Federal Communications Commission DA 19-1027 DA 19-1027 October 10, 2019 AUCTION OF FM BROADCAST CONSTRUCTION PERMITS SCHEDULED FOR APRIL 28, 2020 COMMENT SOUGHT ON COMPETITIVE BIDDING PROCEDURES FOR AUCTION 106 AU Docket No. 19-290 Comment Date: November 6, 2019 Reply Comment Date: November 20, 2019 TABLE OF CONTENTS Heading Paragraph # I. INTRODUCTION 1 II. CONSTRUCTION PERMITS TO BE OFFERED IN AUCTION 106 2 III. PROPOSED BIDDING PROCEDURES 3 A. Simultaneous Multiple-Round Auction Design 4 B. Bidding Rounds 5 C. Stopping Rule 8 D. Information Relating to Auction Delay, Suspension, or Cancellation 11 E. Upfront Payments and Bidding Eligibility 12 F. Activity Rule 15 G. Activity Rule Waivers and Reducing Eligibility 16 H. Reserve Price or Minimum Opening Bids 21 I. Bid Amounts 26 J. Provisionally Winning Bids 32 K. Bid Removal and Bid Withdrawal 34 L. Post-Auction Payments 38 1. Interim Withdrawal Payment Percentage 38 2. Additional Default Payment Percentage 40 IV. EDUCATIONAL INFORMATION FOR AUCTION 106 APPLICANTS 43 V. PROCEDURAL MATTERS 44 A. Paperwork Reduction Act 44 B. Supplemental Initial Regulatory Flexibility Analysis 45 1. Need for, and Objectives of, the Public Notice 46 2. Legal Basis 48 3. Description and Estimate of the Number of Small Entities to Which the Proposed Procedures Will Apply 49 4. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities 57 5. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered 58 6. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules 60 C. Deadlines and Filing Procedures 61 D. Contact Information 66 ATTACHMENT A: CONSTRUCTION PERMITS IN AUCTION 106 I. INTRODUCTION 1. By this Public Notice, the Office of Economics and Analytics (OEA), in conjunction with the Media Bureau (MB), announces an auction of certain FM broadcast construction permits and seeks comment on the procedures to be used for this auction. This auction is scheduled to commence on April 28, 2020, and is designated as Auction 106. II. CONSTRUCTION PERMITS TO BE OFFERED IN AUCTION 106 2. As discussed in greater detail below, Auction 106 will offer 130 construction permits in the FM broadcast service. See Implementation of Section 309(j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, First Report and Order, 13 FCC Rcd 15920, 15923-24, paras. 7-9, 15961, para. 112 (1998) (Broadcast First Report and Order), on recon., Memorandum Opinion and Order, 14 FCC Rcd 8724 (1999), on further recon., Memorandum Opinion and Order, 14 FCC Rcd 12541 (1999), aff'd, Orion Communications Ltd. v. FCC, 221 F.3d 196, No. 98-1424 (D.C. Cir. June 13, 2000) (unpublished opinion available at 2000 WL 816046), aff'd, Orion Communications Ltd. v. FCC, 213 F.3d 761 (D.C. Cir. 2000). The construction permits to be auctioned are for 130 FM allotments, including 34 construction permits that were offered but not sold or were defaulted upon in prior auctions. Attachment A to this Public Notice identifies those previously-offered permits and the auctions in which they were offered. Attachment A lists the specific vacant FM allotments for which the Federal Communications Commission (FCC or Commission) will offer construction permits in this auction, along with the reference coordinates for each vacant FM allotment. In the Broadcast First Report and Order, the Commission gave each applicant in the FM service the opportunity to submit a set of preferred site coordinates as an alternative to the reference coordinates for the vacant FM allotment upon which the applicant intends to bid. See Broadcast First Report and Order, 13 FCC Rcd at 15974-75, para. 142 & nn.152-53. A future public notice announcing the procedures for Auction 106 will provide guidelines for completing FCC Form 175 and exhibits, including detailed instructions for specifying preferred site coordinates. These comprise FM channels added to the Table of FM Allotments, 47 CFR § 73.202(b), pursuant to the Commission’s established rulemaking procedures, and assigned at the indicated communities. Under the policies established in the Broadcast First Report and Order, an applicant may apply for any vacant FM allotment listed in Attachment A. See Broadcast First Report and Order, 13 FCC Rcd at 15974-75, paras. 141-42. If two or more short-form applications (FCC Form 175) specify the same FM allotment, they will be considered mutually exclusive, and the construction permit for that FM allotment will be awarded by competitive bidding procedures. When two or more short-form applications (FCC Forms 175) are submitted for a construction permit for the same allotment in Auction 106, mutual exclusivity exists for auction purposes. See Broadcast First Report and Order, 13 FCC Rcd at 15974, para. 142, 15978-80, paras. 149-53. Once mutual exclusivity exists for auction purposes, even if only one applicant is qualified to bid for a particular construction permit in Auction 106, that applicant is required to submit a bid in order to obtain the construction permit. Any applicant that submits a short-form application, but fails to timely submit an upfront payment, will retain its status as an applicant in Auction 106 and will remain subject to the rules prohibiting certain communications but, having purchased no bidding eligibility, will not be eligible to bid. An applicant that fails to become a qualified bidder for any other reason also will retain its status as an Auction 106 applicant and will remain subject to the rules prohibiting certain communications. III. PROPOSED BIDDING PROCEDURES 3. Consistent with the provisions of section 309(j)(3)(E)(i) of the Communications Act of 1934, as amended (the Act), and to ensure that potential bidders have adequate time to familiarize themselves with the specific rules that will govern the day-to-day conduct of an auction, OEA, in conjunction with MB, seeks comment on a variety of auction-specific procedures relating to the conduct of Auction 106. 47 U.S.C. § 309(j)(3)(E)(i). OEA works in conjunction with MB with respect to the design, implementation and administration of auctions, helping develop policies, programs, and rules concerning auctions of spectrum for broadcasting. See 47 CFR § 0.21(m). A. Simultaneous Multiple-Round Auction Design 4. We propose to use the Commission’s standard simultaneous multiple-round auction format for Auction 106. See Implementation of Section 309(j) of the Communications Act – Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348, 2360-75, paras. 68-159 (1994) (Competitive Bidding Second Report and Order) for a general discussion of competitive bidding design. As described further below, this type of auction offers every construction permit for bid at the same time and consists of successive bidding rounds in which qualified bidders may place bids on individual construction permits. Typically, bidding remains open on all construction permits until bidding stops on every construction permit. We seek comment on this proposal. B. Bidding Rounds 5. The Commission will conduct Auction 106 over the Internet using the FCC auction bidding system. Bidders will also have the option of placing bids by telephone through a dedicated auction bidder line. The toll-free telephone number for the auction bidder line will be provided to qualified bidders prior to the start of bidding in the auction. 6. Under this proposal, Auction 106 will consist of sequential bidding rounds, each followed by the release of round results. The initial bidding schedule will be announced in a public notice to be released at least one week before the start of bidding. Details on viewing round results, including the location and format of downloadable round results files, will be included in the same public notice. 