTIA notified the Commission that there are no costs associated with relocating federal operations from the 1432- 1435 MHz band. 171 Accordingly, a reserve price will not be used for this auction to cover relocation costs under CSEA. b. Minimum Opening Bids 152. The Bureau proposed in the Auction No. 69 Comment Public Notice to establish minimum opening bids for each license, while retaining discretion to lower the minimum opening bids. 172 Specifically, for Auction No. 69, we proposed the following formula for calculating license- by-license minimum opening bids: $0.005 * MHz * License Area Population with a minimum of $1,000 per license. 173 153. The Bureau sought comment on this proposal and, in the alternative, whether, consistent with the Section 309( j), the public interest would be served by having no minimum opening bid. 174 154. In Commission auctions, minimum opening bids are intended to serve as useful starting points for bidding. Minimum opening bids are not intended to be estimates of final auction prices or to reflect all differences between license values. Accordingly, differences in license characteristics, such as population density, that may result in different final prices do not always necessitate different minimum opening bids for the licenses. 166 See CSEA, § 203( b). 167 See CSEA/ Part 1 Report and Order. 168 See CSEA, § 203( b). 169 Id. 170 CSEA, § 203( c). 171 See letter from Michael D. Gallagher, Assistant Secretary for Communications and Information, National Telecommunications and Information Administration, US Department of Commerce, to Kevin J. Martin, Chairman, Federal Communications Commission (Dec. 27, 2005). 172 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9501- 04. 173 All population figures are from the 2000 U. S. Census, U. S. Department of Commerce, Bureau of the Census. See Census 2000 Summary File 1 (SF1) and July 3, 2001, News Releases covering the U. S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Results are rounded using our standard rounding procedure: results above $10,000 are rounded to the nearest $1, 000; results below $10, 000 but above $1, 000 are rounded to the nearest $100; and results below $1, 000 are rounded to the nearest $10. 174 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9502- 03. 40 Federal Communications Commission DA 06– 2014 41 155. Itron proposes that the minimum opening bids should be reduced substantially, claiming that the proposed minimum opening bids do not take into account the amount of spectrum being auctioned. 175 Itron asserts that the proposed minimum opening bid levels are “relatively high” as compared with other auctions and will discourage bidders from participating. 176 Itron further suggests that the value of this spectrum is constrained by other factors, such as the need to protect the radioastronomy service. 177 Finally, Itron argues that the proposed minimum opening bids for this auction are higher than those used for the auction of Multiple Address Systems spectrum (Auction No. 59), which, in Itron’s view, is “more valuable” spectrum than the 1.4 GHz band licenses offered here. We are not persuaded that Itron’s comparison is apt in that it compares two completely different services with different bandwidth, geographic areas and band plans. We continue to believe that the minimum opening bids for this auction are reasonable. Accordingly, we will adopt our proposal and set the minimum opening bids using the proposed formula of $0.005 * MHz * license area population. 156. We did not receive any comments addressing our proposal that we retain the discretion to reduce minimum opening bid amounts. We adopt this proposal. The minimum opening bid amounts we adopt for Auction No. 69 are reducible at the discretion of the Bureau. We emphasize, however, that such discretion will be exercised, if at all, sparingly and early in the auction, i. e., before bidders lose all activity waivers. During the course of the auction, the Bureau will not entertain requests to reduce the minimum opening bid amount on specific licenses. We note that effectively the minimum opening bids operate as reserve prices. 157. The specific minimum opening bid amounts for each license available in Auction No. 69 calculated pursuant to the procedure describe above are set forth in Attachment A. 3. Bid Amounts 158. In the Auction No. 69 Comment Public Notice, we proposed that in each round, eligible bidders be able to place a bid on a given license in any of nine different amounts. 178 Under the proposal, the FCC Auction System interface will list the nine acceptable bid amounts for each license. 179 We received no comment on this issue. Based on our experience in prior auctions, we adopt our proposals for Auction No. 69. 159. The first of the nine acceptable bid amounts is called the minimum acceptable bid amount. The minimum acceptable bid amount for a license will be equal to its minimum opening bid amount until there is a provisionally winning bid for the license. After there is a provisionally winning bid for a license, the minimum acceptable bid amount for that license will be equal to the amount of the provisionally winning bid plus a percentage of that bid amount calculated using the formula described below. In general, the percentage will be higher for a license receiving many bids than for a license receiving few bids. In the case of a license for which the provisionally winning bid has been withdrawn, the minimum acceptable bid amount will equal the second highest bid received for the license. 180 175 Itron, Inc. Comments at 3. 176 Id. 177 Id. 178 Bidders must have sufficient eligibility to place a bid on the particular license. See Section III. D. 3 “Upfront Payments and Bidding Eligibility,” supra. 179 In the event of duplicate bid amounts due to rounding, the FCC Auction System will omit the duplicates and will list fewer than nine acceptable bid amounts for the license. 180 See Section IV. B. 5. “Bid Removal and Bid Withdrawal,” below. 41 Federal Communications Commission DA 06– 2014 42 160. The percentage of the provisionally winning bid used to establish the minimum acceptable bid amount (the “additional percentage”) is calculated at the end of each round, based on an activity index which is a weighted average of the number of bids in that round and the activity index from the prior round. Specifically, the activity index is equal to a weighting factor times the number of bids on the license in the most recent bidding round plus one minus the weighting factor times the activity index from the prior round. 181 The additional percentage is determined as one plus the activity index times a minimum percentage amount, with the result not to exceed a given maximum. The additional percentage is then multiplied by the provisionally winning bid amount to obtain the minimum acceptable bid for the next round. The Commission will initially set the weighting factor at 0.5, the minimum percentage at 0.1 (10%), and the maximum percentage at 0.2 (20%). Hence, at these initial settings, the minimum acceptable bid for a license will be between 10% and 20% higher than the provisionally winning bid, depending upon the bidding activity for the license. Equations and examples are shown in Attachment E. 161. The eight additional bid amounts are calculated using the minimum acceptable bid amount and a bid increment percentage. The first additional acceptable bid amount equals the minimum acceptable bid amount times one plus the bid increment percentage, rounded. If, for example, the bid increment percentage is 5 percent, the calculation is (minimum acceptable bid amount) * (1 + 0.05), rounded, or (minimum acceptable bid amount) * 1.05, rounded; the second additional acceptable bid amount equals the minimum acceptable bid amount times one plus two times the bid increment percentage, rounded, or (minimum acceptable bid amount) * 1. 1, rounded; the third additional acceptable bid amount equals the minimum acceptable bid amount times one plus three times the bid increment percentage, rounded, or (minimum acceptable bid amount) * 1.15, rounded; etc. We will round the results of these calculations, as well as the calculations to determine the minimum acceptable bid amounts, using our standard rounding procedures. 182 For Auction No. 69, the Bureau proposed to use a bid increment percentage of 5 percent to calculate the eight additional acceptable bid amounts. We received no comment on this issue and will begin the auction with a bid increment percentage of 5 percent. 