*Pages 1--9 from Microsoft Word - 55448.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- 490 March 3, 2006 AUCTION OF FULL POWER TELEVISION CONSTRUCTION PERMITS 25 Bidders Qualified to Participate in Auction No. 64 Report No. AUC- 06- 64- D (Auction No. 64) In this Public Notice, the Media Bureau (“ MB”) and the Wireless Telecommunications Bureau (“ WTB”) (collectively the “Bureaus”) identify 25 applicants found to be qualified to bid in the upcoming auction for 11 full power television station construction permits (“ Auction No. 64”). 1 Bidding in Auction No. 64 is scheduled to begin on Wednesday, March 15, 2006. In addition, this Public Notice contains bidding instructions and other important information regarding Auction No. 64. Attachment A lists each of the 25 qualified bidders, their upfront payments, and their maximum eligibility in bidding units. Attachment B lists the construction permits selected on each qualified bidder’s short- form application (FCC Form 175). For qualified bidders claiming a new entrant bidding credit, the bidding credit for each construction permit is indicated as 35 percent or 25 percent. 2 Attachment C lists each applicant that submitted a short- form application, but did not qualify to bid in this auction. These applicants are reminded that they remain subject to the Federal Communication Commission’s rules prohibiting collusion in Commission auctions. 3 In order to participate effectively in the auction, qualified bidders again should familiarize themselves with the auction rules, procedures, and other information described in the Auction No. 64 Procedures Public Notice and subsequent public notices. 4 These public notices and other documents related to 1 See “Auction of Full Power Television Construction Permits Scheduled for March 15, 2006, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction No. 64,” Public Notice, 20 FCC Rcd 18097 (WTB/ MB 2005) (“ Auction No. 64 Procedures Public Notice"). 2 The new entrant bidding credit is not available to an applicant if it, and/ or any individual or entity with an attributable interest in the applicant, has an attributable interest in more than three media of mass communications or any existing media of mass communications in the “same area” as the proposed broadcast facility. 47 C. F. R. § 73. 5007. See 47 C. F. R. § 73. 5007( b)( 1)-( 3) for the specific service definitions of “same area.” 3 See 47 C. F. R. § 1.2105( c); infra, pp. 6- 8. 4 See Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18097; see also Auction of Full Power Television Construction Permits, Status of FCC Form 175 Applications to Participate in Auction No. 64, Public Notice, DA 06- 281 (WTB/ MB Feb. 8, 2006). 1 3 auction purposes, even if only one applicant for a particular construction permit becomes a qualified bidder, that applicant is required to submit a bid in order to obtain the construction permit. 7 The Commission will conduct this auction over the Internet, and telephonic bidding will be available as well. The Integrated Spectrum Auction System (“ ISAS” or “FCC Auction System”) can be accessed at http:// auctions. fcc. gov. Alternatively, you also may use http:// auctions2. fcc. gov. Bidders are reminded that the Apple® Mac OS® is not currently supported. Qualified bidders are permitted to bid telephonically or electronically. In either case, each authorized bidder must have his or her own RSA SecurID card, which the FCC will provide at no charge. Applicants with only 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 and the instructions for using them are only mailed to the contact person at the contact address listed on the applicant’s short- form application. Please note that each SecurID card is tailored to a specific auction. SecurID cards issued for other auctions or obtained from a source other than the FCC will not work for Auction No. 64. The Auction Bidder Line telephone number will be supplied with the registration material. Please note that the SecurID cards can be recycled, and we strongly encourage bidders to return the cards to the FCC. We will provide pre- addressed envelopes that bidders may use to return the cards once the auction closes. Bidding Contingency Plan. Bidders should develop comprehensive contingency plans that can be quickly implemented if bidders experience difficulty participating in the auction. While the FCC will correct any problems within Commission- controlled facilities, bidders are solely responsible for anticipating and overcoming problems such as bidder computer or other technical failures, loss of or problems with data connections, telephone service interruptions, adverse local weather conditions, unavailability of authorized bidders, or the loss or breach of confidential security codes. In their registration materials, all qualified bidders will be supplied with a telephone number for the Auction Bidder Line. Bidders choosing to bid telephonically are required to use this telephone number to place bids. Electronic bidders may use this telephone number as an alternate method of bidding in the event they are unable to submit their bids electronically. Telephonic bidders are reminded to allow sufficient time to bid by placing their calls well in advance of the close of a round. 