7. We propose that the initial bidding schedule may be adjusted in order to foster an auction pace that reasonably balances a goal of moving the bidding along quickly with the bidders’ need to study round results and adjust their bidding strategies. Under this proposal, such changes may include the amount of time for the bidding rounds, the amount of time between rounds, or the number of rounds per day, depending upon bidding activity and other factors. We seek comment on this proposal. Commenters on this issue should address the role of the bidding schedule in managing the pace of the auction, specifically discussing the tradeoffs in managing auction pace by bidding schedule changes, by changing the activity requirements or bid amount parameters, or by using other means. C. Stopping Rule 8. We have discretion to establish stopping rules before or during multiple round auctions in order to complete the auction within a reasonable time. 47 CFR § 1.2104(e). For Auction 106, we propose to employ a simultaneous stopping rule approach, which means all construction permits remain available for bidding until bidding stops on every construction permit. Specifically, bidding will close on all construction permits after the first round in which no bidder submits any new bid, applies a proactive waiver, or withdraws any provisionally winning bid (if bid withdrawals are permitted in this auction). In Section III.K., “Bid Removal and Bid Withdrawal”, we seek comment on whether bid withdrawals should be permitted in Auction 106. Provisionally winning bids are bids that would become final winning bids if the auction were to close in that given round. They are discussed in Section III.J., “Provisionally Winning Bids.” Proactive waivers are described in Section III.G., “Activity Rule Waivers and Reducing Eligibility,” and bid withdrawals are described in Section III.K., “Bid Removal and Bid Withdrawal,” below. Thus, under the proposed simultaneous stopping rule, bidding would remain open on all construction permits until bidding stops on every construction permit. Consequently, under this approach, it is not possible to determine in advance how long the bidding in this auction will last. 9. Further, we propose to retain the discretion to exercise any of the following stopping options during Auction 106: Option 1. The auction would close for all construction permits after the first round in which no bidder applies a waiver, no bidder withdraws a provisionally winning bid (if withdrawals are permitted in this auction), or no bidder places any new bid on a construction permit for which it is not the provisionally winning bidder. Absent any other bidding activity, a bidder placing a new bid on a construction permit for which it is the provisionally winning bidder would not keep the auction open under this modified stopping rule. Option 2. The auction would close for all construction permits after the first round in which no bidder applies a waiver, no bidder withdraws a provisionally winning bid (if withdrawals are permitted in this auction), or no bidder places any new bid on a construction permit that already has a provisionally winning bid. Absent any other bidding activity, a bidder placing a new bid on an FCC-held construction permit (a construction permit that does not already have a provisionally winning bid) would not keep the auction open under this modified stopping rule. Option 3. The auction would close using a modified version of the simultaneous stopping rule that combines Option 1 and Option 2 above. Option 4. The auction would close after a specified number of additional rounds (special stopping rule) to be announced in advance in the FCC auction bidding system. If we invoke this special stopping rule, we will accept bids in the specified final round(s), after which the auction will close. Option 5. The auction would remain open even if no bidder places any new bid, applies a waiver, or withdraws any provisionally winning bid (if withdrawals are permitted in this auction). In this event, the effect will be the same as if a bidder had applied a waiver. The activity rule will apply as usual, and a bidder with insufficient activity will either lose bidding eligibility or use a waiver. 10. We propose to exercise these options only in certain circumstances, for example, where the auction is proceeding unusually slowly or quickly, there is minimal overall bidding activity, or it appears likely that the auction will not close within a reasonable period of time or will close prematurely. Before exercising these options, we are likely to attempt to change the pace of the auction. For example, we may adjust the pace of bidding by changing the number of bidding rounds per day or the minimum acceptable bids. We propose to retain the discretion to exercise any of these options with or without prior announcement during the auction. We seek comment on these proposals. Commenters should provide specific reasons for supporting or objecting to these proposals. D. Information Relating to Auction Delay, Suspension, or Cancellation 11. For Auction 106, we propose that at any time before or during the bidding process we may delay, suspend, or cancel bidding in the auction in the event of a natural disaster, technical obstacle, network interruption, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. 47 CFR § 1.2104(i). We will notify participants of any such delay, suspension, or cancellation by public notice or through the FCC auction bidding system’s messages function. If bidding is delayed or suspended, we may, in our sole discretion, elect to resume the auction starting from the beginning of the current round or from some previous round, or cancel the auction in its entirety. We emphasize that we will exercise this authority solely at our discretion, and not as a substitute for situations in which bidders may wish to apply activity rule waivers. We seek comment on this proposal. E. Upfront Payments and Bidding Eligibility 12. In keeping with the usual practice in spectrum auctions, we propose that applicants be required to submit upfront payments as a prerequisite to becoming qualified to bid. Id. § 1.2106. As described below, the upfront payment is a refundable deposit made by an applicant to establish its eligibility to bid on construction permits. Upfront payments that are related to the specific construction permits being auctioned protect against frivolous or insincere bidding and provide the Commission with a source of funds from which to collect payments owed at the close of the bidding. See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2377-79, paras. 169-76. We note that “[a]ny auction applicant that, pursuant to § 1.2105(a)(2)(xii), certifies that it is a former defaulter must submit an upfront payment equal to 50% more than the amount that would otherwise be required.” 47 CFR § 1.2106(a). 13. We seek comment on an appropriate upfront payment for each construction permit being auctioned, taking into account such factors as the efficiency of the auction process and the potential value of similar construction permits. With these considerations in mind, we propose the upfront payments set forth in Attachment A to this Public Notice, and seek comment on those proposed upfront payment amounts. 