Auction of AM, FM, TV, LPTV, and FM and TV Translator Construction Permits Scheduled for September 28, 1999; Minimum Opening Bids and Other Procedural Issues

FEDERAL COMMUNICATIONS COMMISSION

[DA 99-1346; Report No. AUC-99-25-A (Auction No. 25)]

Auction of AM, FM, TV, LPTV, and FM and TV Translator

Construction Permits Scheduled for September 28, 1999; Minimum Opening

Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: On July 9, 1999, the Mass Media Bureau (``MMB'') and the

Wireless Telecommunications Bureau (``WTB'') (collectively,

``Bureaus'') released a Public Notice announcing the minimum opening

bids and other auction procedures for the Closed Broadcast Auction of

AM, FM, TV, LPTV, and FM and TV Translator Construction Permits.

DATES: The auction will begin on September 28, 1999.

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

information regarding important addresses.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau:

Auctions and Industry Analysis Division: Bob Allen, Legal Branch at

(202) 418-0660; Jeff Garrettson, Auctions Operations Branch at (202)

418-0660 or Bob Reagle, Auctions Operations Branch at (717) 338-2807.

Mass Media Bureau: Shaun Maher, Video Services Division at (202)

418-2324; Lisa Scanlan, Audio Services Division at (202) 418-2700.

Media Contact: Meribeth McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice that

was released on July 9, 1999. The complete text of this Public Notice

is available in its entirety, including all Attachments, for inspection

and copying during normal business hours in the Reference Information

Center, Room CY A-257, 445 12th Street, S.W., Washington, D.C., and

also may be purchased from the Commission's copy contractor,

International Transcription Services, (202) 857-3800, fax (202) 857-

3805, 1231 20th Street, N.W., Washington, D.C. 20036. It is also

available on the Commission's website at http://www.fcc.gov.

Synopsis of the Public Notice

A. Introduction

1. This Public Notice announces the procedures and minimum opening

bids for the upcoming Closed Broadcast Auction. On May 17, 1999 the

Bureaus released a Public Notice (See ``Closed Broadcast Auctions

Scheduled for September 28, 1999; Comment Sought on Minimum Opening

Bids and Other Auction Procedures,'' Public Notice, DA 99-940 (rel. May

17, 1999) (``Closed Broadcast Auction Public Notice''), 64 FR 29312

(June 1, 1999), seeking comment on the establishment of reserve prices

or minimum opening bids for the auction of AM, FM, TV, LPTV, and FM and

TV Translator Construction Permits (Auction No. 25), in accordance with

the Balanced Budget Act of 1997. In addition, the Bureaus sought

comment on a number of procedures to be used in Auction No. 25. The

Bureaus received 39 comments and 7 reply comments in response to the

Closed Broadcast Auction Public Notice.

2. Pursuant to the Broadcast First Report and Order, 63 FR 48615

(September 11, 1998), (See Implementation of Section 309(j) of the

Communications Act--Competitive Bidding for Commercial Broadcast and

Instructional Television Fixed Service Licenses, First Report and

Order, MM Docket No. 97-234, GC Docket No. 92-52 and GEN Docket No. 90-

264, (``Broadcast First Report and Order'') and Memorandum Opinion and

Order, 64 FR 24523 (May 7, 1999), (``Memorandum Opinion and Order on

Reconsideration''), participation in this auction is limited to those

applicants identified in the Closed Broadcast Auction Public Notice.

3. Auction Date: The auction will begin on September 28, 1999. 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 each business day and will

continue until bidding has stopped on all licenses.

4. Auction Title: Auction No. 25 (Closed Broadcast Auction).

5. Bidding Methodology: Simultaneous multiple round bidding.

Bidding will be permitted only from remote locations, either

electronically (by computer) or telephonically.

6. Pre-Auction Deadlines:

Auction Seminar--August 3, 1999.

Short Form Application (FCC Form 175)--August 20, 1999;

5:30 p.m. ET.

Orders for Remote Bidding Software--August 20, 1999.

Upfront Payments (via wire transfer)--September 13, 1999;

6:00 p.m. ET.

Mock Auction--September 24, 1999.

7. Telephone Contacts:

Auctions Hotline--(888) CALL-FCC ((888) 225-5322), press

Option #2 or (717) 338-2888 (direct dial). (For General Auction

Information, and Seminar Registration. Hours of service: 8 a.m.-5:30

p.m. ET. Monday-Friday).

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).

8. List of Attachments:

Attachment A--Summary of Construction Permits to be

Auctioned, Upfront Payments, Minimum Opening Bids.

Attachment B--Guidelines for Completion of FCC Forms 175

and Exhibits.

Attachment C--Auction-Specific Instructions for FCC

Remittance Advice FCC Form 159.

Attachment D--Electronic Filing and Review of FCC Form

175.

Attachment E--Accessing the FCC Network Using Windows 95/

98.

Attachment F--FCC Remote Bidding Software Order Form.

Attachment G--Summary Listing of Documents from the

Commission and the Wireless Telecommunications Bureau Addressing the

Application of the Anti-Collusion Rules.

