Document text
NCAT;
COA
fe PUBLIC NOTICE
Federal Communications Commission News Media Information 202 / 418-0500
445 12" St., S.W. Internet: http://www.fcc.gov
Washington, D.C. 20554 Ta eee
DA 12-1865
November 21, 2012
AUCTION OF FM BROADCAST CONSTRUCTION PERMITS
RESCHEDULED FOR APRIL 23, 2013
NOTICE AND FILING REQUIREMENTS, MINIMUM OPENING BIDS, UPFRONT
PAYMENTS, AND OTHER PROCEDURES FOR AUCTION 94
AU Docket No. 12-239
TABLE OF CONTENTS
Heading Paragraph #
I. (GENERAL, INFORMATION: ssiciiasigesiiviiatinaiii inane dai OEN E EENE N EEES 1
A. Tait OM CH Mis osc ceeeweceseth ea shecesaansbanades See cep shan dundee baucoespcnscyad ee Latiesadhapscvadsadanensdsahehsadaestutsdoubceeupiacuanss doves 1
1. ‘Construct om Permits: 1m AuCton: 94 6.235 siscsececsnsoesseyseceisedaisnedtestessien fete snsstusteendatesdeachanesencyseeceds 3
B Rules and tise] arm iis 245 exseeests secs raene eeen insna E aE EE RS E AONE 6
l: Relevant Authority cu sf 2c send ctn aner erratas eczesivbouedds evpestuiea shi sadentevtabisestipadenpasa duscsbseadc 6
2. Prohibited Communications and Compliance with Antitrust Laws .........ceseseeeeeeeeteneeereeees 8
a; Entities Subjéct.to Section 1.2105 ssscat. snide cine i ae aia 9
b. Prohibition Applies Until Down Payment Deadline... eee eeeseeeeeeeeeteeeeeeeeeeeeeaeeeees 14
C: Prohibited Communications... c2s. ioe scieescpeks asi eot oleh aes tiaaedeh ba icine bev ud erabai 15
d. Disclosure of Bidding Agreements and Arrangement............:sseceeeeeeeeeeseneeereeeeeeeeerees 17
es Section 1.2105(c) Certificati.. isinsin iri ciesstceccsecsonedcensaceceser 20
f. Duty to Report Prohibited Communications...........:ccecccecescesceseesseeeceeceeceseeseeseeseeneeeeeees 21
g. Procedure for Reporting Prohibited Communications ............ssseceeeeeeseeeeeseneeeeeeeeeeeeeeees 24
h. Winning Bidders Must Disclose Terms of Agreement ............seseceseeeseeteteeteeeeeeeeeeeees 27
i. Additional Information Concerning Rule Prohibiting Certain Communications ............. 28
je Antitrust Laws) s.scccccsiacs ct cectscsebenats detisvsis ennsdeiraeaventishvectiabe sauce srt Cokes S boys SEFUE ENCE reei 29
3. Due Dil Bene ..ccsesis seieesivseencision ech onena Eana a TIE sE a eee aibin ai nea ieee 31
4. Use of Integrated Spectrum Auction System .........ccccccceccescesseesecsececeeceeceeeeeecaecaecneeeseseeeeeeeaes 38
S. ccs VU Gara kes citrate erect treet eerie rete acre ere rey reer reenter erevrtepercepren ert ertrrrete E rereee 39
6. Environmental Review Requirement ..........:cccecsesesesseseeeceeeseeeeeeeeeeeceecneeseeeceeseeseesaeeatereeeents 41
(O EEOSE E AE EE ETET E E T 42
1. Auction Start Dates: aN a En ae EEEE dias E E A eS 42
Ne Tora Tle E a E E E handed +4
3. Bidding Methodology. siccccsicsins sistent spiserom ieser oiread oe iekea eier aeeoa 45
4. Pre-Auction Dates and Deadlines sciite iseia sekspoes aeaeaie aeie e esi 46
5. Requirements for ParncipatioM:s istrine es anea a ra ti susdbed she nsoertuan ated aay) 47
Il. SHORT-FORM APPLICATION (FCC FORM 175) REQUIREMENTS seese 48
A. General Information Regarding Short-Form Applications .........cecccssseeeeceeeeeeeeesceeceeceereeeateeeetenes 48
Bs Permit Select ois: a: ienen aise E EE E Walaa eases 53
Cy New Entrant Bidding Credit sce: cscccasisceneds oadeesentiecsens dies. cates dovel evi ean ein aae eoan nire EEren es 56
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D; Application Requirements. sisene aE aE EE E EEE s 63
Ls. Bidding (Credits :.:s2::sstieesecccendicvniensiace stneisssaetensate sudessnntbecl eee usoei ten iedee eE riei EEan reies 64
2; Installment: Payments: cccsicc: csscsasiusersiecs eonesissaeseasabecnvisos gets euebensecetcgensce vatbsaneetenersdraccenabdssegedoevbs 66
E.. Ownership Disclosure Regiments; isss niri aniani ai a it 67
F. Provisions Regarding Former and Current Defaulters ..........s.nssssnsssesseeesensrsessreesesresesetsesessrsessessene 69
G. Optional Applicant Status Identification... eecececseeceeeesceeceeeeeeeceecseceeceseeeeecnecseceeeeseteneeaeearensenes 75
H. Noncommercial Educational Status Election .........cccceccecscsessesseeeceeceecseeeeeeeecnecseceseeseeeeeeaesaeeeseees 76
I. Minor Modifications to Short-Form Applications .........cccccccccseeseeseeseeeeeeeeesecaeeceeseeeeeeeeeeecaeeeeeaees 1T
J. Maintaining Current Information in Short-Form Applications...........ccccscseseeceeseeeeeeeseteneeeeeerenenes 83
I; PRE-AUCTION PROCEDURES sc. sicdcsusatencccanikecisechercts ort en decd orien iaaa er aieka aek EREE 84
A. Online Auction Tutorial — Available January 28, 2013 .....ccececceccccsecseceeeeecesceeeeececsecaecneeeeceneeeeeenes 84
B. Short-Form Applications — Due Prior to 6:00 p.m. ET on February 6, 2013.. 87
C. Application Processing and Minor Corrections .........ccscceccsssesseesesceececeeeeeeeeeeceecaeceseeseteneeaeeareesenes 90
D., Upfront Payments = Due March 18, 2013 -sisirin inanin aiiis 94
1. Making Upfront Payments by Wire Transfer... ee eeeeesesseeeeeeeseeseeseeeseeeseeseaeeesseeeeeeeaeeeeas 95
2 FECT Io Meena he Taney aCe er eee eer renee ee sere eee 99
3. Upfront Payments and Bidding Eligibility 00.0.0... cccccsceseeseeeeeeeeeeececeseeneeeeseeeeseceeneeeaeens 100
E. Applicant’s Wire Transfer Information for Purposes of Refunds of Upfront Payments ............. 106
F; Atton Repistrati om ssie er poni or En NEEE S rE nee SRE E Er NEENA EEEE ENE 107
G. Remote: Electronig Bidding o.s5.:iescisceesssgsiestestinsnectsnedeatoutansnsseszescavastssdessiaasdecgesteseanctsiesecsdenieszesias 111
H. Mock Avictioni=A prall 19: 2013 r a omea araa rE e eaea lagaasd EEEE aN E AES o aE a O Eaei Esasi 113
TV: AUCTION giere N heated heh O A S A ai oa EEA Se a ae 114
A. AUCHOM Structites: .acsaieldadehinindaoinn mada eae 115
1. Simultaneous Multiple Round Auction .......ccececeecesessesseeseseeeeeeeesceseeeceveeseseeeeeeaeeeeeeeaeees 115
2. Eligibility and Activity Rules .........ccccccccecccscessessecsececescesceseeeeecaeceeceecneceseeesecaecaeeneseeeeseeeseeaees 116
3. Activity Rüle Walvers. c.cesccccsesccactcuszscedueeedcess hi enno a E a i eae aE a EEE 119
4. Auction Stopping Rules... ce cecccccccecsececcesceseeesecseceeceeceeceseeeeecaeceecesesseaeseeecaecaeeeseeeeseenseeaees 124
5. Auction Delay, Suspension, or Cancellation ...........cccccccsccscceceeseeeeeeeecseceeceaeeeeeeeeeecaecaeeneeeaeens 127
B: Bidding Procedures isiccs.ve.cssesiecdl nnne a aise ait AE ERE EEEE beanie 129
12 Round Structure missieri re naain aa A E E REE a ata 129
2. Reserve Price and Minimum Opening Bids ............ccceccescesceesecseeeeceeeeeceseeeeecaeeaeeneceseeseeneeeaes 131
32 Bid Amounts jiicctyeisvaiciisi aidklcactiesi ena isstetes oust aus EE EEEE aE E E aE anemia alte 134
4. Provisionally Winning BidS siscscsccosesdccetestzssecscescscets cctaza cecesenastancteitedadceiess scauan ced a E 141
Jee BIJINE esses cst edeent e satanic cies easustats jes E tenes ssp ee os tasee E esac 144
6. Bid Removal and Bid Withdrawal... ccccccesceseeeseeeessecsecceeseeeeeeeceecaecsaeeaeeeeseeeeeesaeeneeeatens 150
Te Round RESUS: vinenn ae aa Resa I he 152
8; Auction Announcements ..isaicniddiieniiddelihcetin i E E ee eee 154
W. POST-AUCTION PROCEDURES | sssiitiesidisidecriathideciincd dldediiardaanianiacdaonisiaiaed 155
PAS MO Wi PA VAISS aeree e eaae eee a ENET A E E G E ESTES 156
B: Emal Payments isean E E E E E E 157
C. Long-Form Application (FCC Form 301)........seeseessesessseseresestsessesesesesroeserteereseeseseresesroeseneessseresees 158
D. Default and Disqualification 0.0... cesssessesseccesceecseesseeceeceeceecaeceseceecsecaeseesesaeceesaecaeeeresaasaeeatenees 159
E: Refund of Remaining Upfront Payment Balance... eeeesessseeceecsecseeeeeesseceecaeceeeerseeaeeaecaeeeees 162
VI; CONTACT INFORMATION | snd taisietiiacstesisi oan ene a SES EEEa SEAE Ra EEE a SENE ESE 164
Attachment A: Construction Permits to Be Auctioned.ssssiissrsississrisersirssserssstisiisedestisesssssvsnseisusrspusesisie iš A-1
Attachment B: Short-Form Application (FCC Form 175) Filing Instructions...........ccccccseeseeseeeeeeeeeeees B-1
Attachment C: Auction-Specific Instructions for FCC Remittance Advice (FCC Form 159)........... C-1
Attachment D: Summary Listing of Judicial, Commission and Bureau Documents Addressing
Application of the Ruling Prohibiting Certain Communications, 47 C.F.R. § 1.2105(C)..... eee D-1
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I. GENERAL INFORMATION
A. Introduction
1. By this Public Notice, the Wireless Telecommunications Bureau (“WTB”) and the Media
Bureau (“MB”) (collectively, the “Bureaus”) establish the procedures and minimum opening bid amounts
for the upcoming auction of certain FM broadcast construction permits and announce a revised auction
schedule. This auction, which is designated as Auction 94, is now scheduled to start on April 23, 2013.