14. We further propose that the amount of the upfront payment submitted by a bidder will determine its initial bidding eligibility in bidding units, which are a measure of bidder eligibility and bidding activity. We propose to assign each construction permit a specific number of bidding units, equal to one bidding unit per dollar of the upfront payment listed in Attachment A. The number of bidding units for a given construction permit is fixed and does not change during the auction as prices change. If an applicant is found to be qualified to bid on more than one permit being offered in Auction 106, such bidder may place bids on multiple construction permits, provided that the total number of bidding units associated with those construction permits does not exceed that bidder’s current eligibility. A bidder cannot increase its eligibility during the auction; it can only maintain its eligibility or decrease its eligibility. In calculating its upfront payment amount and hence its initial bidding eligibility, an applicant must determine the maximum number of bidding units on which it may wish to bid (or hold provisionally winning bids) in any single round and submit an upfront payment amount covering that total number of bidding units. We request comment on these proposals. Example: Upfront Payments, Bidding Eligibility, and Bidding Flexibility Construction Permit Market Name Bidding Units Upfront Payment MM-FM1067-C First Mesa, AZ 15,000 $15,000 MM-FM1069-A Cottonwood, CA 35,000 $35,000 If a bidder wishes to bid on both construction permits in a round, it must have selected both on its FCC Form 175 and purchased at least 50,000 bidding units (15,000 + 35,000) of bidding eligibility. If it only wishes to bid on one, but not both, purchasing 35,000 bidding units would meet the eligibility requirement for either construction permit. The bidder would be able to bid on either construction permit, but not both at the same time. If the bidder purchased only 15,000 bidding units, the bidder would have enough eligibility for the First Mesa, AZ construction permit but not for the Cottonwood, CA construction permit. F. Activity Rule 15. To ensure that the 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. For purposes of the activity rule, the FCC auction bidding system calculates a bidder’s activity in a round as the sum of the bidding units associated with any construction permits upon which it places bids during the current round and the bidding units associated with any construction permits for which it holds provisionally winning bids. See 47 CFR § 1.2104(f). Bidders are required to be active on a specific percentage of their current bidding eligibility during each round of the auction. We propose a single-stage auction with the following activity requirement: In each bidding round, a bidder desiring to maintain its current bidding eligibility is required to be active on 100% of its bidding eligibility. Thus, the activity requirement would be satisfied when a bidder has bidding activity on construction permits with bidding units that total 100% of its current eligibility in the round. If the activity rule is met, then the bidder’s eligibility does not change in the next round. 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 for the next round of bidding, possibly curtailing or eliminating the bidder’s ability to place additional bids in the auction. See Section III.G., “Activity Rule Waivers and Reducing Eligibility,” below. We seek comment on these activity requirements. We encourage commenters that oppose a 100% activity requirement to explain their reasons with specificity. G. Activity Rule Waivers and Reducing Eligibility 16. For our proposed simultaneous multiple round auction format, we propose that when a bidder’s activity in the current round is below the required minimum level, it may preserve its current level of eligibility through an activity rule waiver, if available. An activity rule waiver applies to an entire round of bidding, not to a particular construction permit. Activity rule waivers can be either proactive or automatic. Activity rule waivers are principally a mechanism for a bidder to avoid the loss of bidding eligibility in the event that exigent circumstances prevent it from bidding in a particular round. 17. The FCC auction bidding system will assume that a bidder that does not meet the activity requirement would prefer to use 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 in which a bidder’s activity level is below the minimum required unless (1) the bidder has no activity rule waiver remaining; or (2) the bidder overrides the automatic application of a waiver by reducing eligibility, thereby meeting the activity requirement. If a bidder has no waivers remaining and does not satisfy the required activity level, the bidder’s current eligibility will be permanently reduced, possibly curtailing or eliminating the ability to place additional bids in the auction. 18. A bidder with insufficient activity may wish to reduce its bidding eligibility rather than use an activity rule waiver. If so, the bidder must affirmatively override the automatic waiver mechanism during the bidding round by using the reduce eligibility function in the FCC auction bidding system. In this case, the bidder’s eligibility would be permanently reduced to bring it into compliance with the activity rule described above. Reducing eligibility is an irreversible action; once eligibility has been reduced, a bidder cannot regain its lost bidding eligibility. 19. Under the proposed simultaneous stopping rule, a bidder would be permitted to 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 rule waiver (using the proactive waiver function in the FCC auction bidding system) during a bidding round in which no bid is placed or withdrawn (if bid withdrawals are permitted in this auction), the auction will remain open and the bidder’s eligibility will be preserved. An automatic waiver applied by the FCC auction bidding system in a round in which there is no new bid, no bid withdrawal (if bid withdrawals are permitted in this auction), or no proactive waiver would not keep the auction open. For purposes of comments on this proposal, commenters should note that a bidder cannot apply a proactive waiver after bidding in a round, and applying a proactive waiver will preclude a bidder from placing any bid in that round. Applying a waiver is irreversible; once a proactive waiver is submitted, it cannot be unsubmitted, even if the round has not closed yet. 20. Consistent with recent Commission auctions, we propose that each bidder in Auction 106 be provided with three activity rule waivers that may be used as set forth above at the bidder’s discretion during the course of the auction. We seek comment on this proposal. H. Reserve Price or Minimum Opening Bids 21. We seek comment on the use of a minimum opening bid amount and a reserve price prior to the start of bidding in this auction, as we do prior to the start of bidding in each auction, Broadcast Competitive Bidding Order, 13 FCC Rcd at 15971, para. 134; Amendment of Part 1 of the Commission’s Rules – Competitive Bidding Procedures, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374, 454-56, paras. 139-41 (1998) (Part 1 Third Report and Order). See 47 CFR § 1.2104(c), (d). consistent with the statutory mandate of section 309(j) of the Act. 47 U.S.C. § 309(j)(4)(F). See also 47 CFR § 1.2104(c), (d). 22. Normally, a reserve price is an absolute minimum price below which a construction permit or license will not be sold in a given auction. A minimum opening bid, on the other hand, is the minimum bid price set at the beginning of the auction below which no bids are accepted. It is generally used to accelerate the competitive bidding process. 23. We propose to establish minimum opening bid amounts for Auction 106. Based on our experience in past broadcast auctions, we have found that setting a minimum opening bid amount judiciously is an effective bidding tool for accelerating the competitive bidding process. See, e.g., Auction of FM Broadcast Construction Permits Scheduled for July 23, 2015; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 98, Public Notice, 30 FCC Rcd 3544, 3579, para. 139 (WTB/MB 2015) (Auction 98 Procedures Public Notice). We propose not to establish separate reserve prices for the construction permits to be offered in Auction 106. 