Auction of 156-162 MHz VHF Public Coast Station Service Licenses

FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-9820-B (Auction No. 20); DA 98-1796]

Auction of 156-162 MHz VHF Public Coast Station Service Licenses

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This Public Notice announces the procedures and minimum

opening bids for the upcoming 156-162 MHz VHF Public Coast Station

Service (``VHF Public Coast Service'') auction. On July 23, 1998, the

Commission released a Public Notice, seeking comment on the

establishment of reserve prices or minimum opening bids for the VHF

Public Coast Service auction, in accordance with the Balanced Budget

Act of 1997. In addition, the Commission also sought comment on a

number of procedures to be used in the VHF Public Coast Service

auction.

DATES: The auction is scheduled for December 3, 1998.

ADDRESSES: See the text of the Public Notice and attachments for

information regarding important addresses.

FOR FURTHER INFORMATION CONTACT:

Media Contact: Meribeth McCarrick, 202-418-0654.

Auctions information: Jeff Garretson, Bob Reagle, or Anne Napoli, 202-

418-0660.

VHF Public Coast Service information: Scot Stone, 202-418-0680.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice

released on September 4, 1998, and corrected by subsequent Public

Notices released on September 8, 1998, and September 21, 1998. The

complete text of this corrected Public Notice, including all

attachments, is available for inspection and copying during normal

business hours in the Wireless Telecommunications Bureau Reference

Center (Room 5608), 2025 M Street, NW., Washington, DC 20554, or on the

Commission's World Wide Web page, located at http://www.fcc.gov/wtb/

auctions. Copies also may be purchased from the Commission's copy

contractor, International Transcription Services, Inc. (ITS, Inc.),

1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.

Synopsis of the Public Notice

I. Introduction

The VHF Public Coast Service Licenses to Be Auctioned:

1. The Federal Communications Commission (``FCC'' or

``Commission'') will hold an auction for 42 licenses to operate in the

156-162 MHz band. These licenses encompass the United States, the

Northern Mariana Islands, Guam, American Samoa, the United States

Virgin Islands and Puerto Rico. Specifically, the licenses include: (1)

One license in each of nine geographic areas known as Maritime VHF

Public Coast Station Service Areas (``VPCs''), and (2) one license in

each of 33 geographic areas known as Inland VPCs. The licenses include

the following channels:

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Channel pairs (total kHz

available)

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(1) Maritime VPCs:

Maritime Border VPCs: VPCs 1, 5, 7......... 24, 25, 26, 27, 28, 84,

85, 86, 87, 88 (500

kHz).

Maritime Non-Border VPCs and Maritime 24, 25, 26, 27, 28, 84,

Border VPC 9: VPCs 2, 3, 4, 6, 8, 9. 85, 86, 87 (450 kHz).

(2) Inland VPCs:

[[Page 53431]]

Inland Border VPCs: VPCs 10, 11, 28, 29, 30 24, 26, 27, 28, 85, 86,

87 (350 kHz).

Inland Non-Border VPCs:

VPCs 12-15, 23-27, 33-34, 36-39, 41-42... 24, 26, 27, 28, 85, 86,

87 (350 kHz).

VPCs 16-22, 31-32, 35, 40................ 24, 26, 27, 28, 84, 86,

87 (350 kHz).

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Auction Date: The auction will commence on December 3, 1998. The

initial schedule for bidding will be announced by public notice at

least one week before the start of the auction. Unless otherwise

announced, bidding will be conducted on each business day until bidding

has stopped on all licenses.

Bidding Methodology: Simultaneous multiple round bidding. Bidding

will be permitted only from remote locations, either electronically (by

computer) or telephonically.

Pre-Auction Deadlines:

--Auction Seminar: October 20, 1998

--Short Form Application (FCC Form 175): November 2, 1998; 5:30 p.m. ET

--Upfront Payments (via wire transfer): November 16, 1998; 6:00 p.m. ET

--Orders for Remote Bidding Software: November 17, 1998; 5:30 p.m. ET

--Mock Auction: December 1, 1998

Telephone Contacts:

--FCC National Call Center: (888) CALL-FCC ((888) 225-5322). For Bidder

Information Packages, General Auction Information, and Seminar

Registration, press option #2 at the prompt. Hours: 8 a.m.-5:30 p.m.

ET.

--FCC Technical Support Hotline: (202) 414-1250 (voice), (202) 414-1255

(text telephone (TTY)); Hours of service: 8 a.m.-6 p.m. ET, Monday--

Friday; 9 a.m.-5 p.m. ET, weekend of October 31-November 1.

List of Attachments:

Attachment A--Summary of 156-162 MHz VHF Public Coast Station Licenses

to be Auctioned, Upfront Payments, Minimum Opening Bids

Attachment B--Guidelines for Completing FCC Forms 175 and 159 and

Exhibits

Attachment C--Electronic Filing and Review of FCC Form 175

Attachment D--Summary Listing of Documents from the Commission and the

Wireless Telecommunications Bureau Addressing Application of the Anti-

Collusion Rules

II. Background

2. In July 1998, the Commission restructured the licensing

framework that governs VHF Public Coast Stations. Pursuant to the Third

Report and Order and Memorandum Opinion and Order (``Public Coast Third

Report and Order''), 63 FR 40059 (July 27, 1998), site-specific

licensing has been replaced with a geographic-based system, which will

be used in the upcoming auction. This geographic-based licensing

methodology is similar to that used in other commercial mobile radio

services (``CMRS''). The geographic areas for the inland VPC licenses

were based upon Economic Areas (EAs), developed by the Bureau of

Economic Analysis of the U.S. Department of Commerce, and the

geographic areas for the maritime VPC licenses were roughly based on

U.S. Coast Guard Districts. Service and operational requirements for

VHF Public Coast Stations are contained in part 80 of the Commission's

rules.

III. Due Diligence

3. Potential bidders are reminded that there are a number of

incumbent VHF Public Coast Station licensees and Private Land Mobile

Radio (PLMR) licensees already operating in the 156-162 MHz band. Such

incumbents must be protected from harmful interference by VHF Public

Coast Station geographic area licensees in accordance with the

Commission's Rules. These limitations may restrict the ability of such

VPC geographic area licensees to use certain portions of the

electromagnetic spectrum or provide service to certain areas in their

geographic license areas.

4. In addition, potential bidders seeking licenses for geographic

areas that are near the Canadian border should be aware of agreements

between the United States and Canada that affect the assignment and use

of VHF frequencies in certain parts of maritime and inland border VPCs.

Potential bidders are solely responsible for investigating and

evaluating the degree to which these matters may affect spectrum

availability in areas where they seek maritime or inland border VPC

licenses.

