[Federal Register: December 6, 2002 (Volume 67, Number 235)]
[Notices]
[Page 72683-72689]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06de02-75]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-02-48-A (Auction No. 48); DA 02-1441]
Auction of Licenses for the Lower and Upper Paging Bands
Scheduled for May 13, 2003; Comment Sought on Reserve Prices or Minimum
Opening Bids and Other Auction Procedures
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the auction of 8,874 licenses in the
lower paging bands (35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460 MHz) and
1,328 licenses in the upper paging bands (929-931 MHz) scheduled to
commence on May 13, 2003. This document also seeks comment on reserve
prices or minimum opening bids and other auction procedures.
DATES: Comments are due on or before December 13, 2002, and reply
comments are due on or before December 18, 2002.
ADDRESSES: Comments and reply comments must be sent by electronic mail
to auction48@fcc.gov.
FOR FURTHER INFORMATION CONTACT: For legal questions: Rosemary Cabral
at (202) 418-0660. For general auction questions: Roy Knowles at (717)
338-2888 or Barbara Sibert at (717) 338-2888. For service rule
questions: Bettye Woodward at (202) 418-1345.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 48
Comment Public Notice released on November 7, 2002. The complete text
of the Auction No. 48 Comment Public Notice is available for public
inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC, 20554. The Auction No. 48 Comment Public
Notice may also be purchased from the Commission's duplicating
contractor, Qualex International, Portals II, 445 12th Street, SW.,
Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile
202-863-2898, or via e-mail qualexint@aol.com. The complete list of
licenses available for this auction will be provided in electronic
format only, available as ``Attachment A'' to the Auction No. 48
Comment Public Notice at http://wireless.fcc.gov/auctions/48/.
1. By the Auction No. 48 Comment Public Notice, the Wireless
Telecommunications Bureau (``Bureau'') announces the auction of 8,874
licenses in the lower paging bands (35-36 MHz, 43-44 MHz, 152-159 MHz,
454-460 MHz) and 1,328 licenses in the upper paging bands (929-931 MHz)
scheduled to commence on May 13, 2003 (``Auction No. 48''). This
auction will include licenses that remained unsold from a previous
auction or were defaulted on by a winning bidder in a previous auction.
Due to the large volume of licenses in Auction No. 48, the complete
list of licenses available for this auction will be provided in
electronic format only, available as ``Attachment A'' to the Auction
No. 48 Comment Public Notice at http://wireless.fcc.gov/auctions/48/.
2. In the Paging Reconsideration Order, 64 FR 33762 (June 24,
1999), the Commission concluded that the lower bands licenses should be
awarded in each of the 175 geographic areas known as Economic Areas
(EAs), and the upper band licenses should be awarded in each of the 51
geographic areas known as Major Economic Areas (MEAs). These EAs and
MEAs both encompass the United States, Guam and Northern Mariana
Islands, Puerto Rico and the United States Virgin Islands, and American
Samoa.