24. For Auction 106, we propose minimum opening bid amounts determined by taking into account the type of service and class of facility offered, market size, population covered by the proposed broadcast facility, and recent broadcast transaction data, to the extent such information is available. See, e.g., id. See also Broadcast Competitive Bidding Order, 13 FCC Rcd at 15971, para. 134 (“With respect to the methodology to be employed in establishing [minimum opening bid amounts], among the factors we may consider are the type of service that will be offered, the amount of spectrum being auctioned, the degree of competition from incumbent providers, the size of the geographic service areas, potential advertising revenue, unalterable limitations due to physical phenomena (e.g., propagation losses), equipment design limitations, issues of interference with other spectrum bands, and other relevant factors that could reasonably have an impact on valuation of the spectrum being auctioned.”). Attachment A to this Public Notice lists a proposed minimum opening bid amount for each construction permit available in Auction 106. We seek comment on the minimum opening bid amounts specified in Attachment A. 25. If commenters believe that these minimum opening bid amounts will result in unsold construction permits, are not reasonable amounts at which to start bidding, or should instead operate as reserve prices, they should explain why this is so and comment on the desirability of an alternative approach. Commenters should support their claims with valuation analyses and suggested amounts or formulas for reserve prices or minimum opening bids. In establishing the minimum opening bid amounts, we particularly seek comment on factors that could reasonably have an impact on bidders’ valuation of the broadcast spectrum, including the type of service and class of facility offered, market size, population covered by the proposed FM broadcast facility and any other relevant factors. Commenters also may wish to address the general role of minimum opening bids in managing the pace of the auction. For example, commenters could compare using minimum opening bids – e.g., by setting higher minimum opening bids to reduce the number of rounds it takes for construction permits to reach their final prices – to other means of controlling auction pace, such as changes to bidding schedules, percentage increments, or activity requirements. I. Bid Amounts 26. We propose that, in each round, a qualified bidder will be able to place a bid on a given construction permit in any of up to nine different amounts. Bidders must have sufficient eligibility to place a bid on the particular construction permit. See Section III.E., “Upfront Payments and Bidding Eligibility,” above. Under this proposal, the FCC auction bidding system interface will list the acceptable bid amounts for each construction permit. In the event of duplicate bid amounts due to rounding, the FCC auction bidding system will omit the duplicates and will list fewer than nine acceptable bid amounts for the construction permit. 27. The first of the acceptable bid amounts is called the minimum acceptable bid amount. The minimum acceptable bid amount for a construction permit will be equal to its minimum opening bid amount until there is a provisionally winning bid for the construction permit. After there is a provisionally winning bid for a construction permit, the minimum acceptable bid amount will be equal to the amount of the provisionally winning bid plus a specified percentage of that bid amount. The percentage used for this calculation, the minimum acceptable bid increment percentage, is multiplied by the provisionally winning bid amount, and the resulting amount is added to the provisionally winning bid amount. If, for example, the minimum acceptable bid increment percentage is 10%, then the provisionally winning bid amount is multiplied by 10%. The result of that calculation is added to the provisionally winning bid amount, and that sum is rounded using the Commission’s standard rounding procedure for auctions. The result of that calculation is subject to a minimum of $100, and 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. If bid withdrawals are permitted in this auction, in the case of a construction permit for which the provisionally winning bid has been withdrawn, the minimum acceptable bid amount will equal the second highest bid received for the construction permit. See Section III.K., “Bid Removal and Bid Withdrawal,” below. 28. Under this proposal, the Commission will calculate the eight additional bid amounts using the minimum acceptable bid amount and an additional bid increment percentage. The minimum acceptable bid amount is multiplied by the additional bid increment percentage, and that result (rounded) See note 23 (concerning rounding), above. is the additional increment amount. The first additional acceptable bid amount equals the minimum acceptable bid amount plus the additional increment amount. The second additional acceptable bid amount equals the minimum acceptable bid amount plus two times the additional increment amount; the third additional acceptable bid amount is the minimum acceptable bid amount plus three times the additional increment amount; etc. If, for example, the additional bid increment percentage is 5%, then the calculation of the additional increment amount would be (minimum acceptable bid amount) * (0.05), rounded. The first additional acceptable bid amount equals (minimum acceptable bid amount) + (additional increment amount); the second additional acceptable bid amount equals (minimum acceptable bid amount) + (2*(additional increment amount)); the third additional acceptable bid amount equals (minimum acceptable bid amount) + (3*(additional increment amount)); etc. 29. For Auction 106, we propose to use a minimum acceptable bid increment percentage of 10%. This means that the minimum acceptable bid amount for a construction permit will be approximately 10% greater than the provisionally winning bid amount for the construction permit. To calculate the additional acceptable bid amounts, we propose to use a bid increment percentage of 5%. We seek comment on these proposals. 30. We propose to retain the discretion to change the minimum acceptable bid amounts, the minimum acceptable bid percentage, the additional bid increment percentage, and the number of acceptable bid amounts if we determine, consistent with past practice, that circumstances so dictate. See e.g., Auction 98 Procedures Public Notice, 30 FCC Rcd at 3581, paras. 147-48; see also 47 CFR § 1.2104(d) (“The Commission may, by announcement before or during an auction, require minimum bid increments in dollar or percentage terms.”). We propose to retain the discretion to do so on a construction permit-by-construction permit basis. We also propose to retain the discretion to limit (a) the amount by which a minimum acceptable bid for a construction permit may increase compared with the corresponding provisionally winning bid, and (b) the amount by which an additional bid amount may increase compared with the immediately preceding acceptable bid amount. For example, we could set a $1,000 limit on increases in minimum acceptable bid amounts over provisionally winning bids. In this example, if calculating a minimum acceptable bid using the minimum acceptable bid increment percentage results in a minimum acceptable bid amount that is $1,200 higher than the provisionally winning bid on a construction permit, the minimum acceptable bid amount would instead be capped at $1,000 above the provisionally winning bid. We seek comment on the circumstances under which we should employ such a limit, factors we should consider when determining the dollar amount of the limit, and the tradeoffs in setting such a limit or changing other parameters, such as changing the minimum acceptable bid percentage, the bid increment percentage, or the number of acceptable bid amounts. If we exercise this discretion, we will alert bidders by announcement in the FCC auction bidding system during the auction. 