This Public Notice provides an overview of the procedures, terms and conditions governing Auction 94
and the post-auction application and payment processes.
2. On September 11, 2012, in accordance with section 309(j)(3) of the Communications Act
of 1934, as amended (the “Act”),' the Bureaus released a public notice seeking comment on competitive
bidding procedures to be used in Auction 94.” Six parties submitted seven comments in response to the
Auction 94 Comment Public Notice.
1. Construction Permits in Auction 94
3. Auction 94 will offer 112 construction permits in the FM broadcast service. The
construction permits to be auctioned, which are listed in Attachment A, are for 112 new FM allotments,
including 25 construction permits that were offered but not sold or were defaulted upon in prior auctions.
These construction permits are for vacant FM allotments, reflecting FM channels assigned to the Table of
FM Allotments (“Table”) pursuant to the Commission’s established rulemaking procedures, and are
designated for use in the indicated communities.
4. Attachment A to this Public Notice reflects changes to the list of construction permits that
were proposed for this auction in the Auction 94 Comment Public Notice. As discussed below, we
remove from this auction five construction permits that were listed in the Auction 94 Comment Public
Notice: (1) MM-FM1005-A on Channel 235A at Newark, Maryland; (2) MM-FM1022-C2 on Channel
295C2 at Arlington, Oregon; (3) MM-FM1050-A on Channel 291A at Rocksprings, Texas; (4) MM-
FM1056-A on Channel 233A at Chincoteague, Virginia; and (5) MM-FM477-A on Channel 277A at
Baggs, Wyoming.
5. Two commenters seek removal of certain permits from the list of permits to be offered in
Auction 94. Mullaney Engineering, Inc. (“MET”) and Ted W. Austin, Jr. state that certain allotments are
not in the Table of FM Allotments and thus should be removed.” Their arguments are based on allotment
policies established in the 2006 Community of License R&O which streamlined the process for broadcast
stations changing their communities of license.° In that order, the Commission announced that the FM
! 47 U.S.C. § 309(j)(3)(E)(i) (requirement to seek comment on proposed auction procedures); see also 47 U.S.C.
§ 309(j)(4)(F) (authorization to prescribe reserve price or minimum bid); 47 C.F.R. §§ 1.2104(c) and (d).
? “Auction of FM Broadcast Construction Permits Scheduled for March 26, 2013; Comment Sought on Competitive
Bidding Procedures For Auction 94,” AU Docket No. 12-239, Public Notice, DA 12-1411 (rel. Sept. 11, 2012)
(“Auction 94 Comment Public Notice”). A summary of this public notice was published at 77 Fed. Reg. 60690-95
(Oct. 4, 2012).
3 Radio Pacific, Inc., Hatfield & Dawson Consulting Engineers, LLC,, Mark Jones, Ted W. Austin, Jr., Mullaney
Engineering, Inc., and Fletcher, Heald & Hildreth, P.L.C. filed comments. Mullaney Engineering, Inc., and Bay
View Broadcasting, Inc. filed reply comments. These comments and reply comments are available under
proceeding 12-239 in the Commission’s Electronic Comment Filing System (“ECFS”).
447 C.F.R. § 73.202(b).
5 MEI Comments at 2; Austin Comments at 3.
ê Revision of Procedures Governing Amendments to FM Table of Allotments and Changes of Community of
License in the Radio Broadcast Services, Report and Order, 21 FCC Red 14212 (2006), recon. pending
(“Community of License R&O”).
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Table of Allotments would contain only vacant allotments and that authorized full-power non-reserved
band FM facilities already occupying allotments would be listed only in the Media Bureau’s Consolidated
Data Base System (“CDBS”).’ The Commission reasoned that, while vacant allotments serve as
placeholders to prevent interference to future facilities, existing facilities would be adequately protected
by their authorizations so such “occupied” allotments had no need to be protected by inclusion in the FM
Table of Allotments.’ However, the Community of License R&O inadvertently omitted from the revised
FM Table of Allotments a few vacant allotments. Media Bureau’s Audio Division previously reinstated
two of these allotments -- MM-FM957-C2 (Rule, Texas) and MM-FM1034-C3 (Crowell, Texas) -- into
the Table and a summary of that order has been published in the Federal Register.” Because these
allotments have been reinstated in the revised Table, they will therefore remain in Auction 94. Five
others — MM-FM1005-A (Newark, Maryland); MM-FM1022-C2 (Arlington, Oregon); MM-FM1050-A
(Rocksprings, Texas); MM-FM1056-A (Chincoteague, Virginia); and MM-FM477-A (Baggs, Wyoming)
— were allotted and included in the Table of FM Allotments prior to the Community of License R&O,'°
but were inadvertently omitted from the revised Table of FM Allotments as described in an appendix to
that order. Thus, permits for these five allotments will be removed from Auction 94, and will be offered
in an auction after the Media Bureau reinstates these allotments in the Table."
6. MEI also insists that nine additional permits for allotments should be removed from
Auction 94.’ In this category are nine allotments that were removed by the Community of License R&O
but which subsequently became vacant and were reinstated in the Table: MM-FM869-C0 (Port Lions,
Alaska); MM-FM874-C3 (Lake Village, Arkansas); MM-FM911-C3 (Bunker, Missouri); MM-FM914-A
(Drew, Mississippi); MM-FM915-A (Mound Bayou, Mississipp1); MM-FM916-A (Vardaman,
Mississippi); MM-FM921-C1 (Cloudcroft, New Mexico); MM-FM946-C3 (Cisco, Texas); and MM-
FM960-C2 (Shamrock, Texas). The Media Bureau reinstated these allotments in October 2011, and
there are no pending petitions for reconsideration or applications for review of this action.'? The
reinstatement of these nine allotments is therefore final, and they will be offered in Auction 94.
7. Finally, MEI states that six allotments -- MM-FM975-C1 (McNary, Arizona); MM-
FM982-A (Amboy, California); MM-FM1006-A (Evart, Michigan); MM-FM1007-A (Ludington,
Michigan); MM-FM1036-A (Early, Texas); and MM-FM1043-A (Markham, Texas) -- are being offered
1 Jd.
8 Id. at 14221-22.
?’ See Crowell, Knox City, Rule, and Quanah, Texas, Report and Order, 25 FCC Red 996 (2010), 77 FR 66743
(Nov. 7, 2012).
10 Community of License R&O, 21 FCC Red at 14222.
' Because the Baggs, WY permit is being removed from the list of permits to be offered in Auction 94, we need not
reach the merits of Mr. Austin’s separate contention that the Baggs permit should be removed pending the outcome
of his Application for Review of the denial of his request for waiver of the down payment deadline for winning
bidders in Auction 62. See Austin Comments at 1-3. We note, however, that the Commission and courts have
consistently rejected requests to stay Commission auctions based on matters pending before the Commission. See,
e.g., Alpine Request for Stay of Auction 78 for the Broadband PCS C Block Licenses in the San Luis Obispo, CA
and the Santa Barbara-Santa Maria, CA Basic Trading Areas, Order, 23 FCC Red 10,485, 10,488 § 18
(WTB/ASAD 2008) (“Alpine”) (denying request to stay auction or remove from auction licenses on which requester
was formerly authorized to operate during pendency of petition for reconsideration seeking reinstatement of
licenses).
12 MEI Comments at 5.
3 EM Table of Allotments, (Various Locations), Order, 26 FCC Red 14276, 14278 (MB 2011).
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Federal Communications Commission DA 12-1865
“despite the fact that each was subject to a long form 301 following an auction.”'* The FCC Form 301
applications filed in connection with each of these six allotments were not filed by the winning bidder
“following an auction,” contrary to MEI’s assertion. Rather, FCC Form 301 applications for these
permits were appropriately filed in the rulemaking proceeding by either the original allotment proponent,
or by the party submitting a prevailing counterproposal pursuant to the procedures established by the
Community of License R&O.'° Thus, MEI is incorrect in its assertion that these six allotments had been
“automatically removed” from the Table. These six construction permits will therefore be offered for the
first time in Auction 94.
