Auction of C, D, E, and F Block Broadband PCS Licenses Scheduled for March 23, 1999; Minimum Opening Bids and Other Procedural Issues

FEDERAL COMMUNICATIONS COMMISSION

[DA 98-2604; Report No. AUC-98-22-C (Auction No. 22)]

Auction of C, D, E, and F Block Broadband PCS Licenses Scheduled

for March 23, 1999; Minimum Opening Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This is a summary of a Public Notice (DA 98-2604) released on

December 23, 1998, and corrected by a Public Notice released on January

21, 1999, setting forth notice and filing requirements, minimum opening

bids, and other procedural matters for the upcoming auction of C, D, E,

and F block broadband Personal Communications Services (PCS) licenses

(Auction No. 22), in accordance with the Balanced Budget Act of 1997.

DATES: Auction No. 22 is scheduled to begin on March 23, 1999.

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 Division: Jeff Garretson, Operations; Bob Reagle, Auctions

Analysis; or Audrey Bashkin, Legal, (202) 418-0660.

Commercial Wireless Division: David Judelsohn, (202) 418-7240.

SUPPLEMENTARY INFORMATION: The complete text of this Public Notice,

including four attachments that do not appear in this summary, is

available for inspection and copying Monday through Thursday from 9

a.m. to 4 p.m., and Friday from 9 a.m. to 2 p.m., in the Wireless

Telecommunications Bureau's Public Reference Room (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), 1231 20th Street, NW, Washington,

DC 20036, (202) 857-3800. The four attachments that do not appear in

this summary, but are available as described above, are: Attachment A

(Summary of 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); and Attachment D (Summary Listing of Documents from the

Commission and the Wireless Telecommunications Bureau Addressing

Application of the Anti-Collusion Rules).

Synopsis

I. Introduction

1. The Commission will hold an auction for 208 30 MHz and 134 15

MHz C block licenses, as well as for three 10 MHz D block, six 10 MHz E

block, and five 10 MHz F block licenses.

2. Auction Date: The auction will commence on March 23, 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 on each business day until bidding

has stopped on all licenses.

3. 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--February 3, 1999

Short Form Application (FCC Form 175)--February 12, 1999;

5:30 p.m. ET

Upfront Payments (via wire transfer)--March 1, 1999; 6:00

p.m. ET

Orders for Remote Bidding Software--March 9, 1999

Mock Auction--March 18, 1999

Telephone Contacts:

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

or (717) 338-2888 (direct dial). 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, Monday through Friday.

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

(202) 414-1255 (text telephone (TTY)). Hours of service:

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8 a.m.-6 p.m. ET, Monday through Friday.

A. Background

4. Broadband PCS encompasses a variety of mobile and/or portable

radio services, using such devices as small, lightweight, multifunction

portable phones, portable fax machines, and advanced devices with two-

way data capabilities that are competing with existing cellular,

paging, and other land mobile services. Auction No. 22 will be the

third auction of C block spectrum and the second auction of D, E, and F

block spectrum.

5. Frequency blocks C and F have been designated by the Commission

as ``entrepreneurs' blocks,'' meaning that participation in auctions of

C and F block licenses is limited to entities qualifying as

entrepreneurs under the Commission's rules. Eligibility requirements

for participation in auctions of C or F block licenses are discussed in

greater detail below in Part II of the Public Notice.

6. Frequency block C encompasses 1895-1910 MHz paired with 1975-

1990 MHz. In the first C block auction (Auction No. 5), which began on

December 18, 1995 and concluded on May 6, 1996, the Commission

auctioned licenses authorizing service on 30 MHz of spectrum in each of

the 493 basic trading areas (``BTAs'') in the United States and

territories. In the second C block auction (Auction No. 10), the

Commission made available 18 licenses of 30 MHz of spectrum each.

Auction No. 10 ran from July 3, 1996 to July 16, 1996. In 1997, as one

of several payment options, the Commission allowed C block licensees

from Auctions 5 and 10 to disaggregate and return to the Commission 15

MHz of spectrum from their licenses. As a result, certain C block

licenses available in Auction No. 22 will encompass 15 MHz of spectrum,

rather than 30 MHz. The size of each license to be auctioned is

indicated in Attachment A of the full text of the Public Notice (see

``Supplementary Information'' above).