Attachment H--Auction Seminar Registration Form.

9. Background: All spectrum to be auctioned is the subject of

pending,

[[Page 39996]]

mutually exclusive applications for construction permits for the AM,

FM, TV, LPTV, and FM and television translator services, for which the

Commission has not approved a settlement agreement that obviates the

need for an auction. This includes mutually exclusive applications for

full service FM, AM and television stations that were subject to the

comparative freeze, instituted after the decision of the U.S. Court of

Appeals for the District of Columbia in Bechtel v. FCC. The auction

will also include pending mutually exclusive applications for LPTV, FM

translator and television translator, as well as certain mutually

exclusive LPTV and television translator DTV displacement relief

applications. Pursuant to the Broadcast First Report and Order,

participation in the auction will be limited to those applicants

identified in this Public Notice and applicants will be potentially

eligible to bid on only those construction permits for which they filed

an appropriate long-form application and the Bureaus will dismiss the

previously-filed long-form application of any pending applicant failing

to timely file a short-form application to participate in the Closed

Broadcast Auction.

10. Due Diligence: Potential bidders are solely responsible for

investigating and evaluating all technical and marketplace factors that

may have a bearing on the value of the facilities on which they intend

to bid.

11. The FCC makes no representation or warranties about the use of

this spectrum for particular services. Applicants should be aware that

an FCC auction represents an opportunity to become a FCC permittee in

these services, 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 construction permit

or license constitute a guarantee of business success.

12. Participation: Those wishing to participate in the auction

must:

Submit a short form application (FCC Form 175) by 5:30

p.m. Eastern Time, August 20, 1999.

Submit a sufficient upfront payment and an FCC Remittance

Advice Form (FCC Form 159) by 6:00 p.m. Eastern Time, September 13,

1999.

Comply with all provisions outlined in this Public Notice

and applicable rules of the Commission.

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

auction process, the Commission's Rules prohibit mutually exclusive

applicants within a group from communicating with each other during the

auction about bids, bidding strategies, or settlements. This

prohibition becomes effective at the short form filing deadline and

ends on the down payment due date. Bidders competing for the same

construction permit(s) are encouraged not to use the same individual as

an authorized bidder. A violation of the anti-collusion rule could

occur if an individual acts as the authorized bidder for two or more

competing applicants, and conveys information concerning the substance

of bids or bidding strategies between the bidders he/she is authorized

to represent in the auction. Also, if the authorized bidders are

different individuals employed by the same organization (e.g., law firm

or engineering consulting firm), a violation could similarly occur. At

a minimum, in such a case, applicants should certify that precautionary

steps have been taken to prevent communication between authorized

bidders and that applicants and their bidding agents will comply with

the anti-collusion rule. The Bureaus, however, caution that merely

filing a certifying statement as part of an application will not

outweigh specific evidence that collusive behavior has occurred, nor

will it preclude the initiation of an investigation when warranted.

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. By electronically submitting their FCC Form 175 short

form applications, applicants are certifying their compliance with

Sections 1.2105(c) and 73.5002. In addition, Section 1.65 of the

Commission's Rules requires an applicant to maintain the accuracy and

completeness of information furnished in its pending application and to

notify the Commission within 30 days of any substantial change that may

be of decisional significance to that application. Thus, Section 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.

14. Bidder Information Package: Given the closed nature of Auction

No. 25 and the fact that the pool of potential bidders is limited to

those that had previously filed long-form applications, no Bidder

Information Package will be provided. All information necessary to

participate in the Closed Broadcast Auction is contained in this Public

Notice, the Closed Broadcast Auction Public Notice, the Broadcast First

Report and Order, the Memorandum Opinion and Order on Reconsideration

and the Commission's rules. Applicants may access updated information

about Auction No. 25 at the following address on WTB's web site:

http://www.fcc.gov/wtb/auctions/auc25/auc25.html

15. Future Releases: Further information regarding sequencing and

length of bidding rounds and other procedural issues will be released

in a future public notice.

16. Relevant Authority: Prospective bidders must familiarize

themselves thoroughly with the Commission's Rules relating to broadcast

auctions, contained in Title 47, Part 73 of the Code of Federal

Regulations.

17. Prospective bidders must also be thoroughly familiar with the

procedures, terms and conditions contained in this Public Notice, the

Closed Broadcast Auction Public Notice, the Broadcast First Report and

Order; the Memorandum Opinion and Order on Reconsideration and Part 1,

Subpart Q of the Commission's Rules concerning Competitive Bidding

Proceedings.

18. 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 our

public notices 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)

314-3070. When ordering documents from ITS, please provide the

appropriate FCC number (e.g., FCC 98-194 for the Broadcast First Report

and Order, 63 FR 48615 (September 11, 1998) and FCC 99-234 for the

Memorandum Opinion and Order for Reconsideration 64 FR 24523 (May 7,

1999).