5. Licensing information is contained in the Commission's licensing

database, which is available for inspection in the Wireless

Telecommunications Bureau's Public Reference Rooms, located at 2025 M

Street, NW, Room 5608, Washington, DC 20554, and 1270 Fairfield Road,

Gettysburg, PA 17325. In addition, potential bidders may search for

information regarding incumbent VHF Public Coast station and PLMR

licensees on the World Wide Web at http://www.fcc.gov/wtb. In

particular, information can be accessed by downloading databases by

selecting ``WTB Database Files'' (http://www.fcc.gov/wtb/

databases.html), or searching on-line by selecting ``Search WTB

Databases'' (http://gullfoss.fcc.gov:8080/cgi-bin/ws.exe/beta/genmen/

index.hts). Any telephone inquires regarding these matters should be

directed to the Technical Support Hotline at (202) 414-1250 (voice) or

(202) 414-1255 (text telephone (TTY)).

IV. The Commission Makes No Representations or Guarantees Regarding the

Accuracy or Completeness of Information That Has Been Provided by

Incumbent Licensees and Incorporated Into the Database

Potential bidders are strongly encouraged to physically inspect any

sites located in or near the geographic area for which they plan to

bid.

6. Participation: Those wishing to participate in the auction must:

--Submit a short form application (FCC Form 175) by the above-listed

deadline.

--Submit a sufficient upfront payment and an FCC Remittance Advice Form

(FCC Form 159) by the above-listed deadline.

--Comply with all provisions outlined in this Public Notice.

7. Prohibition of Collusion: To ensure the competitiveness of the

auction process, the Commission's Rules prohibit applicants for the

same geographic license area from communicating with each other during

the auction about bids, bidding strategies, or settlements. This

prohibition begins with the filing of short-form applications, and ends

on the down payment due date. In the VHF Public Coast Service auction,

for example, the rule would apply to any applicants bidding for the

same VPC. Therefore, applicants that apply to bid for ``all markets''

would be precluded from communicating with all other applicants after

filing the FCC Form 175. However, applicants may enter into bidding

agreements before filing their FCC Form 175 short-form applications, as

long as they disclose the existence of the agreement(s) in their Form

175 short-form applications. See 47 CFR

[[Page 53432]]

1.2105(c). By signing their FCC Form 175 short form applications,

applicants are certifying their compliance with Sec. 1.2105(c). In

addition, Sec. 1.65 of the Commission's Rules requires an applicant to

maintain the accuracy and completeness of information furnished in its

pending application and to notify the Commission within 30 days of any

substantial change that may be of decisional significance to that

application. See 47 CFR 1.65. Thus, Sec. 1.65 requires an auction

applicant to notify the Commission of any violation of the anti-

collusion rules upon learning of such violation. Bidders are therefore

required to make such notification to the Commission immediately upon

discovery.

8. Bidder Information Package: More complete details about this

auction are contained in a Bidder Information Package. The Commission

will provide one copy to each company free of charge. Additional copies

may be ordered at a cost of $16.00 each, including postage, payable by

Visa or Master Card, or by check payable to ``Federal Communications

Commission'' or ``FCC.'' To place an order, contact the FCC National

Call Center at (888) CALL-FCC ((888) 225-5322, press option #2 at the

prompt). Prospective bidders that have already contacted the FCC at

this number expressing an interest in this auction will receive a

Bidder Information Package in approximately four weeks, and need not

call again unless they wish to order additional copies.

9. Relevant Authority: Prospective bidders must familiarize

themselves thoroughly with the Commission's rules relating to the VHF

Public Coast Service, contained in Title 47, part 80 of the Code of

Federal Regulations, and those relating to application and auction

procedures, contained in Title 47, part 1 of the Code of Federal

Regulations.

10. Prospective bidders must also be thoroughly familiar with the

procedures, terms and conditions contained in the Public Coast Third

Report and Order, and in Sections I through III of Amendment of part 80

of the Commission's rules Concerning Maritime Communications, Second

Report and Order and Second Further Notice of Proposed Rulemaking, PR

Docket No. 92-257, RM-7956, 8031, 8352, FCC 97-217, 12 FCC Rcd 16949

(1997) 62 FR 40281 (July 28, 1997), 62 FR 37533 (July 14, 1997)

(``Public Coast Second Report and Order'').

11. The terms contained in the Commission's Rules, relevant orders,

public notices and bidder information package are not negotiable. The

Commission may amend or supplement the information contained in its

public notices or the bidder information package at any time, and will

issue public notices to convey any new or supplemental information to

bidders. It is the responsibility of all prospective bidders to remain

current with all Commission Rules and with all public notices

pertaining to this auction. Copies of most Commission documents,

including public notices, can be retrieved from the FCC Internet node

via anonymous ftp @ftp.fcc.gov or the FCC World Wide Web site at http:/

/www.fcc.gov/wtb/auctions. Additionally, documents may be obtained for

a fee by calling the Commission's copy contractor, International

Transcription Service, Inc. (ITS), at (202) 857-3800. When ordering

documents from ITS, please provide the appropriate FCC number (e.g.,

FCC 98-151 for the Public Coast Third Report and Order and FCC 97-217

for the Public Coast Second Report and Order).

12. Bidder Alerts: All applicants must certify on their FCC Form

175 applications under penalty of perjury that they are legally,

technically, financially and otherwise qualified to hold a license, and

not in default on any payment for Commission licenses (including down

payments) or delinquent on any non-tax debt owed to any Federal agency.

Prospective bidders are reminded that submission of a false

certification to the Commission is a serious matter that may result in

severe penalties, including monetary forfeitures, license revocations,

exclusion from participation in future auctions, and/or criminal

prosecution.

V. The Commission Makes No Representations or Warranties About the Use

of This Spectrum for Particular Services

Applicants should be aware that an FCC auction represents an

opportunity to become an FCC licensee in this service, subject to

certain conditions and regulations. An FCC auction does not constitute

an endorsement by the FCC of any particular services, technologies or

products, nor does an FCC license constitute a guarantee of business

success. Applicants should perform their individual due diligence

before proceeding as they would with any new business venture.

13. As is the case with many business investment opportunities,

some unscrupulous entrepreneurs may attempt to use the VHF Public Coast

Service auction to deceive and defraud unsuspecting investors. Common

warning signals of fraud include the following:

--The first contact is a ``cold call'' from a telemarketer, or is made

in response to an inquiry prompted by a radio or television

infomercial.

--The offering materials used to invest in the venture appear to be

targeted at IRA funds, for example by including all documents and

papers needed for the transfer of funds maintained in IRA accounts.

--The amount of the minimum investment is less than $25,000.

--The sales representative makes verbal representations that: (a) The

Internal Revenue Service (``IRS''), Federal Trade Commission (``FTC''),

Securities and Exchange Commission (``SEC''), FCC, or other government

agency has approved the investment; (b) the investment is not subject

to state or federal securities laws; or (c) the investment will yield

unrealistically high short-term profits. The offering materials often

include copies of actual FCC releases, or quotes from FCC personnel,

giving the false appearance of FCC knowledge or approval of the

solicitation.

14. Information about deceptive telemarketing investment schemes is

available from the FTC at (202) 326-2222 and from the SEC at (202) 942-

7040. Complaints about specific deceptive telemarketing investment

schemes should be directed to the FTC, the SEC, or the National Fraud

Information Center at (800) 876-7060. Consumers who have concerns about

specific VHF Public Coast Service proposals may also call the FCC

National Call Center at (888) CALL-FCC ((888) 225-5322).