7. The D, E, and F block auction (Auction No. 11) began on August

26, 1996 and concluded on January 14, 1997. The D and E blocks were

open to all entities. As mentioned, the F block was restricted to

entrepreneurs. In Auction No. 11, the Commission made available 1,479

broadband PCS licenses (three in each of 493 BTAs in the United States

and territories) of 10 MHz (5 MHz paired) each, encompassing the

following frequencies:

D block: 1865-1870/1945-1950 MHz

E block: 1885-1890/1965-1970 MHz

F block: 1890-1895/1970/1975 MHz

B. Due Diligence

8. Potential bidders are reminded that private and common carrier

fixed microwave services (``FMS'') operating in the 1850-1990 MHz band

(and other bands) are being relocated to available frequencies in

higher bands or to other media. Bidders should become familiar with the

status of FMS operation and relocation, and applicable Commission rules

and orders, in order to make a reasoned, appropriate decision about

their participation in Auction No. 22 and their bidding strategy.

9. Potential bidders should be aware that certain applications

(including those for modification), waiver requests, petitions for

reconsideration and applications for review are pending before the

Commission that relate to C, D, E, and F block licensees. We note that

resolution of these matters could have an effect on the availability of

spectrum. In addition, while the Commission will continue to act on

pending applications, requests and petitions, some of these matters may

not be resolved by the time of the auction.

10. In notes to Attachment A of the full text of the Public Notice

(see ``Supplementary Information'' above), as corrected by the Public

Notice released January 21, 1999, the Commission identified certain

licenses that will be included in Auction No. 22 as being the subject

of pending judicial proceedings. The Commission emphasizes that the

auction of spectrum associated with those licenses, including spectrum

associated with defaulted licenses, will not be postponed until the

resolution of pending judicial appeals. It is in the public interest to

include those licenses in Auction No. 22, not only because to do so

will likely speed ultimate service to the public, but also because a

simultaneous auction of licenses for several markets will better

reflect the value of the licenses.

11. Moreover, licenses that are the subject of such proceedings

will be granted at the close of the auction in order to serve the

public interest in prompt implementation of PCS service, and the grant

of such licenses will be conditioned on the outcome of pending

proceedings. A license grant that is conditioned on the outcome of a

pending proceeding may be undone if the basis for the grant is reversed

as a result of the outcome of the proceeding. For this reason,

applicants have a responsibility to familiarize themselves with all

pending administrative or judicial proceedings that may affect the

licenses on which applicants might wish to bid.

12. Winning bidders of licenses subject to pending proceedings are

required to meet the normal payment and construction schedules

established by the Commission. The risk that a pending proceeding might

ultimately displace a winning bidder must be taken into account by

auction participants as they formulate and pursue their bidding

strategies. The Commission has not addressed directly whether, if an

applicant becomes ineligible to hold a license because the initiator of

a pending proceeding is successful, the Commission will return the

payments made for the license by the applicant. This issue will be

addressed separately.

13. 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 a future Public Notice, the Bureau will

provide the new location of the Commission's licensing database in the

Portals building.

14. In addition, potential bidders may search for information

regarding C, D, E, and F block licenses at the Universal Licensing

System site on the FCC Network. Accessing this network involves using

the FCC's Dial-Up Networking facility to dial (800) 844-2784. Once the

connection is established, users point their Internet browser at http:/

/wtbwww05.fcc.gov/ and click the License Search button. On the License

Search screen, choose Market-Based from the menu. On the License Search

criteria screen, specify the desired Market, Channel Block, or other

desired criteria, then click the Search button. Any telephone inquiries

regarding accessing this data should be directed to the Technical

Support Hotline at (202) 414-1250 (voice) or (202) 414-1255 (text

telephone (TTY)).

15. 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.

C. Participation

16. Those wishing to participate in the auction must:

Electronically submit a short form application (FCC Form

175) by February 12, 1999.

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Submit a sufficient upfront payment and an FCC Remittance

Advice Form (FCC Form 159) by March 1, 1999.

Comply with all provisions outlined in the Bidder

Information Package.

D. Prohibition of Collusion

17. To ensure the competitiveness and integrity 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. Bidders competing for the same license(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 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

Bureau, however, cautions 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. In Auction No. 22, for example, the

rule would apply to any applicants bidding for the same BTA. 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. By signing their FCC Form 175 short-form applications,

applicants are certifying their compliance with Section 1.2105(c). 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.

