# Auction of Flexible-Use Licenses in the 2.5 GHz Band for Next-Generation Wireless Services; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 108; Bidding Scheduled To Begin July 29, 2022

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2022-07602

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 13, 2022
- **Citation:** 87 FR 21755

## Text

FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 27
[AU Docket No. 20-429; FCC 22-24; FR ID 81075]
Auction of Flexible-Use Licenses in the 2.5 GHz Band for Next-Generation Wireless Services; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 108; Bidding Scheduled To Begin July 29, 2022

AGENCY:

Federal Communications Commission.

ACTION:

Final action; requirements and procedures.

SUMMARY:

This document summarizes the procedures, deadlines, and upfront payment and minimum opening bid amounts for the upcoming auction of approximately 8,000 new flexible-use geographic overlay licenses in the 2.5 GHz band (Auction 108). The
Auction 108 Procedures Public Notice
summarized here provides details regarding the procedures, terms, conditions, dates, and deadlines governing participation in Auction 108 bidding, as well as overview of the post-auction application and payment process. The
Auction 108 Procedures Public Notice
released on March 21, 2022, was corrected by an erratum released on April 1, 2022. The changes made by the erratum are included in this document.

DATES:

Applications to participate in Auction 108 must be submitted before 6 p.m. Eastern Time (ET) on May 10, 2022. Upfront payments for Auction 108 must be received by 6 p.m. ET on June 23, 2022. Bidding in Auction 108 is scheduled to start on July 29, 2022.

FOR FURTHER INFORMATION CONTACT:

General Auction 108 Information:
FCC Auctions Hotline at 888-225-5322, option two; or 717-338-2868.

Auction 108 Legal Information:
Lyndsey Grunewald, Daniel Habif or Scott Mackoul at (202) 418-0660.

2.5 GHz Band Licensing Information:
Madelaine Maior or Nadja Sodos-Wallace at (202) 418-2487.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's

document,
Auction 108 Procedures Public Notice,
in AU Docket No. 20-429, FCC 22-24, released on March 21, 2022. The complete text of this document, including attachments and any related document, is available on the Commission's website at
http://www.fcc.gov/auction/108
or by using the search function for on the Commission's Electronic Comment Filing System (ECFS) web page at
www.fcc.gov/ecfs.
Alternative formats are available to persons with disabilities by sending an email to
FCC504@fcc.gov
or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

I. General Information

A. Introduction

1. By the
Auction 108 Procedures Public Notice,
the Commission establishes the procedures to be used for Auction 108, the auction of approximately 8,000 new flexible-use geographic overlay licenses in the 2.5 GHz band. Auction 108 will offer the single largest contiguous portion of available mid-band spectrum below 3 GHz, and the licenses made available in this auction will help extend 5G service beyond the most populated areas.

2. Bidding in Auction 108 is scheduled to commence on July 29, 2022. Auction 108 will be conducted using an ascending clock auction with a supply of one in each category of frequency-specific channel blocks, referred to as the clock-1 auction format. The
Auction 108 Procedures Public Notice
provides details regarding the procedures, terms, conditions, dates, and deadlines governing participation in Auction 108 bidding, as well as an overview of the post-auction application and payment processes.

B. Background and Relevant Authority

3. In the
2.5 GHz Report and Order,
84 FR 57343, July 11, 2019, the Commission made available 117.5 megahertz of spectrum in the 2.5 GHz band for new licensed use. In that Order, the Commission established a Rural Tribal Priority Window to enable federally-recognized Tribal Nations an opportunity to obtain 2.5 GHz licenses to provide service using unassigned spectrum in the former Educational Broadband Service (EBS) band on rural Tribal lands before the remaining unassigned spectrum is made generally available through competitive bidding. Among other things, the Commission authorized both fixed and mobile operations in the 2.5 GHz band using geographic area licensing, replaced the regulatory regime of the EBS with new flexible-use licensing and operating rules, and decided to use its competitive bidding rules to assign remaining overlay licenses following the close of the Rural Tribal Priority Window.

4. On January 13, 2021, in accordance with section 309(j)(3) of the Communications Act of 1934, as amended (Communications Act), the Commission released the
Auction 108 Comment Public Notice,
86 FR 12146, March 2, 2021, seeking comment on certain competitive bidding procedures and various other procedures to be used in Auction 108. Interested parties filed 16 comments and 26 reply comments in response to the
Auction 108 Comment Public Notice.
On February 9, 2022, the Commission's Office of Economics and Analytics (OEA) and Wireless Telecommunications Bureau (WTB) released the
Auction 108 Further Comment Public Notice,
87 FR 8764, February 16, 2022, seeking further comment on multiple-round auction procedures for Auction 108. Specifically, OEA and WTB sought comment on whether a clock auction would address commenters' concerns and suggestions regarding the simultaneous multiple-round (SMR) and single-round, sealed bid auction formats proposed in the
Auction 108 Comment Public Notice.
Interested parties filed 13 comments in response to the
Auction 108 Further Comment Public Notice.
On February 18, 2022, OEA and WTB released the
Auction 108 Inventory Comment Public Notice,
87 FR 11379, March 1, 2022, that announced an updated auction inventory and sought comment whether any procedures need to be adjusted for all the licenses available in Auction 108 in light of additions to the initial license inventory. Interested parties filed eight comments in response to the
Auction 108 Inventory Comment Public Notice.
In the
Auction 108 Procedures Public Notice,
the Commission resolves all open issues raised in the
Auction 108 Comment Public Notice,
the
Auction 108 Further Comment Public Notice,
and the
Auction 108 Inventory Comment Public Notice
and address the comments received.

5. Other Commission rules and decisions provide the underlying authority for the procedures the Commission adopts for Auction 108. Among other things, prospective applicants should familiarize themselves with the Commission's general competitive bidding rules, including amendments and clarifications thereto, as well as Commission decisions regarding competitive bidding procedures, application requirements, and obligations of Commission licensees. Prospective applicants also should familiarize themselves with the Commission's rules regarding the 2.5 GHz band, as well as the licensing and operating rules that are applicable to all Part 27 services. In addition, applicants must be thoroughly familiar with the procedures, terms, and conditions contained in the
Auction 108 Procedures Public Notice
and any future public notices that may be released in this proceeding.

6. The terms contained in the Commission's rules, relevant orders, and public notices are not negotiable. The Commission may amend or supplement the information contained in its public notices at any time and will issue public notices to convey any new or supplemental generally applicable information to applicants. Pursuant to the Commission's rules, OEA and WTB also retain the authority to implement further procedures during the course of Auction 108. It is the responsibility of all applicants to remain current with all Commission rules and with all public notices pertaining to Auction 108.

C. Description of Licenses To Be Offered in Auction 108

7. Consistent with the Commission's determination, any remaining unassigned EBS spectrum will be made available in Auction 108. Auction 108 will offer geographic overlay licenses for unassigned spectrum in the 2.5 GHz (2496-2690 MHz) band. The Commission will offer up to three blocks of spectrum—49.5 megahertz, 50.5 megahertz, and 17.5 megahertz blocks, respectively—licensed on a county basis. Specifically, the first channel block will include channels A1-A3, B1-B3, C1-C3 (49.5 megahertz); the second channel block will include channels D1-D3, the J channels, and channels A4, B4, C4, D4, and G4 (50.5 megahertz); and the third channel block will include channels G1-G3 and the relevant K channels (16.5 megahertz of contiguous spectrum and 1 megahertz of the K channels associated with the G channel group, for a total of 17.5 megahertz). New overlay licenses in the EBS portion of the 2.5 GHz band will be issued for 10-year, renewable license terms. A licensee in this band may provide any services permitted under terrestrial fixed or mobile allocations, as set forth in the non-Federal Government column of the Table of Frequency Allocations in 47 CFR 2.106.

8. Concurrent with the release of the
Auction 108 Comment Public Notice,
OEA and WTB made available a file listing all county and channel block

combinations potentially available for Auction 108. Several commenters, including some incumbent licensees, noted potential discrepancies between the Commission's initial list of potentially available licenses and commenters' own analyses of available white space in the band. These commenters and others urged the Commission to audit the preliminary list of licenses available in Auction 108 to ensure that the final list of available licenses is complete and accurate. In light of these comments, WTB staff performed additional geographic information systems (GIS) analysis of existing 2.5 GHz licenses and prepared a new list of potentially available licenses based on license service area data extracted from the Universal Licensing System (ULS) on February 2, 2022. The revised list also took into account licenses issued pursuant to Rural Tribal Priority Window applications and information provided by commenters. OEA and WTB released that updated list of potentially available licenses, which added 189 licenses to the list and removed 370, on February 18, 2022, and requested comment on whether any of the procedures proposed in the
Auction 108 Comment Public Notice
or the
Auction 108 Further Comment Public Notice
needed to be adjusted in light of licenses added to the initial license inventory.

9. Many of the issues raised by commenters in response to the
Auction 108 Comment Public Notice
were addressed in the revised inventory released with the
Auction 108 Inventory Comment Public Notice.
The revised list of licenses also excluded county/channel block combinations where the only areas with unassigned spectrum were over large bodies of water such as the Atlantic Ocean or the Great Lakes. Since a licensee may only place base stations within their geographic service area (GSA) and limit the power flux density of their signal within their GSA, there would be no prospect for a licensee to deploy service to land-based populations in that scenario.

10. The revised license inventory released in conjunction with the
Auction 108 Procedures Public Notice
incorporates WTB's comprehensive review of the inventory in response to additional GIS analyses and feedback from interested parties including incumbent licensees and lessees. The Commission declines a request by certain parties to implement a more formal process by which interested parties may submit data to challenge the revised license inventory. Interested parties had multiple opportunities to provide input on the development of the license inventory, as WTB has continued to refine and revise the inventory in response to feedback from interested parties. Most recently, several parties submitted additional information in response to the
Auction 108 Inventory Comment Public Notice,
and WTB has taken that information into account in developing the most recent inventory listing reflected in the updated Attachment A that is being released in conjunction with the
Auction 108 Procedures Public Notice.
Second, a new, formal process at this time would significantly delay the auction of critical mid-band spectrum.

11. On March 15, 2022, WTB granted seven additional Rural Tribal Priority Window applications in Alaska. As a result of those grants, all 2.5 GHz spectrum in Bristol Bay and Lake and Peninsula Boroughs in Alaska was assigned on all three channel blocks. Accordingly, the three licenses for those boroughs have been removed from the list of available licenses.

12. In light of comments, the Commission has also excluded from its analysis of active licensees' geographic service areas the potential effect of licenses that expired before January 10, 2005, and were not reinstated prior to March 10, 2008. As a result, the Commission removed 80 licenses in 57 counties from the auction inventory.

13. Concurrent with the release of the
Auction 108 Procedures Public Notice,
the Commission makes available an updated file listing all county and channel block combinations potentially available for Auction 108. This file is listed as an Attachment A file on the Auction 108 website at
www.fcc.gov/auction/108.
This inventory of overlay licenses available in Auction 108 released concurrently with the
Auction 108 Procedures Public Notice
removes 87 licenses from the revised inventory released on February 18, 2022, based on OEA and WTB review of comments and the results of the Rural Tribal Priority Window. If additional licenses are removed from inventory because of future Rural Tribal Priority Window grants, those actions will be announced by subsequent public notice(s).