VI. National Environmental Policy Act (NEPA) Requirements

15. Licensees must comply with the Commission's rules regarding the

National Environmental Policy Act (NEPA). The construction of a

wireless antenna facility is a federal action and licensees must comply

with the Commission's NEPA rules for each wireless facility. See 47 CFR

1.1305-1.1319. The Commission's NEPA rules require that, among other

things, licensees consult with expert agencies having NEPA

responsibilities including the U.S. Fish and Wildlife Service, the

State Historic Preservation Office, the Army Corp of Engineers and the

Federal Emergency Management Agency (through the local authority with

jurisdiction over floodplains). Licensees must prepare environmental

assessments for wireless facilities that may have a significant impact

in or on wilderness areas, wildlife preserves, threatened or endangered

species or designated critical habitats, historical or

[[Page 53433]]

archaeologic sites, Indian religious sites, floodplains, and surface

features. Licensees must also prepare environmental assessments for

wireless facilities that include high intensity white lights in

residential neighborhoods or excessive radiofrequency emission.

VII. Eligibility for Very Small and Small Business Provisions

A. General Eligibility Criteria

16. As described above, this auction offers one license in each of

nine geographic areas known as Maritime VPCs, and one license in each

of 33 geographic areas known as Inland VPCs. The Commission's goal in

adopting special small business provisions is to promote and facilitate

the participation of small businesses in the VHF Public Coast Service

auction and in the provision of this and other CMRS services.

(1) Determination of Revenues

17. For purposes of determining which entities qualify as very

small businesses or small businesses, the Commission will consider the

gross revenues of the applicant, its controlling interests, and the

affiliates of the applicant and its controlling interests. Therefore,

the gross revenues of all of the above entities must be disclosed

separately and in the aggregate as Exhibit C to an applicant's FCC Form

175. The Commission does not impose specific equity requirements on

controlling interests. Once principals or entities with a controlling

interest are determined, only the revenues of those principals or

entities will be counted in determining small business eligibility. The

term ``controlling interest'' includes both de facto and de jure

control of the applicant. Typically, de jure control is evidenced by

ownership of at least 50.1 percent of an entity's voting stock. De

facto control is determined on a case-by-case basis. The following are

some common indicia of control:

--The entity constitutes or appoints more than 50 percent 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; or

--The entity plays an integral role in management decisions.

(2) Very Small or Small Business Consortiums

18. A consortium of small businesses or very small businesses is a

conglomerate organization formed as a joint venture between or among

mutually independent business firms, each of which individually

satisfies the definition of very small or small business in

Sec. 80.1252(b)(1) or (2). Thus, each consortium member must disclose

its gross revenues along with those of its affiliates, controlling

interests, and controlling interests' affiliates. The Commission notes

that although the gross revenues of the consortium members will not be

aggregated for purposes of determining eligibility for very small or

small business credits, this information must be provided to ensure

that each individual consortium member qualifies for any bidding credit

awarded to the consortium.

(3) Application Showing

19. Applicants should note that they will be required to file

supporting documentation as Exhibit C to their FCC Form 175 short form

applications to establish that they satisfy the eligibility

requirements to qualify as a very small business or small business (or

consortiums of very small or small businesses) for this auction. See 47

CFR 80.1252 and 1.2105. Specifically, for the VHF Public Coast Service

auction, applicants applying to bid as very small or small businesses

(or consortiums of very small or small businesses) will be required to

file as Exhibit C to their FCC Form 175 short form applications, all

information required under Secs. 1.2105(a) and 1.2112(a). In addition,

these applicants must disclose, separately and in the aggregate, the

gross revenues for the preceding three years of each of the following:

(1) The applicant; (2) the applicant's affiliates; (3) the applicant's

attributable investors; and (4) the affiliates of the applicant's

attributable investors. Certification that the average gross revenues

for the preceding three years do not exceed the applicable limit is not

sufficient. A statement of the total gross revenues for the preceding

three years is also insufficient. The applicant must provide a schedule

of gross revenues for each of the preceding three years, as well as a

statement of total average gross revenues for the three-year period. If

the applicant is applying as a consortium of very small or small

businesses, each consortium member must provide this information.

B. Bidding Credits

20. Qualifying VHF Public Coast Service applicants are eligible for

bidding credits. The size of a VHF Public Coast Service bidding credit

depends on the average gross revenues for the preceding three years of

the bidder and its controlling interests and affiliates:

--A bidder with average gross revenues not to exceed $15 million for

the preceding three years receives a 25 percent discount on its winning

bids for VHF Public Coast Service licenses; and,

--A bidder with average gross revenues not to exceed $3 million for the

preceding three years receives a 35 percent discount on its winning

bids for VHF Public Coast Service licenses.

21. Bidding credits are not cumulative: qualifying applicants

receive either the 25 percent or the 35 percent bidding credit, but not

both. The definitions of very small business and small business (or

consortiums of very small or small businesses) (including calculation

of gross annual revenue) are set forth in 47 CFR 80.1252(b)(1)(2) and

(5).

22. VHF Public Coast Service bidders should note that unjust

enrichment provisions apply to winning bidders that use bidding credits

and subsequently assign or transfer control of their licenses to an

entity not qualifying for the same levels of bidding credits. See 47

CFR 1.2111. Finally, VHF Public Coast Service bidders should also note

that there are no installment payment plans in the VHF Public Coast

Service auction.

VIII. Pre-Auction Procedures

A. Short-Form Application (FCC Form 175)--Due November 2, 1998

23. In order to be eligible to bid in this auction, applicants must

first submit an FCC Form 175 application. This application must be

received at the Commission by 5:30 p.m. ET on November 2, 1998. Late

applications will not be accepted.

24. There is no application fee required when filing an FCC Form

175. However, to be eligible to bid, an applicant must submit an

upfront payment.

(1) Filing Options

25. Auction applicants are strongly encouraged to file their

applications electronically in order to take full advantage of the

greater efficiencies and convenience of electronic filing, bidding and

access to bidding data. For example, electronic filing enables the

applicant to: (a) Receive interactive feedback while completing the

application; and (b) receive immediate acknowledgment that the FCC Form

175 has been submitted for filing. In addition, only those applicants

that file electronically will have the option of bidding

electronically. However, manual filing (via hard copy) is also

permitted. Please note that manual filers will not be

[[Page 53434]]

permitted to bid electronically and must bid telephonically, unless the

FCC Form 175 is amended electronically prior to the resubmission date

for incomplete or deficient applications. The following is a brief

description of each filing method.

(a) Electronic Filing

26. Applicants wishing to file electronically may generally do so

on a 24-hour basis beginning October 12, 1998. The window for filing

the FCC Form 175 electronically will remain open until 5:30 p.m. ET on

November 2, 1998. Applicants are strongly encouraged to file early, and

applicants are responsible for allowing adequate time for filing their

applications. Applicants may update or amend their electronic

applications until the filing deadline of November 2, 1998. Applicants

who file electronically must press the ``Submit Form 175'' button on

the ``Submit'' page to successfully submit their FCC Form 175s.