E. Bidder Information Package

18. More complete details about this auction are contained in a

Bidder Information Package. The Commission will provide one copy to

each applicant 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.

F. Relevant Authority

19. Prospective bidders must familiarize themselves thoroughly with

the Commission's Rules relating to Broadband PCS contained in Title 47,

Part 24, 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. Prospective bidders must also be

thoroughly familiar with the procedures, terms and conditions contained

in the C Block Second Report and Order and Further Notice of Proposed

Rule Making, 62 FR 55348, October 24, 1997; the C Block Reconsideration

Order, 63 FR 17111, April 8, 1998; the C Block Fourth Report and Order,

63 FR 50791, September 23, 1998; Part 24, Subparts A, B, C, E, H, and I

of the Commission's Rules concerning broadband PCS; and Part 1, Subpart

Q, of the Commission's Rules concerning competitive bidding

proceedings.

20. 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.

21. Bidder Alerts: The FCC 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.

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

some unscrupulous entrepreneurs may attempt to use Auction No. 22 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.

23. 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,

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the SEC, or the National Fraud Information Center at (800) 876-7060.

Consumers who have concerns about specific proposals regarding Auction

No. 22 may also call the FCC National Call Center at (888) CALL-FCC

((888) 225-5322).

G. National Environmental Policy Act (NEPA) Requirements

24. 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. These 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 Corps 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 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.

II. Eligibility

A. General Requirements

25. 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, as

discussed below in Part II.D., that they are 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.

B. Eligibility To Participate as an Entrepreneur (C and F Blocks)

(1) General Rule

26. Only entrepreneurs as defined in Section 24.709 of the

Commission's Rules may be licensed in the C and F blocks.

(2) Limited Exception for C Block

27. Applicants that participated in either of the prior C block

auctions, Auction No. 5 and Auction No. 10, will not be required for

Auction No. 22 to meet the revenue and asset requirements of Section

24.709 of the Commission's Rules for C block licenses.

C. Attribution Rules

28. The attribution rules set forth in Section 24.709 of the

Commission's Rules will apply to Auction No. 22.

D. Special C Block Eligibility Provisions Regarding Defaulters

29. The Commission decided in the C Block Fourth Report and Order

to limit participation in future C block auctions to applicants that

are not in default on any Commission licenses and are not delinquent on

any non-tax debt owed to any Federal agency. Accordingly, to be able to

bid on C block licenses, an applicant must certify on its FCC Form 175

application that it is not in default on any Commission licenses and

that it is not delinquent on any non-tax debt owed to any Federal

agency. In addition, to be able to bid on C block licenses, an

applicant must attach to its FCC Form 175 application a statement made

under penalty of perjury indicating whether or not the applicant has

ever been in default on any Commission licenses or has ever been

delinquent on any non-tax debt owed to any federal agency. C block

applicants must include this statement at Exhibit F of the FCC Form

175.

30. ``Former defaulters'' (i.e., applicants that have defaulted or

been delinquent in the past, but that have since paid all of their

outstanding non-tax debts and all associated charges or penalties) are

eligible to bid on C block licenses, provided that they are otherwise

qualified. However, as discussed below in Part III.C.(3), former

defaulters will be required to pay upfront payments that are fifty

percent more than the normal upfront payment amounts if they are

bidding on any C block licenses.

31. An applicant must state under penalty of perjury whether or not

any entity whose gross revenues and total assets are required to be

attributed to the applicant under Section 24.709 of the Commission's

Rules has ever been in default on any Commission licenses or has ever

been delinquent on any non-tax debt owed to any Federal agency. If any

entity whose gross revenues and total assets are required to be

attributed to the applicant under Section 24.709 of the Commission's

Rules has ever been in default on any Commission licenses or has ever

been delinquent on any non-tax debt owed to any Federal agency, the

applicant will be considered a ``former defaulter'' for purposes of the

upfront payment requirements for Auction No. 22.

32. We note, moreover, that if any entity whose gross revenues and

total assets are required to be attributed to the applicant under

Section 24.709 of the Commission's Rules is in default on any

Commission licenses or is delinquent on any non-tax debt owed to any

Federal agency at the time the applicant files its FCC Form 175

application, the applicant will not be able to make the certification

required by Section 1.2105(a)(2)(x) of the Commission's Rules and will

not be eligible to participate in Auction No. 22.