8. MEI, in its Comments, also requests that the staff supplement Attachment A to disclose
“any instance where the high bidder of the allotment is required to reimburse another licensee for the
reasonable costs associated with a channel change(s) required in order to create a (sic) the allotment
which is being offered at auction herein.”'° We decline this request as unnecessary. We have
consistently advised potential applicants in prior Public Notices announcing broadcast auction procedures,
as we do in this Public Notice, of the need to perform due diligence before applying to bid at auction. We
stress that in conducting their due diligence applicants should review all Commission orders underlying
permits of interest, as these orders may describe information unique to the allotment such as site
restrictions or expense reimbursement requirements.'’ We believe that potential applicants are best
positioned to assess the relevance and importance of information gathered as part of their due diligence
efforts. Moreover, we have consistently stated that the Commission makes no representations or
warranties about the use of this spectrum for particular services.
14 MEI Comments at 4-5. MEI goes on to state that “[t]he fact that CDBS shows that a file number with the prefix
“‘BNPH?’ is proof of the long form being filed and thus, by definition the channel-city combination was automatically
removed from the table per [the Community of License R&O].” Id.
15 All proponents filing a petition for rulemaking to add a new allotment to the Table, whether as an original
proposal or as a counterproposal, must simultaneously file an FCC Form 301 application specifying the proposed
facility. Community of License R&O, 21 FCC Red at 14223 4] 18 (requiring allocations proponent simultaneously to
file a Form 301 application with its petition for rule making and the appropriate fee). Therefore, the pendency of a
long-form in connection with an allotment does not necessarily mean that a construction permit has been won at
auction. See McNary, Arizona, Notice of Proposed Rule Making, 24 FCC Red 2229, 2229 nn.1-2 (MB 2009)
(allotment MM-FM975-C1, McNary, Arizona); Amboy, California, Notice of Proposed Rule Making, 25 FCC Red
2774, 2774 nn. 1-2 (MB 2010) (allotment MM-FM982-A, Amboy, California); Evart, Ludington, Pentwater, and
Manistee, Michigan, Notice of Proposed Rule Making, 23 FCC Red 4055, 4055 nn.1-2, 4 (MB 2008) (allotments
MM-FM1006-A, Evart, Michigan and MM-FM1007-A, Ludington, Michigan); Lake Brownwood and Early, Texas,
Report and Order, 26 FCC Red 2437, 2437 n.2 (MB 2011) (allotment MM-FM1036-A, Early, Texas); and
Markham, Ganado, and Victoria, Texas, Report and Order, 25 FCC Red 836, 837 (MB 2008) (allotment MM-
FM1043-A, Markham, Texas; while not cited in the Report and Order, counter-proponent Fort Bend Media
Broadcasting Company (“Fort Bend”) noted in its Comments and Counterproposal that it had simultaneously filed
an FCC Form 301 application, File No. BNPH-20070928ABI. Comments and Counterproposal of Fort Bend in MB
Docket No. 07-163 at 3 (Sept. 28, 2007)).
16 MEI Comments at 1.
1 See infra paragraph 35. See also Auction of FM Broadcast Construction Permits Scheduled for September 1,
2009; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for
Auction 79, Public Notice, 24 FCC Rcd 4445, 4454 (MB/WTB 2009); Auction of FM Broadcast Construction
Permits Rescheduled for April 27, 2011; Notice and Filing Requirements, Minimum Opening Bids, Upfront
Payments, and Other Procedures for Auction 91, Public Notice, 25 FCC Rcd 16787, 16797-98 (MB/WTB 2010);
Auction of FM Broadcast Construction Permits Scheduled for March 27, 2012; Notice and Filing Requirements,
Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 93, Public Notice, 26 FCC Red
15484, 15494-95 (MB/WTB 2011).
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Federal Communications Commission DA 12-1865
9. Pursuant to the policies established in the Broadcast First Report and Order, applicants
may apply for any vacant FM allotment listed in Attachment A.'* When two or more short-form
applications (FCC Form 175) specifying the same FM allotment are accepted for filing, mutual
exclusivity exists for auction purposes”? and that construction permit must be awarded by competitive
bidding procedures.” Once mutual exclusivity exists for auction purposes, even if only one applicant for
a particular construction permit submits an upfront payment, that applicant is required to submit a bid in
order to obtain the permit.’
B. Rules and Disclaimers
1. Relevant Authority
10. Prospective applicants must familiarize themselves thoroughly with the Commission’ s
general competitive bidding rules, including recent amendments and clarifications, as well as Commission
decisions in proceedings regarding competitive bidding procedures, application requirements, and
obligations of Commission licensees.” Broadcasters should also familiarize themselves with the
Commission’s FM broadcast service rules contained in 47 C.F.R. §§ 73.201 — 73.333 and 73.1001 —
73.5009. Prospective bidders must also be familiar with the broadcast auctions and competitive bidding
rules contained in 47 C.F.R. §§ 1.2101 — 1.2112 and 73.5000 — 73.5009. All bidders must also be
thoroughly familiar with the procedures, terms and conditions contained in this Public Notice, the Auction
94 Comment Public Notice, the Broadcast First Report and Order,” the Broadcast First Reconsideration
'8 See Implementation of Section 309(j) of the Communications Act — Competitive Bidding for Commercial
Broadcast and Instructional Television Fixed Service Licenses, MM Docket No. 97-234, First Report and Order,
FCC 98-194, 13 FCC Red 15920, 15923-25 11 7-12, 15974 1 142 (1998) (“Broadcast First Report and Order”),
Memorandum Opinion and Order, FCC 99-74, 14 FCC Red 8724 (1999) (“Broadcast First Reconsideration
Order”), Memorandum Opinion and Order, FCC 99-201, 14 FCC Red 12541 (1999), aff'd, Orion Communications
Ltd. v. FCC, 221 F.3d 196, No. 98-1424, slip op. (D.C. Cir. June 13, 2000) (unpublished opinion available at 2000
WL 816046) (D.C. Cir.), aff'd, Orion Communications Ltd. v. FCC, 213 F.3d 761 (D.C. Cir. 2000). Attachment A
also lists the reference coordinates for each vacant FM allotment. With regard to the FM service, the Commission
gave applicants the opportunity to submit a set of preferred site coordinates as an alternative to the reference
coordinates for the vacant FM allotment upon which they intend to bid. Further information regarding preferred site
coordinates may be found in Attachment B to this public notice. See Broadcast First Report and Order, 13 FCC
Rcd at 15974-75 { 142 & n.153.
O Broadcast First Report and Order, 13 FCC Red at 15978-80 {11 149-154. See also Implementation of Section
309(j) of the Communications Act — Competitive Bidding, PP Docket No. 93-253, Second Report and Order, FCC
94-61, 9 FCC Red 2348, 2376 $ 165 (1994) (“Competitive Bidding Second Report and Order”).
” Broadcast First Report and Order, 13 FCC Red at 15923-25 44 7-12.
a Any applicant that submits a short-form application but fails to timely submit an upfront payment will retain its
status as an applicant in Auction 94 and will remain subject to the Commission’s rules prohibiting certain
communications, 47 C.F.R. §§ 1.2105(c) and 73.5002(d), but, having purchased no bidding eligibility, will not be
eligible to bid. See Broadcast First Report and Order, 13 FCC Rcd at 15979-80 ¥ 153.
2 See, e.g., Amendment of Part 1 of the Commission's Rules — Competitive Bidding Procedures, WT Docket No.
97-82, Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further
Notice of Proposed Rule Making, FCC 00-274, 15 FCC Red 15293 (2000) (“Part 1 Fifth Report and
Order”)(modified by Erratum, DA 00-2475 (rel. Nov. 3, 2000)); Seventh Report and Order, FCC 01-270, 16 FCC
Red 17546 (2001) (“Part 1 Seventh Report and Order”); Eighth Report and Order, FCC 02-34, 17 FCC Red 2962
(2002); Second Order on Reconsideration of the Third Report and Order and Order on Reconsideration of the Fifth
Report and Order, FCC 03-98, 18 FCC Red 10180 (2003); Second Order on Reconsideration of the Fifth Report
and Order, FCC 04-295, 20 FCC Red 1942 (2005).
3 Broadcast First Report and Order, 13 FCC Red at 15920.
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Federal Communications Commission DA 12-1865
Order,” the New Entrant Bidding Credit Reconsideration Order,” the NCE Second Report and Order,
and the NCE Memorandum Opinion and Third Order on Reconsideration.”°
11. The terms contained in the Commission’s rules, relevant orders, and public notices are
not negotiable. The Commission may amend or supplement the information contained in our public
notices at any time, and will issue public notices to convey any new or supplemental information to
applicants. It is the responsibility of all applicants to remain current with all Commission rules and with
all public notices pertaining to this auction. Copies of most auctions-related Commission documents,
including public notices, can be retrieved from the FCC Auctions Internet site at
http://wireless.fcc.gov/auctions. Additionally, documents are available for public inspection and copying
between 8:00 a.m. and 4:30 p.m. Eastern Time (ET) Monday through Thursday or 8:00 a.m. to 11:30 a.m.