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

175 applications under penalty of perjury that they are legally,

technically,

[[Page 39997]]

financially and otherwise qualified to hold a license, and not in

default on any payment for Commission construction permits or licenses

(including down payments) or delinquent on any non-tax debt owed to any

Federal agency. Applicants should be aware that by filing their FCC

Form 175 applications, they are certifying that they have long-form

applications on file and that there has been no change of control of

their long-form applications that would render them ineligible to

participate in the auction under 47 U.S.C. 309(1) or any applicable

Commission rule. 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.

20. Although applicants have had an extensive opportunity to

conduct due diligence due to the length of time ensuing since the

filing of their long-form applications, the following reminder is

provided: As is the case with many business investment opportunities,

some unscrupulous entrepreneurs may attempt to use the broadcast

spectrum 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. In

addition, the offering materials often include copies of actual FCC

releases, or quotes from FCC personnel, giving the appearance of FCC

knowledge or approval of the solicitation.

21. 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 proposals may also call the FCC National Call Center at (888)

CALL-FCC ((888) 225-5322).

22. National Environmental Policy Act (NEPA) Requirements:

Licensees must comply with the Commission's rules regarding the

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

broadcast antenna facility is a federal action and licensees must

comply with the Commission's NEPA rules for each such facility. See 47

CFR 1.1305-1.1319.

B. Eligibility For New Entrant Bidding Credit

23. For the Closed Broadcast Auction the Commission adopted the New

Entrant Bidding Credit to promote and facilitate the diversification of

ownership in the mass media. The bidder's attributable interests shall

be determined as of the short form (FCC Form 175) filing deadline--

August 20, 1999. Bidders intending to divest a media interest or make

any other ownership changes, such as resignation of positional

interests, in order to avoid attribution for purposes of qualifying for

the New Entrant Bidding credit must have consummated such divestment

transactions or have completed such ownership changes by no later than

the short-form filing deadline--August 20, 1999.

24. Determination of Eligibility for Bidding Credit. The interests

of the bidder, and of any individuals or entities with an attributable

interest in the bidder in other media of mass communications shall be

considered when determining a bidder's eligibility for the New Entrant

bidding credit.

25. For purposes of determining which entities qualify for a New

Entrant Bidding Credit, the following information should be considered:

the interests of the bidder, and of individuals or entities with an

attributable interest in the bidder, in other media of mass

communications at the time of the short-form application filing

deadline. These interests should be considered to the extent that they

are considered attributable under the broadcast multiple ownership

rules. Further, any bidder asserting new entrant status must have de

facto as well as de jure control of the entity claiming the bidding

credit.

26. Under traditional broadcast attribution rules, those entities

or individuals with an attributable interest in a bidder include: all

officers and directors of a corporate bidder; any owner of 5% or more

of the voting stock of a corporate bidder; all partners and limited

partners of a partnership bidder, unless the limited partners are

sufficiently insulated from exercising management and control of the

partnership; and all members of a limited liability company, unless

sufficiently insulated. In cases where a bidder is an individual and

his or her spouse or other close family member holds interests in other

media, such interests are not automatically attributable to the bidder,

rather the Commission decides attribution issues in this context based

on certain factors that it has traditionally considered to be relevant.

Bidders are also reminded that, in the Memorandum Opinion and Order on

Reconsideration, the Commission determined to consider, in a future

order, whether to attribute the mass media interests of any individual

or entity who holds a significant equity and/or debt interest in a

broadcast auction bidder claiming New Entrant status, even if such an

interest is nonvoting. Specifically, the Memorandum Opinion and Order

on Reconsideration stated that this further order would consider the

appropriateness of attributing the mass media interests held by

substantial investors in a bidder claiming a credit as a New Entrant

and the threshold at which a nonvoting equity and/or debit interest in

a New Entrant should be attributable. While the Commission has not yet

released its further order resolving these issues, it stated in the

Memorandum Opinion and Order on Reconsideration that the further order

would be released ``expeditiously'' and its release would not delay the

commencement of broadcast service auctions. Therefore, bidders should

be aware of these outstanding issues when considering their

qualifications for the New Entrant bidding credit. The eligibility

standards will be governed by the rule in effect on the short-form

filing for the New Entrant bidding credit.

27. Consortia and Joint Bidding Arrangements. A party holding a

non-controlling, attributable interest in one applicant will be

permitted to acquire an ownership interest, form a consortium with, or

enter into a joint bidding arrangement with other applicants for

construction permits in the same MX Group provided that: (1) the

attributable interest holder certify that it has not and will not

communicate with any party concerning the bids or bidding strategies of

more than one of the applicants in which it holds an attributable

interest, has

[[Page 39998]]

formed a consortium, or has entered into a joint bidding arrangement;

and (2) the arrangements do not result in a change in control of any of

the applicants. While the anti-collusion rule does not prohibit non-

auction related business negotiations among auction applicants, bidders

are reminded that certain discussion or exchanges could broach on

impermissible subject matters because they may convey pricing

information and bidding strategies. Such subject areas include, but are

not limited to, issues such as management, sales, local marketing

agreements, rebroadcast agreements and other transactional

arrangements.

28. Application Showing. Applicants should note that they will be

required to file supporting documentation as Exhibits A and C to their

FCC Form 175 short form applications to establish that they satisfy the

eligibility requirements to qualify for a New Entrant Bidding Credit.