Information about installing and running the FCC Form 175 application

software is included in Attachment D to this Public Notice. Technical

support is available at (202) 414-1250 (voice) or (202) 414-1255 (text

telephone (TTY)); the hours of service are 8 a.m.-6 p.m. ET, Monday-

Friday, and 9 a.m.-5 p.m. ET, the weekend of October 31-November 1.

(b) Manual Filing

27. Auction applicants will be permitted to file their FCC Form 175

applications in hard copy. When any manually filed FCC Form 175 and

175-S exceeds five pages in length, the FCC requires that all

attachments be submitted on a 3.5-inch diskette, or the entire

application be filed in a microfiche version. Manual filers must use

the August 1998 version of FCC Form 175 and FCC Form 175-S (if

necessary). Earlier versions of the FCC Form 175 will not be accepted

for filing. Copies of the FCC Form 175 can be obtained by calling the

Commission's Forms Distribution Center at (800) 418-FORM ((800) 418-

3676) (outside Washington, DC) or (202) 418-FORM ((202) 418-3676) (in

the Washington area). Copies of the FCC Form 175 can also be obtained

via Fax-On-Demand at (202) 418-0177 (the document retrieval number for

the FCC Form 175 is 000175, and 001751 for the FCC Form 175-S), or

downloaded from the Commission's World Wide Web site at http://

www.fcc.gov/formpage.html. If applicants have any questions concerning

availability of the FCC Form 175, they should call the FCC Records

Management Branch at (202) 418-0210.

28. Manual applications may be submitted by hand delivery

(including private ``overnight'' courier) or by U.S. mail (certified

mail with return receipt recommended), addressed to: FCC Form 175

Filing, Auction No. 20, Federal Communications Commission, Wireless

Telecommunications Bureau, Auctions & Industry Analysis Division, 1270

Fairfield Road, Gettysburg, PA 17325-7245. NOTE: Manual applications

delivered to any other location will not be accepted.

(2) Completion of the FCC Form 175

29. Applicants should carefully review 47 CFR 1.2105, and must

complete all items on the FCC Form 175 (and Form 175-S, if applicable).

Instructions for completing the FCC Form 175 are in Attachment B of

this Public Notice. Applicants who file electronically must press the

``Submit Form 175'' button on the ``Submit'' page to successfully

submit their FCC Form 175.

30. Failure to sign a manually filed FCC Form 175 will result in

dismissal of the application and loss of the ability to participate in

the auction. Only original signatures will be accepted for manually

filed applications.

(3) Electronic Review of FCC Form 175

The FCC Form 175 review software may be used to review and print

applicants' FCC Form 175 applications. In other words, applicants that

file electronically may review their own completed FCC Form 175.

Applicants may also view other applicants' completed FCC Form 175s

after the filing deadline has passed and the FCC has issued a public

notice explaining the status of the applications. For this reason, it

is important that applicants do not include their Taxpayer

Identification Numbers (TINs) on any Exhibits to their FCC Form 175

applications. There is a fee of $2.30 per minute for accessing this

system. See Attachment C for details.

B. Application Processing and Minor Corrections

32. After the deadline for filing the FCC Form 175 applications has

passed, the FCC will process all timely applications to determine which

are acceptable for filing, and subsequently will issue a public notice

identifying: (1) Those applications accepted for filing (including FCC

account numbers and the licenses for which they applied); (2) those

applications rejected; and (3) those applications which have minor

defects that may be corrected, and the deadline for filing such

corrected applications.

33. As described more fully in the Commission's Rules, after the

November 2, 1998, short form filing deadline, applicants may make only

minor corrections to their FCC Form 175 applications. Applicants will

not be permitted to make major modifications to their applications

(e.g., change their license selections, change the certifying official

or change control of the applicant). See 47 CFR 1.2105.

C. Upfront Payments--Due November 16, 1998

34. To be eligible to bid in the auction, applicants must submit an

upfront payment accompanied by FCC Remittance Advice Form (FCC Form

159). Manual filers must use the July 1997 version of FCC Form 159.

Electronic filers of the FCC Form 175 will have access to an electronic

version of Form 159 after completing the FCC Form 175. Earlier versions

of this form will not be accepted. Upfront payments must be received at

Mellon Bank in Pittsburgh, PA, by 6 p.m. ET on November 16, 1998.

Please note that:

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

--All payments must be made by wire transfer.

--Upfront payments for Auction No. 20 go to a lockbox number different

from the ones used in previous FCC auctions, and different from the

lockbox number to be used for post-auction payments.

--Failure to deliver the upfront payment by the November 16, 1998

deadline will result in dismissal of the application and

disqualification from participation in the auction.

(1) Making Auction Payments by Wire Transfer

35. Wire transfer payments must be received by 6 p.m. ET on

November 16, 1998. To avoid untimely payments, applicants should

discuss arrangements (including bank closing schedules) with their

banker several days before they plan to make the wire transfer, and

allow sufficient time for the transfer to be initiated and completed

before the deadline. Applicants will need the following information:

ABA Routing Number: 043000261.

Receiving Bank: Mellon Pittsburgh.

BNF: FCC/AC 911-6878.

OBI Field: (Skip one space between each information item)

``Auctionpay''.

Taxpayer Identification no. (Same as FCC Form 159, block 26).

Payment Type Code (Enter ``APWU'').

Fcc Code 1 (Same as FCC Form 159, block 23A: ``20'').

[[Page 53435]]

Payer Name (Same as FCC Form 159, block 2).

Lockbox No.: #358400

Note: The BNF and Lockbox number are specific to the upfront

payments for this auction; do not use BNF or Lockbox numbers from

previous auctions.

36. Applicants must fax a completed FCC Form 159 to Mellon Bank at

(412) 236-5702 at least one hour before placing the order for the wire

transfer (but on the same business day). On the cover sheet of the fax,

write ``Wire Transfer--Auction Payment for Auction Event No. 20.''

Bidders may confirm receipt of their upfront payment at Mellon Bank by

contacting their sending financial institution.

(2) FCC Form 159

37. Each upfront payment must be accompanied by a completed FCC

Remittance Advice Form (FCC Form 159). Proper completion of FCC Form

159 is critical to ensuring correct credit of upfront payments.

Detailed instructions for completion of FCC Form 159 are included in

Attachment B to this Public Notice and will also be included in the

Bidder Information Package.

(3) Amount of Upfront Payment

38. The following upfront payment amounts will apply in the VHF

Public Coast Service auction. For Maritime VPC licenses, an upfront

payment of $.0007 * MHz * Pop (rounded up to the next dollar and with a

minimum upfront payment of $2,500); and for Inland VPC licenses, an

upfront payment of $.0075 * MHz * Pop (rounded up to the next dollar

and with a minimum upfront payment of $2,500).