8 Minimum Opening Bid Amounts. There will be a minimum opening bid amount for each construction permit in Auction No. 64, calculated in accordance with factors previously announced. 9 The minimum opening bid amount is subject to reduction at the discretion of the Bureaus. The Bureaus will not entertain requests to lower minimum opening bid amounts. The Bureaus will exercise this discretion, if at all, independent of any communications from bidders. 7 See Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18099. Any applicant that submits a short- form application but fails to timely submit an upfront payment will retain its place in the relevant MX group for Auction No. 64 but, having purchased no bidding eligibility, will not be eligible to bid. 8 The length of a call to place a telephonic bid may vary; please allow a minimum of 10 minutes. 9 Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18131. Attachment A of the Auction No. 64 Procedures Public Notice sets forth the minimum opening bid amounts for each construction permit offered in Auction No. 64. 3 4 Announcements. The Commission will post pertinent auction information as announcements in the FCC Auction System. Bidders should routinely check for announcements each time they enter the FCC Auction System and should read this information carefully. Bidding Schedule. On Wednesday, March 15, 2006, and continuing until further notice, there will be four rounds of bidding as follows: Bidding Round 10: 00 a. m. - 11: 00 a. m. ET Bidding Round 12: 00 p. m. - 1: 00 p. m. ET Bidding Round 2: 00 p. m. - 3: 00 p. m. ET Bidding Round 4: 00 p. m. - 5: 00 p. m. ET Round results will be available approximately 10 minutes after the close of each round. The Bureaus will set the pace of the auction based upon monitoring of the bidding and assessment of the auction’s progress. All subsequent schedule changes will be made by announcement via the FCC Auction System during the course of the auction. Bidder Questions during the Auction. FCC auction staff and technical support staff will be available during the auction to answer questions from authorized bidders. Bidders should identify themselves as a bidder with a time- sensitive auction question when calling. Help can be obtained through the following options: FCC Auction Bidder Line (telephonic bidding, auction conduct questions) Use Auction Bidder Line telephone number supplied in registration mailing FCC Technical Support (all technical questions, software and hardware) (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY) FCC Auctions and Spectrum Access Division (legal questions only) (202) 418- 0660 FCC Video Division (202) 418- 1600 (legal and service rule questions only) The FCC Auction System includes a function for bidders to submit suggestions to the FCC, but this is not an appropriate mechanism for asking time- sensitive questions that may need an immediate response, such as questions about auction procedures or other issues. Such questions should be directed to one of the telephone numbers listed above. Monitoring Round Results. The Integrated Spectrum Auction System (ISAS) Bidder’s Guide (included in the registration material) provides instructions for reviewing and downloading round results. 4 5 Amendments to Short- Form Applications. Applicants are responsible for maintaining the accuracy and completeness of information furnished in their short- form applications, including their attachments. 10 Applicants should amend their short- form applications as promptly as possible, but no later than ten business days from the occurrence of a reportable change. Changes that cause a loss of or reduction in eligibility for a new entrant bidding credit must be reported immediately. Applicants must modify their short- form application electronically and submit a letter, briefly summarizing the changes, by electronic mail to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction64@ fcc. gov. Questions about changes should be directed to Lynne Milne at (202) 418- 0660. As described in the Commission’s rules, applicants may make only minor corrections to their short- form applications (e. g., changing an authorized bidder or a facsimile number). 11 Major modifications (e. g., construction permit changes, newly claimed or increased new entrant bidding credit, or changing control of the applicant) will not be accepted. 