3. The following tables contain the Block/Frequency Cross-Reference
List for the paging bands:
[[Page 72684]]
35 MHz Lower Bands Unpaired Paging Channels
----------------------------------------------------------------------------------------------------------------
Block Block Block Block
(license Frequency (license Frequency (license Frequency (license Frequency
suffix) suffix) suffix) suffix)
----------------------------------------------------------------------------------------------------------------
CA 35.19-35.21 CE 35.29-35.31 CI 35.45-35.47 CM 35.57-35.59
CB 35.21-35.23 CF 35.33-35.35 CJ 35.49-35.51 CN 35.59-35.61
CC 35.23-35.25 CG 35.37-35.39 CK 35.53-35.55 CO 35.61-35.63
CD 35.25-35.27 CH 35.41-35.43 CL 35.55-35.57 CP 35.65-35.67
----------------------------------------------------------------------------------------------------------------
43 MHz Lower Bands Unpaired Paging Channels
----------------------------------------------------------------------------------------------------------------
Block Block Block Block
(license Frequency (license Frequency (license Frequency (license Frequency
suffix) suffix) suffix) suffix)
----------------------------------------------------------------------------------------------------------------
DA 43.19-43.21 DE 43.29-43.31 DI 43.45-43.47 DM 43.57-43.59
DB 43.21-43.23 DF 43.33-43.35 DJ 43.49-43.51 DN 43.59-43.61
DC 43.23-43.25 DG 43.37-43.39 DK 43.53-43.55 DO 43.61-43.63
DD 43.25-43.27 DH 43.41-43.43 DL 43.55-43.57 DP 43.65-43.67
----------------------------------------------------------------------------------------------------------------
152 MHz and 158 MHz Lower Bands Unpaired Paging Channels
----------------------------------------------------------------------------------------------------------------
Block (license Block (license
suffix) Frequency suffix) Frequency
----------------------------------------------------------------------------------------------------------------
EA 152.230-152.250 EC 158.090-158.110
EB 152.830-152.850 ED 158.690-158.710
----------------------------------------------------------------------------------------------------------------
152 MHz Lower Bands Paired Paging Channels
----------------------------------------------------------------------------------------------------------------
Block Block
(license Frequency (license Frequency
suffix) suffix)
----------------------------------------------------------------------------------------------------------------
FA 152.015-152.045 / 158.475-158.505 FJ 152.555-152.585 / 157.815-157.845
FB 152.045-152.075 / 158.505-158.535 FK 152.585-152.615 / 157.845-157.875
FC 152.075-152.105 / 158.535-158.565 FL 152.615-152.645 / 157.875-157.905
FD 152.105-152.135 / 158.565-158.595 FM 152.645-152.675 / 157.905-157.935
FE 152.135-152.165 / 158.595-158.625 FN 152.675-152.705 / 157.935-157.965
FF 152.165-152.195 / 158.625-158.655 FO 152.705-152.735 / 157.965-157.995
FG 152.195-152.225 / 158.655-158.685 FP 152.735-152.765 / 157.995-158.025
FH 152.495-152.525 / 157.755-157.785 FQ 152.765-152.795 / 158.025-158.055
FI 152.525-152.555 / 157.785-157.815 FR 152.795-152.825 / 158.055-158.085
----------------------------------------------------------------------------------------------------------------
454 MHz Lower Bands Paired Paging Channels
----------------------------------------------------------------------------------------------------------------
Block Block
(license Frequency (license Frequency
suffix) suffix)
----------------------------------------------------------------------------------------------------------------
GA 454.0125-454.0375 / 459.0125-459.0375 GN 454.3375-454.3625 / 459.3375-459.3625
GB 454.0375-454.0625 / 459.0375-459.0625 GO 454.3625-454.3875 / 459.3625-459.3875
GC 454.0625-454.0875 / 459.0625-459.0875 GP 454.3875-454.4125 / 459.3875-459.4125
GD 454.0875-454.1125 / 459.0875-459.1125 GQ 454.4125-454.4375 / 459.4125-459.4375
GE 454.1125-454.1375 / 459.1125-459.1375 GR 454.4375-454.4625 / 459.4375-459.4625
GF 454.1375-454.1625 / 459.1375-459.1625 GS 454.4625-454.4875 / 459.4625-459.4875
GG 454.1625-454.1875 / 459.1625-459.1875 GT 454.4875-454.5125 / 459.4875-459.5125
GH 454.1875-454.2125 / 459.1875-459.2125 GU 454.5125-454.5375 / 459.5125-459.5375