39. Upfront payments are not attributed to specific licenses, but

instead will be translated to bidding units to define the bidder's

maximum bidding eligibility. The amount of the upfront payment will be

translated into bidding units on a one-to-one basis, e.g., a $25,000

upfront payment provides the bidder with 25,000 bidding units. The

total upfront payment defines the maximum amount of bidding units on

which the applicant will be permitted to bid (including standing high

bids) in any single round of bidding. Thus, an applicant does not have

to make an upfront payment to cover all licenses for which the

applicant has applied, but rather to cover the maximum number of

bidding units associated with licenses the bidder wishes to place bids

on and hold high bids on at any given time. In order to be able to

place a bid on a license, in addition to having specified that license

on the FCC Form 175, a bidder must have an eligibility level that meets

or exceeds the number of bidding units assigned to that license. At a

minimum, an applicant's total upfront payment must be enough to

establish eligibility to bid on at least one of the licenses applied

for on the FCC Form 175, or else the applicant will not be eligible to

participate in the auction.

40. In calculating the upfront payment amount, an applicant should

determine the maximum number of bidding units it may wish to bid on in

any single round, and submit an upfront payment covering that number of

bidding units. Bidders should check their calculations carefully as

there is no provision for increasing a bidder's maximum eligibility

after the upfront payment deadline.

Note: An applicant may, on its FCC Form 175, apply for every

license being offered, but its actual bidding in any round will be

limited by the bidding units reflected in its upfront payment.

(4) Applicant's Wire Transfer Information for Purposes of Refunds

41. The Commission will use wire transfers for all Auction No. 20

refunds. To avoid delays in processing refunds, applicants should

include wire transfer instructions with any refund request they file;

they may also provide this information in advance by faxing it to the

FCC Billings and Collections Branch, ATTN: Linwood Jenkins or Geoffrey

Idika, at (202) 418-2843. Please include the following information:

Name of Bank

ABA Number

Account Number to Credit

Correspondent Bank (if applicable)

ABA Number

Account Number

Contact and Phone Number

(Applicants should also note that implementation of the Debt Collection

Improvement Act of 1996 requires the FCC to obtain a Taxpayer

Identification Number (TIN) before it can disburse refunds.)

D. Auction Registration

42. Approximately ten days before the auction, the FCC will issue a

public notice announcing all qualified bidders for the auction.

Qualified bidders are those applicants whose FCC Form 175 applications

have been accepted for filing and that have timely submitted upfront

payments sufficient to make them eligible to bid on at least one of the

licenses for which they applied.

43. All qualified bidders are automatically registered for the

auction. Registration materials will be distributed prior to the

auction by two separate overnight mailings, each containing part of the

confidential identification codes required to place bids. These

mailings will be sent only to the contact person at the applicant

address listed in the FCC Form 175.

44. Applicants that do not receive both registration mailings will

not be able to submit bids. Therefore, any qualified applicant that has

not received both mailings by noon on Wednesday, November 25, 1998

should contact the FCC National Call Center at (888) CALL-FCC ((888)

225-5322, press option #2 at the prompt). Receipt of both registration

mailings is critical to participating in the auction and each applicant

is responsible for ensuring it has received all of the registration

material. Qualified bidders should note that lost login codes,

passwords or bidder identification numbers can be replaced only by

appearing in person at the FCC Auction Headquarters located at 2

Massachusetts Avenue, NE, Washington, DC 20002. Only an authorized

representative or certifying official, as designated on an applicant's

FCC Form 175, may appear in person with two forms of identification

(one of which must be a photo identification) in order to receive

replacement codes.

E. Remote Electronic Bidding Software

45. Qualified bidders that file or amend the FCC Form 175

electronically are allowed to bid electronically, but must purchase

remote electronic bidding software for $175.00 by November 17, 1998.

(Auction software is tailored to a specific auction, so software from

prior auctions will not work for Auction No. 20.) A software order form

is included in the Bidder Information Package.

F. Auction Seminar

46. On October 20, 1998, the FCC will sponsor a seminar for the VHF

Public Coast Service auction in Washington, DC. The seminar will

provide attendees with information about pre-auction procedures,

conduct of the auction, FCC remote bidding software, and the VHF Public

Coast service and auction rules.

47. To register, complete the registration form to be included in

the upcoming Bidder Information Package. The registration form will

include details about the time and location of the seminar.

Registrations are accepted on a first-come, first-served basis.

G. Mock Auction

48. All applicants whose FCC Form 175 and 175-S have been accepted

for filing will be eligible to participate in a mock auction beginning

December 1, 1998. The mock auction will enable applicants to become

familiar with the

[[Page 53436]]

electronic software prior to the auction. Free demonstration software

will be available for use in the mock auction. Participation by all

bidders is strongly recommended. Details will be announced by public

notice.

IX. Auction Event

49. The first round of the auction will begin on December 3, 1998.

The initial round schedule will be announced in a Public Notice listing

the qualified bidders, to be released approximately 10 days before the

start of the auction.

A. Auction Structure

(1) Simultaneous Multiple Round Auction

50. The 42 VHF Public Coast Service licenses, including Maritime

and Inland VPC licenses, will be awarded through a single, simultaneous

multiple round auction. Unless otherwise announced, bids will be

accepted on all licenses in each auction round.

(2) Maximum Eligibility and Activity Rules

51. For the VHF Public Coast Service auction, the amount of the

upfront payment submitted by a bidder determines the initial maximum

eligibility (in bidding units) for each bidder. Upfront payments are

not attributed to specific licenses, but instead will be translated

into bidding units to define a bidder's initial maximum eligibility.

The total upfront payment defines the maximum number of bidding units

on which the applicant will initially be permitted to bid. The

Commission notes that there is no provision for increasing a bidder's

maximum eligibility during the course of an auction.

52. In order to ensure that the auction closes within a reasonable

period of time, an activity rule requires bidders to bid actively

throughout the auction, rather than wait until the end before

participating. Bidders are required to be active on a specific

percentage of their maximum eligibility during each round of the

auction.

53. A bidder is considered active on a license in the current round

if it is either the high bidder at the end of the previous bidding

round and does not withdraw the high bid in the current round, or if it

submits an acceptable bid in the current round. A bidder's activity

level in a round is the sum of the bidding units associated with

licenses on which the bidder is active. The minimum required activity

level is expressed as a percentage of the bidder's maximum bidding

eligibility, and increases as the auction progresses.

(3) Activity Rule Waivers and Reducing Eligibility

54. Each bidder will be provided five activity rule waivers that

may be used in any round during the course of the auction. Use of an

activity rule waiver preserves the bidder's current bidding eligibility

despite the bidder's activity in the current round being below the

required minimum level. An activity rule waiver applies to an entire

round of bidding and not to a particular license.

55. The FCC auction system assumes that bidders with insufficient

activity would prefer to use an activity rule waiver (if available)

rather than lose bidding eligibility. Therefore, the system will

automatically apply a waiver (known as an ``automatic waiver'') at the

end of any round where a bidder's activity level is below the minimum

required unless: (1) There are no activity rule waivers available; or

(2) the bidder overrides the automatic application of a waiver by

reducing eligibility, thereby meeting the minimum requirements.