14. The Commission has also made available resources to assist applicants in conducting due diligence research regarding potential encumbrances in the band. These resources include a new mapping tool to help identify and view existing licenses and Rural Tribal Priority Window applications. The new mapping tool is being made available to all potential bidders in Auction 108, and the public generally, concurrently with the release of the
Auction 108 Procedures Public Notice.
It can be found under the Education tab on the Auction 108 website at
www.fcc.gov/auction/108.
Potential applicants are reminded, however, that this mapping tool is merely a graphical aid for potential applicants and does not represent official licensing information; all information should be confirmed in the Universal Licensing System (ULS) for any specific license or area.

15. The Commission will not adopt an expansion of existing requirements on incumbent licensees and lessors in this band that would mandate disclosure of additional details of spectrum lease agreements to potential bidders. The Commission finds that adoption of proponents' expanded disclosure requirement is beyond the bounds of the existing spectrum leasing rules and the Commission's prior determinations supporting those disclosure requirements. The Commission's spectrum leasing rules already provide that each licensee that enters into a leasing agreement must disclose to the Commission a significant amount of information pertaining to the agreement, including the identity of the lessee, the term, and the spectrum and geographic area covered, and that such information is publicly available through ULS. Given the spectrum lease information already available, the Commission finds that proponents of disclosure have not supported their assertion that additional information is necessary in making decisions about whether or how to participate in this auction. Finally, even if additional information may be helpful or material to one or more bidders—and the Commission makes no such finding—the Commission is not convinced that the benefits to potential bidders of obtaining such information would outweigh the potential competitive harm to the leaseholders from disclosure.

16. Each potential bidder is solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the potential uses of a license that it may seek in Auction 108, including the availability of unassigned white space in any particular license area. In addition to the typical due diligence considerations encouraged of bidders in all auctions, the Commission calls particular attention in Auction 108 to potential encumbrances due to existing licenses and pending applications. In particular there will be a substantial number of licenses in the inventory where the amount of unassigned area or unassigned spectrum is very small. For example, there could be licenses in Channel Block 2 where as little as .333 megahertz of spectrum is unassigned.

There are also a substantial number of licenses where the area with unassigned spectrum is smaller than one square mile. Each applicant should carefully consider these issues and the technical and economic implications for commercial use of the 2.5 GHz band.

D. Auctions Specifics

1. Auction Title and Start Date

17. The auction of licenses in the 2.5 GHz band will be referred to as Auction 108. Bidding in Auction 108 will begin on Friday, July 29, 2022. Pre-bidding dates and deadlines are listed below. The initial schedule for bidding rounds in Auction 108 will be announced by public notice at least one week before bidding begins.

18. Unless otherwise announced, bidding on all licenses will be conducted on each business day until bidding has stopped on all licenses.

2. Auction Dates and Deadlines

19. The following dates and deadlines apply to Auction 108:

Auction Application Tutorial Available (via internet)
No later than April 5, 2022.

Short-Form Application (FCC Form 175) Filing Window Opens
April 27, 2022, 12 p.m. Eastern Time (ET).

Short-Form Application (FCC Form 175) Filing Window Deadline
May 10, 2022, 6 p.m. ET.

Upfront Payments (via wire transfer)
June 23, 2022, 6 p.m. ET.

Bidding Tutorial Available (via internet)
No later than July 13, 2022.

Mock Auction
July 26-27, 2022.

Bidding Begins in Auction 108
July 29, 2022.

3. Requirements for Participation

20. Those wishing to participate in Auction 108 must:

• Submit a short-form application (FCC Form 175) electronically prior to 6 p.m. ET on May 10, 2022, following the electronic filing procedures and other instructions set forth in the
Auction 108 Procedures Public Notice
and in the FCC Form 175 Instructions.

• Submit a sufficient upfront payment and an FCC Remittance Advice Form (FCC Form 159) by 6 p.m. ET on June 23, 2022, following the procedures and instructions set forth in the
Auction 108 Procedures Public Notice.

• Comply with all provisions outlined in the
Auction 108 Procedures Public Notice
and applicable Commission rules.

II. Applying To Participate in Auction 108

A. Certification of Notice of Auction 108 Requirements and Procedures

21. For the reasons set forth in the
Auction 108 Comment Public Notice,
the Commission adopts the proposal to require any applicant seeking to participate in Auction 108 to certify in its short-form application, under penalty of perjury, that it has read the
Auction 108 Procedures Public Notice
adopting procedures for Auction 108 and that it has familiarized itself with these procedures and with the requirements for obtaining a license and operating facilities in the 2.5 GHz band. No commenter opposed the proposed certification, and one commenter,T-Mobile, supports it.

22. This certification is designed to bolster applicants' efforts to educate themselves about the procedures for auction participation and to ensure that, prior to submitting their short-form applications, applicants understand their obligation to stay abreast of relevant, forthcoming information. Familiarity with the Commission's rules and procedures governing Auction 108 may also help bidders avoid the consequences to them associated with defaults, which also cause harm to other applicants and the public by reducing the efficiency of the auction process and reducing the likelihood that the license will be assigned to the bidder that values it the most. This certification, along with the other certifications required pursuant to 47 CFR 1.2105(a), will promote submission of applications that meet the Commission's requirements, thereby leading to a more efficient application process.

23. A substantively similar requirement was recently instituted for Auction 110, a Commission auction of flexible-use licenses in the 3.45-3.55 GHz band. That requirement furthered a long-standing policy under which the Commission expressly places a burden upon each applicant to be thoroughly familiar with the procedures, terms, and conditions contained in the relevant Procedures Public Notice and any future public notices that may be released in the auction proceeding. While the certification the Commission adds refers to information regarding auction procedures and licensing that is available at the time of certification, potential auction applicants are on notice that their educational efforts must continue even after their short-form applications are filed. Commission staff routinely makes available detailed educational materials, such as interactive, online tutorials and technical guides, to enhance interested parties' comprehension of the pre-bidding and bidding processes and to help minimize the need for applicants to engage outside engineers, legal counsel, or other auction experts.

24. For these reasons, the Commission will require each Auction 108 applicant to certify as follows in its short-form application: That the applicant has read the public notice adopting procedures for the auction and that it has familiarized itself both with the auction procedures and with the requirements for obtaining a license and operating facilities in the 2.5 GHz band.

25. An applicant must provide this certification under penalty of perjury, consistent with 47 CFR 1.2105(a). This certification is in addition to the certifications already required under 47 CFR 1.2105. Consistent with the other certifications required in the short-form application, an applicant's failure to make this certification in its FCC Form 175 by the May 10, 2022 filing deadline will render its application unacceptable for filing, and its application will be dismissed with prejudice.

B. General Information Regarding Short-Form Applications

26. An application to participate in Auction 108, referred to as a short-form application or FCC Form 175, provides information that the Commission uses to determine whether the applicant has the legal, technical, and/or financial qualifications to participate in a Commission auction for spectrum licenses or permits. The short-form application is the first part of the Commission's two-phased auction application process. In the first phase, a party seeking to participate in Auction 108 must file a short-form application in which it certifies, under penalty of perjury, that it is qualified to participate. Eligibility to participate in Auction 108 is determined based on an applicant's short-form application and certifications and on the applicant's upfront payment. After bidding closes, in the second phase of the process, each winning bidder in Auction 108 must file a more comprehensive post-auction long-form application (FCC Form 601) for the licenses it wins in the auction,

and it must have a complete and accurate ownership disclosure information report (FCC Form 602) on file with the Commission.

27. A party seeking to participate in Auction 108 must file an FCC Form 175 electronically via the Auction Application System prior to 6 p.m. ET on May 10, 2022, following the procedures prescribed in the FCC Form 175 Instructions. If an applicant claims eligibility for a bidding credit, then the information provided in its FCC Form 175 will be used to determine whether the applicant appears to be eligible for the claimed bidding credit, with the final determination of bidding credit eligibility to occur based on a winning bidder's post-auction long-form application. Below the Commission describes more fully the information disclosures and certifications required in the short-form application. Each Auction 108 applicant will be subject to the Commission's rule prohibiting certain communications. An applicant is subject to the prohibition beginning at the deadline for filing short-form applications—6 p.m. ET on May 10, 2022.

28. An Auction 108 applicant bears full responsibility for submitting an accurate, complete, and timely short-form application. Pursuant to the Commission's competitive bidding rules, an applicant must make a series of certifications under penalty of perjury on its FCC Form 175 related to the information provided in its application and its participation in the auction, and an applicant must confirm that it is legally, technically, financially, and otherwise qualified to hold a license. As noted above, each participant in Auction 108 must also certify that it has read the
Auction 108 Procedures Public Notice
and familiarized itself both with the auction procedures and with the requirements for obtaining a license and operating facilities in the 2.5 GHz band. If an Auction 108 applicant fails to make the required certifications in its FCC Form 175 by the filing deadline, then its application will be deemed unacceptable for filing and cannot be corrected after the filing deadline.

29. An applicant should note that submitting an FCC Form 175 (and any amendments thereto) constitutes a representation by the certifying official that he or she is an authorized representative of the applicant with authority to bind the applicant, that he or she has read the form's instructions and certifications, and that the contents of the application, its certifications, and any attachments are true and correct. Submitting a false certification to the Commission may result in penalties, including monetary forfeitures, license forfeitures, ineligibility to participate in future auctions, and/or criminal prosecution.

30. Applicants are cautioned that, because the required information submitted in FCC Form 175 bears on each applicant's qualifications, requests for confidential treatment will not be routinely granted. The Commission generally has held that it may publicly release confidential business information where the party has put that information at issue in a Commission proceeding or where the Commission has identified a compelling public interest in disclosing the information. In this regard, the Commission specifically has held that information submitted in support of receiving bidding credits in auction proceedings should be made available to the public.

31. An applicant must designate between one and three individuals as authorized bidders in its FCC Form 175. The Commission's rules prohibit an individual from serving as an authorized bidder for more than one auction applicant.

32. In order to access the auction bidding system, each authorized bidder will be required to have a unique email address associated with an FCC Username Account that is linked to the applicant's FCC Registration Number (FRN) in the Commission Registration System (CORES). This added security measure is newly implemented for bidding in Commission auctions. If an authorized bidder does not provide an FCC Username Account linked to the applicant's FRN in the applicant's FCC Form 175, that bidder will be unable to place or submit bids. For further details, applicants should refer to the FCC Form 175 Instructions for Auction 108.

33. No individual or entity may file more than one short-form application or have a controlling interest in more than one short-form application. If a party submits multiple short-form applications for an auction, then only one application may form the basis for that party to become qualified to bid in that auction.

34. Similarly, and consistent with the Commission's general prohibition on joint bidding agreements, a party generally is permitted to participate in a Commission auction only through a single bidding entity. Accordingly, the filing of applications in Auction 108 by multiple entities controlled by the same individual or set of individuals generally will not be permitted. As noted by the Commission in adopting the prohibition on applications by commonly controlled entities, this rule, in conjunction with the prohibition against joint bidding agreements, protects the competitiveness of the Commission's auctions.