162. The Bureau did not receive any comments on our proposal to retain the discretion to change the minimum acceptable bid amounts, the parameters of the formula to determine the percentage of the provisionally winning bid used to determine the minimum acceptable bid, and the bid increment percentage if it determines that circumstances so dictate. The Bureau will do so by announcement in the FCC Auction System during the auction if circumstances warrant. We adopt this proposal. 4. Provisionally Winning Bids 163. At the end of each bidding round, a “provisionally winning bid” will be determined based on the highest bid amount received for each license. A provisionally winning bid will remain the provisionally winning bid until there is a higher bid on the same license at the close of a subsequent round. Provisionally winning bids at the end of the auction become the winning bids. Bidders are reminded that provisionally winning bids count toward activity for purposes of the activity rule. 183 181 For Round 1 calculations, because there is no prior round (i. e., no round 0), the activity index from the prior round is set at 0. 182 Results are rounded using our standard rounding procedure: results above $10,000 are rounded to the nearest $1, 000; results below $10, 000 but above $1, 000 are rounded to the nearest $100; and results below $1, 000 are rounded to the nearest $10. 183 See Section IV. A. 3. “Eligibility and Activity Rules,” supra. 42 Federal Communications Commission DA 06– 2014 43 164. In the Auction No. 69 Comment Public Notice, the Bureau proposed to use a random number generator to select a single provisionally winning bid in the event of identical high bid amounts being submitted on a license in a given round (i. e., tied bids). 184 No comments were received on this proposal. Therefore, the Bureau adopts its proposal. A pseudo- random number generator based on the L’Ecuyer algorithms will be used to assign a random number to each bid. 185 The tied bid with the highest random number wins the tiebreaker, and becomes the provisionally winning bid. The remaining eligible bidders, as well as the provisionally winning bidder, can submit higher bids in subsequent rounds. However, if the auction were to end with no other bids being placed, the winning bidder would be the one that placed the selected provisionally winning bid. 165. During a round, a bidder may submit bids for as many licenses as it wishes (providing that it is eligible to bid), withdraw provisionally winning bids from previous rounds, remove bids placed in the current bidding round, or permanently reduce eligibility. Bidders also have the option of submitting and removing multiple bids and withdrawing multiple provisionally winning bids (subject to the limitation on withdrawal rounds discussed below) during a round. If a bidder submits multiple bids for a single license in the same round, the system takes the last bid entered as that bidder’s bid for the round. Bidders should note that the bidding units associated with licenses for which the bidder has removed or withdrawn its bid do not count towards the bidder’s current activity. 166. All bidding will take place remotely either through the FCC Auction System or by telephonic bidding. There will be no on- site bidding during Auction No. 69. Please note that 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, five to ten minutes are necessary to complete a telephonic bid submission. 167. A bidder’s ability to bid on specific licenses is determined by two factors: (1) the licenses selected on the bidder’s FCC Form 175 and (2) the bidder’s eligibility. The bid submission screens will allow bidders to submit bids on only those licenses the bidder selected on its FCC Form 175. 168. In order to access the bidding function of the FCC Auction System, bidders must be logged in during the bidding round using the passcode generated by the SecurID® card and a personal identification number (PIN) created by the bidder. Bidders are strongly encouraged to print a “round summary” for each round after they have completed all of their activity for that round. 169. In each round, eligible bidders will be able to place bids on a given license in any of nine different amounts. 186 For each license, the FCC Auction System will list the nine acceptable bid amounts in a drop- down box. 187 Bidders use the drop- down box to select from among the acceptable bid amounts. The FCC Auction System also includes an “upload” function that allows bidders to upload text files containing bid information. 184 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9504. 185 A description of the L’Ecuyer algorithms can be found in L’Ecuyer, P. (1999) “Good Parameters and Implementations for Combined Multiple Recursive Random Number Generators” Operations Research 47 (1), pp. 159- 164. A longer version of this paper and the C code for the algorithms can be found on the author’s website at http:// www. iro. umontreal. ca/~ lecuyer/ papers. html. 186 Bidders must have sufficient eligibility to place a bid on the particular license. See Section III. D. 3. “Upfront Payments and Bidding Eligibility,” supra. 187 In the event of duplicate bid amounts due to rounding, the FCC Auction System will omit the duplicates and will list fewer than nine acceptable bid amounts for the license. 43 Federal Communications Commission DA 06– 2014 44 170. Until a bid has been placed on a license, the minimum acceptable bid amount for that license will be equal to its minimum opening bid amount. Once there are bids on a license, minimum acceptable bids for a license will be determined as described in Section IV. B. 3. 171. Finally, bidders are cautioned to select their bid amounts carefully because, as explained below, bidders that withdraw a provisionally winning bid from a previous round, even if the bid was mistakenly or erroneously made, are subject to bid withdrawal payments. 5. Bid Removal and Bid Withdrawal 172. In the Auction No. 69 Comment Public Notice, the Commission proposed bid removal and bid withdrawal procedures. 188 With respect to bid withdrawals, the Commission proposed limiting each bidder to withdrawals in no more than two rounds during the course of the auction. The round in which withdrawals are used would be at each bidder’s discretion. We received no comments on this issue. In previous auctions, we have detected bidder conduct that, arguably, may have constituted anti-competitive behavior through the use of bid withdrawals. While we continue to recognize the important role that bid withdrawals may play in an auction, i. e., reducing risk associated with efforts to secure various licenses in combination, we conclude that, for Auction No. 69, adoption of a limit on the use of withdrawals to two rounds per bidder is appropriate. By doing so we believe we strike a reasonable compromise that will allow bidders to use withdrawals. We base our decision on this issue upon our experience with bid withdrawals in prior auctions, including PCS D, E and F block and 800 MHz SMR, and other auctions. We will therefore limit the number of rounds in which bidders may place withdrawals to two rounds, as previously proposed. 173. 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 bids” function in the FCC Auction System, a bidder may effectively “unsubmit” any bid placed within that round. A bidder removing a bid placed in the same round is not subject to withdrawal payments. Removing a bid will affect a bidder’s activity for the round in which it is removed, i. e., a bid that is removed does not count toward bidding activity. These procedures will enhance bidder flexibility during the auction, and therefore we adopt them for Auction No. 69. 174. Once a round closes, a bidder may no longer remove a bid. However, in later rounds, a bidder may withdraw provisionally winning bids from previous rounds using the “withdraw bids” function in the FCC Auction System (assuming that the bidder has not already withdrawn bids in a previous round). A provisionally winning bidder that withdraws its provisionally winning bid from a previous round during the auction is subject to the bid withdrawal payments specified in 47 C. F. R. § 1.2104( g). Note: Once a withdrawal is submitted during a round, that withdrawal cannot be unsubmitted even if the round has not yet ended. 175. The rounds in which a bidder may withdraw its bids 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 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 a market. 