12 Bidders are reminded that any change affecting eligibility for the new entrant bidding credit, insofar as it results in the diminishment or loss of the new entrant bidding credit claimed on the short- form application, must be clearly stated in the bidder’s amendment and in the summary letter referenced above. In such cases, the Commission will make appropriate adjustments in the new entrant bidding credit prior to the computation of any down and final payment amounts due. 13 Due Diligence. Potential bidders are reminded that they are solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the value of the broadcast facilities being offered in this auction. The Commission makes no representations or warranties about the use of this spectrum for particular services. Potential bidders are strongly encouraged to conduct their own research prior to the beginning of competitive bidding in Auction No. 64 in order to determine the existence of pending administrative or judicial proceedings, pleadings, applications or authorizations that might affect their decisions regarding participation in the auction. Potential bidders also are strongly encouraged to review all underlying Commission orders, such as the specific Report and Order amending the television and digital television Tables of Allotments and allotting the analog or digital channel( s) on which they plan to bid. 14 Bidders are also responsible for reviewing all pending rulemaking petitions and open proceedings, as well as reconsideration petitions or waiver requests, that might affect the construction permit on which they plan to bid. Additionally, potential bidders should perform technical analyses sufficient to assure themselves that, should they prevail in competitive bidding for a specific construction permit, they will be able to build and operate facilities that will fully comply with the Commission’s technical and legal requirements. Participants in Auction No. 64 are strongly encouraged to continue such research throughout the auction. Each potential bidder is solely responsible for identifying associated risks and for investigating and evaluating the degree to which such matters may affect the bidder’s ability to bid on, otherwise acquire, or make use of construction permits (and subsequent licenses) available in Auction No. 64. For further details regarding due diligence, including but not limited to the potential impact of analog- to- digital conversion by television stations and interference protection obligations, qualified bidders should refer to the Auction No. 64 Procedures Public Notice under Section I. B. 3. 15 10 See 47 C. F. R § 1.65. 11 See 47 C. F. R. § 1.2105( b). 12 Id. 13 47 C. F. R. §§ 73. 5007 and 73. 5008. 14 See 47 C. F. R. §§ 73. 606 and 73. 622. 15 Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18106- 08. 5 6 Mock Auction. On Monday, March 13, 2006, the Bureaus will conduct a mock auction which will allow qualified bidders to familiarize themselves with the FCC Auction System. Only qualified bidders will be permitted to participate in the mock auction. The Bureaus will conduct this auction over the Internet, but telephonic bidding also will be available. Qualified bidders that wish to place bids telephonically should use the telephone number supplied in the Auction No. 64 registration materials. The mock auction can be accessed at: http:// auctions. fcc. gov. Alternatively, you may also use http:// auctions2. fcc. gov. The mock auction will include only 3 of the 11 Auction No. 64 construction permits and will follow the rules governing the actual auction. The mock auction will be identified as Mock Auction No. 74. The FCC Auction System will assume that each bidder applied for all 3 of the construction permits included in the mock auction. The FCC Auction System also will assume that each bidder submitted an upfront payment sufficient to give the bidder initial (maximum) eligibility (as measured in bidding units) to bid on all 3 of the permits. The mock auction will simulate the start of the auction, and each bidder will be required to be active on 75 percent of its current bidding eligibility. If a bidder does not meet this requirement, it will have a waiver automatically applied (if the bidder has any waivers available), or its current eligibility will be permanently reduced (if the bidder has no waivers remaining), possibly eliminating the bidder from further bidding in the mock auction. Electronic bidders participating in the mock auction are advised to review the Integrated Spectrum Auction System (ISAS) Bidder’s Guide provided in the registration material. The mock auction bidding schedule for Monday, March 13, 2006, will be: Round 1 10: 00 a. m. - 11: 00 a. m. ET Round 1 12: 00 p. m. - 12: 30 p. m. ET Round 3 1: 30 p. m. - 2: 00 p. m. ET Round 4 3: 00 p. m. - 3: 15 p. m. ET Round 5 4: 00 p. m. - 4: 15 p. m. ET Prohibition of Collusion. Applicants are reminded that Sections 1.2105( c) and 73.5002( d) of the Commission’s rules prohibit applicants for any of the same geographic license areas from communicating with each other about bids, bidding strategies, or settlements unless they have identified each other as parties with which they have entered into agreements under Section 1.2105( a)( 2)( viii). 16 In Auction No. 64, the rule applies to applicants applying for any of the same construction permits. 17 Therefore, applicants that have selected on their short- form applications any one common television station construction permit have been precluded from engaging in prohibited communications since the short-form application filing deadline. In addition, even if auction applicants each selected only one television station construction permit in common, they may not discuss with each other their bids or bidding strategies relating to any television station construction permit on which either applicant selected to bid on the applicant's short- form application. For Auction No. 64, this prohibition became effective at the short- form application filing deadline on Friday, January 20, 2006, and will end at the post- auction down 16 47 C. F. R. §§ 1. 