GI 454.2125-454.2375 / 459.2125-459.2375 GV 454.5375-454.5625 / 459.5375-459.5625
GJ 454.2375-454.2625 / 459.2375-459.2625 GW 454.5625-454.5875 / 459.5625-459.5875
GK 454.2625-454.2875 / 459.2625-459.2875 GX 454.5875-454.6125 / 459.5875-459.6125
GL 454.2875-454.3125 / 459.2875-459.3125 GY 454.6125-454.6375 / 459.6125-459.6375
GM 454.3125-454.3375 / 459.3125-454.3375 GZ 454.6375-454.6625 / 459.6375-459.6625
----------------------------------------------------------------------------------------------------------------
[[Page 72685]]
929-931 MHz Upper Bands Paging Channels
----------------------------------------------------------------------------------------------------------------
Block Block Block Block
(license Frequency (license Frequency (license Frequency (license Frequency
suffix) suffix) suffix) suffix)
----------------------------------------------------------------------------------------------------------------
A 929.0125 AA 931.0125 AN 931.3375 BA 931.6625
B 929.1125 AB 931.0375 AO 931.3625 BB 931.6875
C 929.2375 AC 931.0625 AP 931.3875 BC 931.7125
D 929.3125 AD 931.0875 AQ 931.4125 BD 931.7375
E 929.3875 AE 931.1125 AR 931.4375 BE 931.7625
F 929.4375 AF 931.1375 AS 931.4625 BF 931.7875
G 929.4625 AG 931.1625 AT 931.4875 BG 931.8125
H 929.6375 AH 931.1875 AU 931.5125 BH 931.8375
I 929.6875 AI 931.2125 AV 931.5375 BI 931.8625
J 929.7875 AJ 931.2375 AW 931.5625 BJ 931.9625
K 929.9125 AK 931.2625 AX 931.5875 BK 931.9875
L 929.9625 AL 931.2875 AY 931.6125 ......... ..............
931.3125 AM ................ AZ 931.6375
----------------------------------------------------------------------------------------------------------------
Note: For Auction No. 48, licenses are not available in every
block listed in the tables. The complete list of licenses available
for Auction No. 48 will be provided in electronic format only,
available as ``Attachment A'' to the Auction No. 48 Comment Public
Notice at http://wireless.fcc.gov/auctions/48/.
4. The Balanced Budget Act of 1997 requires the Commission to
``ensure that, in the scheduling of any competitive bidding under this
subsection, an adequate period is allowed * * * before issuance of
bidding rules, to permit notice and comment on proposed auction
procedures * * *.'' Consistent with the provisions of the Balanced
Budget Act and to ensure that potential bidders have adequate time to
familiarize themselves with the specific rules that will govern the
day-to-day conduct of an auction, the Commission directed the Bureau,
under its existing delegated authority, to seek comment on a variety of
auction-specific procedures prior to the start of each auction. The
Bureau seeks comment on the following issues relating to Auction No.
48.
I. Auction Structure
A. Simultaneous Multiple Round (SMR) Auction Design
5. The Bureau proposes to award the licenses included in Auction
No. 48 in a simultaneous multiple-round auction. As described further,
this methodology offers every license for bid at the same time with
successive bidding rounds in which bidders may place bids. The Bureau
seeks comment on this proposal.
B. Upfront Payments and Initial Maximum Eligibility
6. The Bureau has been delegated authority and discretion to
determine an appropriate upfront payment for each license being
auctioned, taking into account such factors as the population in each
geographic license area, and the value of similar spectrum. As
described further, the upfront payment is a refundable deposit made by
each bidder to establish eligibility to bid on licenses. Upfront
payments related to the specific spectrum subject to auction protect
against frivolous or insincere bidding and provide the Commission with
a source of funds from which to collect payments owed at the close of
the auction.
7. The Bureau proposes to make the upfront payments equal to the
minimum opening bids, which are established based on similar facts as
described in section II.B. The specific upfront payments for each
license are set forth in the list of licenses available for Auction No.
48 (``Attachment A''), available with the Auction No. 48 Comment Public
Notice at http://wireless.fcc.gov/auctions/48/. The Bureau seeks
comment on this proposal.