35. After the initial short-form application filing deadline, Commission staff will review all timely submitted applications for Auction 108 to determine whether each application complies with the application requirements and whether the applicant has provided all required information concerning its qualifications for bidding. After this review is completed, a public notice will be released announcing the status of applications and identifying the applications that are complete and those that are incomplete because of minor defects that may be corrected. That public notice also will establish an application resubmission filing window, during which an applicant may make permissible minor modifications to its application to address identified deficiencies. The public notice will include the deadline for resubmitting modified applications. To become a qualified bidder, an applicant must have a complete application (
i.e.,
have timely filed an application that is deemed complete after the deadline for correcting any identified deficiencies), and must make a timely and sufficient upfront payment. Qualified bidders will be identified by public notice at least 10 days prior to the mock auction.

36. The Commission discusses below additional details regarding certain information required to be submitted in the FCC Form 175. An applicant should consult the Commission's rules to ensure that, in addition to the materials described below, all required information is included in its short-form application. To the extent the information in the
Auction 108 Procedures Public Notice
does not address an applicant's specific operating structure, or if the applicant needs additional information or guidance concerning the described disclosure requirements, the applicant should review the educational materials for Auction 108 (see the Education section of the Auction 108 website at
www.fcc.gov/auction/108
) and use the contact information provided in the
Auction 108 Procedures Public Notice
to consult with Commission staff to better understand the information that it must submit in its short-form application.

C. License Area Selection

37. An applicant must select all of the license areas on which it may want to bid from the list of available counties on its FCC Form 175. An applicant must carefully review and verify its license area (
i.e.,
county) selections before the

FCC Form 175 filing deadline because those selections cannot be changed after the auction application filing deadline. An applicant is not required to place bids on licenses in any or all of the license areas selected, but the FCC Auction Bidding System (bidding system) will not accept bids for licenses in license areas (
i.e.,
counties) that the applicant did not select in its FCC Form 175.

38. When two or more short-form applications (FCC Form 175) are submitted selecting the same licenses in Auction 108, mutual exclusivity exists for auction purposes as to those licenses, and the licenses must be awarded by competitive bidding procedures. Once mutual exclusivity exists for auction purposes, even if only one applicant is qualified to bid for a particular license, that applicant is required to submit a bid in order to obtain the license. An applicant may select licenses on its Form 175 by using the select all licenses checkbox or by selecting any particular county. Selection of a county will allow the applicant to bid on any available license within that county, provided that it otherwise becomes a qualified bidder and has sufficient bidding eligibility.

D. Disclosure of Agreements and Bidding Arrangements

39. An applicant must provide in its FCC Form 175 a brief description of, and identify each party to, any partnerships, joint ventures, consortia or agreements, arrangements, or understandings of any kind relating to the licenses being auctioned, including any agreements that address or communicate directly or indirectly bids (including specific prices), bidding strategies (including the specific licenses on which to bid or not to bid), or the post-auction market structure, to which the applicant, or any party that controls or is controlled by the applicant, is a party. In connection with the agreement disclosure requirement, the applicant must certify under penalty of perjury in its FCC Form 175 that it has described, and identified each party to any such agreements, arrangements, or understandings to which it (or any party that controls it or that it controls) is a party. Moreover, since each applicant must maintain the accuracy and completeness of the information in its pending auction application, if it enters into any agreement relating to the licenses being auctioned after the FCC Form 175 filing deadline, then that agreement is subject to these same disclosure requirements.

40. For purposes of making the required agreement disclosures on the FCC Form 175, if parties agree in principle on all material terms prior to the application filing deadline, then each party to the agreement that is submitting an auction application must provide a brief description of, and identify the other party or parties to, the agreement on its respective FCC Form 175, even if the agreement has not been reduced to writing. Parties that have not agreed in principle by the FCC Form 175 filing deadline should not describe, or include the names of parties to, the discussions on their applications.

41. The Commission's rules generally prohibit joint bidding and other arrangements involving auction applicants (including any party that controls or is controlled by such applicants). For purposes of the prohibition, a joint bidding arrangement includes any arrangement relating to the licenses being auctioned that addresses or communicates, directly or indirectly, bidding in the auction, bidding strategies, including arrangements regarding price or the specific licenses on which to bid, and any such arrangement relating to the post-auction market structure.

42. This prohibition applies to joint bidding arrangements involving two or more nationwide providers, as well as joint bidding arrangements involving a nationwide provider and one or more non-nationwide providers, where at least one party to the arrangement is an applicant for the auction. In the
Updating Part 1 Report and Order,
80 FR 56763, Sep. 18, 2015, the Commission stated that entities that qualify as nationwide providers generally would be identified in procedures public notices released before each auction. To that end, and consistent with the Commission's decisions in recent spectrum auctions and in
the 2020 Communications Marketplace Report,
the Commission considers AT&T, T-Mobile, and Verizon to be nationwide providers for the purpose of implementing the competitive bidding rules in Auction 108.

43. Under certain circumstances, a non-nationwide provider may enter into an agreement to form a consortium or a joint venture (as applicable) that results in a single party applying to participate in an auction. Specifically, a designated entity can participate in one consortium or joint venture in an auction, and non-nationwide providers that are not designated entities may participate in an auction through only one joint venture. A non-nationwide provider may enter into only one agreement to form a consortium or joint venture (as applicable), and such consortium or joint venture shall be the exclusive bidding vehicle for its members in the auction. The general prohibition on joint bidding arrangements excludes certain agreements, including those that are solely operational in nature, as defined in 47 CFR 1.2105(a)(2)(ix)(A)-(C).

44. To implement the prohibition on joint bidding arrangements, the Commission's rules require each applicant to certify in its short-form application that it has disclosed any arrangements or understandings of any kind relating to the licenses being auctioned to which it (or any party that controls or is controlled by it) is a party. The applicant must also certify that it (or any party that controls or is controlled by it) has not entered and will not enter into any arrangement or understanding of any kind relating directly or indirectly to bidding at auction with, among others, any other applicant or a nationwide provider.

45. Although the Commission's rules do not prohibit auction applicants from communicating about matters that are within the scope of an excepted agreement that has been disclosed in an FCC Form 175, the Commission reminds applicants that certain discussions or exchanges could nonetheless touch upon impermissible subject matters, and that compliance with the Commission's rules will not insulate a party from enforcement of the antitrust laws.

46. Applicants should bear in mind that a winning bidder will be required to disclose, in its post-auction long-form application, the specific terms, conditions, and parties involved in any agreement relating to the licenses being auctioned into which it had entered prior to the time bidding was completed. This applies to any bidding consortium, joint venture, partnership, or other agreement, arrangement, or understanding of any kind entered into relating to the competitive bidding process, including any agreements relating to the licenses being auctioned that address or communicate directly or indirectly bids (including specific prices), bidding strategies (including the specific licenses on which to bid or not to bid), or the post-auction market structure, to which the applicant, or any party that controls or is controlled by the applicant, is a party.

E. Ownership Disclosure Requirements

47. Each applicant must comply with the applicable part 1 ownership disclosure requirements and provide information required by 47 CFR 1.2105 and 1.2112, and, where applicable, 47 CFR 1.2110. Specifically, in completing FCC Form 175, an applicant must fully

disclose information regarding the real party- or parties-in-interest in the applicant or application and the ownership structure of the applicant, including both direct and indirect ownership interests of 10% or more, as prescribed in 47 CFR 1.2105 and 1.2112 and, where applicable, 47 CFR 1.2110. Each applicant is responsible for ensuring that information submitted in its short-form application is complete and accurate.

48. In certain circumstances, an applicant may have previously filed an FCC Form 602 ownership disclosure information report or filed an auction application for a previous auction in which ownership information was disclosed. If the applicant used the same FCC Registration Number (FRN) the applicant is using to submit its FCC Form 175, the most current ownership information contained in any such filing will automatically be pre-filled into certain ownership sections on the applicant's FCC Form 175, if such information is in an electronic format compatible with FCC Form 175. Each applicant must carefully review any ownership information automatically entered into its FCC Form 175, including any ownership attachments, to confirm that all information supplied on FCC Form 175 is complete and accurate as of the application filing deadline. Any information that needs to be corrected or updated must be changed directly in FCC Form 175.

F. Foreign Ownership Disclosure Requirements

49. Section 310 of the Communications Act requires the Commission to review foreign investment in radio station licenses and imposes specific restrictions on who may hold certain types of radio licenses. Section 310 applies to applications for initial radio licenses, applications for assignments and transfers of control of radio licenses, and spectrum leasing arrangements under the Commission's secondary market rules. In completing FCC Form 175, an applicant is required to disclose information concerning foreign ownership of the applicant. If an applicant has foreign ownership interests in excess of the applicable limit or benchmark set forth in 47 U.S.C. 310(b), then it may seek to participate in Auction 108 as long as it has filed a petition for declaratory ruling with the Commission prior to the FCC Form 175 filing deadline. An applicant must certify in its FCC Form 175 that, as of the deadline for filing its application to participate in the auction, the applicant either is in compliance with the foreign ownership provisions of 47 U.S.C. 310 or has filed a petition for declaratory ruling requesting Commission approval to exceed the applicable foreign ownership limit or benchmark in 47 U.S.C. 310(b) that is pending before, or has been granted by, the Commission.

G. Information Procedures During the Auction Process

50. Consistent with past practice in many prior spectrum license auctions, the Commission adopts the proposal to limit information available in Auction 108 in order to prevent the identification of bidders placing particular bids until after the bidding has closed. Specifically, the Commission will not make public until after bidding has closed: (1) The license areas that an applicant selects for bidding in its short-form application, (2) the amount of any upfront payment made by or on behalf of an applicant for Auction 108, (3) any applicant's bidding eligibility, and (4) any other bidding-related information that might reveal the identity of the bidder placing a bid.

51. Once bidding begins in Auction 108, under the limited information procedures (sometimes also referred to as anonymous bidding), information to be made public after each round of bidding will include, for each license, the aggregate demand, the posted price of the completed round, and the clock price for the next round. The identities of bidders placing specific bids will
not
be disclosed until after the close of bidding.

52. Throughout the auction, bidders will have access to additional information related to their own bidding and bidding eligibility through the Commission's bidding system. Specifically, after the bids of a round have been processed, the bidding system will inform each bidder of its processed demand, whether the bidder has a proxy instruction in place for each license, and its eligibility for the next round.

53. After the close of bidding, bidders' license area selections, upfront payment amounts, bidding eligibility, bids, and other bidding-related actions will be made publicly available. Bids placed according to a bidder's proxy instructions will be available, but a bidder's proxy instructions will not be disclosed.

54. The Commission warns applicants that direct or indirect communication to other applicants or the public disclosure of non-public information (
e.g.,
reductions in eligibility, identities of bidders) could violate the Commission's rule prohibiting certain communications. Therefore, to the extent an applicant believes that such a disclosure is required by law or regulation, including regulations issued by the U.S. Securities and Exchange Commission (SEC), the Commission strongly urges that the applicant consult with Commission staff in the Auctions Division before making such disclosure.