56. A bidder with insufficient activity that wants to reduce its

bidding eligibility rather than use an activity rule waiver must

affirmatively override the automatic waiver mechanism during the round

by using the reduce eligibility function in the software. In this case,

the bidder's eligibility is permanently reduced to bring the bidder

into compliance with the activity rules. Once eligibility has been

reduced, a bidder will not be permitted to regain its lost bidding

eligibility.

57. Finally, a bidder may proactively use an activity rule waiver

as a means to keep the auction open without placing a bid. If a bidder

submits a proactive waiver (using the proactive waiver function in the

bidding software) during a round in which no bids are submitted, the

auction will remain open and the bidder's eligibility will be

preserved. An automatic waiver invoked in a round in which there are no

new valid bids or withdrawals will not keep the auction open.

(4) Auction Stages

58. The VHF Public Coast Service auction will be composed of three

stages, each defined by an increasing activity rule. Below are the

proposed activity levels for each stage of the auction. The FCC

reserves the discretion to further alter the activity percentages

before and/or during the auction.

59. Stage One: In each round of the first stage of the auction, a

bidder desiring to maintain its current eligibility is required to be

active on licenses encompassing at least 80 percent of its current

bidding eligibility. Failure to maintain the requisite activity level

will result in a reduction in the bidder's bidding eligibility in the

next round of bidding (unless an activity rule waiver is used). During

Stage One, reduced eligibility for the next round will be calculated by

multiplying the current round activity by five-fourths (\5/4\).

60. Stage Two: In each round of the second stage, a bidder desiring

to maintain its current eligibility is required to be active on 90

percent of its current bidding eligibility. During Stage Two, reduced

eligibility for the next round will be calculated by multiplying the

current round activity by ten-ninths (\10/9\).

61. Stage Three: In each round of the third stage, a bidder

desiring to maintain its current eligibility is required to be active

on 98 percent of its current bidding eligibility. In this final stage,

reduced eligibility for the next round will be calculated by

multiplying the current round activity by fifty-fortyninths (\50/49\).

CAUTION: Since activity requirements increase in each auction stage,

bidders must carefully check their current activity during the bidding

round of the first round following a stage transition. This is

especially critical for bidders that have standing high bids and do not

plan to submit new bids. In past auctions, some bidders have

inadvertently lost bidding eligibility or used an activity rule waiver

because they did not reverify their activity status at stage

transitions. Bidders may check their activity against the required

minimum activity level by using the bidding software's bidding module.

(5) Stage Transitions

62. The auction will start in Stage One. Under the FCC's general

guidelines it will advance to the next stage (i.e., from Stage One to

Stage Two, and from Stage Two to Stage Three) when, in each of three

consecutive rounds of bidding, the high bid has increased on 10 percent

or less of the licenses being auctioned (as measured in bidding units).

However, the Bureau will retain the discretion to regulate the pace of

the auction by announcement. This determination will be based on a

variety of measures of bidder activity, including, but not limited to,

the auction activity level, the percentages of licenses (as measured in

bidding units) on which there are new bids, the number of new bids, and

the percentage increase in revenue.

[[Page 53437]]

(6) Auction Stopping Rules

63. Barring extraordinary circumstances, bidding will remain open

on all licenses until bidding stops on every license. Thus, the auction

will close for all licenses when one round passes during which no

bidder submits a new acceptable bid on any license, applies a proactive

waiver, or withdraws a previous high bid.

64. The Bureau retains the discretion, however, to keep an auction

open even if no new acceptable bids or proactive waivers are submitted,

and no previous high bids are withdrawn. In this event, the effect will

be the same as if a bidder had submitted a proactive waiver. Thus, the

activity rule will apply as usual, and a bidder with insufficient

activity will either lose bidding eligibility or use an activity rule

waiver (if it has any left).

65. Further, in its discretion, the Bureau reserves the right to

declare that the auction will end after a specified number of

additional rounds (``special stopping rule''). If the FCC invokes this

special stopping rule, it will accept bids in the final round(s) only

for licenses on which the high bid increased in at least one of the

preceding specified number of rounds. The FCC intends to exercise this

option only in extreme circumstances, such as where the auction is

proceeding very slowly, where there is minimal overall bidding

activity, or where it appears likely that the auction will not close

within a reasonable period of time. Before exercising this option, the

FCC is likely to attempt to increase the pace of the auction by, for

example, moving the auction into the next stage (where bidders would be

required to maintain a higher level of bidding activity), increasing

the number of bidding rounds per day, and/or increasing the amount of

the minimum bid increments for the limited number of licenses where

there is still a high level of bidding activity.

(7) Auction Delay, Suspension, or Cancellation

66. By public notice or by announcement during the auction, the

Bureau may delay, suspend or cancel the auction in the event of natural

disaster, technical obstacle, evidence of an auction security breach,

unlawful bidding activity, administrative or weather necessity, or for

any other reason that affects the fair and competitive conduct of

competitive bidding. In such cases, the Bureau, in its sole discretion,

may elect to: resume the auction starting from the beginning of the

current round; resume the auction starting from some previous round; or

cancel the auction in its entirety. Network interruption may cause the

Bureau to delay or suspend the auction. The Commission emphasizes that

exercise of this authority is solely within the discretion of the

Bureau, and its use is not intended to be a substitute for situations

in which bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

(1) Round Structure

67. The initial bidding schedule will be announced by public notice

at least one week before the start of the auction, and will be included

in the registration mailings. The round structure for each bidding

round contains a single bidding round followed by the release of the

round results.

68. The FCC has discretion to change the bidding schedule in order

to foster an auction pace that reasonably balances speed with the

bidders' need to study round results and adjust their bidding

strategies. The FCC may increase or decrease the amount of time for the

bidding rounds and review periods, or the number of rounds per day,

depending upon the bidding activity level and other factors.

(2) Reserve Price or Minimum Opening Bid

69. The Commission adopts minimum opening bids for each of the

licenses in the VHF Public Coast Service auction that are reducible at

the discretion of the Bureau. During the course of the auction, the

Bureau will not entertain any bidder requests to reduce the minimum

opening bid on specific licenses. The formulae for calculating minimum

opening bids is as follows:

1. Maritime VPC Licenses: $.001 * MHz * Pop (rounded up to the next

dollar) with a minimum of no less than $2,500 per license.

2. Inland VPC Licenses: $.011 * MHz * Pop (rounded up to the next

dollar) with a minimum of no less than $2,500 per license.

(3) Minimum Accepted Bids

70. Once there is a standing high bid on a license, a bid increment

will be applied to that license to establish a minimum acceptable bid

for the following round. For the VHF Public Coast Service auction, the

Commission will utilize, as described immediately below, an exponential

smoothing methodology to calculate minimum bid increments. The Bureau

retains the discretion to change the minimum bid increment if it

determines that circumstances so dictate. The exponential smoothing

methodology has been used in previous auctions.

Exponential Smoothing

71. The exponential smoothing formula calculates the bid increment

based on a weighted average of the activity received on each license in

the current and all previous rounds. This methodology will tailor the

bid increment for each license based on activity, rather than setting a

global increment for all licenses. For every license that receives a

bid, the bid increment for the next round for that license will be

established as a percentage increment that is determined using the

exponential smoothing formula.