2105( a)( 2)( viii), 1.2105( c)( 1), and 73. 5002( c). See also Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18103- 06, for a discussion of the anti- collusion rules in Auction No. 64 and the application of geographic license areas to the television broadcast service auction. See 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) (“ Part 1 Seventh Report and Order”); see also id., Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice of Proposed Rule Making, 15 FCC Rcd 15293, 15297- 98 ¶¶ 7- 8 (2000). 17 See generally Part 1 Seventh Report and Order, 16 FCC Rcd at 17549. 6 7 payment deadline, which will be announced in a future public notice. 18 This prohibition applies to all applicants regardless of whether such applicants become qualified bidders or actually bid. 19 The prohibition continues until the down payment deadline regardless of whether a winning bidder needs to make an additional payment by the down payment deadline. For purposes of this prohibition, Section 1.2105( c)( 7)( i) defines “applicant” to include all officers and directors of the entity submitting a short- form application to participate in the auction, as well as all controlling interests of that entity and 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. 20 We note that a violation of the anti- collusion rule could occur when an individual serves as an officer and/ or director for two or more competing applicants. 21 If parties had agreed in principle on all material terms of a bidding agreement( s), those parties must have been identified on the short- form application as required by Section 1.2105( c), even if the agreement had not been reduced to writing. If parties had not agreed in principle by the short- form application filing deadline, an applicant should not have included the names of those parties on its application and must not have continued negotiations or communications prohibited by the anti- collusion rule. 22 Applicants competing for construction permits for any of the same television stations must not communicate indirectly about bids or bidding strategy. 23 Accordingly, the Bureaus encourage such applicants not to use the same individual as an authorized bidder. 24 A violation of the anti- collusion rule could occur if an individual acts as the authorized bidder for two or more competing applicants, and conveys information concerning the substance of bids or bidding strategies between the applicants he or she is authorized to represent in the auction. A violation similarly could occur if the authorized bidders are different individuals employed by the same organization (e. g., law firm or consulting firm). In such a case, at a minimum, applicants should take precautionary steps to prevent communication between authorized bidders. 25 However, the Bureaus caution that merely filing a certifying statement as part of the 18 47 C. F. R. § 1.2105( c)( 1). 19 See, e. g., Star Wireless, LLC, Forfeiture Order, 19 FCC Rcd 18626 (EB 2004) (imposing forfeiture in the amount of $100, 000 for violation of the anti- collusion rule, even though an applicant never made an upfront payment for the auction and was not listed as a qualified bidder); Northeast Communications of Wisconsin, LLC, Forfeiture Order, 19 FCC Rcd 18635 (EB 2004) (imposing forfeiture in the amount of $100, 000 for violation of the anti- collusion rule, even though the applicant never made an upfront payment for the auction and was not listed as a qualified bidder); Letter to Robert Pettit, Esq., from Margaret W. Wiener, 16 FCC Rcd 10080 (WTB Auc. Div. 2000) (declining to exempt an applicant’s controlling interest from coverage by the anti- collusion rule, even though the applicant never made an upfront payment for the auction and was not listed as a qualified bidder). 20 47 C. F. R. § 1.2105( c)( 7)( i). 21 See Letter to Colby M. May from Barbara A. Kreisman and Margaret W. Wiener, 20 FCC Rcd 14648 (Video and Auc. Divs. 2005)( finding apparent violation of anti- collusion rule where applicants with mutually exclusive applications shared same individual as an officer and director and reported no bidding agreement). 22 See “Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti- Collusion Rules,” Public Notice, 11 FCC Rcd 9645 (WTB 1995). 23 Part 1 Seventh Report and Order, 16 FCC Rcd at 17549- 50 ¶ 6. 24 See Auction No. 64 Procedures Public Notice, 20 FCC Rcd at 18104. 25 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). 7 8 short- form application will not outweigh specific evidence that collusive behavior has occurred, nor will it preclude the initiation of an investigation when warranted. 26 In addition, Section 1.65 of the Commission’s rules requires an applicant to maintain the accuracy and completeness of information furnished in its pending application and to notify the Commission within 30 days of any substantial change that may be of decisional significance to that application. 