H. Prohibited Communications and Compliance With Antitrust Laws

55. The rules prohibiting certain communications set forth in 47 CFR1.2105(c) apply to each applicant in Auction 108. Section 1.2105(c)(1) provides that, subject to specified exceptions, after the short-form application filing deadline, all applicants are prohibited from cooperating or collaborating with respect to, communicating with or disclosing, to each other or any nationwide provider of communications services that is not an applicant, or, if the applicant is a nationwide provider, any non-nationwide provider that is not an applicant, in any manner the substance of their own, or each other's, or any other applicants' bids or bidding strategies (including post-auction market structure), or discussing or negotiating settlement agreements, until after the down payment deadline.

1. Entities Subject to Section 1.2105(c)

56. An applicant for purposes of this rule includes all controlling interests in the entity submitting the FCC Form 175 auction application, as well as all holders of interests amounting to 10% or more of the entity (including institutional investors and asset management companies), and all officers and directors of that entity. Under 47 CFR 1.2105(c), a party that submits an application becomes an applicant under the rule, which goes into effect at the application deadline, and that status does not change based on later developments.

57. As proposed in the
Auction 108 Comment Public Notice,
the Commission considers AT&T, T-Mobile, and Verizon to be nationwide providers for the purposes of the prohibited communications rule for Auction 108.

2. Prohibition Applies Until Down Payment Deadline

58. The prohibition in 47 CFR 1.2105(c) on certain communications begins at an auction's short-form application filing deadline and ends at the auction's down payment deadline after the auction closes, which will be announced in a future public notice.

3. Scope of Prohibition on Certain Communications; Prohibition on Joint Bidding Agreements

59. Section 1.2105(c) prohibits certain communications between applicants for an auction, regardless of whether the applicants seek permits or licenses in the same geographic area or market. The rule also applies to communications by applicants with non-applicant nationwide providers of communications services and by nationwide applicants with non-applicant, non-nationwide providers. The rule further prohibits joint bidding arrangements, including arrangements relating to the permits or licenses being auctioned that address or communicate, directly or indirectly, bidding at the auction, bidding strategies, including arrangements regarding price or the specific permits or licenses on which to bid, and any such arrangements relating to the post-auction market structure. The rule allows for limited exceptions for communications within the scope of any arrangement consistent with the exclusion from the Commission's rule prohibiting joint bidding, provided such arrangement is disclosed on the applicant's auction application. Applicants may communicate pursuant to any pre-existing agreements, arrangements, or understandings relating to the licenses being auctioned that are solely operational or that provide for the transfer or assignment of licenses, provided that such agreements, arrangements, or understandings are disclosed on their applications and do not both relate to the licenses at auction and address or communicate bids (including amounts), bidding strategies, or the particular permits or licenses on which to bid or the post-auction market structure.

60. In addition to express statements of bids and bidding strategies, the prohibition against communicating in any manner includes public disclosures as well as private communications and indirect or implicit communications. Consequently, an applicant must take care to determine whether its auction-related communications may reach another applicant.

61. Parties subject to 47 CFR 1.2105(c) should take special care in circumstances where their officers, directors, and employees may receive information directly or indirectly relating to any applicant's bids or bidding strategies. Such information may be deemed to have been received by the applicant under certain circumstances. For example, Commission staff have found that, where an individual serves as an officer and director for two or more applicants, the bids and bidding strategies of one applicant are presumed to be conveyed to the other applicant through the shared officer, which creates an apparent violation of the rule.

62. Subject to the limited exceptions for communications within the scope of any arrangement consistent with the exclusion from the Commission's rule prohibiting joint bidding, 47 CFR 1.2105(c)(1) prohibits applicants from communicating with specified other parties only with respect to their own, or each other's, or any other applicant's bids or bidding strategies. The
Prohibited Communications Guidance Public Notice,
80 FR 63215, October 19, 2015, released in advance of the broadcast incentive auction (Auction 1000) reviewed the scope of the prohibition generally, as well as in that specific auction's forward auction of spectrum licenses and reverse auction to relinquish broadcast licenses. As the Commission explained therein, a communication conveying bids or bidding strategies (including post-auction market structure) must also relate to the licenses being auctioned in order to be covered by the prohibition. Thus, the prohibition is limited in scope and does not apply to all communications between or among the specified parties. The Commission consistently has made clear that application of the rule prohibiting communications has never required total suspension of essential ongoing business. Entities subject to the prohibition may negotiate agreements during the prohibition period, provided that the communications involved do not relate to both: (1) The licenses being auctioned and (2) bids or bidding strategies or post-auction market structure.

63. Accordingly, business discussions and negotiations that do not convey information about the bids or bidding strategies, including the post-auction market structure, of an applicant are not prohibited by the rule. Moreover, not all auction-related information is covered by the prohibition. For example, communicating merely whether a party has or has not applied to participate in Auction 108 will not violate the rule. In contrast, communicating, among other things, how a party will participate, including specific geographic areas selected, specific bid amounts, and/or whether or not the party is placing bids, would convey bids or bidding strategies and would be prohibited.

64. While 47 CFR 1.2105(c) does not prohibit business discussions and negotiations among auction applicants that are unrelated to the auction, each applicant must remain vigilant not to communicate, directly or indirectly, information that affects, or could affect, bids or bidding strategies. Certain discussions might touch upon subject matters that could convey price or geographic information related to bidding strategies. Such subject areas include, but are not limited to, management, sales, local marketing agreements, and other transactional agreements.

65. The Commission cautions applicants that bids or bidding strategies may be communicated outside of situations that involve one party subject to the prohibition communicating privately and directly with another such party. For example, the Commission has warned that prohibited communications concerning bids and bidding strategies may include communications regarding capital calls or requests for additional funds in support of bids or bidding strategies to the extent such communications convey information concerning the bids and bidding strategies directly or indirectly. Moreover, the Commission found a violation of the rule against prohibited communications when an applicant used the Commission's bidding system to disclose its bidding strategy in a manner that explicitly invited other auction participants to cooperate and collaborate in specific markets, and it has placed auction participants on notice that the use of its bidding system to disclose market information to competitors will not be tolerated and will subject bidders to sanctions.

66. Likewise, when completing a short-form application, each applicant should avoid any statements or disclosures that may violate 47 CFR 1.2105(c), particularly in light of the limited information procedures in effect for Auction 108. Specifically, an applicant should avoid including any information in its short-form application that might convey information regarding its license area selections, such as referring to counties or other geographic areas in describing agreements, including any information in application attachments that will be publicly available that may otherwise disclose the applicant's license area selections, or using applicant names that refer to licenses being offered.

67. Applicants also should be mindful that communicating non-public application or bidding information publicly or privately to another applicant may violate 47 CFR 1.2105(c) even though that information subsequently may be made public during later periods of the application or bidding processes.

4. Communicating With Third Parties

68. Section 1.2105(c) does not prohibit an applicant from communicating bids or bidding strategies to a third party, such as a consultant or consulting firm, counsel, or lender. An applicant should take appropriate steps, however, to ensure that any third party it employs for advice pertaining to its bids or bidding strategies does not become a conduit for prohibited communications to other specified parties, as that would violate the rule. For example, an applicant might require a third party, such as a lender, to sign a non-disclosure agreement before the applicant communicates any information regarding bids or bidding strategy to the third party. Within third-party firms, separate individual employees, such as attorneys or auction consultants, may advise individual applicants on bids or bidding strategies, as long as such firms implement firewalls and other compliance procedures that prevent such individuals from communicating the bids or bidding strategies of one applicant to other individuals representing separate applicants. Although firewalls and/or other procedures should be used, their existence is not an absolute defense to liability if a violation of the rule has occurred.

69. As the Commission has noted in other spectrum auctions, in the case of an individual, the objective precautionary measure of a firewall is not available. As a result, an individual that is privy to bids or bidding information of more than one applicant presents a greater risk of becoming a conduit for a prohibited communication. The Commission will take the same approach to interpreting the prohibited communications rule in Auction 108. The Commission emphasizes that whether a prohibited communication has taken place in a given case will depend on all the facts pertaining to the case, including who possessed what information, what information was conveyed to whom, and the course of bidding in the auction.

70. The Commission reminds potential applicants that they may discuss the short-form application or bids for specific licenses or license areas with the counsel, consultant, or expert of their choice
before
the short-form application deadline. Furthermore, the same third-party individual could continue to give advice after the short-form deadline regarding the application, provided that no information pertaining to bids or bidding strategies, including license areas, or counties, selected on the short-form application, is conveyed to that individual.

71. Applicants also should use caution in their dealings with other parties, such as members of the press, financial analysts, or others who might become conduits for the communication of prohibited bidding information. For example, even though communicating that it has applied to participate in the auction will not violate the rule, an applicant's statement to the press that it intends to stop bidding in an auction could give rise to a finding of a 47 CFR 1.2105 violation. Similarly, an applicant's public statement of intent not to place bids during bidding in Auction 108 could also violate the rule.

5. Section 1.2105(c) Certifications

72. By electronically submitting its FCC Form 175, each applicant for Auction 108 certifies its compliance with 47 CFR 1.2105(c). The mere filing of a certifying statement as part of an application, however, will not outweigh specific evidence that a prohibited communication has occurred, nor will it preclude the initiation of an investigation when warranted. Any applicant found to have violated these communication prohibitions may be subject to sanctions.

6. Duty To Report Prohibited Communications

73. 47 CFR 1.2105(c)(4) requires that any applicant that makes or receives a communication that appears to violate 47 CFR 1.2105(c) must report such communication in writing to the Commission immediately, and in no case later than five business days after the communication occurs. Each applicant's obligation to report any such communication continues beyond the five-day period after the communication is made, even if the report is not made within the five-day period.

7. Procedures for Reporting Prohibited Communications

74. A party reporting any information or communication pursuant to 47 CFR 1.65(a), 1.2105(a)(2), or 1.2105(c)(4) must take care to ensure that any report of a prohibited communication does not itself give rise to a violation of 47 CFR 1.2105(c). For example, a party's report of a prohibited communication could violate the rule by communicating prohibited information to other parties specified under the rule through the use of Commission filing procedures that allow such materials to be made available for public inspection.

75. An applicant must file only a single report concerning a prohibited communication and must file that report with the Commission personnel expressly charged with administering the Commission's auctions. This rule is designed to minimize the risk of inadvertent dissemination of information in such reports. Any reports required by 47 CFR 1.2105(c) must be filed consistent with the instructions set forth in the
Auction 108 Procedures Public Notice.
For Auction 108, such reports must be filed with the Chief of the Auctions Division, Office of Economics and Analytics, by the most expeditious means available. Any such report should be submitted by email to the Auctions Division Chief and sent to
auction108@fcc.gov.
If you choose instead to submit a report in hard copy, contact Auctions Division staff at
auction108@fcc.gov
or (202) 418-0660 for guidance.

76. Given the potential competitive sensitivity of public disclosure of information in such a report, a party seeking to report such a prohibited communication should consider submitting its report with a request that the report or portions of the submission be withheld from public inspection by following the procedures specified in 47 CFR 0.459. The Commission encourages such parties to coordinate with the Auctions Division staff about the procedures for submitting such reports.