176. If a provisionally winning bid is withdrawn, the minimum acceptable bid amount will equal the amount of the second highest bid received for the license, which may be less than, or in the case of tied bids, equal to, the amount of the withdrawn bid. 189 To set the additional bid amounts, the 188 Auction No. 69 Comment Public Notice, 21 FCC Rcd at 9504- 05. 189 The Bureau retains the discretion to lower the minimum acceptable bid on such licenses in the next round or in later rounds. 44 Federal Communications Commission DA 06– 2014 45 second highest bid amount also will be used in place of the provisionally winning bid in the formula used to calculate bid increment amounts. The Commission will serve as a “place holder” provisionally winning bidder on the license until a new bid is submitted on that license. 177. Calculation of Bid Withdrawal Payment. Generally, the Commission imposes payments on bidders that withdraw high bids during the course of an auction. 190 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 provisionally winning bid in the same or subsequent auction( s). 191 In the case of multiple bid withdrawals on a single license, 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 will not be responsible for any withdrawal payments if there is a subsequent higher bid in the same or subsequent auction( s). 192 This policy allows bidders most efficiently to 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 license for evidence of anti- competitive strategic behavior and take appropriate action when deemed necessary. 178. Section 1.2104( g)( 1) of the rules sets forth the payment obligations of a bidder that withdraws a high bid on a license during the course of an auction, and provides for the assessment of interim bid withdrawal payments. 193 In the Auction No. 69 Comment Public Notice, we proposed to establish the percentage at ten percent (10%) for the 1.4 GHz band auction and sought comment on the proposal. 179. We received no comments on this issue and adopt our proposal. The Commission will assess an interim withdrawal payment equal to ten percent (10%) of the amount of the withdrawn bids. The ten percent (10%) interim payment will be applied toward any final bid withdrawal payment that will be assessed after subsequent auction of the license. Assessing an interim bid withdrawal payment ensures that the Commission receives a minimal withdrawal payment pending assessment of any final withdrawal payment. Section 1.2104( g) provides specific examples showing application of the bid withdrawal payment rule. 194 6. Round Results 180. If information is withheld in accordance with the procedures described above, limited information about the results of a round will be made public after the conclusion of the round. 195 Specifically, after a round closes, the Bureau will make available for each license, its current 190 47 C. F. R. §§ 1.2104( g), 1. 2109. 191 The payment will equal the lower of: (1) the difference between the net withdrawn bid and the subsequent net winning bid; or (2) the difference between the gross withdrawn bid and the subsequent gross winning bid. See 47 C. F. R. § 1. 2104( g)( 1). 192 See following paragraph for discussion of interim bid withdrawal payments. 193 47 C. F. R. § 1.2104( g)( 1); see Part 1 Fifth Report and Order, 15 FCC Rcd at 15302 ¶ 15. 194 47 C. F. R. § 1.2104( g). 195 The identities of parties that are qualified to bid in Auction No. 69 will be available before the auction. Thus, bidders will know in advance of this auction the identities of the other parties against which they may be bidding in the auction. 45 Federal Communications Commission DA 06– 2014 46 provisionally winning bid amount, the minimum acceptable bid amount for the following round, the amounts of all bids placed on the license during the round, and whether the license is FCC held. The reports will be publicly accessible. Moreover, after the auction, the Bureau will make available complete reports of all bids placed during each round of the auction, including bidder identities. 181. If, however, limited information procedures are not used, more information will be provided after each round in the auction. Bids placed during a round, including bidder identities, will be made public at the conclusion of that round. Specifically, after a round closes, the Bureau will compile reports of all bids placed and which bidders made them, current provisionally winning bids, new minimum acceptable bid amounts, and bidder eligibility status (bidding eligibility and activity rule waivers) and will post the reports for public access. 7. Auction Announcements 182. The Commission will use auction announcements to announce items such as schedule changes and stage transitions. All auction announcements will be available by clicking a link in the FCC Auction System. V. POST- AUCTION PROCEDURES A. Down Payments 183. After bidding has ended, the Commission will issue a public notice declaring the auction closed and identifying winning bidders, down payments and final payments due. 184. Within ten business days after release of the auction closing 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 Commission for Auction No. 69 to 20 percent of the net amount of its winning bids (gross bids less any applicable small business or very small business bidding credits). 196 B. Final Payments 185. Each winning bidder will be required to submit the balance of the net amount of its winning bids within 10 business days after the deadline for submitting down payments. 197 C. Long- Form Application (FCC Form 601) 186. 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. 69. Winning bidders that are small businesses or very small businesses must demonstrate their eligibility for a small business or very small business bidding credit. 198 Further filing instructions will be provided to auction winners at the close of the auction. 187. The CSEA/ Part 1 Report and Order modifies the procedure by which a consortium that is a winning bidder in Auction No. 69 will apply for a license. 199 In particular, (a) each member or group of members of a winning consortium seeking separate licenses will be required to file a separate long-form application for its respective license( s) and, in the case of a license to be partitioned or disaggregated, the member or group filing the applicable long- form application shall provide the parties’ partitioning or disaggregation agreement in its long- form application; (b) two or more 196 See 47 C. F. R. § 1.2107( b). 197 See 47 C. F. R. § 1.2109( a). 198 See 47 C. F. R. § 1.2112( b). 199 See CSEA/ Part 1 Report and Order at ¶¶ 51- 52, petitions for reconsideration pending. 46 Federal Communications Commission DA 06– 2014 47 consortium members seeking to be licensed together shall first form a legal business entity; and (c) any such entity must meet the applicable eligibility requirements in our rules for small business status. 200 Applicants applying as consortia should review the CSEA/ Part 1 Report and Order in detail and monitor any relevant future proceedings to understand how the members of the consortia will apply for a license in the event they are winning bidders. D. Ownership Disclosure Information Report (FCC Form 602) 188. At the time it submits its long- form application (FCC Form 601), each winning bidder also must comply with the ownership reporting requirements as set forth in 47 C. F. R. §§ 1. 913, 1.919, and 1.2112. An ownership disclosure record is automatically created in ULS for any applicant that submits an FCC Form 175. However, winning bidders will be required to review and confirm that it is complete and accurate as of the date of filing Form 601. Further instructions will be provided to auction winning bidders at the close of the auction. E. Tribal Lands Bidding Credit 189. A winning bidder that intends to use its license( s) to deploy facilities and provide services to federally recognized tribal lands that are unserved by any telecommunications carrier or that have a wireline penetration rate equal to or below 85 percent is eligible to receive a tribal lands bidding credit as set forth in 47 C. F. R. §§ 1.2107 and 1.2110( f). A tribal lands bidding credit is in addition to, and separate from, any other bidding credit for which a winning bidder may qualify. 