Ownership information must also be provided in the Closed Broadcast

Auction in order for us to verify eligibility to participate in the

auction. Specifically, for the Closed Broadcast Auction, applicants

will be required to file (in Exhibit A to their FCC Form 175 short form

applications) a full and complete statement of the ownership of the

bidding entity, to include all attributable interest holders. If the

information reflects that here has been a change of control, the

related long-form application will be dismissed and the applicant will

be ineligible to participate in the auction. The applicant must provide

the ownership information for itself and its attributable interest-

holders, as defined by Section 73.3555 and Note 2 of that section,

including: all officers and directors of a corporate bidder; any owner

of 5% or more of the voting stock of a corporate bidder; all partners

and limited partners of a partnership bidder, unless the limited

partners are sufficiently insulated from the management or operation of

the partnership; and all members of a limited liability company, except

those sufficiently insulated from its management or operation. Bidders

must certify (in Exhibit A) compliance with the Commission's policies

relating to media interests of immediate family members. In addition,

in those cases where a New Entrant Bidding credit is being sought, a

certification under penalty of perjury must be set forth in Exhibit C

attesting to the eligibility of the bidder for the level of credit

claimed. If the applicant is applying to bid as a consortium of

applicants eligible for the New Entrant bidding credit, this

information must be provided for each consortium member. In cases where

a joint biding arrangement is contemplated, an Exhibit B must be filed.

Applicants owned by minorities or women, as defined in 47 CFR

1.2110(b)(2), may attach an exhibit (Exhibit D) regarding this status.

29. Bidding Credits. Applicants that qualify for the New Entrant

Bidding Credit, as set forth in 47 CFR 73.5007, are eligible for a

bidding credit that represents the amount by which a bidder's winning

bids are discounted. The size of a New Entrant Bidding Credit depends

on the number of ownership interests in other media of mass

communications that are attributable to the bidder-entity and its

attributable interest-holders:

A 35 percent bidding credit will be given to a winning

bidder if it, and/or any individual or entity with an attributable

interest in the winning bidder, has no attributable interest in any

other media of mass communications, as defined in 47 CFR 73.5008 and

A 25 percent bidding credit will be given to a winning

bidder if it, and/or any individual or entity with an attributable

interest in the winning bidder, has no attributable interest in no more

than three media of mass communications, as defined in 47 CFR 73.5008;

and

No bidding credit will be given if any of the commonly

owned mass media facilities would serve the same area as the proposed

broadcast or secondary broadcast station, as defined in 47 CFR 73.5007,

or if the winning bidder, and/or any individual or entity with an

attributable interest in the winning bidder, have attributable

interests in more than three mass media facilities.

30. Attributable interests held by a winning bidder in existing low

power television, television translator or FM translator facilities

will not be counted among the bidders' other mass media facilities.

Bidding credits are not cumulative: qualifying applicants receive

either the 25 percent or the 35 percent bidding credit, but not both.

31. Closed Broadcast Auction 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 level of bidding credit. Finally,

Closed Broadcast Auction bidders should also note that there are no

installment payment plans in the Closed Broadcast Auction.

C. Pre-Auction Procedures

32. Short-Form Application (FCC Form 175)--Due August 20, 1999,

5:30 p.m. ET. In order to be eligible to bid in this auction,

applicants must first electronically submit an FCC Form 175

application. This application must be received at the Commission by

5:30 p.m. ET on August 20, 1999. Late applications will not be

accepted.

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

175. However, to purchase bidding eligibility, an applicant must submit

an upfront payment. See Paragraph 40 below.

34. Electronic Filing. As of January 1, 1999, applications to

participate in FCC auctions must be filed electronically, unless it is

not operationally feasible. See 47 CFR 1.2105(a). Applicants will be

permitted to file their FCC Form 175 applications in paper form only in

the event the FCC experiences technical difficulties with its

electronic systems. In such an event, the FCC will announce the

procedure for submitting paper applications.

35. For Auction No. 25, applicants may file applications

electronically beginning August 3, 1999. The system will generally be

open for filing on a 24-hour basis. The Form 175 filing window will

remain open until 5:30 p.m. ET on August 20, 1999. 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 multiple times until the

filing deadline on August 20, 1999. Information about the electronic

filing of the FCC Form 175 application is included in Attachment D.

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.

36. Completion of the FCC Form 175. Applicants should carefully

review 47 CFR 1.2105 and 73.5002 and must complete all items on the FCC

Form 175. Instructions for completing the FCC Form 175 are in

Attachment B to the Public Notice. Applicants should not consider their

form submitted to the FCC until they press the ``Submit Form 175''

button on the ``Submit'' page and receive confirmation from the filing

system that the form has been received by the Commission.

37. Electronic Review of FCC Form 175. The FCC Form 175 review

software may be used to review and print applicants' FCC Form 175

applications. Applicants may also view other applicants' completed FCC

Form 175

[[Page 39999]]

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 are no fees for accessing this system or for

submitting an FCC Form 175. See Attachment D of the Public Notice for

details.