8. Winning Bidders Must Disclose Terms of Agreements

77. Each applicant that is a winning bidder will be required to provide as part of its long-form application any agreement or arrangement it has entered into and a summary of the specific terms, conditions, and parties involved in any agreement it has entered into. This applies to any bidding consortia, joint venture, partnership, or agreement, understanding, or other arrangement entered into relating to the competitive bidding process, including any agreement relating to the post-auction market structure. Failure to comply with the Commission's rules can result in enforcement action.

9. Additional Information Concerning Prohibition on Certain Communications in Commission Auctions

78. A summary listing of documents issued by the Commission and OEA/WTB addressing the application of 47 CFR 1.2105(c) is available on the Commission's auction web page at
www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications.

10. Antitrust Laws

79. Regardless of compliance with the Commission's rules, applicants remain

subject to the antitrust laws, which are designed to prevent anticompetitive behavior in the marketplace. Compliance with the disclosure requirements of 47 CFR 1.2105(c)(4) will not insulate a party from enforcement of the antitrust laws. For instance, a violation of the antitrust laws could arise out of actions taking place well before any party submits a short-form application. The Commission has cited a number of examples of potentially anticompetitive actions that would be prohibited under antitrust laws: for example, actual or potential competitors may not agree to divide territories in order to minimize competition, regardless of whether they split a market in which they both do business, or whether they merely reserve one market for one and another market for the other.

80. To the extent the Commission becomes aware of specific allegations that suggest that violations of the federal antitrust laws may have occurred, they may refer such allegations to the United States Department of Justice for investigation. If an applicant is found to have violated the antitrust laws or the Commission's rules in connection with its participation in the competitive bidding process, then it may be subject to a forfeiture and may be prohibited from participating further in Auction 108 and in future auctions, among other sanctions.

I. Provisions for Small Businesses and Rural Service Providers

81. A bidding credit represents an amount by which a bidder's overall payment across all of the licenses won will be discounted, subject to the caps discussed below. As set forth in 47 CFR 1.2110, and as described below, the designated entity rules include, but are not limited to: (1) A two-pronged standard for evaluating eligibility for small business benefits, (2) an attribution rule for certain disclosable interest holders of applicants claiming designated entity benefits, (3) updated gross revenue amounts defining eligibility for small business benefits, (4) a bidding credit for eligible rural service providers, and (5) caps on the total amount of designated entity benefits any eligible winning bidder may receive.

82. In Auction 108, designated entity bidding credits will be available to applicants demonstrating eligibility for a small business or a rural service provider bidding credit and subsequently winning license(s). These bidding credits will not be cumulative—an applicant is permitted to claim either a small business bidding credit or a rural service provider bidding credit, but not both. Each applicant must also certify that it is eligible for the claimed bidding credit in its FCC Form 175. In addition to the information provided below, each applicant should review carefully the Commission's decisions regarding the designated entity provisions as well as the part 1 rules.

83. In particular, the Commission reminds applicants applying for designated entity bidding credits that they should take due account of the requirements of the Commission's rules and implementing orders regarding
de jure
and
de facto
control of such applicants. These rules include a prohibition, which applies to all applicants (whether they seek bidding credits or not), against changes in ownership of the applicant that would constitute an assignment or transfer of control after the initial filing deadline for FCC Form 175. Applicants should not expect to receive any opportunities to revise their ownership structure after the filing of their short- and long-form applications, including making revisions to their agreements or other arrangements with interest holders, lenders, or others in order to address potential concerns relating to compliance with the designated entity bidding credit requirements. This policy will help to ensure compliance with the Commission's rules applicable to the award of bidding credits prior to the conduct of the auction, which will involve competing bids from those that do and do not seek bidding credits, and thus preserves the integrity of the auction process. The Commission also believes that this will meet the Commission's objectives in awarding licenses through the competitive bidding process.

1. Small Business Bidding Credit

84. For Auction 108, bidding credits will be available to eligible small businesses and consortia thereof, subject to the caps discussed below. Under the service rules applicable to the 2.5 GHz band licenses to be offered in Auction 108, the level of bidding credit available is determined as follows:

• A bidder that qualifies as a small business—
i.e.,
one with attributed average annual gross revenues that do not exceed $55 million for the preceding five years—is eligible to receive a 15% discount on its overall payment.

• A bidder that qualifies as a very small business—
i.e.,
one with attributed average annual gross revenues that do not exceed $20 million for the preceding five years—is eligible to receive a 25% discount on its overall payment.

85. In adopting this two-tiered approach in the
2.5 GHz Report and Order,
the Commission observed that this approach would provide consistency and predictability for small businesses.

86. Small business bidding credits are not cumulative; an eligible applicant may receive either the 15% or the 25% bidding credit on its overall payment, but not both. The Commission's unjust enrichment provisions also apply to a winning bidder that uses a bidding credit and subsequently seeks to assign or transfer control of its license within a certain period to an entity not qualifying for at least the same level of small business bidding credit.

87. Each applicant claiming a small business bidding credit must disclose the gross revenues for the preceding five years for each of the following: (1) The applicant, (2) its affiliates, (3) its controlling interests, and (4) the affiliates of its controlling interests. The applicant must also submit an attachment that lists all parties with which the applicant has entered into any spectrum use agreements or arrangements for any licenses that may be won by the applicant in Auction 108. In addition, to the extent that an applicant has an agreement with any disclosable interest holder for the use of more than 25% of the spectrum capacity of any license that may be won in Auction 108, the applicant must disclose the identity and the attributable gross revenues of any such disclosable interest holder. This attribution rule will be applied on a license-by-license basis. As a result, an applicant may be eligible for a bidding credit on some, but not all, of the licenses for which it is bidding in Auction 108. If an applicant is applying as a consortium of small businesses, then the disclosures described in this paragraph must be provided for each consortium member.

2. Rural Service Provider Bidding Credit

88. An eligible applicant may request a 15% discount on its overall payment using a rural service provider bidding credit, subject to the cap discussed below. To be eligible for a rural service provider bidding credit, an applicant must: (1) Be a service provider that is in the business of providing commercial communications services and, together with its controlling interests, affiliates, and the affiliates of its controlling interests, has fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers; and (2) serve predominantly rural areas. Rural areas are defined as counties with a population density of 100 or fewer persons per square mile. An applicant seeking a rural service provider bidding credit must provide the number of subscribers served as of the short-form

application deadline. An applicant may count any subscriber as a single subscriber even if that subscriber receives more than one service.

89. Each applicant seeking a rural service provider bidding credit must disclose the number of its subscribers, along with the number of subscribers of its affiliates, controlling interests, and the affiliates of its controlling interests. The applicant must also submit an attachment that lists all parties with which the applicant has entered into any spectrum use agreements or arrangements for any licenses that may be won by the applicant in Auction 108. In addition, to the extent that an applicant has an agreement with any disclosable interest holder for the use of more than 25% of the spectrum capacity of any license that may be won in Auction 108, the identity and the attributable subscribers of any such disclosable interest holder must be disclosed. Like applicants seeking eligibility for small business bidding credits, eligible rural service providers may also form a consortium. If an applicant is applying as a consortium of rural service providers, then the disclosures described in this paragraph, including the certification, must be provided for each consortium member.

3. Caps on Bidding Credits

90. Eligible applicants claiming either a small business or rural service provider bidding credit will be subject to specified caps on the total bidding credit discount that they may receive. The Commission adopts the bidding credit caps for Auction 108 at the amounts proposed for the reasons discussed by the Commission in the
Auction 108 Comment Public Notice.
Specifically, the Commission adopts a $25 million cap on the total bidding credit discount that may be awarded to an eligible small business, and a $10 million cap on the total bidding credit discount that may be awarded to an eligible rural service provider. Additionally, to create parity among eligible small businesses and rural service providers competing against each other in smaller markets, no winning designated entity bidder may receive more than $10 million in bidding credit discounts in total for licenses won in counties located within any partial economic area (PEA) with a population of 500,000 or less.

4. Attributable Interests

a. Controlling Interests and Affiliates

91. Pursuant to 47 CFR 1.2110, an applicant's eligibility for designated entity benefits is determined by attributing the gross revenues (for those seeking small business benefits) or subscribers (for those seeking rural service provider benefits) of the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests. Controlling interests of an applicant include individuals and entities with either
de facto
or
de jure
control of the applicant. Typically, ownership of greater than 50% of an entity's voting stock evidences
de jure
control.
De facto
control is determined on a case-by-case basis based on the totality of the circumstances. The following are some common indicia of
de facto
control:

• The entity constitutes or appoints more than 50% of the board of directors or management committee;

• the entity has authority to appoint, promote, demote, and fire senior executives that control the day-to-day activities of the licensee; and

• the entity plays an integral role in management decisions.

92. Additionally, for attribution purposes, officers and directors of an applicant seeking a bidding credit are considered to have a controlling interest in the applicant. Applicants should refer to 47 CFR 1.2110(c)(2) and the FCC Form 175 Instructions to understand how certain interests are calculated in determining control for purposes of attributing gross revenues.

93. Affiliates of an applicant or controlling interest include an individual or entity that: (1) Directly or indirectly controls or has the power to control the applicant, (2) is directly or indirectly controlled by the applicant, (3) is directly or indirectly controlled by a third party that also controls or has the power to control the applicant, or (4) has an identity of interest with the applicant. The Commission's definition of an affiliate of the applicant encompasses both controlling interests of the applicant and affiliates of controlling interests of the applicant. For more information on the application requirements regarding controlling interests and affiliates, applicants should refer to 47 CFR 1.2110(c)(2) and (5) respectively, as well as the FCC Form 175 Instructions.

94. An applicant seeking a small business bidding credit must demonstrate its eligibility for the bidding credit by: (1) Meeting the applicable small business size standard, based on the controlling interest and affiliation rules discussed above; and (2) retaining control, on a license-by-license basis, over the spectrum associated with the licenses for which it seeks small business benefits. For purposes of the first prong of the standard, applicants should note that control and affiliation may arise through, among other things, ownership interests, voting interests, management and other operating agreements, or the terms of any other types of agreements—including spectrum lease agreements—that independently or together create a controlling, or potentially controlling, interest in the applicant's or licensee's business as a whole. In addition, once an applicant demonstrates eligibility as a small business under the first prong, it must also be eligible for benefits on a license-by-license basis under the second prong. As part of making the FCC Form 175 certification that it is qualified as a designated entity under 47 CFR 1.2110, an applicant is certifying that it does not have any spectrum use or other agreements that would confer either
de jure
or
de facto
control of any license it seeks to acquire with bidding credits.