ET Fridays at the FCC Reference Information Center, 445 12th Street, SW, Room CY-A257,
Washington, DC 20554. Documents may also be purchased from the Commission’s duplicating
contractor, Best Copy and Printing, Inc. (“BCPI’’), 445 12th Street, SW, Room CY-B402, Washington,
DC 20554, 800-378-3160 or at http://www.bcpiweb.com.””
2. Prohibited Communications and Compliance with Antitrust Laws
12. To ensure the competitiveness of the auction process, section 1.2105(c) of the
Commission’s rules prohibits auction applicants for construction permits in any of the same geographic
license areas from communicating with each other about bids, bidding strategies, or settlements unless
such applicants have identified each other on their short-form applications (FCC Form 175) as parties
with whom they have entered into agreements pursuant to section 1.2105(a)(2)(viii).”*
a. Entities Subject to Section 1.2105
13. Section 1.2105(c)’s prohibition on certain communications will apply to any applicants
that submit short-form applications seeking to participate in a Commission auction for construction
permits in the same geographic license area. Thus, unless they have identified each other on their short-
form applications as parties with whom they have entered into agreements under section
1.2105(a)(2)(viil), applicants for any of the same geographic license areas must affirmatively avoid all
communications with or disclosures to each other that affect or have the potential to affect bids or bidding
strategy.” In some instances, this prohibition extends to communications regarding the post-auction
market structure. This prohibition applies to all applicants regardless of whether such applicants
become qualified bidders or actually bid.” In broadcast services, the “geographic license area” is the
4 Broadcast First Reconsideration Order, 14 FCC Red at 8724.
= Implementation of Section 309(j) of the Communications Act — Competitive Bidding for Commercial Broadcast
and Instructional Television Fixed Service Licenses, MM Docket No. 97-234, Memorandum Opinion and Order,
FCC 99-201, 14 FCC Red 12541 (1999).
°° Reexamination of the Comparative Standard for Noncommercial Educational Applicants, MM Docket No. 95-31,
Second Report and Order, FCC 03-44, 18 FCC Red 6691 (2003) (“NCE Second Report and Order”), Memorandum
Opinion and Third Order on Reconsideration, FCC 08-219, 23 FCC Red 17423 (2008).
*7 When ordering documents from BCPI, please provide the appropriate FCC document number (for example, DA
12-1411 for the Auction 94 Comment Public Notice, or DA 12-1865 for this Public Notice).
°8 See 47 C.F.R. §§ 1.2105(a)(2)(viii), 1.2105(c)(1) and 73.5002; see also Part 1 Seventh Report and Order, 16 FCC
Red at 17546.
» See, e, g., Wireless Telecommunications Bureau Provides Guidance on the Anti-Collusion Rule for D, E and F
Block Bidders, Public Notice, DA 96-1460, 11 FCC Red 10134 (WTB 1996).
20 See, e.g., Star Wireless, LLC, Forfeiture Order, DA 04-3026, 19 FCC Red 18626, 18628 14 & n.19 (EB 2004),
order granted in part sub nom, Star Wireless, LLC and Northeast Communications of Wisconsin, Inc., Order on
(continued....)
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market designation of the particular service.*' For the FM service, the market designation is the particular
vacant FM allotment (e.g., Harrison, Michigan, Channel 280A, MM-FM664A). In Auction 94, this rule
would apply to applicants designating any of the same FM allotments on the short-form application.
14. Applicants are also reminded that, for purposes of this prohibition on certain
communications, section 1.2105(c)(7)(i) defines “applicant” as including all officers and directors of the
entity submitting a short-form application to participate in the auction, all controlling interests of that
entity, as well as all holders of partnership and other ownership interests and any stock interest amounting
to 10 percent or more of the entity, or outstanding stock, or outstanding voting stock of the entity
submitting a short-form application.” For example, where an individual served as an officer for two or
more applicants, the Bureaus have found that the bids and bidding strategies of one applicant are
conveyed to the other applicant, and, absent a disclosed bidding agreement, an apparent violation of
section 1.2105(c) occurs.”
15. Individuals and entities subject to section 1.2105(c) should take special care in
circumstances where their employees may receive information directly or indirectly relating to any
competing applicant’s bids or bidding strategies. The Bureaus have not addressed a situation where non-
principals (i.e., those who are not officers or directors, and thus not considered to be the applicant) receive
information regarding a competing applicant’s bids or bidding strategies and whether that information
should be presumed to be communicated to the applicant.
16. An exception to the prohibition on certain communications allows non-controlling
interest holders to obtain interests in more than one competing applicant without violating section
1.2105(c) provided specified conditions are met (including a certification that no prohibited
communications have occurred or will occur), but that exception does not extend to controlling interest
holders.
17. Moreover, Auction 94 applicants are encouraged not to use the same individual as an
authorized bidder. A violation of section 1.2105(c) 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 such applicants. Similarly, if the authorized bidders are different
individuals employed by the same organization (e.g., law firm, engineering firm or consulting firm), a
(Continued from previous page)
Review, FCC 07-80, 22 FCC Red 8943 (2007)(“Star and Northeast Review Order’), petition for review denied, Star
Wireless, LLC v. FCC, 522 F.3d 469 (D.C. Cir. 2008) (section 1.2105(c) applies to applicants regardless of whether
they are qualified to bid); Letter to Robert Pettit, [Esquire], from Margaret W. Wiener, Chief, Auctions and Industry
Analysis Division, DA 00-2905, 16 FCC Red 10080 (WTB 2000) (declining to exempt an applicant’s controlling
interest from coverage by the communication prohibitions of section 1.2105(c), even though the applicant never
made an upfront payment for the auction and was not listed as a qualified bidder).
3! Part 1 Seventh Report and Order, 16 FCC Rcd at 17549 n.12.
32 47 CFR. § 1.2105(c)(7)(i).
33 See, e, g., Letter to Colby M. May, TCCSA, Inc., d/b/a Trinity Broadcasting Network, from Barbara A. Kreisman,
Chief, Video Division, Media Bureau, and Margaret W. Wiener, Chief, Auctions and Spectrum Access Division,
Wireless Telecommunications Bureau, DA 05-2445, 20 FCC Rcd 14648 (WTB/MB 2005) (“Trinity”) ( (finding
apparent violation of communication prohibitions of section 1.2105(c) where applicants with mutually exclusive
applications reported sharing same individual as an officer and director and reported having no bidding agreement).
AT CR § 1.2105(c)(4). Specifically, the Commission’s rules permit a party holding a non-controlling,
attributable interest in one applicant to acquire an ownership interest in or entering into a joint bidding arrangement
with other applicants after the short-form application filing deadline, provided that: (1) the attributable interest holder
certifies that it has not and will not communicate with any party concerning the bids or bidding strategies of more
than one of the applicants in which it holds an attributable interest, or with which it has entered into a joint bidding
arrangement; and (ii) the arrangements do not result in a change in control of any of the applicants. 47 C.F.R. §§
1.2105(c)(4)(i), (ii).
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violation similarly could occur.” In such a case, at a minimum, applicants should certify on their
applications that precautionary steps have been taken to prevent communication between authorized
bidders, and that the applicant and its bidders will comply with section 1.2105(c).*°
b. Prohibition Applies Until Down Payment Deadline
18. Section 1.2105(c)’s prohibition on certain communications begins at the short-form
application filing deadline and ends at the down payment deadline after the auction closes, which will be
announced in a future public notice.*”
c. Prohibited Communications
19. Applicants must not communicate directly or indirectly about bids or bidding strategy to
other applicants in this auction (as described above).** Section 1.2105(c) prohibits not only
communication about an applicant’s own bids or bidding strategy, it also prohibits communication of
another applicant’s bids or bidding strategy.*” While section 1.2105(c) does not prohibit non-auction-
related business negotiations among auction applicants, each applicant must remain vigilant so as not to
directly or indirectly communicate information that affects, or could affect, bids, bidding strategy, or the
negotiation of settlement agreements.
20. Applicants are cautioned that the Commission remains vigilant about prohibited
communications taking place in other situations. For example, the Commission has warned that
prohibited “communications concerning bids and bidding strategies may include communications
regarding capital calls or requests for additional funds in support of bids or bidding strategies to the extent
such communications convey information concerning the bids and bidding strategies directly or
indirectly.”*° Moreover, the Commission has found a violation of section 1.2105(c) where an applicant
used the Commission’s bidding system to disclose “its bidding strategy in a manner that explicitly invited
other auction participants to cooperate and collaborate in specific markets,”*! and has placed auction
participants on notice that the use of its bidding system “to disclose market information to competitors
will not be tolerated and will subject bidders to sanctions.” Applicants also should use caution in their
dealings with other parties, such as members of the press, financial analysts, or others who might become
conduits for the communication of prohibited bidding information. For example, an applicant’s statement
to the press that it intends to stop bidding in the auction could give rise to a finding of a section 1.2105(c)
violation. Similarly, an applicant’s public statement of intent not to participate in Auction 94 bidding
35 See Application of Nevada Wireless, Memorandum Opinion and Order, DA 98-1137, 13 FCC Red 11973, 11977-
78 91 11-12 (WTB 1998) (“Nevada Wireless Order’).
36 Ig.
37 47 C.F.R. § 1.2105(c)(1).
38 Part 1 Seventh Report and Order, 16 FCC Rcd at 17553-54 1 12. For a discussion of the term “applicant” within
the meaning of section 1.2105(c), see Section I.B.2.a. above.