8. The Bureau further propose that the amount of the upfront
payment submitted by a bidder will determine the number of bidding
units on which a bidder may place bids. This limit is a bidder's
``maximum initial eligibility.'' Each license is assigned a specific
number of bidding units equal to the upfront payment, listed in the
license inventory available for Auction No. 48 (``Attachment A''),
available with the Auction No. 48 Comment Public Notice at http://wireless.fcc.gov/auctions/48/
, on a bidding unit per dollar basis. This
number does not change as prices rise during the auction. A bidder's
upfront payment is not attributed to specific licenses. Rather, a
bidder may place bids on any combination of licenses as long as the
total number of bidding units associated with those licenses does not
exceed its maximum initial eligibility. Eligibility cannot be increased
during the auction. Thus, in calculating its upfront payment amount, an
applicant must determine the maximum number of bidding units it may
wish to bid on (or hold high bids on) in any single round, and submit
an upfront payment covering that number of bidding units. The Bureau
seeks comment on this proposal.
C. Activity Rules
9. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively on a
percentage of their maximum bidding eligibility during each round of
the auction rather than wait until the end to participate. A bidder
that does not satisfy the activity rule will either lose bidding
eligibility in the next round or must use an activity rule waiver (if
any remain).
10. The Bureau proposes to divide the auction into three stages,
each characterized by an increased activity requirement. The auction
will start in Stage One. The Bureau proposes that the auction generally
will advance to the next stage (i.e., from Stage One to Stage Two, and
from Stage Two to Stage Three) when the auction activity level, as
measured by the percentage of bidding units receiving new high bids, is
approximately twenty percent or below for three consecutive rounds of
bidding. However, the Bureau further proposes that it the discretion to
change stages unilaterally by announcement during the auction. In
exercising this discretion, the Bureau will consider 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. The Bureau seeks comment on these
proposals.
11. For Auction No. 48, the Bureau proposes the following activity
requirements:
[[Page 72686]]
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 representing 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).
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).
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\).
12. The Bureau seeks comment on these proposals. Commenters that
believe these activity rules should be modified should explain their
reasoning and comment on the desirability of an alternative approach.
Commenters are advised to support their claims with analyses and
suggested alternative activity rules.
D. Activity Rule Waivers and Reducing Eligibility
13. 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. Activity
waivers can be either proactive or automatic and are principally a
mechanism for auction participants to avoid the loss of auction
eligibility in the event that exigent circumstances prevent them from
placing a bid in a particular round.
Note: Once a proactive waiver is placed during a round, that
waiver cannot be unsubmitted.
14. The FCC Automated 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 bidding period 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.
Note: If a bidder has no waivers remaining and does not satisfy
the required activity level, its current eligibility will be
permanently reduced, possibly eliminating the bidder from the
auction.
15. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding period by using the reduce eligibility function in
the bidding system. In this case, the bidder's eligibility is
permanently reduced to bring the bidder into compliance with the
activity rules as described. Once eligibility has been reduced, a
bidder will not be permitted to regain its lost bidding eligibility.
16. 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
system) during a bidding period in which no bids or withdrawals 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.
17. The Bureau proposes that each bidder in Auction No. 48 be
provided with five activity rule waivers that may be used at the
bidder's discretion during the course of the auction as set forth. The
Bureau seeks comment on this proposal.
E. Information Relating to Auction Delay, Suspension, or Cancellation
18. The Bureau proposes 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 efficient 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 Bureau, and its use is not intended
to be a substitute for situations in which bidders may wish to apply
their activity rule waivers. The Bureau seeks comment on this proposal.
F. Information Available to Bidders During the Course of the Auction
19. In the Paging Second Report and Order, 62 FR 11616 (March 12,
1997), the Commission concluded that, due to the large number of
licenses to be auctioned, limiting the disclosure of information to
bidders during the course of paging auctions (e.g., revealing only high
bids and total number of bids on each license and withholding bidder
identities) might help to speed the pace of the auctions. In the Paging
Reconsideration Order, the Commission directed the Bureau to seek
further comment on this issue. Based on its experience in Auctions No.