31. We seek comment on these proposals. If commenters disagree with the proposal to begin the auction with nine acceptable bid amounts per construction permit, they should suggest an alternative number of acceptable bid amounts to use. Commenters may wish to address the role of the minimum acceptable bids and the number of acceptable bid amounts in managing the pace of the auction and the tradeoffs in managing auction pace by changing the bidding schedule, activity requirement, bid amounts, or by using other means. J. Provisionally Winning Bids 32. The FCC auction bidding system will determine provisionally winning bids consistent with practice in past auctions. See e.g., Auction of FM Broadcast Construction Permits Scheduled for July 23, 2015; Comment Sought on Competitive Bidding Procedures for Auction 98, Public Notice, 30 FCC Rcd 1755, 1764-65, paras. 37-38 (WTB/MB 2015) (Auction 98 Comment Public Notice). At the end of a bidding round, the bidding system will determine a provisionally winning bid for each construction permit based on the highest bid amount received for that permit. The FCC auction bidding system will advise bidders of the status of their bids when round results are released. A provisionally winning bid will remain the provisionally winning bid until there is a higher bid on the same construction permit at the close of a subsequent round, unless the provisionally winning bid is withdrawn (if bid withdrawals are permitted in this auction). Provisionally winning bids at the end of the auction become the winning bids. As a reminder, provisionally winning bids count toward activity for purposes of the activity rule. See Section III.F., “Activity Rule,” above. 33. The FCC auction bidding system assigns a pseudo-random number generated by an algorithm to each bid when the bid is entered. If identical high bid amounts are submitted on a construction permit in any given round (i.e., tied bids), the FCC auction bidding system will use a pseudo-random number generator to select a single provisionally winning bid from among the tied bids. The tied bid with the highest pseudo-random number wins the tiebreaker and becomes the provisionally winning bid. The remaining bidders, as well as the provisionally winning bidder, can submit higher bids in subsequent rounds. However, if the auction were to close with no other bids being placed, the winning bidder would be the one that placed the provisionally winning bid. If the construction permit receives any bids in a subsequent round, the provisionally winning bid again will be determined by the highest bid amount received for the construction permit. K. Bid Removal and Bid Withdrawal 34. The FCC auction bidding system allows each bidder to remove any of the bids it placed in a round before the close of that round. By removing a bid placed within a round, a bidder effectively “unsubmits” the bid. In contrast to the bid withdrawal provisions described below, a bidder removing a bid placed in the same round is not subject to a withdrawal payment. Once a round closes, a bidder may no longer remove a bid. 35. We seek comment on whether bid withdrawals should be permitted in Auction 106. When permitted in an auction, bid withdrawals provide a bidder with the option of withdrawing bids placed in prior rounds that have become provisionally winning bids. A bidder would be able to withdraw its provisionally winning bids using the withdraw function in the FCC auction bidding system. A bidder that withdraws its provisionally winning bid(s), if permitted, is subject to the bid withdrawal payment provisions of the Commission’s rules. 47 CFR §§ 1.2104(g), 1.2109. 36. The Commission has recognized that bid withdrawals may be helpful tool for bidders seeing to efficiently aggregate licenses or implement backup strategies in certain auctions. See Part 1 Third Report and Order, 13 FCC Rcd at 458-60, paras. 148-50. The Commission has also acknowledged that allowing bid withdrawals may encourage insincere bidding or increased opportunities for anti-competitive bidding in certain circumstances. See Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Report and Order, 21 FCC Rcd 891, 902-03, para. 29, 904 n.57 (2006) (CSEA/Part 1 Report and Order). The Commission stated that we should exercise discretion assertively, consider limiting the number of rounds in which bidders may withdraw bids, and prevent bidders from bidding on a particular market if they find a bidder is abusing the Commission’s bid withdrawal procedures. Part 1 Third Report and Order, 13 FCC Rcd at 458-60, paras. 148-50. In managing the auction, therefore, we have discretion to limit the number of withdrawals to prevent bidding abuses. 37. Based on this guidance and on our experience with past auctions of FM broadcast construction permits, we propose to prohibit bidders from withdrawing any bid after the close of the round in which that bid was placed. We make this proposal in light of the site-specific nature and wide geographic dispersion of the permits available in this auction, which suggests that potential applicants for this auction may have fewer incentives to aggregate permits through the auction process (as compared with bidders in many auctions of wireless licenses). Thus, we believe that it is unlikely that bidders will have a need to withdraw bids in this auction. Further, we are mindful that bid withdrawals, particularly if they were made late in this auction, could result in delays in licensing new FM stations and attendant delays in the offering of new broadcast service to the public. We seek comment on our proposal to prohibit bid withdrawals in Auction 106. Commenters advocating alternative approaches should support their arguments by taking into account the construction permits offered, the impact of auction dynamics and the pricing mechanism, and the effects on the bidding strategies of other bidders. L. Post-Auction Payments 1. Interim Withdrawal Payment Percentage 38. In the event bid withdrawals are permitted in Auction 106, we propose the interim bid withdrawal payment be 20% of the withdrawn bid. See CSEA/Part 1 Report and Order, 21 FCC Rcd at 903-04, paras. 30-31. A bidder that withdraws a bid during an auction is subject to a withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the winning bid in the same or a subsequent auction. 47 CFR § 1.2104(g)(1). However, if a construction permit for which a bid has been withdrawn does not receive a subsequent higher bid or winning bid in the same auction, the Commission cannot calculate the final withdrawal payment until that construction permit receives a higher bid or winning bid in a subsequent auction. In such cases, when that final withdrawal payment cannot yet be calculated, the Commission imposes on the bidder responsible for the withdrawn bid an interim bid withdrawal payment, which will be applied toward any final bid withdrawal payment that is ultimately assessed. Id. 39. The amount of the interim bid withdrawal payment is established in advance of bidding in each auction and may range from 3% to 20% of the withdrawn bid amount. Id. The Commission has determined that the level of interim withdrawal payment in a particular auction will be based on the nature of the service and the inventory of the licenses being offered. See CSEA/Part I Report and Order, 21 FCC Rcd at 903-04, paras. 30-31. The Commission noted specifically that a higher interim withdrawal payment percentage is warranted to deter the anti-competitive use of withdrawals when, for example, bidders will not need to aggregate the licenses being offered in the auction or when there are few synergies to be captured by combining licenses. In light of these considerations with respect to the construction permits being offered in this auction, we propose to use the maximum interim bid withdrawal payment percentage permitted by section 1.2104(g)(1) in the event bid withdrawals are allowed in this auction. We request comment on using 20% for calculating an interim bid withdrawal payment amount in Auction 106. Commenters advocating the use of bid withdrawals should also address the percentage of the interim bid withdrawal payment. 