3 See Notice of Apparent [L]iability for Forfeiture of Western PCS BTA 1 Corp., Memorandum Opinion and
Order, FCC 99-385, 14 FCC Red 21571, 21574 4 8 (1999).
i Implementation of Section 309(j) of the Communications Act — Competitive Bidding, PP Docket No. 93-253,
Memorandum Opinion and Order, FCC 94-295, 9 FCC Red 7684, 7689 $] 12 (1994) (“Competitive Bidding
Memorandum Opinion and Order”).
a Mercury PCS II, LLC, Notice of Apparent Liability for Forfeiture, FCC 97-388, 12 FCC Red 17970, 17974 $ 12,
17976 ¥ 17 (1997).
i Mercury PCS II, LLC, Memorandum Opinion and Order, FCC 98-203, 13 FCC Red 23755, 23760 ¥ 11 (1998).
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could also violate the rule. Applicants are hereby placed on notice that public disclosure of information
relating to bids, or bidding strategies, or to post auction market structures may violate section 1.2105(c).
d. Disclosure of Bidding Agreements and Arrangements
21. The Commission’s rules do not prohibit applicants from entering into otherwise lawful
bidding agreements before filing their short-form applications, as long as they disclose the existence of
the agreement(s) in their short-form applications.” Applicants must identify in their short-form
applications all parties with whom they have entered into any agreements, arrangements, or
understandings of any kind relating to the construction permits being auctioned, including any agreements
relating to post-auction market structure.”
22. If parties agree in principle on all material terms prior to the short-form application filing
deadline, each party to the agreement must identify the other party or parties to the agreement on its short-
form application under section 1.2105(c), even if the agreement has not been reduced to writing. If the
parties have not agreed in principle by the short-form filing deadline, they should not include the names
of parties to discussions on their applications, and they may not continue negotiation, discussion or
communication with any other applicants after the short-form application filing deadline.*°
23. Section 1.2105(c) does not prohibit non-auction-related business negotiations among
auction applicants.“ However, certain discussions or exchanges could touch upon impermissible subject
matters because they may convey pricing information and bidding strategies. Such subject areas include,
but are not limited to, issues such as management, sales, local marketing agreements, rebroadcast
agreements, and other transactional agreements.”
e. Section 1.2105(c) Certification
24. By electronically submitting a short-form application, each applicant in Auction 94
certifies its compliance with sections 1.2105(c) and 73.5002. In particular, an applicant must certify
under penalty of perjury it has not entered and will not enter into any explicit or implicit agreements,
arrangements or understandings of any kind with any parties, other than those identified in the
application, regarding the amount of the applicant’s bids, bidding strategies, or the particular construction
permits on which it will or will not bid. However, the Bureaus caution that merely filing a certifying
statement as part of an application will not outweigh specific evidence that a prohibited communication
has occurred, nor will it preclude the initiation of an investigation when warranted.’ The Commission
has stated that it “intend[s] to scrutinize carefully any instances in which bidding patterns suggest that
(Continued from previous page)
= Compare Wireless Telecommunications Bureau Responds to Questions About the Local Multipoint Distribution
Service Auction, Public Notice, DA 98-37, 13 FCC Red 341, 347-48 (1998) (“Public statements can give rise to
collusion concerns. This has occurred in the antitrust context, where certain public statements can support other
evidence which tends to indicate the existence of a conspiracy.”’).
“47 C.F.R. § 1.2105(c)(1).
4 47 C.F.R. §§ 1.2105(a)(2)(viii), (c)(1).
46 See Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti-Collusion Rules, Public Notice, DA
95-2244, 11 FCC Red 9645, 9646 (WTB 1995) (“Anti-Collusion Public Notice”).
* See, e.g., Todd Stuart Noordyk, Memorandum Opinion and Order, FCC 01-275, 16 FCC Red 18113, 18116-17 {
12 (2001).
48 See Amendment of Part 1 of the Commission's Rules — Competitive Bidding Procedures, WT Docket No. 97-82,
Third Report and Order and Second Further Notice of Proposed Rule Making, FCC 97-413, 13 FCC Red 374, 467-
68 ¥ 163 (1997) (“Part 1 Third Report and Order”).
” 47 C.F.R. § 1.2105(a)(2)(ix).
°° Nevada Wireless Order, 13 FCC Red at 11978 { 13.
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collusion may be occurring.”*' Any applicant found to have violated section 1.2105(c) may be subject to
sanctions.”
f. Duty to Report Prohibited Communications
25: Section 1.2105(c)(6) provides that any applicant that makes or receives a communication
that appears to violate section 1.2105(c) must report such communication in writing to the Commission
immediately, and in no case later than five business days after the communication occurs.” The
Commission has clarified that each applicant’s obligation to report any such communication continues
beyond the five-day period after the communication is made, even if the report is not made within the
five-day period.”
26. 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 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 substantial change to the
information or certifications included in its pending short-form application. An applicant is therefore
required by section 1.65 to report to the Commission any communication the applicant has made to or
received from another applicant after the short-form application filing deadline that affects or has the
potential to affect bids or bidding strategy, unless such communication is made to or received from a
party to an agreement identified under section 1.2105(a)(2)(viii).”*
27. Sections 1.65(a) and 1.2105(c) require each applicant in competitive bidding proceedings
to furnish additional or corrected information within five days of a significant occurrence, or to amend its
short-form application no more than five days after the applicant become aware of the need for
amendment.” These rules are intended to facilitate the auction process by making the information
available promptly to all participants and to enable the Bureaus to act expeditiously on those changes
when such action is necessary.
g. Procedure for Reporting Prohibited Communications
28. A party reporting any communication pursuant to sections 1.65, 1.2105(a)(2), or
1.2105(c)(6) must take care to ensure that any report of a prohibited communication does not itself give
rise to a violation of section 1.2105(c). For example, a party’s report of a prohibited communication
could violate the rule by communicating prohibited information to other applicants through the use of
Commission filing procedures that would allow such materials to be made available for public inspection.
29. Section 1.2105(c) requires parties to file only a single report concerning a prohibited
communication and to file that report with Commission personnel expressly charged with administering
Competitive Bidding Memorandum Opinion and Order, 9 FCC Rcd at 7689 {| 12.
5 See 47 C.F.R. §§ 1.2105(c), 1.2107(d), and 1.2109(d).
3 47C.F.R. § 1.2105(c)(6); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17553-55 {ff 13-17.
54 See Service Rules for the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Second Report
and Order, FCC 07-132, 22 FCC Red 15,289, 15,395 419 285-86 (2007).
47 CER. § 1.65; see also Part 1 Seventh Report and Order, 16 FCC Red at 17550-51 1 9.
°° See Part 1 Seventh Report and Order, 16 FCC Red at 17550-51 49.
57 Procedural Amendments to Commission Part 1 Competitive Bidding Rules, WT Docket No. 10-18, Order, FCC
10-4, 25 FCC Red 521, 523 1 8 (2010) (“Part 1 Procedural Amendments Order”).
58 Id.
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the Commission’s auctions.” This rule is designed to minimize the risk of inadvertent dissemination of
information in such reports. Any reports required by section 1.2105(c) must be filed consistent with the
instructions set forth in this Public Notice.” For Auction 94, such reports must be filed with the Chief of
the Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, by the most
expeditious means available. Any such report should be submitted by e-mail to Ms. Wiener at the
following e-mail address: [email protected]. If you choose instead to submit a report in hard copy, any
such report must be delivered only to: Margaret W. Wiener, Chief, Auctions and Spectrum Access
Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 (2° Street,
SW, Room 6423, Washington, DC 20554.
30. A party seeking to report such a prohibited communication should consider submitting its
report with a request that the report or portions of the submission be withheld from public inspection by
following the procedures specified in section 0.459 of the Commission’s rules.°' Such parties also are
encouraged to coordinate with the Auctions and Spectrum Access Division staff about the procedures for
submitting such reports.” This Public Notice provides additional guidance on procedures for submitting
application-related information below.”
h. Winning Bidders Must Disclose Terms of Agreements
31, Each applicant that is a winning bidder will be required to disclose in its long-form
applications the specific terms, conditions, and parties involved in any agreement it has entered into. This
applies to any bidding consortia, joint venture, partnership, or agreement, understanding, or other
arrangement entered into relating to the competitive bidding process, including any agreement relating to
the post-auction market structure.” Failure to comply with the Commission’s rules can result in
enforcement action.
i. Additional Information Concerning Rule Prohibiting Certain
Communications
32. A summary listing of documents issued by the Commission and the Bureaus addressing
the application of section 1.2105(c) may be found in Attachment D. These documents are available on
the Commission’s auction web page at http://wireless.fcc.gov/auctions/prohibited_communications.
°° Part 1 Procedural Amendments Order, 25 FCC Red at 522 4/4. This process differs from filing procedures used
in connection with other Commission rules and processes which may call for submission of filings to the
Commission’s Office of the Secretary or ECFS. Filing through the Office of Secretary or ECFS could allow the
report to become publicly available and might result in the communication of prohibited information to other
auction applicants.
9 Wd.
6l See 47 CFR. § 0.459 (requests that materials or information submitted to the Commission be withheld from
public inspection). Filers requesting confidential treatment of documents must be sure that the cover page of the
filing prominently displays that the documents seek confidential treatment. For example, a filing might include a
cover page stamped with “Request for Confidential Treatment Attached” or “Not for Public Inspection.” Any such
request must cover all of the material to which the request applies. See 47 C.F.R. § 0.459 (a).
® See Section VI. “Contact Information,” below.
% See Section II. J. “Maintaining Current Information in Short-Form Applications,” below.