95. Applicants should note that, under this standard for evaluating eligibility for small business bidding credits, if an applicant executes a spectrum use agreement that does not comply with the Commission's relevant standard of
de facto
control, then it will be subject to unjust enrichment obligations for the benefits associated with that particular license, as well as the penalties associated with any violation of 47 U.S.C. 310(d) and related regulations, which require Commission approval of transfers of control. If that spectrum use agreement (either alone or in combination with the designated entity controlling interest and attribution rules described above) goes so far as to confer control of the applicant's overall business, then the gross revenues of the additional interest holders will be attributed to the applicant, which could render the applicant ineligible for all current and future small business benefits on all licenses.

b. Limitation on Spectrum Use

96. Under 47 CFR 1.2110(c)(2)(ii)(J), the gross revenues (or the subscribers, in the case of a rural service provider) of an applicant's disclosable interest holder are attributable to the applicant, on a license-by-license basis, if the disclosable interest holder has an agreement with the applicant to use, in any manner, more than 25% of the spectrum capacity of any license won by the applicant and acquired with a bidding credit during the five-year unjust enrichment period for the applicable license. For purposes of this requirement, a disclosable interest holder of an applicant seeking designated entity benefits is defined as

any individual or entity holding a 10% or greater interest of any kind in the applicant, including but not limited to, a 10% or greater interest in any class of stock, warrants, options, or debt securities in the applicant or licensee. Any applicant seeking a bidding credit for licenses won in Auction 108 will be subject to this attribution rule and must make the requisite disclosures.

97. Certain disclosable interest holders may be excluded from this attribution rule. Specifically, an applicant claiming the rural service provider bidding credit may have spectrum license use agreements with a disclosable interest holder, without having to attribute the disclosable interest holder's subscribers, so long as the disclosable interest holder is independently eligible for a rural service provider credit and the disclosable interest holder's spectrum use and any spectrum use agreements are otherwise permissible under the Commission's existing rules. If applicable, the applicant must attach to its FCC Form 175 any additional information as may be required to indicate any license (or license area) that may be subject to this attribution rule or to demonstrate its eligibility for the exception from this attribution rule. Consistent with the Commission's limited information procedures, the Commission intends to withhold from public disclosure all information contained in any such attachments until after the close of Auction 108.

c. Exceptions From Attribution Rules for Small Businesses and Rural Service Providers

98. Applicants claiming designated entity benefits may be eligible for certain exceptions from the Commission's attribution rules. For example, in calculating an applicant's gross revenues under the controlling interest standard, the Commission will not attribute to the applicant the personal net worth, including personal income, of its officers and directors. However, to the extent that the officers and directors of the applicant are controlling interest holders of other entities, the gross revenues of those entities will be attributed to the applicant. Moreover, if an officer or director operates a separate business, then the gross revenues derived from that business would be attributed to the applicant.

99. The Commission has also exempted from attribution to the applicant the gross revenues of the affiliates of a rural telephone cooperative's officers and directors, if certain conditions specified in 47 CFR 1.2110(b)(4)(iii) are met. An applicant claiming this exemption must provide, in an attachment, an affirmative statement that the applicant, affiliate and/or controlling interest is an eligible rural telephone cooperative within the meaning of 47 CFR 1.2110(b)(4)(iii), and the applicant must supply any additional information as may be required to demonstrate eligibility for the exemption from the attribution rule.

100. An applicant claiming a rural service provider bidding credit may be eligible for an exception from the Commission's attribution rules as an existing rural partnership. To qualify for this exception, an applicant must be a rural partnership providing service as of July 16, 2015, and each member of the rural partnership must individually have fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers. Because each member of the rural partnership must individually qualify for the bidding credit, by definition, a partnership that includes a nationwide provider as a member will not be eligible for the benefit.

101. Finally, a consortium of small businesses or rural service providers may seek an exception from the Commission's attribution rules. Under the Commission's rules, a consortium of small businesses or rural service providers is a conglomerate organization composed of two or more entities, each of which individually satisfies the definition of small business or rural service provider. A consortium must provide additional information for each member demonstrating each member's eligibility for the claimed bidding credit in order to show that the applicant satisfies the eligibility criteria for the bidding credit. The gross revenue or subscriber information of each consortium member will not be aggregated for purposes of determining the consortium's eligibility for the claimed bidding credit. This information must be provided, however, to ensure that each consortium member qualifies for the bidding credit sought by the consortium.

J. Tribal Lands Bidding Credit

102. A winning bidder that intends to use its license(s) to deploy facilities and provide services to qualifying Tribal lands that have a wireline penetration rate equal to or below 85% is eligible to receive a Tribal lands bidding credit. A tribal lands bidding credit is in addition to, and separate from, any other bidding credit for which a winning bidder may qualify. Unlike other bidding credits that are requested prior to an auction, a winning bidder applies for a Tribal lands bidding credit after the auction when it files its FCC Form 601 post-auction application.

K. Provisions Regarding Former and Current Defaulters

103. Pursuant to the rules governing competitive bidding, each applicant must make certifications regarding whether it is a current or former defaulter or delinquent. A current defaulter or delinquent is not eligible to participate in Auction 108, but a former defaulter or delinquent may participate so long as it is otherwise qualified and makes an upfront payment that is 50% more than would otherwise be necessary. Accordingly, each applicant must certify under penalty of perjury on its FCC Form 175 that it, its affiliates, its controlling interests, and the affiliates of its controlling interests are not in default on any payment for a Commission construction permit or license (including down payments) and that they are not delinquent on any non-tax debt owed to any Federal agency. Additionally, an applicant must certify under penalty of perjury whether it (along with its controlling interests) has ever been in default on any payment for a Commission construction permit or license (including down payments) or has ever been delinquent on any non-tax debt owed to any Federal agency, subject to the exclusions described below. For purposes of making these certifications, the term controlling interest is defined in 47 CFR 1.2105(a)(4)(i).

104. Under the Commission's rule regarding applications by former defaulters, an applicant is considered a former defaulter or a former delinquent when, as of the FCC Form 175 filing deadline, the applicant or any of its controlling interests has defaulted on any Commission construction permit or license or has been delinquent on any non-tax debt owed to any Federal agency, but has since remedied all such defaults and cured all of the outstanding non-tax delinquencies. For purposes of the certification under 47 CFR 1.2105(a)(2)(xii), the applicant may exclude from consideration any cured default on a Commission construction permit or license or cured delinquency on a non-tax debt owed to a Federal agency for which any of the following criteria are met: (1) The notice of the final payment deadline or delinquency was received more than seven years before the FCC Form 175 filing deadline, (2) the default or delinquency amounted to less than $100,000, (3) the default or delinquency was paid within two quarters (
i.e.,
six months) after receiving the notice of the final payment deadline or delinquency, or (4) the

default or delinquency was the subject of a legal or arbitration proceeding and was cured upon resolution of the proceeding. With respect to the first exclusion, notice to a debtor may include notice of a final payment deadline or notice of delinquency and may be express or implied depending on the origin of any Federal non-tax debt giving rise to a default or delinquency. Additionally, for the third exclusion, the date of receipt of the notice of a final default deadline or delinquency by the intended party or debtor will be used for purposes of verifying receipt of notice.

105. In addition to the
Auction 108 Procedures Public Notice,
applicants are encouraged to review previous guidance on default and delinquency disclosure requirements in the context of the auction short-form application process. Parties are also encouraged to consult with Auctions Division staff if they have any questions about default and delinquency disclosure requirements.

106. The Commission considers outstanding debts owed to the United States Government, in any amount, to be a serious matter. The Commission has previously adopted rules, including a provision referred to as the red light rule, that implement its obligations under the Debt Collection Improvement Act of 1996, which governs the collection of debts owed to the United States. Under the red light rule, applications and other requests for benefits filed by parties that have outstanding debts owed to the Commission will not be processed. When adopting that rule, the Commission explicitly declared, however, that its competitive bidding rules are not affected by the red light rule. As a consequence, the Commission's adoption of the red light rule does not alter the applicability of any of its competitive bidding rules, including the provisions and certifications of 47 CFR 1.2105 and 1.2106, with regard to current and former defaults or delinquencies.

107. The Commission reminds each applicant, however, that any indication in the Commission's Red Light Display System, which provides information regarding debts currently owed to the Commission, may not be determinative of an auction applicant's ability to comply with the default and delinquency disclosure requirements of 47 CFR 1.2105. Thus, while the red light rule ultimately may prevent the processing of long-form applications by auction winners, an auction applicant's lack of current red light status is not necessarily determinative of its eligibility to participate in an auction (or whether it may be subject to an increased upfront payment obligation). Moreover, a prospective applicant in Auction 108 should note that any long-form applications filed after the close of bidding will be reviewed for compliance with the Commission's red light rule, and such review may result in the dismissal of a winning bidder's long-form application. The Commission encourages each applicant to carefully review all records and other available Federal agency databases and information sources to determine whether the applicant, or any of its affiliates, or any of its controlling interests, or any of the affiliates of its controlling interests, owes or was ever delinquent in the payment of non-tax debt owed to any Federal agency.

L. Optional Applicant Status Identification

108. Applicants owned by members of minority groups and/or women, as defined in 47 CFR 1.2110(c)(3), and rural telephone companies, as defined in 47 CFR 1.2110(c)(4), may identify themselves regarding this status in filling out their FCC Form 175 applications. This applicant status information is collected for statistical purposes only and assists the Commission in monitoring the participation of various groups in its auctions.

M. Modifications to FCC Form 175

1. Only Minor Modifications Allowed

109. After the initial FCC Form 175 filing deadline, an Auction 108 applicant will be permitted to make only minor amendments to its application consistent with the Commission's rules. Examples of minor changes include the deletion or addition of authorized bidders (to a maximum of three) and the revision of addresses and telephone numbers of the applicant, its responsible party, and its contact person. Major amendments to an FCC Form 175 (
e.g.,
change of license area selection, certain changes in ownership that would constitute an assignment or transfer of control of the applicant, change in the required certifications, change in applicant's legal classification that results in a change in control, or change in claimed eligibility for a higher percentage of bidding credit) will not be permitted after the initial FCC Form 175 filing deadline. If an amendment reporting changes is a major amendment, as described in 47 CFR 1.2105(b)(2), the major amendment will not be accepted and may result in the dismissal of the application.

2. Duty To Maintain Accuracy and Completeness of FCC Form 175

110. Pursuant to 47 CFR 1.65, each applicant has a continuing obligation to maintain the accuracy and completeness of information furnished in a pending application, including a pending application to participate in Auction 108. Consistent with the requirements for prior spectrum auctions, an applicant for Auction 108 must furnish additional or corrected information to the Commission within five business days after a significant occurrence, or amend its FCC Form 175 no more than five business days after the applicant becomes aware of the need for the amendment. An applicant is obligated to amend its pending application even if a reported change may result in the dismissal of the application because it is subsequently determined to be a major modification.

3. Modifying and FCC Form 175

111. As noted above, a party seeking to participate in Auction 108 must file an FCC Form 175 electronically via the FCC's Auction Application System. During the initial filing window, an applicant will be able to make any necessary modifications to its FCC Form 175 in the Auction Application System. An applicant that has certified and submitted its FCC Form 175 before the close of the initial filing window may continue to make modifications as often as necessary until the close of that window; however, the applicant must re-certify and re-submit its FCC Form 175 before the close of the initial filing window to confirm and effect its latest application changes. After each submission, a confirmation page will be displayed stating the submission time and submission date.

112. An applicant will also be allowed to modify its FCC Form 175 in the Auction Application System, except for certain fields, during the resubmission filing window and after the release of the public notice announcing the qualified bidders for an auction. During these times, if an applicant needs to make permissible minor changes to its FCC Form 175 or must make changes in order to maintain the accuracy and completeness of its application pursuant to 47 CFR 1.65 and 1.2105(b)(4), then it must make the change(s) in the Auction Application System and re-certify and re-submit its application to confirm and effect the change(s).