33. We will not consider an applicant in default or delinquent on a

Commission installment obligation for purposes of C block eligibility

and upfront payment rules unless and until the obligated entity has

allowed the Section 1.2110(f)(4)(ii) non-default period to pass without

having made the requisite payment.

E. Special C Block Eligibility Restriction Regarding Surrendered C

Block Licenses

34. C block licensees that surrendered C block licenses pursuant to

the disaggregation, prepayment, and/or amnesty/prepayment election

options the Commission made available in the C Block Second Report and

Order and Further Notice, as modified by the C Block Reconsideration

Order, are ineligible to reacquire the spectrum represented by their

surrendered licenses through participation in Auction No. 22, or by any

other means, for a period of two years from the start date of Auction

No. 22. This prohibition extends to qualifying members of the

licensee's control group, and their affiliates. See 47 CFR

24.709(b)(9)(ii). Licensees that surrendered licenses pursuant to the

``pure amnesty'' election option remain eligible to reacquire the

spectrum represented by those surrendered licenses in Auction No. 22 or

through a secondary market transaction.

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F. General Eligibility Criteria Regarding Small and Very Small

Businesses

35. The Commission has adopted special small business provisions

for the C and F blocks in order to promote and facilitate the

participation of small businesses in auctions of C and F block licenses

and in the provision of broadband PCS.

(1) Determination of Revenues

36. To determine which entities qualify as very small businesses or

small businesses, the Commission will consider the gross revenues of

the applicant, its affiliates, persons or entities holding interests in

the applicant and their affiliates on a cumulative basis and aggregated

subject to the exceptions set forth in Section 24.709(b) of the

Commission's Rules. 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.

(2) Very Small or Small Business Consortia

37. 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 Section

24.720(b)(1) or (2). Thus, each consortium member must disclose its

gross revenues along with those of its affiliates and persons or

entities holding interests in the consortium member and their

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

38. 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 meet the gross revenue and total

asset limitations of Section 24.709 of the Commission's Rules, and that

they satisfy the eligibility requirements to qualify as very small

businesses or small businesses (or consortia of very small or small

businesses) for this auction. See 47 CFR 24.709 and 1.2105.

Specifically, for Auction No. 22, applicants applying to bid for C and/

or F block licenses as very small or small businesses (or consortia 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 Sections 1.2105(a), 1.2112(b), and 24.709. 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 interests; and (4) the affiliates of the applicant's

attributable interests. 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, this information must be provided for each consortium

member.

G. Bidding Credits

39. Qualifying applicants in Auction No. 22 are eligible for a

bidding credit on C and F block licenses that represents the amount by

which a bidder's winning bids are discounted. The size of the bidding

credit depends on the average gross revenues for the preceding three

years of the bidder, its affiliates, and persons or entities that hold

interests in the bidder and their affiliates:

A bidder with average gross revenues not to exceed $40

million for the preceding three years receives a 15 percent discount on

its winning bids for C and F block licenses; and,

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 C and F block licenses.

40. Bidding credits are not cumulative: qualifying applicants

receive either the 15 percent or the 25 percent bidding credit, but not

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

consortium of very small or small businesses) (including calculation of

average gross revenues) are set forth in 47 CFR 24.720(b).

41. Bidders for C or F block licenses should note that transfer and

assignment restrictions and 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 and 24.714(a)(3).

There are no installment payment plans in Auction No. 22.

III. Pre-auction Procedures

A. Short-Form Application (FCC Form 175)--Due February 12, 1999

(1) Electronic Filing

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

first electronically submit an FCC Form 175 application. 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.

Applications may be filed at any time from January 25, 1999 until 5:30

p.m. ET on February 12, 1999. Late applications will not be accepted.

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 of February 12, 1999. Applicants must

press the ``Submit Form 175'' button on the ``Submit'' page of the

electronic form to successfully submit their FCC Form 175s. Information

about installing and running the FCC Form 175 application software is

included in Attachment C of the full text of the Public Notice (see

SUPPLEMENTARY INFORMATION above). 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 through Friday.

(2) Completion of the FCC Form 175

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

complete all items on the FCC Form 175. Instructions for completing the

FCC Form 175 are in Attachment B of the full text of the Public Notice

(see Supplementary Information above).