47 C.F.R. § 1.2107(d).
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Federal Communications Commission DA 12-1865
j. Antitrust Laws
33. Regardless of compliance with the Commission’s rules, applicants remain subject to the
antitrust laws, which are designed to prevent anticompetitive behavior in the marketplace. Compliance
with the disclosure requirements of section 1.2105(c) will not insulate a party from enforcement of the
antitrust laws.® For instance, a violation of the antitrust laws could arise out of actions taking place well
before any party submitted a short-form application.” Similarly, the Wireless Telecommunications
Bureau previously reminded potential applicants and others that “[e]ven where the applicant discloses
parties with whom it has reached an agreement on the short-form application, thereby permitting
discussions with those parties, the applicant is nevertheless subject to existing antitrust laws.”
34. To the extent the Commission becomes aware of specific allegations that suggest that
violations of the federal antitrust laws may have occurred, the Commission may refer such allegations to
the United States Department of Justice for investigation.” If an applicant is found to have violated the
antitrust laws or the Commission’s rules in connection with its participation in the competitive bidding
process, it may be subject to forfeiture of its upfront payment, down payment, or full bid amount and may
be prohibited from participating in future auctions, among other sanctions.”
3. Due Diligence
35. We remind each potential bidder that it is solely responsible for investigating and
evaluating all technical and marketplace factors that may have a bearing on the value of the construction
permits for broadcast facilities they are seeking in this auction. Each bidder is responsible for assuring
that, if it wins a construction permit, it will be able to build and operate facilities in accordance with the
Commission’s rules. 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 permittee in a broadcast service, subject to certain conditions and
regulations. An FCC auction does not constitute an endorsement by the FCC of any particular
service, technology, or product, nor does an FCC construction permit or license constitute a
guarantee of business success.
36. An applicant should perform its due diligence research and analysis before proceeding, as
it would with any new business venture. In particular, the Bureaus strongly encourage each potential
® See Amendment of Part 1 of the Commission's Rules — Competitive Bidding Procedures, WT Docket No. 97-82,
Third Further Notice of Proposed Rulemaking, FCC 99-384, 14 FCC Red 21558, 21560-61 4 4 & n.17 (1999)
quoting Competitive Bidding Memorandum Opinion and Order, 9 FCC Red at 7689 {| 12 (“[W]e wish to emphasize
that all applicants and their owners continue to be subject to existing antitrust laws. Applicants should note that
conduct that is permissible under the Commission's Rules may be prohibited by the antitrust laws.”);
Implementation of Section 309(j) of the Communications Act — Competitive Bidding, PP Docket No. 93-253,
Fourth Memorandum Opinion and Order, FCC 94-264, 9 FCC Rcd 6858, 6869 n.134 (1994)(“[A ]pplicants will also
be subject to existing antitrust laws.”) (“Fourth Memorandum Opinion and Order”).
See Competitive Bidding Memorandum Opinion and Order, 9 FCC Rcd at 7689 ¥ 12. See also “Justice
Department Sues Three Firms Over FCC Auction Practices,” Press Release 98-536 (DOJ Nov. 10, 1998).
€T See, e.g., Fourth Memorandum Opinion and Order, 9 FCC Rcd at 6869 n.134. The Commission has cited a
number of examples of potentially anticompetitive actions that would be prohibited under antitrust laws: for
example, actual or potential competitors may not agree to divide territories in order to minimize competition,
regardless of whether they split a market in which they both do business, or whether they merely reserve one market
for one and another market for the other. Id.
68 Anti-Collusion Public Notice, 11 FCC Red at 9646.
© See Competitive Bidding Second Report and Order, 9 FCC Red at 2388 § 226.
” See 47 CFR. § 1.2109(d); see also Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388 1 226.
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Federal Communications Commission DA 12-1865
bidder to review all underlying Commission orders, such as the specific Report and Order amending the
FM Table of Allotments and allotting the FM channel(s) on which it plans to bid.” A Report and Order
adopted in an FM allotment rulemaking proceeding” may include information unique to the allotment
such as site restrictions or expense reimbursement requirements.” Additionally, each potential bidder
should perform technical analyses or refresh their previous analyses to assure itself that, should it become
a winning bidder for any Auction 94 construction permit, it will be able to build and operate facilities that
will fully comply with all applicable technical and legal requirements. The Bureaus strongly encourage
each applicant to inspect any prospective transmitter sites located in, or near, the service area for which it
plans to bid, confirm the availability of such sites, and to familiarize itself with the Commission’s rules
regarding the National Environmental Policy Act.”
37. The Bureaus strongly encourage each applicant to conduct its own research prior to
Auction 94 in order to determine the existence of pending administrative or judicial proceedings,
including pending allocation rulemaking proceedings that might affect its decision to participate in the
auction. The Bureaus strongly encourage each participant in Auction 94 to continue such research
throughout the auction. The due diligence considerations mentioned in this Public Notice do not
comprise an exhaustive list of steps that should be undertaken prior to participating in this auction. As
always, the burden is on the potential bidder to determine how much research to undertake, depending
upon specific facts and circumstances related to its interests.
38. The Bureaus also remind each applicant that pending and future judicial proceedings, as
well as certain pending and future proceedings before the Commission — including applications,
applications for modification, petitions for rulemaking, requests for special temporary authority, waiver
requests, petitions to deny, petitions for reconsideration, informal objections, and applications for review
— may relate to particular applicants, incumbent permittees, incumbent licensees, or the construction
permits available in Auction 94. Each prospective applicant is responsible for assessing the likelihood of
the various possible outcomes and for considering the potential impact on construction permits available
in this auction.
39. Applicants are solely responsible for identifying associated risks and for
investigating and evaluating the degree to which such matters may affect their ability to bid on,
otherwise acquire, or make use of the construction permits available in Auction 94. Each potential
bidder is responsible for undertaking research to ensure that any permits won in this auction will be
suitable for its business plans and needs. Each potential bidder must undertake its own assessment of the
relevance and importance of information gathered as part of its due diligence efforts.
40. Applicants may research the licensing database for the Media Bureau in order to
determine which channels are already licensed to incumbent licensees or previously authorized to
construction permittees. Licensing records are contained in the Consolidated Data Base System (CDBS)
7l See 47 C.F.R. § 73.202.
72 See, e.g., Circleville, Ohio, Second Report and Order, FCC 67-578, 8 FCC 2d 159 (1967); Charlotte Amalie,
Frederiksted, and Christiansted, Virgin Islands, MM Docket No. 00-102, Report and Order, DA 03-4120, 19 FCC
Red 30 (MB 2004); Cheyenne, Wyoming and Gering, Nebraska, MM Docket No. 97-106, Report and Order, DA
00-865, 15 FCC Red 7528 (MMB 2000).
® For example, in its Reply Comments, Bay View Broadcasting, Inc. emphasizes that, as part of Docket 08-06, in
which the Commission amended the Table to allot Channel 274A at Evart, Michigan, in order to accommodate the
allotment the Commission ordered that “the ultimate permittee of Channel 274A, Evart, Michigan, shall reimburse
Bay View Broadcasting, Inc., for its reasonable costs of changing the frequency of its Station WMOM (FM),
Pentwater, Michigan, from Channel 274A to Channel 242A.” Evart and Ludington, Michigan, Report and Order,
DA 09-412, 24 FCC Red 2584, 2586 (MB 2009).
74 47 C.F.R. Chapter 1, Part 1, Subpart I.
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and may be researched on the Internet from http://www.fcc.gov/encyclopedia/media-bureau-filing-
systems-and-databases. Potential bidders may query the database online and download a copy of their
search results if desired. Instructions on using Station Search, Ownership Search, and Application Search
and downloading query results are also available online via the above link. The database searches return
either station or application data. The application search provides an application link that displays the
complete electronically filed application in application format. An AL/TC search under the Application
Search link permits searching for Assignment of License/Transfer of Control groups using the AL/TC
group lead application. Potential bidders should direct questions regarding the search capabilities of
CDBS to the Media Bureau help line at (202) 418-2662, or via e-mail at [email protected].
41. The Commission makes no representations or guarantees regarding the accuracy or
completeness of information in its databases or any third party databases, including, for example, court
docketing systems. To the extent the Commission’s databases may not include all information deemed
necessary or desirable by an applicant, it must obtain or verify such information from independent sources
or assume the risk of any incompleteness or inaccuracy in said databases. Furthermore, the Commission
makes no representations or guarantees regarding the accuracy or completeness of information that has
been provided by incumbent licensees and incorporated into its databases.
4. Use of Integrated Spectrum Auction System
42. Bidders will be able to participate in Auction 94 over the Internet using the
Commission’s web-based Integrated Spectrum Auction System (“ISAS” or “FCC Auction System”). The
Commission makes no warranty whatsoever with respect to the FCC Auction System. In no event shall
the Commission, or any of its officers, employees, or agents, be liable for any damages whatsoever
(including, but not limited to, loss of business profits, business interruption, loss of business information,
or any other loss) arising out of or relating to the existence, furnishing, functioning, or use of the FCC
Auction System that is accessible to qualified bidders in connection with this auction. Moreover, no
obligation or liability will arise out of the Commission’s technical, programming, or other advice or
service provided in connection with the FCC Auction System.
5. Fraud Alert
43. As is the case with many business investment opportunities, some unscrupulous
entrepreneurs may attempt to use Auction 94 to deceive and defraud unsuspecting investors. Common
warning signals of fraud include the following:
e 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.
e 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.
e The amount of investment is less than $25,000.
e The sales representative makes verbal representations that: (a) the Internal Revenue Service,
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.