2. Additional Default Payment Percentage 40. Any winning bidder that defaults or is disqualified after the close of an auction (i.e., fails to remit the required down payment by the specified deadline, fails to make full and timely final payment, fails to submit a timely long-form application, or whose long-form application is not granted for any reason, or is otherwise disqualified) is liable for a default payment under section 1.2104(g)(2) of the rules. See 47 CFR § 1.2104(g)(2). This payment consists of a deficiency payment, equal to the difference between the amount of the Auction 106 bidder’s winning bid and the amount of the winning bid the next time a construction permit 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. See also 47 CFR § 1.2109. 41. The Commission’s rules provide that, in advance of each auction, it will establish a percentage between 3% and 20% of the applicable winning bid to be assessed as an additional default payment. See 47 CFR § 1.2104(g)(2). As the Commission has indicated, the level of this additional payment in each auction will be based on the nature of the service and the construction permits being offered. See CSEA/Part 1 Report and Order, 21 FCC Rcd at 903-04, paras. 30-31. 42. For Auction 106, we propose to establish an additional default payment of 20%, which is consistent with the percentage in recent auctions of FM construction permits. See, e.g., Auction 98 Procedures Public Notice, 30 FCC Rcd at 3584, para. 168 (setting additional default payment for Auction 98 permits at 20% of the applicable bid). As noted in the CSEA/Part 1 Report and Order, defaults weaken the integrity of the auction process and may impede the deployment of service to the public, and an additional 20% default payment will be more effective in deterring defaults than the 3% used in some earlier auctions. CSEA/Part 1 Report and Order, 21 FCC Rcd at 902-03, para. 29. In light of these considerations, we propose for Auction 106 an additional default payment of 20% of the relevant bid. We seek comment on this proposal. IV. EDUCATIONAL INFORMATION FOR AUCTION 106 APPLICANTS 43. The Commission intends to provide an online tutorial to assist applicants in understanding Auction 106 auction application procedures and the auction bidding system. This tutorial will be made available at the Auction 106 website: www.fcc.gov/auction/106. The Commission intends to provide additional educational opportunities for applicants to familiarize themselves with Auction 106 bidding procedures at a later date. V. PROCEDURAL MATTERS A. Paperwork Reduction Act 44. The Office of Management and Budget (OMB) has approved the information collections in the Application to Participate in an FCC Auction, FCC Form 175. OMB Control No. 3060-0600. This Public Notice does not propose new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. Therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198. See 44 U.S.C. § 3506(c)(4). B. Supplemental Initial Regulatory Flexibility Analysis 45. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), 5 U.S.C. § 603. The Regulatory Flexibility Act, see 5 U.S.C. §§ 601-12, was amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). the Commission prepared Initial Regulatory Flexibility Analyses (IRFAs) in connection with the Broadcast Competitive Bidding Notice of Proposed Rulemaking (NPRM), Implementation of Section 309(j) of the Communications Act–Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, Notice of Proposed Rulemaking, 12 FCC Rcd 22363, 22416-22, Appendix B (1997) (Broadcast Competitive Bidding Notice). and other Commission NPRMs (collectively, Competitive Bidding NPRMs) pursuant to which Auction 106 will be conducted. See Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Declaratory Ruling and Notice of Proposed Rule Making, 20 FCC Rcd 11268, 11301-07, Appendix B (2005) (CSEA Declaratory Ruling); Implementation of Section 309(j) of the Communications Act – Competitive Bidding, Notice of Proposed Rule Making, 8 FCC Rcd 7635, 7666, Appendix (1993) (Competitive Bidding Notice). Final Regulatory Flexibility Analyses (FRFAs) likewise were prepared in the Broadcast First Report and Order and other Commission rulemaking orders (collectively, Competitive Bidding Orders) pursuant to which Auction 106 will be conducted. The Office of Economics and Analytics (OEA), in conjunction with the Media Bureau (MB), has prepared this Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this Public Notice, to supplement the Commission’s Initial and Final Regulatory Flexibility Analyses completed in the Broadcast First Report and Order and other Commission orders pursuant to which Auction 106 will be conducted. See Broadcast Competitive Bidding Order, 13 FCC Rcd at 16015-27, Appendix B; Broadcast Competitive Bidding Notice, 12 FCC Rcd at 22416-22, Appendix B; CSEA Declaratory Ruling, 20 FCC Rcd at 11301-07, Appendix B; Competitive Bidding Notice, 8 FCC Rcd at 7666, Appendix; CSEA/Part 1 Report and Order, 21 FCC Rcd at 927-34, Appendix C; Part 1 Third Report and Order, 13 FCC Rcd at 492-503, Appendix B; 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, 5749-53, Appendix C (1997) (Part 1 Order); Competitive Bidding Second Report and Order, 9 FCC Rcd at 2400, paras. 299-302. Written public comments are requested on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the same filing deadlines for comments specified on the first page of this Public Notice. The Commission will send a copy of the Public Notice, including this Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). See 5 U.S.C. § 603(a). In addition, a summary of the Public Notice, including this Supplemental IRFA, will be published in the Federal Register. See id. 1. Need for, and Objectives of, the Public Notice 46. The proposed procedures for the conduct of Auction 106 as described in the Auction 106 Comment Public Notice would constitute the more specific implementation of the competitive bidding rules contemplated by Parts 1 and 73 of the Commission’s rules, adopted by the Commission in multiple notice-and-comment rulemaking proceedings, See note 49 above. including the Commission’s establishing in the underlying rulemaking orders additional procedures to be used on delegated authority. More specifically, the Auction 106 Comment Public Notice seeks comment on proposed procedures, terms and conditions governing Auction 106, and the post-auction application and payment processes, as well as seeking comment on the minimum opening bid amounts for 130 specified construction permits, and is fully consistent with the underlying rulemaking orders, including the Broadcast First Report and Order and other relevant competitive bidding orders. 47. This Public Notice also is intended to provide notice of proposed auction procedures and adequate time for Auction 106 applicants to comment on those proposed procedures. 47 U.S.C. § 309(j)(3)(E)(i) (requirement to seek comment on auction procedures). To promote the efficient and fair administration of the competitive bidding process for all Auction 106 participants, including small businesses, we seek comment on the following proposed procedures: · use of a simultaneous multiple-round auction format, consisting of sequential bidding rounds with a simultaneous stopping rule (with discretion to exercise alternative stopping rules under certain circumstances); · a specific minimum opening bid amount for each construction permit available in Auction 106; · a specific number of bidding units for each construction permit; · a specific upfront payment amount for each construction permit; · establishment of a bidder’s initial bidding eligibility in bidding units based on that bidder’s upfront payment through assignment of a specific number of bidding units for each construction permit; · use of an activity requirement so that bidders must bid actively during the auction rather than waiting until late in the auction before participating; · a single-stage auction in which a bidder is required to be active on 100% of its bidding eligibility in each bidding round; · provision of three activity waivers for each qualified bidder to allow it to preserve eligibility during the course of the auction; · use of minimum acceptable bid amounts and additional bid increments, along with a proposed methodology for calculating such amounts, while retaining discretion to change the methodology if circumstances dictate; · a procedure for breaking ties if identical high bid amounts are submitted on a construction permit in a given round; · whether to permit use of bid withdrawals; · establishment of an interim bid withdrawal percentage of 20% of the withdrawn bid in the event we allow bid withdrawals in Auction 106; and · establishment of an additional default payment of 20% under section 1.2104(g)(2) in the event that a winning bidder defaults or is disqualified after the auction. 