(3) Electronic Review of FCC Form 175

44. 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 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. For details, see Attachment C of

the full text of the Public Notice (see SUPPLEMENTARY INFORMATION

above).

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B. Application Processing and Minor Corrections

45. After the FCC Form 175 filing deadline has passed, the FCC will

process all timely submitted 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 incomplete applications which have

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

corrected applications. After the FCC Form 175 filing deadline has

passed, applicants cannot 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 March 1, 1999

(1) FCC Form 159

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

upfront payment accompanied by an FCC Remittance Advice Form (FCC Form

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

FCC Form 159. Filers of the FCC Form 175 will have access to an

electronic version of FCC Form 159 after completing the FCC Form 175.

Earlier versions of this form will not be accepted. 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 of the full text of the Public Notice (see

SUPPLEMENTARY INFORMATION above), and will also be included in the

Bidder Information Package.

(2) Making Auction Payments by Wire Transfer

47. All upfront payments must be received at Mellon Bank in

Pittsburgh, PA, by 6:00 p.m. ET on March 1, 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. 22 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 March 1,

1999 deadline will result in dismissal of the application and

disqualification from participation in the auction.

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 910-0198

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

``AUCTIONPAY''

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

PAYMENT TYPE CODE (enter ``APCU'')

FCC CODE 1 (same as FCC Form 159, block 23A: ``22'')

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

LOCKBOX NO. #358410

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

payments for this auction; BNF or Lockbox numbers from previous

auctions should not be used. 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. 22.'' Bidders may confirm receipt of

their upfront payment by contacting their sending financial

institution.

(3) Amount of Upfront Payment

48. The upfront payment amount for each C, D, E, and F block

license to be auctioned in Auction No. 22 will be calculated as

$0.06*MHz*BTA Population (``Pops''). The upfront payment amount for

each license has been calculated and is listed in Attachment A of the

full text of the Public Notice (see Supplementary Information above).

49. In accordance with the C Block Fourth Report and Order, and as

proposed in Procedural Public Notice I and II, the upfront payment

amount for ``former defaulters'' applying to bid on any C block

licenses will be fifty percent more than the normal amount required to

be paid. (In other words, ``former defaulters'' must pay an extra fifty

percent in upfront payment to receive the same number of bidding units

that ``non-former defaulters'' receive for the basic upfront payment.

See Attachment A of the full text of the Public Notice (see

SUPPLEMENTARY INFORMATION above). Any former defaulter that applies to

bid on ``all markets,'' or designates D, E, or F block licenses in

addition to at least one C block license will be subject to the higher

upfront payment requirement. Former defaulters that apply to bid only

on D, E, or F block licenses will not be subject to the higher upfront

payment requirement.

50. In Auction No. 22, the amount of the upfront payment submitted

by a bidder will determine the initial maximum eligibility (as measured

in bidding units) for each bidder. Please note that upfront payments

are not attributed to specific licenses. For Auction No. 22, 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, unless the bidder is a ``former defaulter.'' A

``former defaulter'' will be required to pay $37,500 (or 1.5 times the

basic upfront payment) for 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 that the applicant has

selected on FCC Form 175, but rather to cover the maximum number of

bidding units that are associated with licenses the bidder wishes to

place bids on and hold high bids on at any given time.

51. 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.

52. 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.

53. Former defaulters that apply to bid on any C block licenses

should calculate their upfront payment for all licenses by multiplying

the number of bidding units they wish to purchase by 1.5. The 50

percent increase calculation has been included on the spreadsheet in

Attachment A of the full text of the Public Notice. To calculate the

number of bidding units to assign to former defaulters applying to bid

on any C block licenses, the Commission will divide the upfront payment

received by

[[Page 6898]]

1.5 and round the result up to the nearest bidding unit.

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

54. The Commission will use wire transfers for all Auction No. 22

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 to the attention of Linwood Jenkins

or Geoffrey Idika, at (202) 418-2843. Please include the following

information: (1) Name of Bank; (2) ABA Number; (3) Account Number to

Credit; (4) Correspondent Bank (if applicable); (5) ABA Number; (6)

Account Number; and (7) 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.) Eligibility for refunds is discussed

below in Part V.D.

D. Auction Registration

55. 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.

56. 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.