26 and No. 40, in which the information was disclosed, the Bureau
tentatively concludes that it is unnecessary to withhold bidder
identities in Auction No. 48. The Bureau seeks comment on this
tentative conclusion. In addition, as in Auctions No. 26 and No. 40,
the Bureau proposes to disclose all information relating to the bids
during Auction No. 48 after each round of bidding closes, including all
bids and withdrawals placed in each round, the identity of the bidder
placing each bid or withdrawal, and the net and gross amounts of each
bid or withdrawal. The Bureau seeks comment on this proposal.
II. Bidding Procedures
A. Round Structure
20. The Commission will conduct Auction No. 48 over the Internet.
Telephonic Bidding will also be available. As a contingency, the FCC
Wide Area Network, will be available as well. The telephone number
through which the backup FCC Wide Area Network may be accessed will be
announced in a later public notice. Full information regarding how to
establish such a connection, and related charges, will be provided in
the public notice announcing details of auction procedures.
21. The initial bidding schedule will be announced in a public
notice to be released at least one week before the start of the
auction, and will be included in the registration mailings. The
simultaneous multiple round format will consist of sequential bidding
rounds, each followed by the release of round results. Details
regarding the
[[Page 72687]]
location and format of round results will be included in the same
public notice.
22. The Bureau 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 Bureau 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. The Bureau
seeks comment on this proposal.
B. Reserve Price or Minimum Opening Bid
23. The Balanced Budget Act calls upon the Commission to prescribe
methods for establishing a reasonable reserve price or a minimum
opening bid when FCC licenses are subject to auction, unless the
Commission determines that a reserve price or minimum opening bid is
not in the public interest. Consistent with this mandate, the
Commission has directed the Bureau to seek comment on the use of a
minimum opening bid and/or reserve price prior to the start of each
auction.
24. Normally, a reserve price is an absolute minimum price below
which an item will not be sold in a given auction. Reserve prices can
be either published or unpublished. A minimum opening bid, on the other
hand, is the minimum bid price set at the beginning of the auction
below which no bids are accepted. It is generally used to accelerate
the competitive bidding process. Also, the auctioneer often has the
discretion to lower the minimum opening bid amount later in the
auction. It is also possible for the minimum opening bid and the
reserve price to be the same amount.
25. In light of the Balanced Budget Act's requirements, the Bureau
proposes to establish minimum opening bids for Auction No. 48. The
Bureau believes a minimum opening bid, which has been utilized in other
auctions, is an effective auction tool.
26. Because multiple licenses in the same geographic area are being
auctioned at the same time, under the same general conditions, the
Commission believes that it is appropriate to use a common baseline to
establish the minimum opening bid formula for all the licenses in the
auction. The gross high bids from the prior Lower and Upper Paging
Bands Auction (Auction No. 40) provide the most comprehensive paging
baseline. Therefore, the Bureau proposes to base the minimum opening
bid for each license available in Auction No. 48 on the average of the
corresponding gross high bids received in Auction No. 40, as follows:
[sbull] For a license being auctioned by MEA, the minimum opening
bid will be 20% of the average gross high bid received in Auction No.
40 in the same MEA.
[sbull] For a license being auctioned by EA, the minimum opening
bid will be 20% of the average gross high bid received in Auction No.
40 in the same EA.
The Commission will set a ``floor'' for minimum opening bids at
$500 for licenses in both the upper paging bands (929-931 MHz) and the
lower paging bands (35-36 MHz, 43-44 MHz, 152-159 MHz, and 454-460
MHz).
27. This formula is intended to apply to all geographic paging
licenses in Auction No. 48, and takes into account considerations
discussed. The specific proposed minimum opening bid for each license
available in Auction No. 48 is set forth in the list of licenses
provided in electronic format as ``Attachment A'' of the Auction No. 48
Comment Public Notice at http://wireless.fcc.gov/auctions/48/. Comment
is sought on this proposal.