190. Unlike other bidding credits that are requested prior to the auction, a winning bidder applies for the tribal lands bidding credit after winning the auction when it files its long- form application (FCC Form 601). When initially filing the long- form application, the winning bidder will be required to advise the Commission whether it intends to seek a tribal lands bidding credit, for each market won in the auction, by checking the designated box( es). After stating its intent to seek a tribal lands bidding credit, the applicant will have 180 days from the close of the long- form filing window to amend its application to select the specific tribal lands to be served and provide the required tribal government certifications. Licensees receiving a tribal lands bidding credit are subject to performance criteria as set forth in 47 C. F. R. § 1.2110( f)( 3)( vi). 201 191. For additional information on the tribal lands bidding credit, including how the amount of the credit is calculated, applicants should review the Commission’s rule making proceeding regarding tribal lands bidding credits and related public notices. 202 Relevant documents can be viewed on the Commission’s web site by going to http:// wireless. fcc. gov/ auctions and clicking on the Tribal Land Credits link. 200 See id. 201 See also 47 C. F. R. § 1. 2110( f)( 3)( ii) & (vii). 202 See generally, Extending Wireless Telecommunications Services to Tribal Lands, Report and Order and Further Notice of Proposed Rule Making, 15 FCC Rcd 11794 (2000), Second Report and Order and Second Further Notice of Proposed Rulemaking, 18 FCC Rcd 4775, 4778- 79 ¶ 10 (2003), Third Report and Order, 19 FCC Rcd 17652 (2004). See also “Wireless Telecommunications Bureau Announces Enhancements to the Universal Licensing System to Help Winning Bidders of FCC Auctions File for Tribal Lands Bidding Credits,” Public Notice, 16 FCC Rcd 5355 (2001); “Wireless Telecommunications Bureau Releases Additional Information Regarding the Procedures for Obtaining a Tribal Lands Bidding Credit and List of Tribal Lands,” Public Notice, 15 FCC Rcd 24838 (2000); “Wireless Telecommunications Bureau Announces Availability of Bidding Credits for Providing Wireless Services to Qualifying Tribal Lands: Tribal Lands Bidding Credits to be Available Beginning in Auction No. 36 (800 MHz Specialized Mobile Radio (SMR) Lower 80 Channels) and in Future Auctions,” Public Notice, 15 FCC Rcd 18351 (2000). 47 Federal Communications Commission DA 06– 2014 48 F. Default and Disqualification 192. Any winning 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 described in 47 C. F. R. § 1.2104( g)( 2). The payments include both a deficiency payment, equal to the difference between the amount of the bidder’s bid and the amount of the winning bid the next time a license covering the same spectrum is won in an auction, plus an additional payment equal to a percentage of the defaulter’s bid or of the subsequent winning bid, whichever is less. Pursuant to recent modifications to the rule governing default payments, the percentage of the applicable bid to be assessed as an additional payment for defaults in a particular auction is established in advance of the auction. Accordingly, in the Auction No. 69 Comment Public Notice, we proposed to set the additional default payment for the auction of 1.4 GHz band licenses at ten percent (10%) of the applicable bid. We sought comment on our proposal. 193. No comments were received on this issue. We therefore adopt our proposal and set the additional default payment for the auction of 1.4 GHz band licenses at ten percent (10%) of the applicable bid. 194. Finally, we note that in the event of a default, the Commission may re- auction the license or offer it to the next highest bidder (in descending order) at its final bid amount. 203 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 held by the applicant. 204 G. Refund of Remaining Upfront Payment Balance 195. All applicants that submit upfront payments but after the close of the auction are not winning bidders for a license in Auction No. 69 may be entitled to a refund of their remaining upfront payment balance after the conclusion of the auction. All refunds will be returned to the payer of record, as identified on the FCC Form 159, unless the payer submits written authorization instructing otherwise. 196. Bidders that drop out of the auction completely may be eligible for a refund of their upfront payments before the close of the auction. Qualified bidders that have exhausted all of their activity rule waivers, have no remaining bidding eligibility, and have not withdrawn a provisionally winning bid during the auction may also be eligible for a refund of their upfront payment before the close of the auction. If an applicant has completed the refund instructions electronically, the refund will be sent automatically. If an applicant has not completed the refund instructions electronically, a written request must be submitted for the refund and include wire transfer instructions, Taxpayer Identification Number (TIN) and FCC Registration Number (FRN). Send refund requests to: Federal Communications Commission Financial Operations Center Auctions Accounting Group Gail Glasser 445 12th Street, SW, Room 1- C864 Washington, DC 20554 203 See 47 C. F. R. § 1.2109( b) and (c). 204 47 C. F. R. § 1.2109( d). 48 Federal Communications Commission DA 06– 2014 49 197. Bidders are encouraged to file their refund information electronically using the Refund Information icon found on the Auction Application Manager page or through the Wire Transfer for Refund Purposes link available in various locations throughout the FCC Auction System, but bidders may also send their information by facsimile 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. 198. Following the close of the auction, the Commission may refund upfront monies on deposit that exceed the required final payment amount. Such refunds will be made to the payer of record as identified on the FCC Form 159, provided the necessary refund request and wire transfer instructions have been received. NOTE: Refund processing generally takes up to two weeks to complete. Bidders with questions about refunds should contact Gail Glasser at (202) 418- 0578. VI. CONTACTS 199. List of Commission staff contacts: Media Contact For press inquiries: Chelsea Fallon (202) 418- 7991 Auctions and Spectrum Access Division For legal questions: Howard Davenport at (202) 418- 0660 For general auction questions: Roy Knowles or Barbara Sibert at (717) 338- 2868 Mobility Division For legal and technical questions: Erin McGrath, Michael Connelly (legal) or Keith Harper (technical), at (202) 418- 0620 For licensing questions: Bettye Woodward at (202) 418- 0620 To request materials in accessible formats (Braille, large print, electronic files, audio format) for people with disabilities, send an e- mail to fcc504@ fcc. gov or call the Consumer and Governmental Affairs Bureau at (202) 418- 0530 or (202) 418- 0432 (TTY). -- FCC -- 49 A - 1 ATTACHMENT A Auction No. 69 – 1.4 GHz band DA 06- 2014 Attachment A Market Number Description License Number Frequencies (MHz) Channel Block Population Bandwidth (MHz) Bidding Units Upfront Payment Minimum Opening Bid MEA Licenses (1390- 1392 MHz) MEA001 Boston BA- MEA001 1390- 1392 9,229,477 2 92,000 $92,000 $92,000 MEA002 New York City BA- MEA002 1390- 1392 30,885,797 2 309,000 $309,000 $309,000 MEA003 Buffalo BA- MEA003 1390- 1392 1,507,759 2 15,000 $15,000 $15,000 MEA004 Philadelphia BA- MEA004 1390- 1392 8,435,057 2 84,000 $84,000 $84,000 MEA005 Washington BA- MEA005 1390- 1392 8,767,100 2 88,000 $88,000 $88,000 MEA006 Richmond BA- MEA006 1390- 1392 4,329,258 2 43,000 $43,000 $43,000 MEA007 Charlotte- Greensboro- Raleigh BA- MEA007 1390- 1392 11,679,928 2 117,000 $117,000 $117,000 MEA008 Atlanta BA- MEA008 1390- 1392 9,198,217 2 92,000 $92,000 $92,000 MEA009 Jacksonville BA- MEA009 1390- 1392 2,605,624 2 26,000 $26,000 $26,000 MEA010 Tampa- St. Petersburg- Orlando BA- MEA010 1390- 1392 6,802,332 2 68,000 $68,000 $68,000 MEA011 Miami BA- MEA011 1390- 1392 6,294,487 2 63,000 $63,000 $63,000 MEA012 Pittsburgh BA- MEA012 1390- 1392 4,109,453 2 41,000 $41,000 $41,000 MEA013 Cincinnati- Dayton BA- MEA013 1390- 1392 4,517,237 2 45,000 $45,000 $45,000 MEA014 Columbus BA- MEA014 1390- 1392 2,349,060 2 23,000 $23,000 $23,000 MEA015 Cleveland BA- MEA015 1390- 1392 5,211,808 2 52,000 $52,000 $52,000 MEA016 Detroit BA- MEA016 1390- 1392 10,696,754 2 107,000 $107,000 $107,000 MEA017 Milwaukee BA- MEA017 1390- 1392 5,023,107 2 50,000 $50,000 $50,000 MEA018 Chicago BA- MEA018 1390- 1392 13,667,977 2 137,000 $137,000 $137,000 MEA019 Indianapolis BA- MEA019 1390- 1392 3,066,469 2 31,000 $31,000 $31,000 MEA020 Minneapolis- St. Paul BA- MEA020 1390- 1392 6,657,036 2 67,000 $67,000 $67,000 MEA021 Des Moines- Quad Cities BA- MEA021 1390- 1392 2,879,403 2 29,000 $29,000 $29,000 MEA022 Knoxville