72. Using exponential smoothing, the calculation of the percentage

bid increment for each license will be based on an activity index,

which is calculated as the weighted average of the current activity and

the activity index from the previous round. The activity index at the

start of the auction (round 0) will be set at 0. The current activity

index is equal to a weighting factor times the number of new bids

received on the license in the current bidding period plus one minus

the weighting factor times the activity index from the previous round.

The activity index is then used to calculate a percentage increment by

multiplying a minimum percentage increment by one plus the activity

index with that result being subject to a maximum percentage increment.

The Commission will initially set the weighting factor at 0.5, the

minimum percentage increment at 0.1, and the maximum percentage

increment at 0.2. Equations

Ai=(C * Bi) + ( (1-C) * Ai-1)

Ii=smaller of ( (1 + Ai) * N) and M

Where,

Ai=activity index for the current round (round i)

C=activity weight factor

Bi=number of bids in the current round (round i)

Ai-1=activity index from previous round (round i-1),

A0 is 0

Ii=percentage bid increment for the current round (round i)

N=minimum percentage increment

M=maximum percentage increment

Under the exponential smoothing methodology, once a bid has been

received on a license, the minimum acceptable bid for that license in

the following round will be the new high bid plus the dollar amount

associated with the percentage increment (variable Ii from

above times the high bid). This result will be rounded to the nearest

thousand if it is over 10,000 or to the nearest hundred if it is under

10,000.

[[Page 53438]]

Examples

License 1

C=0.5, N=0.1, M=0.2

Round 1 (2 New Bids, High Bid = $1,000,000)

1. Calculation of percentage increment using exponential smoothing:

A1=(0.5 * 2) + (0.5 * 0)=1

The smaller of I1=(1 + 1) * 0.1=0.2 or 0.2 (the maximum

percentage increment)

2. Minimum bid increment using the percentage increment (I1

from above) 0.2 * $1,000,000=$200,000

3. Minimum acceptable bid for round 2=1,200,000

Round 2 (3 New Bids, High Bid = $2,000,000)

1. Calculation of percentage increment using exponential smoothing:

A2=(0.5 * 3) + (0.5 * 1)=2

The smaller of I2=(1 + 2) * 0.1=0.3 or 0.2 (the maximum

percentage increment)

2. Minimum bid increment using the percentage increment is

(I2 from above) 0.2 * $2,000,000=$400,000

3. Minimum acceptable bid for round 3 = $2,400,000

Round 3 (1 New Bid, High Bid = $2,400,000)

1. Calculation of percentage increment using exponential smoothing:

A3=(0.5 * 1) + (0.5 * 2)=1.5

The smaller of I3=(1 + 1.5) * 0.1=0.25 or 0.2 (the

maximum percentage increment)

2. Minimum bid increment using the percentage increment (I3

from above) 0.2 * $2,400,000=$480,000

3. Minimum acceptable bid for round 4 = $2,880,000

(4) High Bids

73. Each bid will be date-and time-stamped when it is entered into

the computer system. In the event of tie bids, the Commission will

identify the high bidder on the basis of the order in which bids are

received by the Commission, starting with the earliest bid. The bidding

software allows bidders to make multiple submissions in a round. As

each bid is individually date and time-stamped according to when it was

submitted, bids submitted by a bidder earlier in a round will have an

earlier date-and time-stamp than bids submitted later in a round.

(5) Bidding

74. During a bidding round, a bidder may submit bids for as many

licenses for which it is eligible, as well as withdraw high bids from

previous bidding rounds, remove bids placed in the same bidding round,

or permanently reduce eligibility. Bidders also have the option of

making multiple submissions and withdrawals in each bidding round. If a

bidder submits multiple bids for a single license in the same round,

the system takes the last bid entered as that bidder's bid for the

round, and the date-and time-stamp of that bid reflect the latest time

the bid was submitted.

75. Please note that all bidding will take place either through the

automated bidding software or by telephonic bidding. (Telephonic bid

assistants are required to use a script when handling bids placed by

telephone. Telephonic bidders are therefore reminded to allow

sufficient time to bid, by placing their calls well in advance of the

close of a round, because four to five minutes are necessary to

complete a bid submission.) There will be no on-site bidding during

Auction No. 20.

76. A bidder's ability to bid on specific licenses in the first

round of the auction is determined by two factors: (1) the licenses

applied for on FCC Form 175; and (2) the upfront payment amount

deposited. The bid submission screens will be tailored for each bidder

to include only those licenses for which the bidder applied on its FCC

Form 175. A bidder also has the option to further tailor its bid

submission screens to call up specified groups of licenses.

77. The bidding software requires each bidder to login to the FCC

auction system during the bidding round using the FCC account number,

bidder identification number, and the confidential security codes

provided in the registration materials. Bidders are encouraged to

download and print bid confirmations after they submit their bids.

78. The bid entry screen of the Automated Auction System software

for the VHF Public Coast Service auction allows bidders to place

multiple increment bids which will let bidders increase high bids from

one to nine bid increments. A single bid increment is defined as the

difference between the standing high bid and the minimum acceptable bid

for a license. To place a bid on a license, the bidder must enter a

whole number between 1 and 9 in the bid increment multiplier (Bid Mult)

field. This value will determine the amount of the bid (Amount Bid) by

multiplying the bid increment multiplier by the bid increment and

adding the result to the high bid amount according to the following

formula:

Amount Bid = High Bid + (Bid Mult * Bid Increment)

Thus, bidders may place a bid that exceeds the standing high bid by

between one and nine times the bid increment. For example, to bid the

minimum acceptable bid, which is equal to one bid increment, a bidder

will enter ``1'' in the bid increment multiplier column and press

submit.

79. For any license on which the FCC is designated as the high

bidder (i.e., a license that has not yet received a bid in the auction

or where the high bid was withdrawn and a new bid has not yet been

placed), bidders will be limited to bidding only the minimum acceptable

bid. In both of these cases no increment exists for the licenses, and

bidders should enter ``1'' in the Bid Mult field. Note that any whole

number between 1 and 9 entered in the multiplier column will result in

a bid value at the minimum acceptable bid amount. Finally, bidders are

cautioned in entering numbers in the Bid Mult field because, as

explained in the following section, a high bidder that withdraws its

standing high bid from a previous round, even if mistakenly or

erroneously made, is subject to bid withdrawal payments.

(6) Bid Removal and Bid Withdrawal

80. Before the close of a bidding round, a bidder has the option of

removing any bids placed in that round. By using the remove bid

function in the software, a bidder may effectively ``unsubmit'' any bid

placed within that round. A bidder removing a bid placed in the same

round is not subject to withdrawal payments. Removing a bid will affect

a bidder's activity for the round in which it is removed. This

procedure will enhance bidder flexibility and, the Commission believes,

may serve to expedite the course of the auction.

81. Once a round closes, a bidder may no longer remove a bid.

However, in the next round, a bidder may withdraw standing high bids

from previous rounds using the withdraw bid function (assuming that the

bidder has not exhausted its withdrawal allowance). A high bidder that

withdraws its standing high bid from a previous round is subject to the

bid withdrawal payments specified in 47 CFR 1.2104(g) and 1.2109.