28. If commenters believe that these minimum opening bids will
result in substantial numbers of unsold licenses, or are not reasonable
amounts, or should instead operate as reserve prices, they should
explain why this is so, and comment on the desirability of an
alternative approach. Commenters are advised to support their claims
with valuation analyses and suggested reserve prices or minimum opening
bid levels or formulas. In establishing the minimum opening bids, the
Bureau particularly seeks comment on such factors as the amount of
spectrum being auctioned, levels of incumbency, the availability of
technology to provide service, the size of the geographic service
areas, issues of interference with other spectrum bands and any other
relevant factors that could reasonably have an impact on valuation of
the paging bands. Alternatively, comment is sought on whether,
consistent with the Balanced Budget Act, the public interest would be
served by having no minimum opening bid or reserve price.
C. Minimum Acceptable Bids and Bid Increments
29. In each round, eligible bidders will be able to place bids on a
given license in any of nine different amounts. The Automated Auction
System interface will list the nine acceptable bid amounts for each
license. Until a bid has been placed on a license, the minimum
acceptable bid for that license will be equal to its minimum opening
bid. In the rounds after an acceptable bid is placed on a license, the
minimum acceptable bid for that license will be equal to the standing
high bid plus the defined increment.
30. For Auction No. 48, the Bureau proposes to set the defined
increment for each license based on a percentage of the standing high
bid on the license or, if no bid has been placed on the license, a
percentage of the minimum opening bid for the license. The defined
increment will be calculated as follows. Presuming, for example, that
the percentage being used is 20 percent, we will multiply the standing
high bid (or, if no standing high bid exists for the particular
license, the minimum opening bid) by 1.2. (If the percentage being used
is 30 percent, we would multiply by 1.3, etc.) The product will be
rounded as follows: amounts below $1,000 will be rounded to the nearest
$10; amounts above $1,000 but below $10,000 will be rounded to the
nearest $100; and amounts above $10,000 will be rounded to the nearest
$1,000. The defined increment then will be determined by subtracting
the standing high bid (or, if applicable, the minimum opening bid) from
the rounded result. At the start of the auction, the Bureau proposes to
use 20 percent to calculate the defined increment. The Bureau also
proposes to retain discretion to change the percentage used to
calculate the defined increment if we determine that circumstances so
dictate. Further, the Bureau proposes to retain discretion to set a
floor for the increment used to calculate the minimum acceptable bid at
an absolute dollar amount.
31. In addition, the Bureau proposes that it have discretion to use
a smaller defined increment to calculate acceptable bids higher than
the minimum acceptable bid. The smaller defined increment would be
calculated using a smaller percentage than the percentage used to
calculate the defined increment that sets the minimum acceptable bid.
For example, 20 percent might be used to calculate the defined
increment for the minimum acceptable bid and 10 percent might be used
to calculate the smaller defined increment used to calculate higher
acceptable bids. In all other respects, the smaller defined increment
would be calculated in exactly the manner described for the initial
defined increment, including rounding.