BA- MEA022 1390- 1392 1,559,410 2 16,000 $16,000 $16,000 MEA023 Louisville- Lexington BA- MEA023 1390- 1392 4,349,581 2 43,000 $43,000 $43,000 MEA024 Birmingham BA- MEA024 1390- 1392 3,390,273 2 34,000 $34,000 $34,000 MEA025 Nashville BA- MEA025 1390- 1392 2,444,643 2 24,000 $24,000 $24,000 MEA026 Memphis- Jackson BA- MEA026 1390- 1392 4,192,132 2 42,000 $42,000 $42,000 50 A - 2 Market Number Description License Number Frequencies (MHz) Channel Block Population Bandwidth (MHz) Bidding Units Upfront Payment Minimum Opening Bid MEA027 New Orleans- Baton Rouge BA- MEA027 1390- 1392 4,762,929 2 48,000 $48,000 $48,000 MEA028 Little Rock BA- MEA028 1390- 1392 2,652,998 2 27,000 $27,000 $27,000 MEA029 Kansas City BA- MEA029 1390- 1392 3,187,783 2 32,000 $32,000 $32,000 MEA030 St. Louis BA- MEA030 1390- 1392 4,787,224 2 48,000 $48,000 $48,000 MEA031 Houston BA- MEA031 1390- 1392 6,626,248 2 66,000 $66,000 $66,000 MEA032 Dallas- Fort Worth BA- MEA032 1390- 1392 11,571,024 2 116,000 $116,000 $116,000 MEA033 Denver BA- MEA033 1390- 1392 4,978,469 2 50,000 $50,000 $50,000 MEA034 Omaha BA- MEA034 1390- 1392 1,773,282 2 18,000 $18,000 $18,000 MEA035 Wichita BA- MEA035 1390- 1392 1,175,577 2 12,000 $12,000 $12,000 MEA036 Tulsa BA- MEA036 1390- 1392 1,384,426 2 14,000 $14,000 $14,000 MEA037 Oklahoma City BA- MEA037 1390- 1392 1,837,958 2 18,000 $18,000 $18,000 MEA038 San Antonio BA- MEA038 1390- 1392 3,668,441 2 37,000 $37,000 $37,000 MEA039 El Paso- Albuquerque BA- MEA039 1390- 1392 2,519,690 2 25,000 $25,000 $25,000 MEA040 Phoenix BA- MEA040 1390- 1392 4,808,845 2 48,000 $48,000 $48,000 MEA041 Spokane- Billings BA- MEA041 1390- 1392 2,001,065 2 20,000 $20,000 $20,000 MEA042 Salt Lake City BA- MEA042 1390- 1392 3,132,367 2 31,000 $31,000 $31,000 MEA043 San Francisco- Oakland- San Jose BA- MEA043 1390- 1392 13,850,204 2 139,000 $139,000 $139,000 MEA044 Los Angeles- San Diego BA- MEA044 1390- 1392 22,527,050 2 225,000 $225,000 $225,000 MEA045 Portland BA- MEA045 1390- 1392 3,675,513 2 37,000 $37,000 $37,000 MEA046 Seattle BA- MEA046 1390- 1392 4,812,965 2 48,000 $48,000 $48,000 MEA047 Alaska BA- MEA047 1390- 1392 626,932 2 6,300 $6,300 $6,300 MEA048 Hawaii BA- MEA048 1390- 1392 1,211,537 2 12,000 $12,000 $12,000 MEA049 Guam- Northern Mariana Islands BA- MEA049 1390- 1392 224,026 2 2,200 $2,200 $2,200 MEA050 Puerto Rico- US Virgin Islands BA- MEA050 1390- 1392 3,917,222 2 39,000 $39,000 $39,000 MEA051 American Samoa BA- MEA051 1390- 1392 57,291 2 1,000 $1,000 $1,000 MEA052 Gulf of Mexico BA- MEA052 1390- 1392 0 2 1,000 $1,000 $1,000 Total MEA Licenses 52 2,858,500 $2,858,500 $2,858,500 51 A - 3 Market Number Description License Number Frequencies (MHz) Channel Block Population Bandwidth (MHz) Bidding Units Upfront Payment Minimum Opening Bid EAG Licenses (1392- 1395 MHz and 1432- 1435 MHz, Paired) EAG001 Northeast BB- EAG001- A 1392.0- 1393.5 / 1432.0- 1433.5 A 44,077,625 3 661,000 $661,000 $661,000 EAG001 Northeast BB- EAG001- B 1393.5- 1395.0 / 1433.5- 1435.0 B 44,077,625 3 661,000 $661,000 $661,000 EAG002 Mid- Atlantic BB- EAG002- A 1392.0- 1393.5 / 1432.0- 1433.5 A 47,079,540 3 706,000 $706,000 $706,000 EAG002 Mid- Atlantic BB- EAG002- B 1393.5- 1395.0 / 1433.5- 1435.0 B 47,079,540 3 706,000 $706,000 $706,000 EAG003 Southeast BB- EAG003- A 1392.0- 1393.5 / 1432.0- 1433.5 A 51,610,405 3 774,000 $774,000 $774,000 EAG003 Southeast BB- EAG003- B 1393.5- 1395.0 / 1433.5- 1435.0 B 51,610,405 3 774,000 $774,000 $774,000 EAG004 Great Lakes BB- EAG004- A 1392.0- 1393.5 / 1432.0- 1433.5 A 44,940,233 3 674,000 $674,000 $674,000 EAG004 Great Lakes BB- EAG004- B 1393.5- 1395.0 / 1433.5- 1435.0 B 44,940,233 3 674,000 $674,000 $674,000 EAG005 Central/ Mountain BB- EAG005- A 1392.0- 1393.5 / 1432.0- 1433.5 A 49,321,832 3 740,000 $740,000 $740,000 EAG005 Central/ Mountain BB- EAG005- B 1393.5- 1395.0 / 1433.5- 1435.0 B 49,321,832 3 740,000 $740,000 $740,000 EAG006 Pacific BB- EAG006- A 1392.0- 1393.5 / 1432.0- 1433.5 A 48,590,810 3 729,000 $729,000 $729,000 EAG006 Pacific BB- EAG006- B 1393.5- 1395.0 / 1433.5- 1435.0 B 48,590,810 3 729,000 $729,000 $729,000 Total EAG Licenses 12 8,568,000 $8,568,000 $8,568,000 Total Licenses in Auction No. 69 64 11,426,500 $11,426,500 $11,426,500 52 Federal Communications Commission DA 06– 2014 B - 1 ATTACHMENT B FCC AUCTION NO. 69 SEMINAR REGISTRATION FORM The FCC will sponsor a one- day seminar for Auction No. 69 applicants. The seminar is free of charge and will provide information about pre- auction procedures, service and auction rules, conduct of the auction, and the FCC Auction System. Representatives from each company may attend on a reservation basis, first- come first- served until room capacity is filled. The seminar will be held: Wednesday, November 29, 2006 Federal Communications Commission 445 12th Street, SW Washington, DC 20554 Registration 10: 00 a. m. - 10: 30 a. m. Seminar 10: 30 a. m. - 2: 00 p. m. If hotel accommodations are needed Please contact 888- 225- 5322 (option #2) for a list of hotels in the area. ********************************** To register, please provide the information listed below no later than Monday, November 27, 2006 by either E- mail: Auchelp@ fcc. gov Facsimile: 717- 338- 2850 Phone: 717- 338- 2868 Note: The seminar will also be available via webcast and may be viewed by clicking on the Auction Seminar link on the Auction No. 69 web page, http:// wireless. fcc. gov/ auctions/ 69/. For further information about accessing FCC webcasts, please visit http:// www. fcc. gov/ realaudio/. _______________________________________________________ I/ We will attend the Auction No. 69 Seminar, scheduled for Wednesday, November 29, 2006. Name of attendee: _____________________________________________________________________ Name of attendee: _____________________________________________________________________ Company name: ______________________________________________________________________ Company address: ____________________________________________________________________ Phone: ________________________________ Fax: ______________________________________ 53 Federal Communications Commission DA 06– 2014 C - 2 (secondary location). Once on the FCC Integrated Spectrum Auction System page, an applicant may log in to create an FCC Form 175 application using its FCC Registration Number (FRN) and password. C. Application Filing Instructions The on- line FCC Form 175 requests information needed to determine whether an applicant qualifies to participate in competitive bidding for Commission licenses or construction permits. 205 Pursuant to Section 1.2105( a), FCC Form 175 must be submitted electronically. Applicants must submit required information as entries in the data fields of the electronic FCC Form 175 whenever a data field is available for that information. Attachments should not be used to provide information that can be supplied within the data fields of the electronic FCC Form 175. The screens comprising FCC Form 175 consist of five series, each requesting five separate types of information: 1) Applicant Information; 2) License Selection; 3) Agreements; 4) Ownership; and 5) Certify and Submit. In addition, Summary screens, a sixth series, appear prior to the Certify and Submit screens. The Summary screens provide an overview of an applicant’s FCC Form 175 that facilitates reviewing and revising specific information, as well as an automated check for certain inconsistencies and omissions in submitted information. To simplify filling out FCC Form 175, certain initial information applicants provide is used to determine what additional information is needed, and what subsequent screens will appear to collect that information. For example, a corporate applicant, unlike an individual applicant, must identify a corporate officer or director responsible for the application (sometimes called a responsible party). If an applicant identifies itself as an individual, no additional information is needed regarding an additional responsible party, and screens requesting responsible party information will not appear. However, if the applicant identifies itself as a corporation, subsequent screens in the FCC Form 175 will ask for responsible party information. Applicants should be able to fill out Form 175 by following the instructions below. Additional help in filling out FCC Form 175 can be accessed from the electronic FCC Form 175 in two ways: 1) by clicking on the Help link in the upper right of any screen, which will open Auction Application Online Filing Help; or 2) by clicking on the text of any Common Question link appearing on the right side of the screen. The common questions displayed relate to the current screen and vary from screen to screen. In the event the assistance provided by these sources is insufficient, filers should use the contact information provided in the Procedures Public Notice to obtain additional assistance. 