27 Thus, Section 1.65 requires auction applicants that engage in a communication of bids or bidding strategies that results in a bidding agreement, arrangement, or understanding not already identified on their short- form applications to promptly disclose any such agreement, arrangement or understanding to the Commission by amending their pending applications. In addition, Section 1.2105( c)( 6) requires all auction applicants to report any prohibited discussion or disclosure regarding bids or bidding strategy to the Commission in writing immediately but in no case later than five business days after the communication occurs, even if the communication does not result in an agreement or understanding regarding bids or bidding strategies that must be reported under Section 1.65. 28 Applicants that are winning bidders will be required to disclose in their long- form applications the specific terms, conditions, and parties involved in all bidding consortia, joint ventures, partnerships, and other agreements or arrangements entered into relating to the competitive bidding process. 29 Any applicant found to have violated the anti- collusion rule may be subject to sanctions. 30 In addition, applicants are reminded that they are subject to the antitrust laws, which are designed to prevent anti-competitive behavior in the marketplace. If an applicant is found to have violated the antitrust laws in connection with its participation in the competitive bidding process, it may be subject to forfeiture of its upfront payment, down payment, or full bid amount and may be prohibited from participating in future auctions. 31 Submission of Auction- related Filings. As noted above, applicants seeking to amend their short- form applications during the auction must make modifications to their short- form applications electronically and submit a letter, briefly summarizing the changes, by electronic mail to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction64@ fcc. gov. Parties wishing to submit requests, complaints, or other information concerning Auction No. 64 also should send a copy by electronic mail to the attention of Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the following address: auction64@ fcc. gov, in addition to following other procedures prescribed by the Commission’s rules. The Commission occasionally receives complaints regarding certain bidders and requests to suspend bidding during an auction. While the Commission reserves the right to take appropriate action during an auction to preserve the integrity of the auction process, it is generally our practice to address any such allegations only after the winning bidders have submitted their long- form applications, when there is greater opportunity for investigation of such allegations, if warranted. 26 Id., 13 FCC Rcd at 11978 ¶ 13. 27 47 C. F. R. § 1.65. 28 47 C. F. R. §§ 1.65, 1. 2105( c)( 6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17555 ¶ 17. 29 See 47 C. F. R. § 1.2107( d). 30 See 47 C. F. R. §§ 1.2105( c), 1.2107( d), and 1.2109( d). 31 See 47 C. F. R. § 1.2109( d). 8 9 Finally, parties wishing to make suggestions concerning Auction No. 64 or future auctions are encouraged to present such ideas using the suggestion feature of the FCC Auction System. (As mentioned above, this feature is not an appropriate mechanism for posing time- sensitive questions that need an immediate response.) Commission staff considers all suggestions, but may not always provide an individualized response. Long- Form Applications. Within thirty days after release of the auction closing public notice, winning bidders must electronically submit a properly completed long- form application (FCC Form 301), including required exhibits, for each construction permit won through Auction No. 64. 32 The electronic submission of the long- form application must be accompanied by the applicable filing fee. 33 Winning bidders claiming new entrant status must include an exhibit demonstrating their eligibility for the bidding credit. 34 Further filing instructions will be provided to auction winners at the close of the auction. 35 For additional information regarding this public notice, please contact: Auctions and Spectrum Access Division, Wireless Telecommunications Bureau: For general auction questions: Debbie Smith or Lisa Stover at (717) 338- 2888 For legal questions: Lynne Milne at (202) 418- 0660 Video Division, Media Bureau: For legal and service rule questions: Shaun Maher at (202) 418- 2324 or Shaleim Henry at (202) 418- 1600 For technical questions about software or hardware, please contact FCC Technical Support at (877) 480- 3201, option nine; (202) 414- 1250; or (202) 414- 1255 (TTY). - FCC - 32 See 47 C. F. R. §§ 1. 2107 and 73.5005. See also Broadcast Competitive Bidding First Report and Order, 13 FCC Rcd at 15984- 85 ¶¶ 163- 64. 33 See id., 13 FCC Rcd at 15984 ¶ 164. 34 See 47 C. F. R. §§ 1. 2112( b), 73. 5005, 73. 5007 and 73. 5008. See also Instructions for Form 301, Application for Construction Permit for Commercial Broadcast Station, Instructions for Section II: Legal Information, paragraph G: Item 10: Auction Authorization for auction- related exhibit filing requirements. 35 See 47 C. F. R. §§ 1.2107, 1. 2109( a), 73. 3572, 73. 5003, 73. 5005, and 73. 5006( d). 9