2. Legal Basis 48. The Commission’s statutory obligations to small businesses participating in a spectrum auction under the Act are found in sections 309(j)(3)(B) and 309(j)(4)(D). The statutory basis for the Commission’s competitive bidding rules is found in various provisions of the Act, including 47 U.S.C. §§ 154(i), 301, 303(e), 303(f), 303(r), 304, 307, and 309(j). The Commission has established a framework of competitive bidding rules pursuant to which it has conducted auctions since the inception of the auction program in 1994 and would conduct Auction 106. See generally 47 CFR Part 1, Subpart Q. See also 47 CFR §§ 73.5000, 73.5002-73.5003, 73.5005-73.5009. In promulgating those rules, the Commission conducted numerous Regulatory Flexibility Act analyses to consider the possible impact of those rules on small businesses that might seek to participate in Commission auctions. See, e.g., Competitive Bidding Notice, 8 FCC Rcd at 7666, Appendix; Part 1 Order, 12 FCC Rcd at 5749-53, Appendix C; Broadcast Competitive Bidding Notice 12 FCC Rcd at 22416-22, Appendix B; CSEA Declaratory Ruling, 20 FCC Rcd at 11301-07, Appendix B. In addition, multiple Final Regulatory Flexibility Analyses (FRFAs) were included in the rulemaking orders which adopted or amended rule provisions relevant to this Public Notice. See CSEA/Part 1 Report and Order, 21 FCC Rcd at 927-34, Appendix C; Broadcast Competitive Bidding Order, 13 FCC Rcd at 16015-27, Appendix B; Part 1 Third Report and Order, 13 FCC Rcd at 492-503, Appendix B; Competitive Bidding Second Report and Order, 9 FCC Rcd at 2400, paras. 299-302. The Commission has directed that we, under delegated authority, seek comment on a variety of auction-specific procedures prior to the start of bidding in each auction. 47 U.S.C. § 309(j)(3)(E)(i), 309(j)(4)(F); 47 CFR § 1.2104(c), (d), (e), (f), (g), (i); Part 1 Third Report and Order, 13 FCC Rcd at 447-49, paras. 123-25; see Broadcast Competitive Bidding Order, 13 FCC Rcd at 15967-68, paras. 127-28. See generally Part 1 Order, 12 FCC Rcd at 5697-98, para. 16. 3. Description and Estimate of the Number of Small Entities to Which the Proposed Procedures Will Apply 49. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed procedures, if adopted. 5 U.S.C. § 603(b)(3). The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small government jurisdiction.” 5 U.S.C. § 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 5 U.S.C. § 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15 U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.” A “small business concern” is one which: (1) is independently owned and operated, (2) is not dominant in its field of operation, and (3) satisfies any additional criteria established by the SBA. 15 U.S.C. § 632. 50. The specific procedures and minimum opening bid amounts on which comment is sought in this Public Notice will directly affect all applicants participating in Auction 106. The number of entities that may apply to participate in Auction 106 is unknown. Based on the number of applicants in prior FM auctions, we estimate that the number of applicants for Auction 106 may range from approximately 175 to 260. This estimate is based on the number of applicants who filed short-form applications to participate in previous auctions of FM construction permits held to date, an average of 1.98 short-form applications were filed per construction permit offered, with a median of 1.365 applications per permit. The number of applicants and permits in open FM auctions held to date are as follows: Auction 37 – 697 applicants for 288 permits; Auction 62 – 339 applicants for 171 permits; Auction 68 – 51 applicants for 9 permits; Auction 70 – 181 applicants for 120 permits; Auction 79 – 121 applicants for 122 permits; Auction 91 – 161 applicants for 144 permits; Auction 93 – 145 applicants for 119 permits; Auction 94 – 109 applicants for 112 permits; Auction 98 – 112 applicants for 131 permits. The actual number of applicants for Auction 106 could vary significantly as any individual’s or entity’s decision to participate may be affected by a number of factors beyond the Commission’s control. 51. Radio Stations. This U.S. Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources.” U.S. Census Bureau, 2017 North American Industry Classification System (NAICS) Definitions, “515112 Radio Stations,” https://www.census.gov/cgi-bin/sssd/naics/naicsrch?input=515112&search=2017+NAICS+Search&search=2017. According to the most recent rulemaking order to assess annual regulatory fees, Assessment and Collection of Regulatory Fees for Fiscal Year 2019, Report and Order and Further Notice of Proposed Rulemaking, FCC 19-83, paras. 32-33 (2019). Commission staff identified from the Media Bureau’s Consolidated Database System (CDBS) 10,011 licensed radio facilities subject to annual regulatory fees as of October 1, 2018, excluding from this count radio stations exempt from required annual regulatory fees. In this context, noncommercial educational facilities, non-profit entities, facilities that rebroadcast an exempt entity’s signal, and entities classified as de minimis are exempt from radio facility annual regulatory fees. 52. The SBA has established a small business size standard for this category as firms having $41.5 million or less in annual receipts. 13 CFR § 121.201; NAICS code 515112. Economic Census data from 2012 shows that 2,849 radio station firms operated during that year. U.S. Census Bureau, Table No. EC0751SSSZ4, Information: Subject Series – Establishment and Firm Size: Receipts Size of Firms for the United States: 2012 NAICS Code 515112, https://factfinder.census.gov/bkmk/table/1.0/en/ECN/2012_US/51SSSZ4//naics~515112. Of that number, 2,806 firms operated with annual receipts of less than $25 million per year, 17 with annual receipts between $25 million and $49,999,999 and 26 with annual receipts of $50 million or more. Id. Therefore, based on the SBA’s size standard, the majority of such entities are small entities. 53. According to Commission staff review of the BIA/Kelsey, LLC’s Media Access Pro Radio Database as of September 17, 2019, about 11,033 (or about 99.95%) of 11,039 commercial radio stations had revenues of $41.5 million or less and thus qualify as small entities under the SBA definition. BIA/Kelsey, MEDIA Access Pro Database (viewed Sept. 17, 2019). We note, however, that the SBA size standard data does not enable us to make a meaningful estimate of the number of small entities who may participate in Auction 106. 