38. Application Processing and Minor Corrections. After the

deadline for filing the FCC Form 175 applications has passed, the FCC

will process all timely submitted short-form applications to determine

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

notice identifying: (1) those short-form applications which are

mutually exclusive and are acceptable for filing (including FCC file

numbers and the construction permits for which they applied); (2) those

applications rejected; and (3) those short-formed applications that

have minor defects that may be corrected, and the deadline for filing

such corrected applications.

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

August 20, 1999, short form filing deadline, applicants may make only

minor non-technical corrections to their FCC Form 175 applications.

Applicants will not be permitted to make major modifications to their

applications (e.g., change their construction permit selections or

proposed service areas, change the certifying official, or change

control of the applicant, or change bidding credits). See 47 CFR

1.2105.

40. Upfront Payments--Due September 13, 1999. In order to be

eligible to bid in the auction, applicants must submit an upfront

payment accompanied by an FCC Remittance Advice Form (FCC Form 159).

Applicants may access an electronic version of the FCC Form 159 (August

1998 version) after completing the electronic FCC Form 175; however,

the FCC Remittance Advice Form (FCC Form 159) is to be submitted by

facsimile transmission to Mellon Bank in accordance with the

instructions below. Earlier versions of this form will not be accepted.

All upfront payments must be received at Mellon Bank in Pittsburgh, PA,

by 6:00 p.m. ET on September 13, 1999.

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. 25 go to a lockbox number

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

different from the lockbox number to be used for post-auction payments.

Failure to deliver the upfront payment by the September

13, 1999 deadline will result in no bidding eligibility being accorded

the applicant.

41. Making Auction Payments by Wire Transfer. Wire transfer

payments must be received by 6:00 p.m. ET on September 13, 1999. 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/ 910-0171

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

``AUCTIONPAY''

TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)

PAYMENT TYPE CODE (enter ``A25U'')

FCC CODE 1 (same as FCC Form 159, block 23A: ``25'')

PAYER NAME (same as FCC Form 159, block 2)

LOCKBOX NO. #358430

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.

42. 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. 25.''

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

contacting their sending financial institution.

43. FCC Form 159. 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 C to the Public Notice.

44. Amount of Upfront Payment. In the Broadcast First Report and

Order the Commission delegated to the Bureaus the authority and

discretion to determine an appropriate upfront payment for each

construction permit being auctioned. In the Closed Broadcast Auction

Public Notice, the Bureaus proposed certain upfront payments. We

received comments from a number of parties, including the National

Translator Association (``NTA''). NTA states that any organization

which is exempt from annual regulatory fees should be exempted from the

requirement of filing upfront payments. However, Section 73.5003 of the

Commission's rules requires that every bidder in every broadcast

service shall submit an upfront payment prior to the commencement of

bidding. Therefore, we shall not adopt NTA's suggestion and all bidders

will be required to submit an upfront payment.

45. Applicants potentially eligible to participate in competitive

bidding in more than one MX Group should note that upfront payments are

not attributed to specific licenses, but instead will be translated to

bidding units to define a bidder's maximum bidding eligibility. For

Auction No. 25, 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 construction permits which the

applicant has selected on FCC Form 175, but rather to cover the maximum

number of bidding units that are associated with construction permits

on which the bidder wishes to place bids and hold high bids at any

given time. Bidders are reminded that failure to submit an upfront

payment of sufficient size to provide bidding eligibility for every MX

Group in which an applicant has a pending long-form application will

limit the bidding eligibility of that applicant.

46. In order to be able to place a bid on a construction permit, in

addition to having specified that permit 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 construction permits applied for on the FCC Form

175, or else the applicant will not be eligible to participate in the

auction.

47. 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

[[Page 40000]]

increasing a bidder's maximum eligibility after the upfront payment

deadline.

48. An applicant potentially eligible to bid in more than one MX

group may, on its FCC Form 175, indicate an intent to bid on every

construction permit for which an underlying long-form has been filed,

but its actual bidding in any round will be limited by the bidding

units reflected in its upfront payment.

49. Applicant's Wire Transfer Information for Purposes of Refunds.

Because experience with prior auctions has shown that in most cases

wire transfers provide quicker and more efficient refunds than paper

checks, the Commission will use wire transfers for all Auction No. 25

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.)

50. Auction Registration. Approximately ten days before the

auction, the FCC will issue a public notice announcing all qualified

bidders for Auction No. 25. 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 construction permits for which a long-

form application was previously accepted.

51. 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.

52. 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 September 23, 1999 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.

53. 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 445--12th Street,

S.W., Washington, D.C. 20554. 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. Bidders

needing replacement codes must call technical support at 202-414-1250

prior to arriving at the FCC.

54. Remote Electronic Bidding Software. Qualified bidders that file

or amend the FCC Form 175 electronically are strongly encouraged to bid

electronically. Due to the fact that each of the potential bidders has

already paid substantial fees to the Commission in connection with the

filing of their long-form applications, the software packages required

to participate in remote electronic bidding will be provided on request

at no charge to the bidders in the Closed Broadcast Auction. These

software packages must be ordered by August 20, 1999. (Auction software

is tailored to a specific auction, so software from prior auctions will

not work for Auction No. 25.) A software order form is included in the

Public Notice.