57. 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, March 17, 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 that 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

58. Qualified bidders must purchase remote electronic bidding

software for $175.00 by March 9, 1999. (Auction software is tailored to

a specific auction, so software from prior auctions will not work for

Auction No. 22.) A software order form is included in the upcoming

Bidder Information Package.

F. Auction Seminar

59. On February 3, 1999, the FCC will sponsor a seminar for Auction

No. 22 at the Park Hyatt Washington, 1201 24th Street, NW, Washington,

DC 20037, (202) 789-1234. The seminar will provide attendees with

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

remote bidding software, and the C, D, E, and F broadband PCS blocks

and auction rules. To register, complete the registration form to be

included in the 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

60. All applicants whose FCC Form 175 has been accepted for filing

will be eligible to participate in a mock auction beginning March 18,

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.

IV. Auction Event

61. The first round of the auction will begin on March 23, 1999.

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

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

start of the auction.

A. Auction Structure

(1) Simultaneous Multiple Round Auction

62. As proposed in Procedural Public Notices I and II, the

Commission will use a simultaneous multiple-round design for Auction

No. 22.

(2) Maximum Eligibility and Activity Rules

63. For Auction No. 22, the amount of the upfront payment submitted

by a bidder will determine the initial maximum eligibility (as measured

in bidding units) for each bidder. As stated above in Part III.C.(3),

``former defaulters'' must pay a fifty percent higher upfront payment

amount. There is no provision for increasing a bidder's maximum

eligibility during the course of an auction, as described below in Part

IV.A.(4).

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 a specific percentage of their maximum

eligibility during each round of the auction.

65. 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 (see Part IV.B.(3),

below). 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. These procedures have proven successful in maintaining the

pace of previous auctions, as discussed below in Parts IV.A.(4) and

(5).

(3) Activity Rule Waivers and Reducing Eligibility

66. 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.

67. 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

[[Page 6899]]

no activity rule waivers available; or (2) the bidder overrides the

automatic application of a waiver by reducing eligibility, thereby

meeting the minimum requirements.

68. 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 as described below in Part

IV.A.(4). Once eligibility has been reduced, a bidder will not be

permitted to regain its lost bidding eligibility.

69. 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

70. Auction No. 22 will be composed of three stages, which are each

defined by an increasing activity rule. The FCC reserves the discretion

to further alter the activity percentages before and/or during the

auction. These procedures have proven successful in maintaining the

proper pace in previous auctions.

71. 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).

72. 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).

73. 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-forty-ninths (50/49).

Caution: Since activity requirements increase in each auction

stage, bidders must carefully check their current activity during

the bidding period 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 re-verify 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

74. Auction No. 22 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 less than

ten percent of the licenses being auctioned (as measured in bidding

units). However, the Commission 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.

(6) Auction Stopping Rules

75. 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. The Commission retains the

discretion to close the auction for all licenses 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 high bidder. Thus,

absent any other bidding activity, a bidder placing a new bid on a

license for which it is the standing high bidder would not keep the

auction open under this stopping rule procedure. We will notify bidders

in advance of implementing any change to our simultaneous stopping

rule.

76. The Commission 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).

77. Further, in its discretion, the Commission 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. As the Commission

plans to invoke this option only in extreme circumstances, we will not

routinely request bidder input prior to doing so; however, we remind

bidders that they are free to make their views known to the Commission

throughout the auction, and that the Suggestion Box in the Automated

Auction System affords them one possible avenue of communication.

(7) Auction Delay, Suspension, or Cancellation

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

Commission 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 Commission, 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

[[Page 6900]]

cause the Commission to delay or suspend the auction. We emphasize that

exercise of this authority is solely within the discretion of the

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

situations in which bidders may wish to apply their activity rule

waivers.

79. We will provide bidders with reasonable notice either by Public

Notice or by announcement over the Automated Auction System prior to

recommencing the auction. Although we will not seek comment prior to

recommencing the auction, we reiterate that bidders may make their

views known to the Commission throughout the auction and, if they

choose, may use the Suggestion Box in the Automated Auction System for

such communication.

B. Bidding Procedures

(1) Round Structure

80. 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.

81. 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

82. We adopt minimum opening bids for each of the licenses in

Auction No. 22 that are reducible at the discretion of the Commission.

This discretion will allow the Commission flexibility to adjust the

minimum opening bids if circumstances warrant. We emphasize, however,

that such discretion will be exercised, if at all, 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

Commission will not entertain any bidder requests to reduce the minimum

opening bid on specific licenses.