113. An applicant's ability to modify its FCC Form 175 in the Auction Application System will be limited between the closing of the initial filing

window and the opening of the application resubmission filing window, and between the closing of the resubmission filing window and the release of the public notice announcing the qualified bidders for an auction. During these periods, an applicant will be able to view its submitted application, but will be permitted to modify only the applicant's address, responsible party address, and contact information (
e.g.,
name, address, telephone number) in the Auction Application System. An applicant will not be able to modify any other pages of the FCC Form 175 in the Auction Application System during these periods. If, during these periods, an applicant needs to make other permissible minor changes to its FCC Form 175, or changes to maintain the accuracy and completeness of its application pursuant to 47 CFR 1.65 and 1.2105(b)(4), then the applicant must submit a letter briefly summarizing the changes to its FCC Form 175 via email to
auction108@fcc.gov.
The email summarizing the changes must include a subject line referring to Auction 108 and the name of the applicant, for example, Re: Changes to Auction 108 Auction Application of XYZ Corp. Any attachments to the email must be formatted as Adobe® Acrobat® (PDF) or Microsoft® Word documents. An applicant that submits its changes in this manner must subsequently modify, certify, and submit its FCC Form 175 application(s) electronically in the Auction Application System once it is again open and available to applicants.

114. Applicants should also note that even at times when the Auction Application System is open and available to applicants, the system will not allow an applicant to make certain other permissible changes itself (
e.g.,
correcting a misstatement of the applicant's legal classification). If an applicant needs to make a permissible minor change of this nature, then it must submit a written request by email to the Auctions Division Chief, via
auction108@fcc.gov
requesting that the Commission manually make the change on the applicant's behalf. Once Commission staff has informed the applicant that the change has been made in the Auction Application System, the applicant must then re-certify and re-submit its FCC Form 175 in the Auction Application System to confirm and effect the change(s).

115. As with filing the FCC Form 175, any amendment(s) to the application and related statements of fact must be certified by an authorized representative of the applicant with authority to bind the applicant. Applicants should note that submission of any such amendment or related statement of fact constitutes a representation by the person certifying that he or she is an authorized representative with such authority and that the contents of the amendment or statement of fact are true and correct.

116. Applicants must not submit application-specific material through the Commission's Electronic Comment Filing System. Further, as discussed above, parties submitting information related to their applications should use caution to ensure that their submissions do not contain confidential information or communicate information that would violate 47 CFR 1.2105(c) or the limited information procedures adopted for Auction 108. An applicant seeking to submit, outside of the Auction Application System, information that might reflect non-public information, such as an applicant's county selection(s), upfront payment amount, or bidding eligibility, should consider including in its email a request that the filing or portions of the filing be withheld from public inspection until the end of the prohibition on certain communications pursuant to 47 CFR 1.2105(c).

117. Questions about FCC Form 175 amendments should be directed to the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 108

A. Due Diligence

118. The Commission reminds each potential bidder that it is solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the value of the licenses that it is seeking in Auction 108 and that it is required to certify, under penalty of perjury, that it has read the
Auction 108 Procedures Public Notice
and has familiarized itself with the auction procedures and the service rules for the 2.5 GHz band. The Commission makes no representations or warranties about the use of this spectrum or these licenses for particular services. Each applicant should be aware that a Commission auction represents an opportunity to become a Commission licensee, subject to certain conditions and regulations. This includes the established authority of the Commission to alter the terms of existing licenses by rulemaking, which is equally applicable to licenses awarded by auction. A Commission auction does not constitute an endorsement by the Commission of any particular service, technology, or product, nor does a Commission license constitute a guarantee of business success.

119. An applicant should perform its due diligence research and analysis before proceeding, as it would with any new business venture. In particular, the Commission encourages each potential bidder to perform technical analyses and/or refresh its previous analyses to assure itself that, should it become a winning bidder for any Auction 108 license, it will be able to build and operate facilities that will fully comply with all applicable technical and legal requirements. The Commission urges each applicant to inspect any prospective sites for communications facilities located in, or near, the geographic area for which it plans to bid, confirm the availability of such sites, and to familiarize itself with the Commission's rules regarding the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), and any other environmental statutes that may apply.

120. As noted above, applicants must carefully consider potential encumbrances on existing licenses. The Commission notes in particular that there will be a substantial number of licenses in inventory where the amount of unassigned area or unassigned spectrum is very small. For example, there could be licenses in Channel Block 2 where as little as .333 megahertz of spectrum is unassigned. There are also a substantial number of licenses where the area with unassigned spectrum is smaller than one square mile. Each applicant should carefully research the existence of incumbent licenses and the technical and economic implications for commercial use of the 2.5 GHz band.

121. The Commission also encourages each applicant in Auction 108 to continue to conduct its own research throughout the auction in order to determine the existence of pending or future administrative or judicial proceedings that might affect its decision on continued participation in the auction. Each applicant is responsible for assessing the likelihood of the various possible outcomes and for considering the potential impact on licenses available in an auction. The due diligence considerations mentioned in the
Auction 108 Procedures Public Notice
do not constitute an exhaustive list of steps that should be undertaken prior to participating in Auction 108. As always, the burden is on the potential bidder to determine how much research to undertake, depending upon the specific facts and circumstances related to its interests. For example, applicants should pay particular attention to the

results applications filed in the Rural Tribal Priority Window, which will determine the final inventory of licenses available for bidding in Auction 108. The Commission emphasizes again that licenses granted through applications received during the Rural Tribal Priority Window have incumbent status
vis-à-vis
licenses awarded in Auction 108. In other words, any winning bidder awarded a license in Auction 108 will not be allowed to operate within the license area of a successful Rural Tribal Priority Window applicant, even if that application remains pending today or at the time of issuance of the overlay license. In addition, the Commission reminds applicants that the tools made available to assess the available licenses in Auction 108, including the mapping tool described above, may not represent official licensing information and all information should be confirmed in ULS for any specific license or area.

122. Applicants are solely responsible for identifying associated risks and for investigating and evaluating the degree to which such matters may affect their ability to bid on, otherwise acquire, or make use of the licenses available in Auction 108. Each potential bidder is responsible for undertaking research to ensure that any licenses won in the auction will be suitable for its business plans and needs. Each potential bidder must undertake its own assessment of the relevance and importance of information gathered as part of its due diligence efforts.

123. The Commission makes no representations or guarantees regarding the accuracy or completeness of information in its databases or any third-party databases, including, for example, court docketing systems. To the extent the Commission's databases may not include all information deemed necessary or desirable by an applicant, it must obtain or verify such information from independent sources or assume the risk of any incompleteness or inaccuracy in said databases. Furthermore, the Commission makes no representations or guarantees regarding the accuracy or completeness of information that has been provided by incumbent licensees and incorporated into its databases.

B. Licensing Considerations

1. Incumbency Issues

124. Potential applicants in Auction 108 should carefully review the new rules applicable to the 2.5 GHz band as well as the results of applications filed in the Rural Tribal Priority Window, which will determine the final license inventory for Auction 108, when developing business plans, assessing market conditions, and evaluating the availability of equipment for 2.5 GHz operations. Each applicant should closely follow releases from the Commission concerning these issues and consider carefully the technical and economic implications for commercial use of the 2.5 GHz band.

2. International Coordination

125. Potential bidders seeking licenses for geographic areas adjacent to the Canadian and Mexican borders should be aware that the use of the 2.5 GHz frequencies they acquire in Auction 108 are subject to current and future agreements with the governments of Canada and Mexico.

126. The Commission routinely works with the United States Department of State and Canadian and Mexican government officials to ensure the efficient use of the spectrum as well as interference-free operations in the border areas near Canada and Mexico. Until such time as any adjusted agreements, as needed, between the United States, Mexico, and/or Canada can be agreed to, operations in the 2.5 GHz band must not cause harmful interference across the border, consistent with the terms of the agreements currently in force.

3. Environmental Review Requirements

127. Licensees must comply with the Commission's rules for environmental review under the NEPA, the NHPA, and any other environmental statutes that may apply. Licensees and other applicants that propose to build certain types of communications facilities for licensed service must follow Commission procedures implementing obligations under NEPA and NHPA prior to constructing the facilities. Under NEPA, a licensee or applicant must assess if certain environmentally sensitive conditions specified in the Commission's rules are relevant to the proposed facilities, and prepare an environmental assessment when applicable. If an environmental assessment is required, then facilities may not be constructed until environmental processing is completed. Under NHPA, a licensee or applicant must follow the procedures in 47 CFR 1.1320, the
Nationwide Programmatic Agreement for Collocation of Wireless Antennas
and the
Nationwide Programmatic Agreement Regarding the Section 106 National Historic Preservation Act Review Process.
Compliance with section 106 of the NHPA requires Tribal consultation, and if construction of the communications facilities would have adverse effects on historic or Tribally significant properties, an environmental assessment must be prepared.

4. Mobile Spectrum Holdings Policies

128. The Commission reminds bidders of the Commission's mobile spectrum holdings policies applicable to the 2.5 GHz band. Specifically, the Commission did not impose a pre-auction bright-line limit on acquisitions of the 2.5 GHz band. The Commission determined that “EBS white space spectrum should be considered available for purposes of the spectrum screen.” In addition, the Commission eliminated the EBS white space discounts and ended the 5% exclusion of spectrum from the screen. The Commission also concluded that it would perform case-by-case review of secondary market transactions to assess the effect of educational use restrictions in existing spectrum leases in particular local markets.

C. Bidder Education

129. Before the opening of the short-form filing window for Auction 108, detailed educational information will be provided in various formats to would-be participants on the Auction 108 web page. Specifically, the Commission directs OEA to provide various materials on the pre-bidding processes in advance of the opening of the short-form application window, beginning with the release of step-by-step instructions for completing the FCC Form 175, which OEA will make available in the Education section of the Auction 108 website at
www.fcc.gov/auction/108.
In addition, OEA will provide an online application procedures tutorial for the auction, covering information on pre-bidding preparation, completing short-form applications, and the application review process.

130. In advance of the start of the mock auction, OEA will provide educational materials on the bidding procedures for Auction 108, including a user guide for the bidding system, bidding system file formats, and an online bidding procedures tutorial. These materials will provide detailed information on bidding features specific to the ascending clock auction format, including intra-round bidding and proxy bids. The Commission recognizes the importance of these materials to applicants' and bidders' comprehension of the bidding procedures adopted in the
Auction 108 Procedures Public Notice.
Accordingly, the educational materials shall be released as soon as reasonably possible to provide potential applicants and bidders with time to

understand them and ask questions before bidding begins.

131. The Commission believes that parties interested in participating in Auction 108 will find the interactive, online tutorials an efficient and effective way to further their understanding of the application and bidding processes. The online tutorials will allow viewers to navigate the presentation outline, review written notes, and listen to audio of the notes. Additional features of this web-based tool include links to auction-specific Commission releases, email links for contacting Commission staff, and screen shots of the online application and bidding systems. The online tutorials will be accessible in the Education section of the Auction 108 website at
www.fcc.gov/auction/108.
Once posted, the tutorials will remain continuously accessible.