44. Information about deceptive telemarketing investment schemes is available from the FCC
as well as the FTC and SEC. Additional sources of information for potential bidders and investors may
be obtained from the following sources:
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Federal Communications Commission DA 12-1865
e the FCC’s Consumer Call Center at (888) 225-5322 or by visiting
http://wireless.fcc.gov/csinfo#fraud
e the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting
http://ftc.gov/bcp/edu/pubs/consumer/invest/inv03.shtm
e the SEC at (202) 942-7040 or by visiting
http://sec. gov/cgi-bin/txt-srch-sec?text=fraud§ion=Investor+Information.
Complaints about specific deceptive telemarketing investment schemes should be directed to the FTC, the
SEC, or the National Fraud Information Center at (800) 876-7060.
6. Environmental Review Requirements
45. Permittees or licensees must comply with the Commission’s rules regarding
implementation of the National Environmental Policy Act and other federal environmental statutes.” The
construction of a broadcast facility is a federal action, and the permittee or licensee must comply with the
Commission’s environmental rules for each such facility.” These environmental rules require, among
other things, that the permittee or licensee consult with expert agencies having environmental
responsibilities, including the U.S. Fish and Wildlife Service, the State Historic Preservation Office, the
U.S. Army Corps of Engineers, and the Federal Emergency Management Agency (through the local
authority with jurisdiction over floodplains). In assessing the effect of facility construction on historic
properties, the permittee or licensee must follow the provisions of the FCC’s Nationwide Programmatic
Agreement Regarding the Section 106 National Historic Preservation Act Review Process.” The
permittee or licensee must prepare environmental assessments for any facility that may have a significant
impact in or on wilderness areas, wildlife preserves, threatened or endangered species, or designated
critical habitats, historical or archaeological sites, Indian religious sites, floodplains, and surface features.
In addition, the permittee or licensee must prepare environmental assessments for facilities that include
high intensity white lights in residential neighborhoods or excessive radio frequency emission.
Ç: Auction Specifics
1. Auction Start Date
46. Bidding in Auction 94 has been rescheduled and will begin on Tuesday, April 23, 2013.
Pre-auction dates and deadlines are listed below.
47. Fletcher and MEI each request that we postpone the start of bidding in Auction 94.8
Fletcher points out that a substantial number of the permits to be offered in Auction 94 cover areas of
Texas and that a March auction start date will directly conflict with the April 1, 2013 license renewal
deadline applicable to licenses in Texas and some other states.” Fletcher also notes that April 1 is the
deadline for telecommunications service providers to file the annual Universal Service reporting
worksheet (Form 499-A),® though it does not explain how that deadline might be relevant to broadcast
interests. Fletcher and MEI each claim that postponing the start of Auction 94 until after religious
observances will give bidders more opportunities to work with their financial institutions and otherwise
15 47 C.F.R. Chapter 1, Part 1, Subpart I.
7° 47 C.F.R. §§ 1.1301-1.1319.
” 47 C.F.R. Part 1, Appendix C.
78 Fletcher Comments at 2; MEI Comments at 5-6; MEI Reply at 1-3.
” Pletcher Comment at 2.
8° Fletcher Comment at 2.
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foster greater participation in the auction.*' MEI suggests that the auction start date be pushed back until
after the conclusion of the National Association of Broadcasters Convention.” The Bureaus do not
believe that the existence of deadlines for unrelated Commission programs justify delaying the auction.
Nevertheless, in view of the foregoing, we conclude that rescheduling the starting date for Auction 94 to
April 23, 2013, will avoid conflicts with this widely-attended industry convention and widely-observed
religious holidays and may thus foster auction participation and an efficient auction process, as well as
provide prospective applicants with additional time for auction preparation.
48. The initial schedule for bidding rounds will be announced by public notice at least one
week before the auction starts. Moreover, unless otherwise announced, bidding on all construction
permits will be conducted on each business day until bidding has stopped on all construction permits.
2. Auction Title
49. Auction 94 — FM Broadcast
3. Bidding Methodology
50. As discussed in more detail below, the bidding methodology for Auction 94 will be a
simultaneous multiple round format.*’ The Commission will conduct this auction over the Internet using
the FCC Auction System. Qualified bidders are permitted to bid electronically via the Internet or by
telephone using the telephonic bidding option. All telephone calls are recorded.
4. Pre-Auction Dates and Deadlines
51. The following dates and deadlines apply:
Auction Tutorial Available (via Internet) ........... eee January 28, 2013
Short-Form Application (FCC Form 175)
Filing Window OPenss .........:csesesesceeeseeeseeeeeeeeeereeeaeneeenens January 28, 2013; 12:00 noon ET
Short-Form Application (FCC Form 175)
Filing Window Deadline... cceeeeseeseeeeeeeeseeeteeeeeeees February 6, 2013; prior to 6:00 p.m. ET
Upfront Payments (via wire transfer)... March 18, 2013; 6:00 p.m. ET
Mock Achomair April 19, 2013
Auction Beggsin a E April 23, 2013
S. Requirements for Participation
52. Those wishing to participate in this auction must:
e Submit a short-form application (FCC Form 175) electronically prior to 6:00 p.m. ET, on
February 6, 2013, following the electronic filing procedures set forth in Attachment B to this
Public Notice;
e Submit a sufficient upfront payment and an FCC Remittance Advice Form (FCC Form 159) by
6:00 p.m. ET, on March 18, 2013, following the procedures and instructions set forth in
Attachment C to this Public Notice; and
e Comply with all provisions outlined in this Public Notice and applicable Commission rules.
8! Id.
82 MEI Comments at 5-6.
8 See Section IV.A.1. “Simultaneous Multiple Round Auction,” below.
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II. SHORT-FORM APPLICATION (FCC FORM 175) REQUIREMENTS
A. General Information Regarding Short-Form Applications
53: An application to participate in an FCC auction, referred to as a short-form application or
FCC Form 175, provides information used to determine whether the applicant is legally, technically, and
financially qualified to participate in Commission auctions for licenses or permits.’ The short-form
application is the first part of the Commission’s two-phased auction application process. In the first
phase, parties desiring to participate in the auction must file a streamlined, short-form application in
which they certify under penalty of perjury as to their qualifications.” Each applicant must take seriously
its duties and responsibilities and carefully determine before filing an application that it has the legal,
technical and financial resources to participate in the auction and to construct and operate an FM station if
it becomes a licensee as a result of its participation in this auction. Eligibility to participate in bidding is
based on the applicant’s short-form application and certifications, and on its upfront payment, as
explained below.*° In the second phase of the process, each winning bidder must file a more
comprehensive long-form application.*”
54. Every entity and individual seeking a construction permit available in Auction 94 must
file a short-form application electronically via the FCC Auction System prior to 6:00 p.m. ET on
February 6, 2013, following the procedures prescribed in Attachment B to this Public Notice. If an
applicant claims eligibility for a bidding credit, the information provided in its FCC Form 175 will be
used to determine whether the applicant is eligible for the claimed bidding credit. Applicants filing a
short-form application are subject to the Commission’s anti-collusion rules beginning at the deadline for
filing, as described above.
55. Applicants bear full responsibility for submitting accurate, complete and timely short-
form applications. All applicants must certify on their short-form applications under penalty of perjury
that they are legally, technically, financially and otherwise qualified to hold a license.** Applicants
should read carefully the instructions set forth in Attachment B to this Public Notice and should consult
the Commission’s rules to ensure that, in addition to the materials described below, all the information
required is included within their short-form application.”
56. An individual or entity may not submit more than one short-form application for a single
auction. If a party submits multiple short-form applications, only one application may be accepted for
filing.
57. Applicants should note that submission of a short-form application (and any amendments
thereto) constitutes a representation by the certifying official that he or she is an authorized representative
of the applicant, that he or she has read the form’s instructions and certifications, and that the contents of
the application, its certifications, and any attachments are true and correct. Applicants are not permitted
447 C.F.R. §§ 1.2105, 73.5002.
35 Id.; see also Competitive Bidding Second Report and Order, 9 FCC Rcd at 2376 § 165.
3 Section III.D. “Upfront Payments — Due March 18, 2013,” below.
87 47 C.F.R. §§ 1.2107, 73.5005.
88 47 C.F.R. § 1.2105(a)(2)(v).
® As discussed generally in the NCE Second Report and Order, 18 FCC Rcd at 6691, the opening of a window for
nonreserved vacant FM allotments provides a filing opportunity for both NCE and commercial applicants.
However, as discussed in Section II.C, below, while non-mutually exclusive NCE applications will not be resolved
through competitive bidding, any applications specifying NCE facilities that are mutually exclusive with any
applications specifying commercial facilities will be returned as unacceptable for filing. 47 C.F.R. § 73.5002(b).
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Federal Communications Commission DA 12-1865
to make major modifications to their applications; such impermissible changes include a change of the
certifying official to the application.” Submission of a false certification to the Commission may result in
penalties, including monetary forfeitures, license forfeitures, ineligibility to participate in future auctions,
and/or criminal prosecution.
B. Permit Selection
58. An applicant must select the construction permits on which it wants to bid from the
“Eligible Permits” list on its short-form application. To assist in identifying construction permits of
interest that will be available in Auction 94, the FCC Auction System includes a filtering mechanism that
allows an applicant to filter the “Eligible Permits” list. Selections for one or more of the filter criteria can
be made and the system will produce a list of construction permits satisfying the specified criteria. Any
or all of the construction permits in the filtered results may be selected. Applicants will also be able to
select construction permits from one set of filtered results and then filter on different criteria to select
additional construction permits.