82. In previous auctions, the Commission detected bidder conduct

that, arguably, may have constituted strategic bidding through the use

of bid withdrawals. While the Commission continues to recognize the

important role that bid withdrawals play in an auction, i.e., reducing

risk associated with efforts to secure various geographic area licenses

in combination, the

[[Page 53439]]

Commission concludes that, for the VHF Public Coast Service auction,

adoption of a limit on their use to two rounds is the most appropriate

outcome. By doing so the Commission believes it strikes a reasonable

compromise that will allow bidders to use withdrawals. The Commission's

decision on this issue is based upon its experience in prior auctions,

particularly the PCS D, E and F block auction, 800 MHz SIR auction, and

LADS auction, and is in no way a reflection of its view regarding the

likelihood of any speculation or ``gaming'' in the VHF Public Coast

Service auction.

83. The Bureau will therefore limit the number of rounds in which

bidders may place withdrawals to two rounds. These rounds will be at

the bidder's discretion and there will be no limit on the number of

bids that may be withdrawn in either of these rounds. Withdrawals will

still be subject to the bid withdrawal payments specified in 47 CFR

1.2104(g), and 1.2109. Bidders should note that abuse of the

Commission's bid withdrawal procedures could result in the denial of

the ability to bid on a market.

84. If a high bid is withdrawn, the license will be offered in the

next round at the second highest bid price, which may be less than, or

equal to, in the case of tie bids, the amount of the withdrawn bid,

without any bid increment. The FCC will serve as a ``place holder'' on

the license until a new acceptable bid is submitted on that license.

85. Generally, a bidder that withdraws a standing high bid during

the course of an auction will be subject to a payment equal to the

lower of: (1) The difference between the net withdrawn bid and the

subsequent net winning bid; or (2) the difference between the gross

withdrawn bid and the subsequent gross winning bid for that license.

See 47 CFR 1.2104(g), and 1.2109. No withdrawal payment will be

assessed if the subsequent winning bid exceeds the withdrawn bid.

(7) Round Results

86. The bids placed during a round are not published until the

conclusion of that bidding period. After a round closes, the FCC will

compile reports of all bids placed, bids withdrawn, current high bids,

new minimum accepted bids, and bidder eligibility status (bidding

eligibility and activity rule waivers), and post the reports for public

access.

87. Reports reflecting bidders' identities and bidder

identification numbers for Auction No. 20 will be available before and

during the auction. Thus, bidders will know in advance the identities

of the bidders against which they are bidding.

(8) Auction Announcements

88. The FCC will use auction announcements to announce items such

as schedule changes and stage transitions. All FCC auction

announcements will be available on the FCC remote electronic bidding

system, as well as the Internet and the FCC Bulletin Board System.

(9) Other Matters

89. After the short-form filing deadline, applicants may make only

minor changes to their FCC Form 175 applications. For example,

permissible minor changes include deletion and addition of authorized

bidders (to a maximum of three) and revision of exhibits. Filers should

make these changes on-line, and submit a letter to Amy Zoslov, Chief,

Auctions and Industry Analysis Division, Wireless Telecommunications

Bureau, Federal Communications Commission, 2025 M Street, NW., Room

5202, Washington, DC 20554 (and mail a separate copy to Anne Napoli,

Auctions and Industry Analysis Division), briefly summarizing the

changes. Questions about other changes should be directed to Anne

Napoli of the FCC Auctions and Industry Analysis Division at (202) 418-

0660.

X. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

90. After bidding has ended, the Commission will issue a public

notice declaring the auction closed, identifying the winning bids and

bidders for each license, and listing withdrawn bid payments due.

91. Within ten business days after release of the auction closing

notice, each winning bidder must submit sufficient funds (in addition

to its upfront payment) to bring its total amount of money on deposit

with the Government to 20 percent of its net winning bids (actual bids

less any applicable bidding credits). See 47 CFR 1.2107(b). In

addition, by the same deadline all bidders must pay any withdrawn bid

amounts due under 47 CFR 1.2104(g). Upfront payments are applied first

to satisfy any withdrawn bid liability, before being applied toward

down payments.

B. Long-Form Application

92. Within ten business days after release of the auction closing

notice, winning bidders must submit a properly completed long-form

application and required exhibits for each VHF Public Coast Service

license won through the auction. Winning bidders that are small

businesses or very small businesses must include an exhibit

demonstrating their eligibility for bidding credits. See 47 CFR

1.2112(b). Further filing instructions will be provided to auction

winners at the close of the auction.

C. Default and Disqualification

93. Any high bidder that defaults or is disqualified after the

close of the auction (i.e., fails to remit the required down payment

within the prescribed period of time, fails to submit a timely long-

form application, fails to make full payment, or is otherwise

disqualified) will be subject to the payments described in 47 CFR

1.2104(g)(2). In such event the Commission may re-auction the license

or offer it to the next highest bidders (in descending order) at their

final bids. See 47 CFR 1.2109(b) and (c). In addition, if a default or

disqualification involves gross misconduct, misrepresentation, or bad

faith by an applicant, the Commission may declare the applicant and its

principals ineligible to bid in future auctions, and may take any other

action that it deems necessary, including institution of proceedings to

revoke any existing licenses held by the applicant. See 47 CFR

1.2109(d).

D. Refund of Remaining Upfront Payment Balance

94. All applicants that submitted upfront payments but were not

winning bidders for a VHF Public Coast Service license may be entitled

to a refund of their remaining upfront payment balance after the

conclusion of the auction. No refund will be made unless there are

excess funds on deposit from that applicant after any applicable bid

withdrawal payments have been paid.

95. Bidders that drop out of the auction completely may be eligible

for a refund of their upfront payments before the close of the auction.

However, bidders that reduce their eligibility and remain in the

auction are not eligible for partial refunds of upfront payments until

the close of the auction. Qualified bidders that have exhausted all of

their activity rule waivers, have no remaining bidding eligibility, and

have not withdrawn a high bid during the auction must submit a written

refund request which includes wire transfer instructions, a Taxpayer

Identification Number (``TIN''), and a copy of their bidding

eligibility screen print, to: Federal Communications Commission,

Billings and Collections Branch, Attn: Regina Dorsey or Linwood

Jenkins, 1919 M Street, NW., Room 452, Washington, D.C. 20554.

[[Page 53440]]

96. Bidders can also fax their request to the Billings and

Collections Branch at (202) 418-2843. Once the request has been

approved, a refund will be sent to the address provided on the FCC Form

159. Refund processing generally takes up to two weeks to complete.

Questions about refunds should be directed to Linwood Jenkins or

Geoffrey Idika at (202) 418-1995.

Federal Communications Commission.

Amy J. Zoslov,

Chief, Auctions and Industry Analysis Division, Wireless

Telecommunications Bureau.

[FR Doc. 98-26407 Filed 10-1-98; 8:45 am]

BILLING CODE 6712-01-P