54. Also, in assessing whether a business entity qualifies as small under the SBA definition, business control affiliations must be included. Business concerns are affiliates of each other when one concern controls or has the power to control the other, or a third party or parties controls or has the power to control both. 13 CFR § 121.103(a)(1). Our estimate therefore likely overstates the number of small entities that might be affected by this auction because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. Moreover, the definition of small business also requires that an entity not be dominant in its field of operation and that the entity be independently owned and operated. The estimate of small businesses to which Auction 106 competitive bidding rules may apply does not exclude any radio station from the definition of a small business on these bases and is therefore over-inclusive to that extent. Furthermore, we are unable at this time to define or quantify the criteria that would establish whether a specific radio station is dominant in its field of operation. In addition, we note that it is difficult to assess these criteria in the context of media entities and therefore estimates of small businesses to which they apply may be over-inclusive to this extent. 55. We also note that we are unable to accurately develop an estimate of how many of the entities in this auction would be small businesses based on the number of small entities that applied to participate in prior broadcast auctions, because that information is not collected from applicants for broadcast auctions in which bidding credits are not based on an applicant’s size (as is the case in auctions of licenses for wireless services). 56. In 2013, the Commission estimated that 97% of radio broadcasters met the SBA’s prior definition of “small business concern,” based on annual revenues of $7 million. Revitalization of the AM Radio Service, Notice of Proposed Rule Making, 28 FCC Rcd 15221, 15247, para. 6 (2013). The SBA has since increased that revenue threshold to $41.5 million, which suggests that an even greater percentage of radio broadcasters would fall within the SBA’s definition. 13 CFR § 121.201; NAICS code 515112. Based on Commission staff review of BIA/Kelsey, LLC’s Media Access Pro Radio Database, 6,739 (99.91%) of 6,745 FM radio stations have revenue of $41.5 million or less. BIA/Kelsey, MEDIA Access Pro Database (viewed Sept. 17, 2019). Accordingly, based on this data, we estimate that the majority of Auction 106 applicants would likely meet the SBA’s definition of a small business concern. 4. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities 57. In this Public Notice, we propose no new reporting, recordkeeping, or other compliance requirements for small entities or other auction applicants. The Commission designed the auction application process itself to minimize reporting and compliance requirements for applicants, including small business applicants. To participate in this auction, parties will file streamlined, short-form applications in which they certify under penalty of perjury as to their qualifications. See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2376-77, paras. 163-66. Eligibility to participate in bidding is based on an applicant’s short-form application and certifications, as well as its upfront payment. In the second phase of the auction application process, there are additional compliance requirements for winning bidders. Thus, a small business that fails to become a winning bidder does not need to file a long-form application and provide the additional showings and more detailed demonstrations required of a winning bidder. 5. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered 58. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.” 5 U.S.C. § 603(c)(1)-(4). 59. We intend that the proposals of this Public Notice to facilitate participation in Auction 106 will result in both operational and administrative cost savings for small entities and other auction participants. In light of the numerous resources that will be available from the Commission at no cost, the processes and procedures proposed for Auction 106 in this Public Notice should result in minimal economic impact on small entities. For example, prior to the auction, the Commission will hold a mock auction to allow qualified bidders the opportunity to familiarize themselves with both the bidding processes and systems that will be used in Auction 106. During the auction, participants will be able to access and participate in bidding via the Internet using a web-based system, or telephonically, providing two cost-effective methods of participation and avoiding the cost of travel for in-person participation. Further, small entities as well as other auction participants will be able to avail themselves of a telephone hotline for assistance with auction processes and procedures as well as a telephone technical support hotline to assist with issues such as access to or navigation within the electronic FCC Form 175 and use of the FCC’s auction system. In addition, all auction participants, including small business entities, will have access to various other sources of information and databases through the Commission that will aid in both their understanding of and participation in the process. These mechanisms are made available to facilitate participation in Auction 106 by all qualified bidders and may result in significant cost savings for small business entities that utilize these mechanisms. These steps, coupled with the advance description of the bidding procedures in Auction 106, should ensure that the auction will be administered efficiently and fairly, thus providing certainty for small entities, as well as other auction participants. 6. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules 60. None. C. Deadlines and Filing Procedures 61. Pursuant to sections 1.415 and 1.419 of the Commission’s rules, 47 CFR §§ 1.415, 1.419. interested parties may file comments or reply comments on or before the dates indicated on the first page of this document in AU Docket No. 19-290. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24121 (May 1, 1998). · Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS at www.fcc.gov/ecfs. · Paper Filers: Parties that choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the captions of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. 62. Filings in response to this Public Notice may be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. · All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th Street, SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. Eastern Time (ET). All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. · Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. · U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW, Washington, DC 20554. 63. Auction 106 Email Box: MB and OEA also request that a copy of all comments and reply comments be submitted electronically to the following address: auction106@fcc.gov. 64. People with Disabilities: To request materials in accessible formats (braille, large print, electronic files, audio format) for people with disabilities, send an email to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). 65. This proceeding has been designated as a “permit-but-disclose” proceeding in accordance with the Commission’s ex parte rules. 47 CFR §§ 1.1200(a), 1.1206. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to the Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with section 1.1206(b). In proceedings governed by section 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the Electronic Comment Filing System available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules. D. Contact Information 66. For further information concerning this proceeding, contact the offices listed below: Audio Division, Media Bureau FM service questions: James Bradshaw, Lisa Scanlan or Tom Nessinger at (202) 418-2700 Auctions Division, Office of Economics and Analytics Auction legal questions: Lynne Milne at (202) 418-0660 General auction questions: Auctions Hotline at (717) 338-2868 Office of Communications Business Opportunities For questions concerning small business inquiries: (202) 418-0990 – FCC – 19 Federal Communications Commission [Click to enter order number] ATTACHMENT A: CONSTRUCTION PERMITS IN AUCTION 106 This page was intentionally inserted as a placeholder for Attachment A, which is available as a separate file. 2