32. For example, the Bureau could calculate bids using 20 percent
to calculate the defined increment for the minimum acceptable bid and
10 percent to calculate the smaller defined increment. Assuming that
the standing
[[Page 72688]]
high bid on a given license is $50,000, in the next round,
Defined Increment=Rounded (Standing High Bid * 1.2)--Standing High Bid
=Rounded ($50,000 * 1.2)--$50,000
=Rounded ($60,000)--$50,000
=$60,000--$50,000
=$10,000
Minimum Acceptable Bid=Standing High Bid + Defined Increment
=$50,000 + $10,000
=$60,000
Smaller Defined Increment=Rounded (Standing High Bid * 1.1)--Standing
High Bid
=Rounded ($50,000 * 1.1)--$50,000
=Rounded ($55,000)--$50,000
=$55,000--$50,000
=$5,000
One Increment Higher Than Minimum Acceptable Bid=Minimum Acceptable Bid
+ (Smaller Defined Increment * 1)
=$60,000 + ($5,000 * 1)
=$60,000 + $5,000
=$65,000
Two Increments Higher Than Minimum Acceptable Bid=Minimum Acceptable
Bid + (Smaller Defined Increment * 2)
=$60,000 + ($5,000 * 2)
=$60,000 + $10,000
=$70,000
33. This procedure would enable bidders unwilling to raise the
standing high bid by twice the defined increment to place bids higher
than the minimum acceptable bid. Thus, in the example, a bidder wanting
to bid above the minimum acceptable bid but unwilling to raise the
standing high bid of $50,000 by twice the defined increment of $10,000
($20,000 or 40 percent) would have the flexibility to bid $65,000,
raising the standing high bid by $15,000.
34. In the case of a license for which the standing high bid has
been withdrawn, the minimum acceptable bid will equal the second
highest bid received for the license. The additional bid amounts are
calculated using the defined increment, as stated.
35. In summary, the Bureau proposes it have discretion at any time
during the auction to change the initial 20 percent used to calculate
the defined increment and/or to set an absolute dollar amount floor for
the increment used to calculate the minimum acceptable bid. The Bureau
also proposes that it have additional discretion to calculate the
minimum acceptable bid using one percentage and to calculate higher
acceptable bids using another percentage, as described. The Bureau's
decision to exercise its discretion with regard to minimum acceptable
bids and bid increments would be announced via the Automated Auction
System. The Bureau seeks comment on these proposals.
D. High Bids
36. At the end of a bidding round, the high bids will be determined
based on the highest gross bid amount received for each license. In the
event of identical high bids on a license in a given round (i.e., tied
bids), the Bureau proposes to use a random number generator to select a
high bid from among the tied bids. The remaining bidders, as well as
the high bidder, will be able to submit a higher bid in a subsequent
round. If no bidder submits a higher bid in a subsequent round, the
high bid from the previous round will win the license. If any bids are
received on the license in a subsequent round, the high bid will again
be determined on the highest gross bid amount received for the license.
The Bureau seeks comment on this proposal.
37. A high bid will remain the high bid until there is a higher bid
on the same license at the close of a subsequent round. A high bid from
a previous round is sometimes referred to as a ``standing high bid.''
Bidders are reminded that standing high bids confer activity credit.
E. Information Regarding Bid Withdrawal and Bid Removal
38. For Auction No. 48, the Bureau proposes the following bid
removal and bid withdrawal procedures. Before the close of a bidding
period, a bidder has the option of removing any bid placed in that
round. By using the remove selected bids function in the bidding
system, 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 a withdrawal payment. Once a round closes, a bidder may no
longer remove a bid.
39. A high bidder may withdraw its standing high bids from previous
rounds using the withdrawal function in the bidding system. A high
bidder that withdraws its standing high bid from a previous round is
subject to the bid withdrawal payment provisions of the Commission
rules. The Bureau seeks comment on these bid removal and bid withdrawal
procedures.
40. In the Part 1 Third Report and Order, 63 FR 770 (January 7,
1998), the Commission explained that allowing bid withdrawals
facilitates efficient aggregation of licenses and the pursuit of
efficient backup strategies as information becomes available during the
course of an auction. The Commission noted, however, that, in some
instances, bidders may seek to withdraw bids for improper reasons. The
Bureau, therefore, has discretion, in managing the auction, to limit
the number of withdrawals to prevent any bidding abuses. The Commission
stated that the Bureau should assertively exercise its discretion,
consider limiting the number of rounds in which bidders may withdraw
bids, and prevent bidders from bidding on a particular market if the
Bureau finds that a bidder is abusing the Commission's bid withdrawal
procedures.