1. Applicant Information The Applicant Information screens are the first series of screens in FCC Form 175. In the Applicant Information screens, the applicant will provide basic information including • the applicant’s legal classification, e. g., individual, corporation, etc. • optional information regarding the applicant’s status as a minority- or woman- owned business or a rural telephone company • the applicant’s name, which will be used as the bidder name during the auction • citizenship (for individuals), or jurisdiction of formation for legal entities 205 See generally, 47 C. F. R. § 1.2105. 55 Federal Communications Commission DA 06– 2014 C - 4 The License Selection screen contains a listing of all available licenses in the auction. Applicants can navigate within the License Selection screen by selecting the individual page links or the “Previous” and “Next” buttons above and below the list of available licenses. In addition, applicants can use pre- defined filters to narrow down the list of licenses for which they wish to select and save. Specifically, licenses can be selected by either: 1) clicking the check box next to the license name, then selecting the “Save Selected Items” button; 2) clicking the “Save all Items” button to save all available licenses; or by 3) clicking the “Save All Filtered Items” button after applying a filter. Once the applicant has successfully saved a license, the word “Saved” will appear next to the license name to confirm that it has been saved with the application. NOTE: Licenses selected on the License Selection screen will be automatically saved when navigating to another screen within the Auction Application by using the links and buttons provided on the screen. Licenses can be removed by either: 1) clicking the check box (to uncheck) next to a previously saved license, then selecting the ”Remove Selected Items” button; 2) clicking the ”Remove all Items” button to remove all previously saved licenses; or by 3) clicking the “Remove All Filtered Items” button after applying a filter. Removed licenses will not have the word “Saved” next to the license name. Applicants may view all saved licenses by either clicking the Edit Icon next to “View Saved Items” at the top- right corner of the list, or by clicking the “CONTINUE” button at the bottom of the page. Once licenses have been saved, the View/ Edit License Selections screen will be the first screen displayed when navigating to the License Selection step. This screen lists all licenses the applicant has selected and saved for the auction. To select a new license or remove a previously selected license, click the Edit Icon next to “Return to License Selection” at the top- right corner of the list. This will take you to the original Select Licenses screen, as described above. 3. Agreements The Agreements screens are the third series of screens in FCC Form 175. In the Agreements screens, applicants will provide information regarding auction- related agreements subject to disclosure under the Commission’s rules. 208 On the first screen, applicants must state whether the applicant has any agreements that are subject to disclosure under the Commission’s rules by responding yes or no to a question asking whether the applicant has entered into partnerships, joint ventures, consortia or other agreements or understandings of any kind relating to the licenses being auctioned, including any such agreement relating to the post- auction market structure. If an applicant answers “No,” the applicant will continue with the Ownership series of screens, described below. If the applicant answers “Yes,” the applicant will continue with additional Agreements screens described here. In the additional Agreements screens, applicants must provide an identifying name for the agreement and must identify the parties, other than the applicant, to the agreement. The agreement identifier can be a brief description of the agreement or a simple reference name; however, each agreement identifier must be unique. 208 See 47 C. F. R. § 1. 2105( a)( 2)( viii). 57 Federal Communications Commission DA 06– 2014 C - 8 d. Bidding Credit Revenue Information If the applicant has claimed eligibility for a bidding credit based on revenues attributable to the applicant and related parties, the first Ownership screen will request relevant information regarding the applicant’s revenues. The subsequent screen will request which of the two sources of financial information authorized by Section 1.2110 (n) the applicant used for the revenue information. 216 Applicants claiming eligibility for a bidding credit based on revenues are required to provide revenue information separately and in the aggregate for the applicant, its affiliates, its controlling interests, and affiliates of its controlling interests. In addition, if the applicant is a consortium of small businesses, the information must be provided with respect to each member comprising the consortium. 217 The Commission’s definition of an affiliate of the applicant encompasses both controlling interests of the applicant and affiliates of controlling interests of the applicant. 218 FCC Form 175 screens request information regarding the applicant, disclosable interest holders, and affiliates of the applicant. Accordingly, information that Commission rules require be disclosed regarding controlling interests and affiliates of controlling interests that are not disclosable interest holders should be disclosed in screens requesting information regarding affiliates of the applicant. Following the first two screens, the subsequent screen will be similar to the initial Ownership screen described above, with one addition. In addition to being able to add disclosable interest holders and FCC- regulated business, applicants that claim eligibility for bidding credits based on revenues also will have an option to add information regarding affiliates, including their revenues, that are not disclosable interest holders. 219 Applicants that claim eligibility based on revenues attributable to the applicant and related parties will be requested to provide revenue information for each disclosable interest holder. With respect to disclosable interest holders that are affiliates or controlling interests of the applicant, applicants will fill out two screens similar to the two described above with respect to the applicant, i. e., one screen requesting the relevant information and a second screen regarding the source of the revenue information. However, not all disclosable interest holders that must be listed in FCC Form 175 pursuant to Section 1.2112( a) are affiliates of the applicant, controlling interests of the applicant, or affiliates of the applicant’s controlling interests. 220 Consequently, applicants claiming eligibility for a bidding credit based on revenues may not need to provide revenue information for every disclosable interest holder. Accordingly, applicants may indicate that no revenue information is required with respect to the relevant disclosable interest holder on the first screen requesting revenue information for that disclosable interest holder. To do so, check the box indicating that the disclosable interest holder is not an affiliate or a controlling interest within the meaning of the 216 47 C. F. R. § 1.2110( n). 217 See 47 C. F. R. § 1. 2112( b)( 1)( iii). 218 See 47 C. F. R. § 1.2110( c)( 5). 219 See 47 C. F. R. §1. 2112( b)( 1)( iii). 220 Compare 47 C. F. R. 1. 2110( c)( 2) (definition of controlling interests) and (c)( 5)( definition of affiliate) with 47 C. F. R. 1.2112( a) (describing disclosable interest holders). 