55. Auction Seminar. On August 3, 1999, the FCC will sponsor a

free, informational seminar for the Closed Broadcast Auction at the

Main Meeting Room on the first floor of the Headquarters Building of

the Federal Communications Commission located at 445--12th Street,

S.W., Washington, DC 20554. The seminar will provide attendees with

information about pre-auction procedures, conduct of the auction, FCC

remote bidding software, and the Closed Broadcast Auction service and

auction rules.

56. To register, refer to the registration materials form included

as Attachment H with the Public Notice. Registrations are accepted on a

first-come, first-served basis.

57. Mock Auction. All qualified bidders will be eligible to

participate in a mock auction on September 24, 1999. The mock auction

will enable applicants to become familiar with the 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.

D. Auction Event

58. The first round of the auction will begin on September 28,

1999. 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.

59. Auction Structure--Simultaneous Multiple Round Auction. In the

Closed Broadcast Auction Public Notice, we proposed to award the

construction permits in a single, simultaneous multiple round auction.

On this proposal, Community Broadcasters Association (``CBA'') filed

comments, stating that auctions for LPTV displacement applications

should be set up to run seriatim. CBA stresses the importance of the

auction for displaced LPTV licensees and notes that this category of

bidder consists of small operators who cannot afford the time or staff

to stay on-line indefinitely. However, contrary to CBA's expressed

concerns, bidders in the Closed Broadcast Auction are not compelled by

our procedures to stay online indefinitely, or for extensive periods of

time. Only a periodic presence will be required during each round of

the auction: first to place a bid; then later to check round results.

60. The Bureau concludes that the construction permits in the

Closed Broadcast Auction will be awarded through a single, simultaneous

multiple round auction. Unless otherwise announced, bids will be

accepted on all construction permits in each round of the auction. This

approach allows for a more efficient auction process and, in cases

where bidders are eligible to participate in multiple markets, allows

them to take advantage of any synergies that exist among construction

permits.

61. Maximum Eligibility and Activity Rules. In the Closed Broadcast

Auction Public Notice, the Bureau proposed that the amount of the

upfront payment submitted by a bidder would determine the initial

maximum eligibility (as measured in bidding units) for each bidder. We

received comments from Fant Broadcasting Company (``Fant''). Fant

believes that the 100% eligibility rule is too high for a multiple

market bidder and will force such bidders to either exercise a waiver

or to bid, producing artificially low bid amounts for markets with

smaller bidding units. Fant suggests a 50% eligibility requirement in

stage one of the auction.

[[Page 40001]]

62. We note that in the Closed Broadcast Auction, only a very small

percentage of bidders are potentially eligible to bid on more than one

market. For that reason, even if valid, we do not see the factors

stated by Fant as having a significant impact on the conduct of the

Closed Broadcast Auction. Further, no other commenter raises similar

concerns and none of the reply comments express support for this

position.

63. We adopt the maximum eligibility and activity rule proposal for

the Closed Broadcast Auction. The amount of the upfront payment

submitted by a bidder determines the initial maximum eligibility (in

bidding units) for each bidder. Note again that upfront payments are

not attributed to specific construction permits, 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.

64. 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 100 percent of their maximum eligibility

during each round of the auction.

65. A bidder is considered active on a construction permit 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 construction permits on which the bidder is active.

Required minimum activity levels ensure that an auction will proceed

expeditiously and efficiently. Because such procedures have proven

successful in maintaining the pace of previous auctions, we adopt them

for the Closed Broadcast Auction.

66. Activity Rule Waivers, Reducing Eligibility and Stopping Rules.

In the Closed Broadcast Auction Public Notice, we proposed that each

bidder in the auction would be provided five activity rule waivers that

may be used in any round during the course of the auction. We also

proposed to employ a simultaneous stopping rule in Auction No. 25,

meaning that all construction permits would remain open until the first

round in which no new acceptable bids, proactive waivers or withdrawals

were received. Finally, we proposed a special stopping rule, meaning

that the Bureaus would accept bids in the final round(s) only for

construction permits on which the high bid increased in at least one of

the preceding specified number of rounds. We received numerous comments

on our activity rule, eligibility reduction and stopping rule

proposals.

67. Based upon our experience in previous auctions, the Bureau

adopts its proposal and 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 construction permit.

68. 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.

69. 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.

70. 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.

71. Bidding will remain open on all construction permits until

bidding stops on every construction permit. Thus, the auction will

close for all construction permits when one round passes during which

no bidder submits a new acceptable bid on any construction permit,

applies a proactive waiver, or withdraws a previous high bid. The

Bureaus retain the discretion to close the auction for all construction

permits after the first round in which no bidder submits a proactive

waiver, a withdrawal, or a new bid on any license on which it is not

the standing highest bidder. Thus, absent any other bidding activity, a

bidder placing a new bid on a construction permit for which it is the

standing high bidder would not keep the auction open under this

modified stopping rule.