41. Applying this reasoning, the Bureau proposes to limit each
bidder in Auction No. 48 to withdrawing standing high bids in no more
than two rounds during the course of the auction. To permit a bidder to
withdraw bids in more than two rounds would likely encourage insincere
bidding or the use of withdrawals for anti-competitive purposes. The
two rounds in which withdrawals are utilized will be at the bidder's
discretion; withdrawals otherwise must be in accordance with the
Commission's rules. There is no limit on the number of standing high
bids that may be withdrawn in either of the rounds in which withdrawals
are utilized. Withdrawals will remain subject to the bid withdrawal
payment provisions specified in the Commission's rules. The Bureau
seeks comment on this proposal.
F. Stopping Rule
42. The Bureau has discretion ``to establish stopping rules before
or during multiple round auctions in order to terminate the auction
within a reasonable time.'' For Auction No. 48, the Bureau proposes to
employ a simultaneous stopping rule approach. A simultaneous stopping
rule means that all licenses remain open until bidding closes
simultaneously on all licenses.
43. Bidding will close simultaneously on all licenses after the
first round in which no new acceptable bids, proactive waivers, or
withdrawals are received. Thus, unless circumstances dictate otherwise,
bidding will remain open on all licenses until bidding stops on every
license.
44. However, the Bureau proposes to retain the discretion to
exercise any of the following options during Auction No. 48:
i. Utilize a modified version of the simultaneous stopping rule.
The modified stopping rule would close the auction for all licenses
after the first round in which no bidder submits a proactive waiver,
withdrawal, or a new bid on any license on which it is not the standing
high bidder. Thus, absent any
[[Page 72689]]
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 modified stopping rule. The Bureau further seeks comment on
whether this modified stopping rule should be used at any time or only
in stage three of the auction.
ii. Keep the 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. The activity rule, therefore, will
apply as usual, and a bidder with insufficient activity will either
lose bidding eligibility or use a remaining activity rule waiver.
iii. Declare that the auction will end after a specified number of
additional rounds (``special stopping rule''). If the Bureau invokes
this special stopping rule, it will accept bids in the specified final
round(s) only for licenses on which the high bid increased in at least
one of a specified preceding number of rounds.
45. The Bureau proposes to exercise these options only in certain
circumstances, such as, for example, where the auction is proceeding
very slowly, there is minimal overall bidding activity, or it appears
likely that the auction will not close within a reasonable period of
time. Before exercising these options, the Bureau is likely to attempt
to increase the pace of the auction by, for example, 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. The Bureau seeks comment on
these proposals.
III. Conclusion
46. Comments are due on or before December 13, 2002, and reply
comments are due on or before December 18, 2002. Because of the
disruption of regular mail and other deliveries in Washington, DC, the
Bureau requires that all comments and reply comments be filed
electronically. Comments and reply comments must be sent by electronic
mail to the following address: auction48@fcc.gov. The electronic mail
containing the comments or reply comments must include a subject or
caption referring to Auction No. 48 Comments. The Bureau requests that
parties format any attachments to electronic mail as Adobe[reg]
Acrobat[reg] (pdf) or Microsoft[reg] Word documents. Copies of comments
and reply comments will be available for public inspection during
regular business hours in the FCC Public Reference Room, Room CY-A257,
445 12th Street, SW., Washington, DC 20554. In addition, the Bureau
requests that commenters fax a courtesy copy of their comments and
reply comments to the attention of Kathryn Garland at (717) 338-2850.
Parties that have previously filed comments or reply comments for
Auction No. 48 need not refile them.
47. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte
rules. Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentations must contain summaries of the
substance of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. Other rules pertaining to
oral and written ex parte presentations in permit-but-disclose
proceedings are set forth in Sec. 1.1206(b) of the Commission's rules.
Federal Communications Commission.
Margaret Wiener,
Chief, Auctions & Industry Analysis Division.
[FR Doc. 02-30500 Filed 12-5-02; 8:45 am]
BILLING CODE 6712-01-P