61 Federal Communications Commission DA 06– 2014 C - 10 Clicking on the CHECK ERRORS button initiates an automated check of the application. If the automated check encounters any errors that must be corrected before submitting the application, the error( s) will be listed in an Error box at the top of the screen. To correct one of these errors, click its corresponding EDIT button. In addition, if the automated check encounters any apparent errors that might render the application incomplete if the application is submitted with current information, the apparent error will be listed in a Warning box. To revise the information related to the apparent error, click its corresponding EDIT button. Each applicant is solely responsible for providing complete and accurate information in its FCC Form 175. The automated check is provided to assist applicants in completing FCC Form 175. However, the automated check cannot be relied upon to determine whether the information provided in the FCC Form 175 is complete or accurate. The automated check may not catch all errors and applicants cannot rely on the automated check to determine the completeness or the accuracy of submitted information. If the automated check does not encounter any errors, a box will appear displaying the message “No Errors found - You may continue to Certify and Submit.” Applicants may then click the CONTINUE TO CERTIFY button. 6. Attaching Additional Information If an applicant needs to provide additional information not requested directly in the screens comprising the FCC Form 175, additional information can be provided in an attachment. The screen for adding an attachment to FCC Form 175 can be accessed by clicking on the Attachments link in the upper right of any screen. The Add Attachment screen requests information regarding the type of attachment to be added, the name of the file to be attached, and a brief description of the attachment. If the attachment is a request for a waiver of any of the Commission’s rules or procedures, the applicant must identify the “Type” of attachment as a “Waiver” to facilitate prompt processing. Once the requested information is provided, applicants can add the attachment to the application by clicking on the ADD ATTACHMENT button. A list of any attachments already uploaded along with the applicant’s FCC Form 175 appears at the bottom of the screen. When uploading attachments, applicants may use a variety of file formats-- including (but not limited to) Word 2000 or earlier, WordPerfect 5. x or later, Adobe PDF, and ASCII text-- and must verify that the files contain all exhibit information. Files may be no larger than 10 Mb. Graphics files (e. g., .bmp, .tiff, .jpg) and spreadsheets (e. g., Excel, Lotus) are supported but not recommended. Files must not be password- protected. 7. Certify and Submit The Certify and Submit screens are the sixth and final series of screens in FCC Form 175. In the Certify and Submit screens, applicants will provide certifications required of all participants in the Commission’s competitive bidding processes. 223 223 See generally, 47 C. F. R. § 1.2105( a)( 2) (iv)-( vii) and (ix)-( xi). 63 Federal Communications Commission DA 06– 2014 C - 11 The first Certify and Submit screen requires each applicant to indicate whether the applicant, any affiliate, any controlling interest, and any affiliate of a controlling interest have ever been in default on any Commission license or have ever been delinquent on any non- tax debt owed to any Federal agency. 224 Applicants associated with a relevant entity that has been in default or delinquent may participate in an auction, if otherwise qualified. However, such applicants must submit an upfront payment equal to 50 percent more than otherwise required. 225 The second Certify and Submit screen lists the certifications required of all applicants in the Commission’s competitive bidding processes and requests that the applicant’s certifying official be identified and sign the application. Any auction short- form application must be certified by: (1) the applicant, if the applicant is an individual, (2) one of the partners if the applicant is a partnership, (3) by an officer, director, or duly authorized employee, if the applicant is a corporation, (4) by a member who is an officer, if the applicant is an unincorporated association, (5) by the trustee if the applicant is an amateur radio service club, or (6) a duly elected or appointed official who is authorized to do so under the laws of the applicable jurisdiction, if the applicant is a governmental entity. 226 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 license. 227 Applicants are reminded that 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, its certifications and any attachments are true and correct. (Moreover, as noted above, a change of certifying official is considered a major change of the short- form application and will not be permitted after the short- form deadline.) 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. Once the two Certify and Submit screens have been filled out, the application may be submitted by clicking on the SUBMIT button. After the application has been submitted, a confirmation screen will be displayed that states the submission time and date, along with a unique file number. It is recommended that you print a copy of the confirmation page for your records. You may then view and print a copy of your submitted application by clicking on Print Preview. FCC Form 175 applications must be submitted and confirmed prior to 6: 00 p. m. ET on Monday, December 11, 2006. Late applications or unconfirmed submissions of electronic data will not be accepted. 224 See 47 C. F. R. § 1.2105( a)( 2)( xi). 225 See 47 C. F. R. § 1. 2106( a). 226 See 47 C. F. R. § 1.917. 227 See 47 C. F. R. § 1.2105( a)( 2)( v). 64 Federal Communications Commission DA 06– 2014 C - 12 8. Withdrawing an Application Before the Short- Form Filing Deadline and Updating Existing Applications a. Withdrawing an Application If you wish to withdraw a submitted application before the short- form filing deadline, click on the Withdraw Application icon on the Auction Application Manager Create or Review Auction Applications page and confirm that you want to withdraw your application. If you subsequently decide to file an application, you will have to re- enter all previously- submitted data. Applications may not be withdrawn after the short- form application filing deadline. b. Updating Existing Applications Once you have logged into the Auctions Application Manager, the Create or Review Auction Applications page displays any application you have created or submitted within a filing window. Note: This page shows the application status, the date and time the application was last updated; and the date and time the application was last submitted. You may use this page as a reference to confirm the date and time of your most recent submission of the application. To review or continue working on an existing application, click its auction number. This produces the application’s Summary page and places you in a view/ edit mode. Applicants must go to the Certify and Submit screens and click the SUBMIT button to submit any changes made to their FCC Form 175. After the revised application has been submitted, a confirmation page will be displayed that states the submission time and date, along with your unique file number. It is recommended that you print a copy of the confirmation page for your records. You may then view and print a copy of your submitted application by clicking on Print Preview. After the short- form application filing deadline (6: 00 p. m. ET December 11, 2006), applicants may make only minor changes to their applications. Applicants will not be permitted to make major modifications to their applications (e. g., change their license selections, change the certifying official, change control of the applicant, or increase its bidding credit). 228 9. Upfront Payment Calculator and Form 159 You may access the Upfront Payment Calculator and Form 159 from the Create or Review Auction Applications page and from the Auction Application Submit Confirmation page. When you click the Upfront Payment Calculator and Form 159 icon or link, a page will be displayed where you can determine the appropriate upfront payment amount to submit with the FCC Form 159. From the Calculate Upfront Payment page, you may click the Form 159 button to obtain the FCC Form 159. 10. Refund of Upfront Payment On My Auctions page, click on the See Wire Transfer for Refund Purposes link to provide your wire transfer instructions for purposes of refunds of upfront payments. The Commission will use this information to refund excess funds on deposit upon receipt of a written refund request. 228 See 47 C. F. R. § 1.2105( b). 