72. The Bureaus retain the discretion 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).

73. The Bureaus reserve 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 construction permits 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, increasing the number

of bidding rounds per day.

74. Auction Delay, Suspension, or Cancellation. In the Closed

Broadcast Auction Public Notice, the Bureau proposed that, by public

notice or by announcement during the auction, the Bureau may delay,

suspend, or cancel the auction in the event of natural disaster,

technical obstacle, evidence of an auction security breach, unlawful

bidding activity, administrative or weather necessity, or for any other

reason that affects the fair and competitive conduct of competitive

bidding. The Commission received no comments on this proposal.

75. Because this approach has proven effective in resolving exigent

circumstances in previous auctions, the Bureau will adopt its proposed

auction cancellation rules. 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,

[[Page 40002]]

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 Bureau emphasizes that

exercise of this authority is solely within the discretion of the

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

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

76. Bidding Procedures--Round Structure. 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.

77. 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.

78. Reserve Price or Minimum Opening Bid. In the Closed Broadcast

Auction Public Notice, the Bureaus proposed to establish minimum

opening bids and to retain discretion to lower the minimum opening

bids. In the alternative, the Bureaus sought comment on whether,

consistent with the Budget Act, the public interest would be served by

having no minimum opening bid or reserve price. Numerous comments

addressed the issue of minimum opening bids and reserve prices.

79. Except as disclosed below, the Bureaus will adopt the minimum

opening bids proposed for each of the construction permits in the

Closed Broadcast Auction and which are reducible at the discretion of

the Bureaus, if circumstances warrant. This discretion will be

exercised sparingly and early in the auction, i.e. before bidders lose

all waivers and begin to lose substantial eligibility. During the

course of the auction, the Bureaus will not entertain any bidder

requests to reduce the minimum opening bid on specific construction

permits.

80. A number of commenters submitted comments requesting that

certain minimum opening bids be lowered for specific primary service

television markets, due to disproportionate differences in the sizes of

the markets, the number of households in the proposed markets and the

average price of stations in the market. We find merit in these

commenters suggesting that minimum opening bids be lowered due to

differences in the size of the markets and the revisions are contained

in Attachment A of the Public Notice.

81. Minimum Accepted Bids and Bid Increments. In the Closed

Broadcast Auction Public Notice, the Bureaus proposed a minimum bid

increment of 10 percent. Biltmore Forest submitted comments stating

that 10 percent bidding increments are too high to maintain in the

later stages of an auction. However, our past experience has shown us

that a 10 percent bid increment is not excessive and will not

significantly affect the amounts of prospective bids or the rate at

which bidding occurs. Furthermore, we do have discretion to lower the

bid increment during the progress of an auction, if we deem that

circumstances so dictate.

82. The Bureaus adopt the proposal contained in the Closed

Broadcast Auction Public Notice. The Bureau retains the discretion to

change the minimum bid increment if it determines that circumstances so

dictate, such as raising the minimum bid increment toward the end of

the auction to speed the pace at which bids reach their final values.

The Bureaus will do so by announcement in the Automated Auction System.

Under its discretion, the Bureau may also implement an absolute dollar

floor for the bid increment to further facilitate a timely close of the

auction.

83. Once there is a standing high bid on a construction permit,

there will be a bid increment associated with that bid indicating the

minimum amount by which the bid on that license can be raised. For the

Closed Broadcast Auction, we will use a flat, across-the-board

increment of 10 percent to calculate minimum bid increments and retain

the discretion to compute the minimum bid increment through other

methodologies if circumstances so dictate.

84. 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. 25.

85. A bidder's ability to bid on specific construction permits in

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

construction permits 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.

86. 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.

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

for the Closed Broadcast 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 construction permit.

88. Bid Removal and Bid Withdrawal--Procedures. Before the close of

a bidding round, a bidder has the option of removing any bids placed in

that round. By using the ``remove 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 serve to expedite the course of the auction. Therefore,

the Bureaus will adopt these procedures for the Closed Broadcast

Auction.

89. 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.

90. In previous auctions, the Bureaus have detected bidder conduct

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

of bid withdrawals. While the Bureaus continues to recognize the

important

[[Page 40003]]

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

associated with efforts to secure various construction permits or

licenses in combination, the Bureaus concludes that, for the Closed

Broadcast Auction, adoption of a limit on their use to two rounds is

the most appropriate outcome. By doing so the Bureaus believe they

strike a reasonable compromise that will allow bidders to use

withdrawals. Our decision on this issue is based upon our experience in

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

SMR auction, and LMDS auction, and is in no way a reflection of our

view regarding the likelihood of any speculation or ``gaming'' in this

Closed Broadcast Auction.

91. The Bureaus 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.

92. If a high bid is withdrawn, the construction permit 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 construction permit until a new acceptable bid

is submitted on that permit.