83. Because all four spectrum blocks are being auctioned at the

same time, under the same general conditions, we believe that it is

appropriate to use a common baseline to establish the minimum opening

bid formulae for all of the licenses in the auction. The net high bids

from prior C block auctions provide the most comprehensive broadband

PCS baseline. We, therefore, have decided to base the minimum opening

bids for each license available in Auction No. 22, including D, E, and

F block licenses, on the most recent net high bid for the C block

license in the same BTA.

84. We adopt the following formulae for calculating minimum opening

bids:

1. 30 MHz licenses--5 percent of most recent net high bid for C block

licenses in same BTA

2. 15 MHz licenses--2.5 percent of most recent net high bid for C block

licenses in same BTA

3. 10 MHz licenses--1.6 percent of most recent net high bid for C block

licenses in same BTA

These formulae will apply without regard to the upfront payment

amount required for the same license in Auction No. 22. The specific

minimum opening bid for each license available in Auction No. 22 is set

forth in Attachment A of the full text of the Public Notice (see

Supplementary Information above).

(3) Minimum Accepted Bids

85. 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 Auction No. 22, we will utilize an

exponential smoothing methodology (further explained in the Bidder

Information Package) to calculate minimum bid increments. We retain the

discretion to change the minimum bid increment if we determine that

circumstances so dictate.

(4) High Bids

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

the FCC 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

87. 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.

88. 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. 22.

89. 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.

90. The bidding software requires bidders 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 their registration materials. Bidders are strongly

encouraged to download and print bid confirmations after they submit

their bids.

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

for Auction No. 22 allows bidders to place multiple increment bids to

increase their 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.

92. 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 per 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

[[Page 6901]]

bid increment, a bidder will enter ``1'' in the bid increment

multiplier column and press submit.

93. 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 a license on which 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.

(6) Bid Removal and Bid Withdrawal

a. Procedures

94. 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. These

procedures will enhance bidder flexibility and may serve to expedite

the course of the auction.

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

the next round, however, 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. The

procedure for withdrawing a bid and receiving a withdrawal confirmation

is essentially the same as the bidding procedure described above in

Part IV.B.(4).

96. The Commission will 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.

97. 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,

in the case of tie bids, equal to, 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.

b. Calculation

98. 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. No

withdrawal payment will be assessed if a subsequent bid exceeds the

withdrawn bid.

(7) Round Results

99. 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. Reports reflecting bidders' identities and bidder

identification numbers for Auction No. 22 will be available before and

during the auction. Thus, bidders will know in advance of this auction

the identities of the bidders against which they are bidding.

(8) Auction Announcements

100. 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

101. As noted above in Part III.B., 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 Audrey Bashkin, Auctions and Industry Analysis Division),

briefly summarizing the changes. Questions about other changes should

be directed to Audrey Bashkin of the FCC Auctions and Industry Analysis

Division at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

102. 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 bid withdrawal 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 bid withdrawal

amounts due under 47 CFR 1.2104(g), as discussed above in Part

IV.B.(6). (Upfront payments are applied first to satisfy any bid

withdrawal liability, before being applied toward down payments.)

B. Long-Form Application

104. 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 license won in Auction No.

22. Under Section 1.2112(b) of the Commission's Rules, winning bidders

for C or F block licenses that are small businesses or very small

businesses (or consortia of small businesses or very small businesses)

must include an exhibit demonstrating their eligibility for bidding

credits. Further filing instructions will be provided to auction

winners at the close of the auction.

C. Default and Disqualification

105. 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). Under Section 1.2109 of the Commission's Rules, 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. 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

[[Page 6902]]

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.

D. Refund of Remaining Upfront Payment Balances

106. All applicants that submitted upfront payments for a license

in Auction No. 22 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.

107. 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, SW, Washington, DC 20554. 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.

Note: Refund processing generally takes up to two weeks to

complete. Bidders with questions about refunds should contact

Linwood Jenkins or Tim Dates at (202) 418-1995.

Federal Communications Commission.

Mark R. Bollinger,

Deputy Chief, Auctions and Industry Analysis Division, Wireless

Telecommunications Bureau.

[FR Doc. 99-3334 Filed 2-10-99; 8:45 am]

BILLING CODE 6712-01-P