65 Federal Communications Commission DA 06– 2014 C - 13 D. Application Review Once the FCC has completed the short- form application 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:// auctions. fcc. gov/ (primary location) or http:// auctions2. fcc. gov/ (secondary location). Click the Auction Applications link in the Public Access area on the FCC Integrated Spectrum Auction System page to start your search. E. Technical Support For technical assistance with using FCC software, contact the FCC Technical Support Hotline at (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY). The FCC Technical Support Hotline is available Monday through Friday from 8 a. m. to 6 p. m. ET. All calls to the FCC Technical Support Hotline are recorded. FCC Technical Support can also be contacted electronically by filling out a help request form at https:// esupport. fcc. gov/ request. htm. On the Submit Help Request page, select Integrated Spectrum Auction System (ISAS) from the "FCC System" drop- down. Paperwork Reduction Act Approval: The FCC Form 175 was assigned control number 3060- 0600 and was approved by the Office of Management and Budget on June 6, 2006. 66 Federal Communications Commission DA 06– 2014 E - 1 ATTACHMENT E FORMULAS TO DETERMINE MINIMUM ACCEPTABLE BIDS Ai = (C * Bi) + (( 1- C) * Ai- 1) Ii+ 1 = smaller of (( 1 + Ai) * N) and M X i+ 1 = Ii+ 1 * Yi where, Ai = activity index for the current round (round i) C = activity weight factor Bi = number of bidders submitting bids on the licenses in the current round (round i) Ai- 1 = activity index from previous round (round i- 1), A0 is 0 Ii+ 1 = percentage increment for the next round (round i+ 1) N = minimum percentage increment or percentage increment floor M = maximum percentage increment or percentage increment ceiling X i+ 1 = dollar amount associated with the percentage increment Yi = provisionally winning bid amount from the current round Examples License 1 C= 0.5, N = 0.1, M = 0.2 Round 1 (2 bidders submitting bids, provisionally winning bid = $1, 000,000) 1. Calculation of additional percentage for round 2: A1 = (0.5 * 2) + (0.5 * 0) = 1 I2 = The smaller of (( 1 + 1) * 0.1) = 0.2 or 0.2 (the maximum percentage increment) 2. Calculation of dollar amount associated with the additional percentage for round 2 (using I2 from above): X2 = 0.2 * $1, 000,000 = $200,000 3. Minimum acceptable bid amount for round 2 = $1,200,000 Round 2 (3 bidders submitting bids, provisionally winning bid = $2, 000,000) 1. Calculation of additional percentage for round 3: A2 = (0.5 * 3) + (0.5 * 1) = 2 I3 = The smaller of (( 1 + 2) * 0.1) = 0.3 or 0.2 (the maximum additional percentage) 2. Calculation of dollar amount associated with the additional percentage for round 3 (using I3 from above): X3 = 0.2 * $2, 000,000 = $400,000 69 Federal Communications Commission DA 06– 2014 E - 2 3. Minimum acceptable bid amount for round 3 = $2,400,000 Round 3 (1 bidder submitting bids, provisionally winning bid = $2,400,000) 1. Calculation of additional percentage for round 4: A3 = (0.5 * 1) + (0.5 * 2) = 1.5 I4 = The smaller of (( 1 + 1.5) * 0.1) = 0.25 or 0.2 (the maximum additional percentage) 2. Calculation of dollar amount associated with the additional percentage for round 4 (using I4 from above): X4 = 0.2 * $2,400,000 = $480,000 3. Minimum acceptable bid amount for round 4 = $2,880,000 70 Federal Communications Commission DA 06– 2014 F - 1 ATTACHMENT F SUMMARY LISTING OF DOCUMENTS ADDRESSING APPLICATION OF THE ANTI- COLLUSION RULE Commission Decisions Implementation of Section 309( j) of the Communications Act – Competitive Bidding, PP Docket No. 93- 253, Second Report and Order, 9 FCC Rcd 2348, 2386- 2388 ¶¶ 221- 226 (1994). Implementation of Section 309( j) of the Communications Act – Competitive Bidding, Fifth Report and Order, PP Docket No. 93- 253, 9 FCC Rcd 5532, 5570- 5571 ¶¶ 91- 92 (1994). Implementation of Section 309( j) of the Communications Act – Competitive Bidding, Fourth Memorandum Opinion and Order, PP Docket No. 93- 253, 9 FCC Rcd 6858, 6866- 6869 ¶¶ 47- 60 (1994). Implementation of Section 309( j) of the Communications Act – Competitive Bidding, Second Memorandum Opinion and Order, PP Docket No. 93- 253, 9 FCC Rcd 7245, 7253- 7255 ¶¶ 48- 55 (1994). Implementation of Section 309( j) of the Communications Act – Competitive Bidding, Memorandum Opinion and Order, PP Docket No. 93- 253, 9 FCC Rcd 7684, 7687- 7689 ¶¶ 8- 12 (1994). Commercial Realty St. Pete, Notice of Apparent Liability for Forfeiture, 10 FCC Rcd 4277 (1995), Memorandum Opinion and Order, 11 FCC Rcd 15374 (1996). Applications of Mercury PCS II, LLC, Notice of Apparent Liability for Forfeiture, 12 FCC Rcd 17970 (1997), Memorandum Opinion and Order, 13 FCC Rcd 23755 (1998). 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 374, 463- 469 ¶¶ 155- 166 (1997). Application of US West Communications, Inc., Notice of Apparent Liability for Forfeiture, 13 FCC Rcd 8286 (1998); Notice of Apparent Liability for Forfeiture of US West Communications, Inc., Order, 14 FCC Rcd 8816 (1999). Application of Western PCS BTA I Corp., Notice of Apparent Liability for Forfeiture, 13 FCC Rcd 8305 (1998); Notice of Apparent Liability for Forfeiture of Western PCS BTA 1 Corp., Memorandum Opinion and Order, 14 FCC Rcd 21571, 21577- 78 ¶ 20 (1999). Amendment of Part 1 of the Commission’s Rules – Competitive Bidding Procedures, WT Docket No. 97- 82, Seventh Report and Order, 16 FCC Rcd 17546 (2001). 71 Federal Communications Commission DA 06– 2014 F - 2 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, MM Docket No. 94- 13, Order, 11 FCC Rcd 9655 (Wireless Telecom. Bur. 1995). Applications of GWI PCS, Inc., Memorandum Opinion and Order, 12 FCC Rcd 6441 (Wireless Telecom. Bur. 1997). Applications of Mercury PCS II, LLC, Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 18093 (Wireless Telecom. Bur. 1997). Applications of High Plains Wireless, L. P., Memorandum Opinion and Order, 12 FCC Rcd 19627 (Wireless Telecom. Bur. 1997). Applications of Mercury PCS II, LLC, Memorandum Opinion and Order, 13 FCC Rcd 5756 (Wireless Telecom. Bur. 1997). Public Notices Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules, Public Notice, 11 FCC Rcd 9645 (Wireless Telecom. Bur. 1995). FCC Staff Clarifies Application of Anti- Collusion Rule to Broadband PCS "C" Block Reauction, Public Notice, 11 FCC Rcd 7031 (Auc. Div. 1996). Wireless Telecommunications Bureau Provides Guidance on the Anti- Collusion Rule for D, E and F Block Bidders, Public Notice, 11 FCC Rcd 10134 (Wireless Telecom. Bur. 1996). Wireless Telecommunications Bureau Responds to Questions About the Local Multipoint Distribution Service Auction, Public Notice, 13 FCC Rcd 341 (Wireless Telecom. Bur. 1998). Letters from the Office of General Counsel, the Wireless Telecommunications Bureau and the Media 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 from Kathleen O’Brien Ham, 10 FCC Rcd 13783 (Auc. Div. 1995). Letter to Mark Grady from Kathleen O’Brien Ham, 11 FCC Rcd 10895 (Auc. Div. 1996). Letter to David L. Nace from Kathleen O’Brien Ham, 11 FCC Rcd 11363 (Auc. Div. 1996). 72 Federal Communications Commission DA 06– 2014 F - 3 Letter to Elliott J. Greenwald from Christopher J. Wright, 13 FCC Rcd 7132 (Gen. Counsel 1998). Letter to Robert Pettit from Margaret W. Wiener, 16 FCC Rcd 10080 (Auc. Div. 2000). Letter to Colby M. May from Barbara A. Kreisman and Margaret W. Wiener, 20 FCC Rcd 14648 (Video and Auc. Divs. 2005). Letter to John Cooper, Aurora Communications, Inc., from Margaret W. Wiener, 21 FCC Rcd 523 (Auc. Div. 2006). Letter to Howard A. Kalmenson, Lotus Communications Corp., from Margaret W. Wiener, 21 FCC Rcd 520 (Auc. Div. 2006). Enforcement Bureau Decisions Application of Star Wireless, LLC, Forfeiture Order, 19 FCC Rcd 18626 (Enf. Bur. 2004). Application of Northeast Communications of Wisconsin, Inc., Forfeiture Order, 19 FCC Rcd 18635 (Enf. Bur. 2004). Civil Actions Initiated by U. S. Department of Justice U. S. v. Omnipoint Corp., Proposed Final Judgments and Competitive Impact Statements, Department of Justice, 63 FR 65,228 (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). How to Obtain Copies of the Anti- Collusion Decisions Many of the documents listed in this attachment can be retrieved from the following Commission web site: http:// wireless. fcc. gov/ auctions/ anticollusion. The documents may be located by using our search engine (select the link “search”). Documents retrieved from the web site are available in various formats including Word, WordPerfect, Acrobat Reader, Excel, and ASCII Text. To review a document in its entirety, including footnotes, it is necessary to access the document in WordPerfect, MS Word, or Acrobat Reader. Additionally, all of the documents can be ordered in hard copy for a fee from the Commission’s duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW, Room CY- B402, Washington, DC 20554, (800) 378- 3160 (telephone) or http:// www. bcpiweb. com. 73