93. Calculation. 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

construction permit. In the case of multiple withdrawals on a

construction permit, the payment for the final withdrawer will be

computed as above. The payment for all other withdrawers will be

computed as the lower of: (1) either the difference between the net

withdrawn bid and the highest of the subsequent net winning bids or the

difference between the net withdrawn bid and the subsequent net winning

bid, whichever is less; or (2) either the difference between the gross

withdrawn bid and the highest of the subsequent gross withdrawn bids or

the difference between the gross withdrawn bid and the subsequent gross

winning bid, whichever is less. No withdrawal payment will be assessed

for a withdrawn bid if either the subsequent gross or net winning bid

or if any of the subsequent gross or net withdrawn bids exceed the

gross or net amount of the withdrawn bid. In the event that a

construction permit for which there have been withdrawn bids is not won

in that auction, then those bidders with outstanding withdrawals will

have 3 percent of their withdrawn bid withheld until such time as the

construction permit can be reauctioned and a final payment assigned.

94. Round Results. 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.

95. Reports reflecting bidders' identities and bidder

identification numbers for Auction No. 25 will be available before and

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

of the bidders against which they are bidding.

96. Auction Announcements. The FCC will use auction announcements

to announce items such as schedule changes and round sequences and

length. 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.

97. Other Matters --Deletions and Corrections. Commenters

Association of American Public Television Stations (APTS) and Rocky

Mountain Public Broadcasting Network, Inc. (Rocky Mountain) request

that so-called ``noncommercial educational'' applicants for secondary

television facilities not be included in the auction. We decline the

requests of APTS and Rocky Mountain and disagree that they are exempt

from auction. In this case, applicants in the secondary television

services are not eligible to be licensed as noncommercial educational,

a key element in the Communications Act, Section 309(j)(2)(c) statutory

exemption. Accordingly, the Commission must subject these applications

to auction.

98. Pre-auction Procedures for Pending, Applications. Several

commenters urge the Commission to remove their particular MX Group from

the September 28, 1999 Closed Broadcast Auction, alleging that their

only competitor within the group is unacceptable and should be

dismissed. In the First Report and Order, the Commission decisively

rejected this argument and unequivocally stated that it would ``not

consider petitions to deny already filed, or accept additional

petitions against pending applications, nor consider any questions

raised in such petitions relating to the tenderability or acceptability

of the pending long form applications.'' Rather, petitions to deny will

be entertained only with respect to the auction winning bidder. The

Commission concluded that the interests of the group of pending

applicants is best served by this approach and, to do otherwise would

significantly delay the commencement of competitive bidding and

ultimate service to the public. Accordingly, we reject commenters'

requests to examine issue pleadings at this time.

99. Conflict Removal. One applicant for an MX FM translator

facility contends that there is no need for an auction because

alternative frequencies exist and either one of the competing

applicants could amend to specify a different frequency and remove the

conflict. The applicant argues that the Commission's failure to open a

filing window, however, precludes the filing of such amendment and

forces the parties into an unnecessary auction. The applicant's

assessment of its settlement options is misguided. As explicitly stated

in the First Report and Order, pending secondary service applicants may

still avoid an auction through a settlement agreement that complies

with all Commission regulations, including the resolution of mutual

exclusivity through various engineering means.

100. Minor Modifications to FCC Form 175 Applications. After the

short-form filing deadline, applicants may make only minor changes to

their FCC Form 175 applications. Filers should make these changes on-

line, submit a letter to Amy Zoslov, Chief Auctions and Industry

Analysis Division, Wireless Telecommunications Bureau, Federal

Communications Commission, 445 12th Street, SW, Suite 4-A760

Washington, DC 20554, briefly summarizing the changes. Questions about

other changes should be directed to Bob Allen of the FCC Auctions and

Industry Analysis Division at (202) 418-0660.

101. Maintaining Currency of Information in FCC Form 175

Applications. Applicants have an obligation under Section 1.65 of the

Commission's Rules, 47 CFR 1.65, to maintain the completeness and

accuracy of information in their short-form applications. Amendments

reporting substantial changes of possible decisional significance in

information

[[Page 40004]]

contained in FCC Form 175 applications, as defined by 47 CFR

1.2105(b)(2), will not be accepted and may in some instances result in

the dismissal of the FCC Form 175 application.

E. Post-Auction Procedures

102. Down Payments and Withdrawn Bid Payments. After bidding has

ended, the Commission will issue a public notice declaring the auction

closed, identifying the winning bids and bidders for each construction

permit and listing withdrawn bid payments due.

103. 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.)

104. Default and Disqualification. 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

construction permit to the next highest bidder (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

construction permits or licenses held by the applicant. See 47 CFR

1.2109(d).

105. Refund of Remaining Upfront Payment Balance. All applicants

that submitted upfront payments but were not winning bidders for a

Closed Broadcast Auction construction permit 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.

106. 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, 445 12th Street, S.W., Room 1-A824, Washington, D.C.

20554.

107. 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.

Bidders with questions about refunds should contact Linwood Jenkins or

Geoffrey Idika at (202) 418-1995.

Federal Communications Commission.

Mark R. Bollinger,

Deputy Chief, Auctions and Industry Analysis Division, Wireless

Telecommunications Bureau.

[FR Doc. 99-18834 Filed 7-22-99; 8:45 am]

BILLING CODE 6712-01-P