D. Short-Form Applications: Due Before 6 p.m. ET on May 10, 2022

132. In order to be eligible to bid in Auction 108, an applicant must first follow the procedures to submit a short-form application (FCC Form 175) electronically via the Auction Application System, following the instructions set forth in the FCC Form 175 Instructions. The short-form application will become available with the opening of the initial filing window and must be submitted prior to 6 p.m. ET on May 10, 2022. Late applications will not be accepted. No application fee is required for short-form applications.

133. Applications may be filed at any time beginning at noon ET on April 27, 2022, until the filing window closes at 6 p.m. ET on May 10, 2022. Applicants are strongly encouraged to file early and are responsible for allowing adequate time for filing their applications. There are no limits or restrictions on the number of times an application can be updated or amended until the initial filing deadline on May 10, 2022.

134. An applicant must always click on the CERTIFY & SUBMIT button on the Certify & Submit screen to successfully submit its FCC Form 175 and any modifications; otherwise the application or changes to the application will not be received or reviewed by Commission staff. Additional information about accessing, completing, and viewing the FCC Form 175 is provided in the FCC Form 175 Instructions. Applicants requiring technical assistance should contact FCC Auctions Technical Support using the contact information provided in Section VI.D. (Contact Information), below. In order to provide better service to the public, all calls to Technical Support are recorded.

E. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and Opportunity for Minor Modifications

135. After the deadline for filing auction applications, the Commission will process all timely submitted applications to determine whether each applicant has complied with the application requirements and provided all information concerning its qualifications for bidding. OEA will issue a public notice with applicants' initial application status, identifying: (1) Those that are complete; and (2) those that are incomplete or deficient because of defects that may be corrected. The public notice will include the deadline for resubmitting corrected applications and an electronic copy will be sent by email to the contact address listed in the FCC Form 175 for each applicant. In addition, each applicant with an incomplete application will be sent information on the nature of the deficiencies in its application, along with the name and contact information of a Commission staff member who can answer questions specific to the application.

136. After the initial application filing deadline on May 10 2022, applicants can make only minor modifications to their applications. Major modifications (
e.g.,
change of license area selection, change in ownership that would constitute an assignment or transfer of control of the applicant, change in the required certifications, change in applicant's legal classification that results in a change in control, or change in claimed eligibility for a higher percentage of bidding credit) will not be permitted. After the deadline for resubmitting corrected applications, an applicant will have no further opportunity to cure any deficiencies in its application or provide any additional information that may affect Commission staff's ultimate determination of whether and to what extent the applicant is qualified to participate in Auction 108.

137. Commission staff will communicate only with an applicant's contact person or certifying official, as designated on the applicant's FCC Form 175, unless the applicant's certifying official or contact person notifies Commission staff in writing that another representative is authorized to speak on the applicant's behalf. Authorizations may be sent by email to
auction108@fcc.gov.

2. Public Notice of Applicants' Final Application Status After Upfront Payment Deadline

138. After Commission staff reviews resubmitted applications and upfront payments, OEA will release a public notice identifying applicants that have become qualified bidders for the auction. A
Qualified Bidders Public Notice
will be issued before bidding in the auction begins. Qualified bidders are those applicants with submitted FCC Form 175 applications that are deemed timely filed and complete and that have made a sufficient upfront payment.

F. Upfront Payments

139. In order to be eligible to bid in Auction 108, a sufficient upfront payment and a complete and accurate FCC Remittance Advice Form (FCC Form 159, Revised 2/03) must be submitted before 6 p.m. ET on June 23, 2022. After completing its short-form application, an applicant will have access to an electronic pre-filled version of the FCC Form 159. An accurate and complete FCC Form 159 must accompany each payment. Proper completion of this form is critical to ensuring correct crediting of upfront payments. Payers using the pre-filled FCC Form 159 are responsible for ensuring that all the information on the form, including payment amounts, is accurate. Instructions for completing FCC Form 159 for Auction 108 are provided below.

1. Making Upfront Payments by Wire Transfer for Auction 108

140. Upfront payments for Auction 108 must be wired to, and will be deposited in, the U.S. Treasury.

141. Wire transfer payments for Auction 108 must be received before 6 p.m. ET on June 23, 2022. No other payment method is acceptable. To avoid untimely payments, applicants should discuss arrangements (including bank closing schedules and other specific bank wire transfer requirements, such as an in-person written request before a specified time of day) with their bankers several days before they plan to make the wire transfer, and must allow sufficient time for the transfer to be initiated and completed before the deadline. The following information will be needed:

ABA Routing Number:
021030004.

Receiving Bank:
TREAS NYC, 33 Liberty Street, New York, NY 10045.

Beneficiary:
FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.

Account Number:
827000001002.

Originating Bank Information (OBI Field):
(Skip one space between each information item).

“AUCTIONPAY”

Applicant FCC Registration Number (FRN):
(use the same FRN as used on the applicant's FCC Form 159, block 21).

Payment Type Code:
(same as FCC Form 159, block 24A: “U108”).

Note:
The beneficiary account number (BNF Account Number) is specific to the upfront payments for Auction 108. Do not use a BNF Account Number from a previous auction.

142. At least one hour before placing the order for the wire transfer (but on the same business day), applicants must print and fax a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843. Alternatively, the completed form can be scanned and sent as an attachment to an email to
RROGWireFaxes@fcc.gov.
On the fax cover sheet or in the email subject header, write “Wire Transfer—Auction Payment for Auction 108”. To meet the upfront payment deadline, an applicant's payment must be credited to the Commission's account for Auction 108 before the deadline.

143. Each applicant is responsible for ensuring timely submission of its upfront payment and for timely filing of an accurate and complete FCC Form 159. An applicant should coordinate with its financial institution well ahead of the due date regarding its wire transfer and allow sufficient time for the transfer to be initiated and completed prior to the deadline. The Commission repeatedly has cautioned auction participants about the importance of planning ahead to prepare for unforeseen last-minute difficulties in making payments by wire transfer. Each applicant also is responsible for obtaining confirmation from its financial institution that its wire transfer to the U.S. Treasury was successful and from Commission staff that its upfront payment was timely received and that it was deposited into the proper account. As a regulatory requirement, the U.S. Treasury screens all payments from all financial institutions before deposits are made available to specified accounts. If wires are suspended, the U.S. Treasury may direct questions regarding any transfer to the financial institution initiating the wire. Each applicant must take care to assure that any questions directed to its financial institution(s) are addressed promptly. To receive confirmation from Commission staff, contact Scott Radcliffe of the Office of Managing Director's Revenue & Receivables Operations Group/Auctions at (202) 418-7518 or Theresa Meeks at (202) 418-2945.

144. Please note the following information regarding upfront payments:

• All payments must be made in U.S. dollars.

• All payments must be made by wire transfer.

• Upfront payments for Auction 108 go to an account number different from the accounts used in previous FCC auctions.

145. Failure to deliver a sufficient upfront payment as instructed in the
Auction 108 Procedures Public Notice
by the upfront payment deadline will result in dismissal of the short-form application and disqualification from participation in the auction.

2. Completing and Submitting FCC Form 159

146. The following information supplements the standard instructions for FCC Form 159 (Revised 2/03) and is provided to help ensure correct completion of FCC Form 159 for upfront payments for Auction 108. Applicants need to complete FCC Form 159 carefully, because:

• Mistakes may affect bidding eligibility; and

• Lack of consistency between information provided in FCC Form 159 (Revised 2/03), FCC Form 175, long-form application (FCC Form 601), and correspondence about an application may cause processing delays.

147. Therefore, appropriate cross-references between the FCC Form 159 Remittance Advice and the short-form application (FCC Form 175) are described below.

Block No.
Required information

1
LOCKBOX #—Leave Blank.

2
Payer Name—Enter the name of the person or company making the payment. If the applicant itself is the payer, this entry would be the same name as in FCC Form 175.

3
Total Amount Paid—Enter the amount of the upfront payment associated with the FCC Form 159 (Revised 2/03).

4-8
Street Address, City, State, ZIP Code—Enter the street mailing address (not post office box number) where mail should be sent to the payer. If the applicant is the payer, these entries would be the same as FCC Form 175 from the Applicant Information section.

9
Daytime Telephone Number—Enter the telephone number of a person knowledgeable about this upfront payment.

10
Country Code—For addresses outside the United States, enter the appropriate postal country code (available from the Mailing Requirements Department of the U.S. Postal Service).

11
Payer FRN—Enter the payer's 10-digit FCC Registration Number (FRN) registered in the Commission Registration System (CORES).

21
Applicant FRN (Complete only if applicant is different than payer)—Enter the applicant's 10-digit FRN registered in CORES.

24A
Payment Type Code—Enter “U108”.

25A
Quantity—Enter the number “1”.

26A
Fee Due—Amount of Upfront Payment

27A
Total Fee—Will be the same amount as 26A.

28A
FCC Code 1—Enter the number “108” (indicating Auction 108).

Notes:

• Do not use Remittance Advice (Continuation Sheet), FCC Form 159-C, for upfront payments.
• If applicant is different from the payer, complete blocks 13 through 21 for the applicant, using the same information shown on FCC Form 175. Otherwise leave them blank.
• No signature is required on FCC Form 159 for auction payments
• Since credit card payments will not be accepted for upfront payments for an auction, leave Section E blank.

3. Upfront Payments and Bidding Eligibility

148. The Commission has authority to determine appropriate upfront payments for each license being auctioned, taking into account such factors as the efficiency of the auction process and the potential value of similar licenses. An upfront payment is a refundable deposit made by each applicant seeking to participate in bidding to establish its eligibility to bid on licenses. Upfront payments that are related to the inventory of licenses 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 bidding.

149. Applicants that are former defaulters must pay upfront payments 50% greater than non-former defaulters. For purposes of classification as a former defaulter or a former delinquent, defaults and delinquencies of the applicant itself and its controlling interests are included.

150. An applicant must make an upfront payment sufficient to obtain bidding eligibility on the licenses on which it will bid. The Commission adopts the proposals to set upfront payments based on the total potential MHz-pops of each license offered in the auction and to determine an applicant's initial bidding eligibility, the maximum number of bidding units on which a bidder may place bids in any single round, based on the amount of the upfront payment. In order to bid for a license, qualified bidders must have a current eligibility level that meets or exceeds the number of bidding units assigned to that license. At a minimum, therefore, an applicant's total upfront payment must be enough to establish eligibility to bid on at least one license in one of the license areas selected on its FCC Form 175 for Auction 108, or else the applicant will not become qualified to participate in the auction. The total upfront payment does not affect the total dollar amount the bidder may bid.

151. In the
Auction 108 Comment Public Notice,
the Commission proposed to require applicants to submit upfront payments based on $0.003 per MHz-pop with a minimum of $500 per license. Because upfront payments 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 bidding, the Commission adopts the proposal. For the 49.5-megahertz and 50.5-megahertz channel blocks, the calculation will be based on 50 megahertz, which is beneficial for the purpose of allowing switch bids because it will result in the same number of bidding units, as described below, for each of those channel blocks within a county. For the 17.5-megahertz channel block, the calculation will be based on the 16.5 megahertz of contiguous

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2022-07602. Public record. Not legal advice.