59. Applicants interested in participating in Auction 94 must have selected construction
permit(s) available in this auction by the short-form application filing deadline. Applicants must review
and verify their construction permit selections before the deadline for submitting short-form applications.
Construction permit selections cannot be changed after the short-form application filing deadline.” The
FCC Auction System will not accept bids on construction permits that were not selected on the
applicant’s short-form application.
C. New Entrant Bidding Credit
60. To promote the objectives of section 309(j) and further its long-standing commitment to
the diversification of broadcast facility ownership, the Commission adopted a tiered New Entrant Bidding
Credit for broadcast auction applicants with no, or very few, other media interests.”
61. The interests of the applicant, and of any individuals or entities with an attributable
interest in the applicant, in other media of mass communications are considered when determining an
applicant’s eligibility for the New Entrant Bidding Credit.” In Auction 94, the bidder’s attributable
interests and, thus, its maximum new entrant bidding credit eligibility are determined as of the short-form
application filing deadline.” An applicant intending to divest a media interest or make any other
ownership changes, such as resignation of positional interests, in order to avoid attribution for purposes of
qualifying for the New Entrant Bidding Credit must have consummated such divestment transactions or
have completed such ownership changes by no later than the short-form filing deadline.” Each
See 47 C.F.R. § 1.2105(b).
°! 47 C.F.R. § 1.2105(b)(2).
°° Broadcast First Report and Order, 13 FCC Red at 15994-95 {| 189 (adopting new entrant bidding credit to
implement statutory provisions regarding opportunities for small, minority-owned and women-owned businesses).
°3 «Media of mass communications” include both commercial and noncommercial educational (NCE) full-power
broadcast stations. See 47 C.F.R. § 73.5008.
4 See 47 C.F.R. § 73.5007(a).
2 If, for example, on February 6, 2013, an FM applicant has a pending or granted application to assign or transfer
control of a media interest, the applicant will not avoid attribution with respect to that interest. To avoid attribution,
an applicant must have consummated the transaction before the short-form application deadline. Thus, an applicant
could not qualify for a bidding credit, nor upgrade a previously claimed bidding credit, based upon ownership or
positional changes occurring after the short-form filing deadline. See Liberty Productions, MM Docket No. 88-577,
Memorandum Opinion and Order, FCC 01-129, 16 FCC Red 12061, 12077-79 {f| 34-37, stay denied, Order, FCC
01-276, 16 FCC Red 18966 (2001), aff'd sub nom, Biltmore Forest Broadcasting FM, Inc. v. FCC, 321 F.3d 155
(D.C. Cir.), cert. denied, 540 U.S. 981 (2003) (“Liberty Productions”).
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Federal Communications Commission DA 12-1865
prospective bidder is reminded, however, that events occurring after the short-form filing deadline, such
as the acquisition of attributable interests in media of mass communications, may cause diminishment or
loss of the bidding credit, and must be reported immediately.”°
62. Under traditional broadcast attribution rules, those entities or individuals with an
attributable interest in a bidder include:
e all officers and directors of a corporate bidder;
e any owner of 5 percent or more of the voting stock of a corporate bidder;
e all partners and limited partners of a partnership bidder, unless the limited partners are
sufficiently insulated; and
e all members of a limited liability company, unless sufficiently insulated.”
63. In cases where an applicant’s spouse or close family member holds other media interests,
such interests are not automatically attributable to the bidder. The Commission decides attribution issues
in this context based on certain factors traditionally considered relevant.” Applicants should note that the
mass media attribution rules were revised in 1999.”
64. Applicants are also reminded that, by the New Entrant Bidding Credit Reconsideration
Order, the Commission further refined the eligibility standards for the New Entrant Bidding Credit,
judging it appropriate to attribute the media interests held by very substantial investors in, or creditors of,
an applicant claiming new entrant status. Specifically, the attributable mass media interests held by an
individual or entity with an equity and/or debt interest in an applicant shall be attributed to that applicant
for purposes of determining its eligibility for the New Entrant Bidding Credit, if the equity and debt
interests, in the aggregate, exceed 33 percent of the total asset value of the applicant, even if such an
interest is non-voting.
65. In the Diversity Order, the Commission relaxed the equity/debt plus (“EDP”) attribution
standard, to allow for higher investment opportunities in entities meeting the definition of “eligible
entities.”'°! An “eligible entity” is defined in Note 2(i) of section 73.3555.' On July 7, 2011, the United
%47 C.F.R. § 73.5007(a). We remind each applicant of its duty to continuously maintain the accuracy of
information submitted in its auction application. 47 C.F.R. § 1.65. See Vermont Telephone Company, Inc., DA 11-
1536, Notice of Apparent Liability for Forfeiture (EB rel. Oct. 14, 2011) (“Vermont Telephone Company ”) (finding
Vermont Telephone Company apparently liable for forfeiture in the amount of $34,000 for failing to submit accurate
bidding credit information and failing to maintain the continuing accuracy of bidding credit information in its
application for Auction 86 (Broadband Radio Service)).
*7 See 47 C.F.R. § 73.3555 Note 2.
°8 See Clarification of Commission Policies Regarding Spousal Attribution, Policy Statement, FCC 92-60, 7 FCC
Red 1920 (1992).
? See Review of the Commission’s Regulations Governing Attribution of Broadcast and Cable/MDS Interests, MM
Docket No. 94-150, Report and Order, FCC 99-207, 14 FCC Red 12559 (1999) (prior history omitted).
100 See 47 C.F.R. § 73.5008(c).
= Promoting Diversification of Ownership In the Broadcasting Services, MB Docket No. 07-294, Report and
Order and Third Further Notice of Proposed Rule Making, FCC 07-217, 23 FCC Red 5922 (2008) (“Diversity
Order”). Pursuant to the Diversity Order, the Commission will now allow the holder of an equity or debt interest in
the applicant to exceed the above-noted 33 percent threshold without triggering attribution provided (1) the
combined equity and debt in the “eligible entity” is less than 50 percent; or (2) the total debt in the “eligible entity”
does not exceed 80 percent of the asset value, and the interest holder does not hold any equity interest, option, or
promise to acquire an equity interest in the “eligible entity” or any related entity.
102 47 C.F.R. § 73.3555, Note 2(i). An “eligible entity” shall include any entity that qualifies as a small business
under the Small Business Administration’s size standards for its industry grouping, as set forth in 13 C.F.R. §
(continued....)
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Federal Communications Commission DA 12-1865
States Court of Appeals for the Third Circuit issued a decision'®’ vacating the Commission’s “eligible
entity” definition, and remanding those provisions of the Diversity Order’ that rely on the “eligible
entity” definition. Consistent with the Court Decision, actions required on remand will be addressed
within the Commission’s 2010 Quadrennial Review of the media ownership rules.'°° Pending such
review, the Media Bureau has suspended application of the eligible entity rule provisions and policies in
all contexts, including broadcast auctions.'"° Accordingly, the relaxed EDP rule for eligible entities as the
basis for the New Entrant Bidding Credit will be unavailable in Auction 94.
66. Generally, media interests will be attributable for purposes of the New Entrant Bidding
Credit to the same extent that such other media interests are considered attributable for purposes of the
broadcast multiple ownership rules.” However, attributable interests held by a winning bidder in
existing low power television, television translator or FM translator facilities will not be counted among
the applicant’s other mass media interests in determining its eligibility for a New Entrant Bidding
Credit.” A medium of mass communications is defined in section 73.5008(b).'” Full service
noncommercial educational stations, on both reserved and non-reserved channels, are included
among “media of mass communications” as defined in section 73.5008(b)." "°
(Continued from previous page)
121.201, and holds (i) 30 percent or more of the stock or partnership interests and more than 50 percent of the voting
power of the corporation or partnership that will own the media outlet; or (ii) 15 percent or more of the stock or
partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own
the media outlet, provided that no other person or entity owns or controls more than 25 percent of the outstanding
stock or partnership interests; or (iii) more than 50 percent of the voting power of the corporation that will own the
media outlet if such corporation is a publicly traded company.
1% Prometheus Radio Project v. FCC, No. 08-3078, 652 F.3d 431 (3d Cir. July 7, 2011) (“Court Decision”).
104 Diversity Order, 23 FCC Rcd at 5922. To delineate the group receiving the benefits of the measures adopted in
the Diversity Order, the Commission used the term “eligible entity” as defined in the Commission’s 2002 Biennial
Review Order. See 2002 Biennial Regulatory Review — Review of the Commission’s Broadcast Ownership Rules
and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 02-277,
Report and Order and Notice of Proposed Rulemaking, FCC 03-127, 18 FCC Red 13620, 13810-12 (2003).
Generally, “eligible entities” are defined to include all entities that qualify as small businesses under the standards of
the Small Business Administration for industry groupings based on revenue.
05 See 2010 Quadrennial Regulatory Review — Review of the Commission’s Broadcast Ownership Rules and Other
Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 09-182, Notice of
Inquiry, FCC 10-92, 25 FCC Rcd 6086 (2010).
° See Media Bureau Provides Notice of Suspension of Eligible Entity Rule Changes and Guidance on the
Assignment of Broadcast Station Construction Permits to Eligible Entities, DA 11-1232, Public Notice, 26 FCC Red
10370 (MB 2011).
o Further, any bidder asserting new entrant status must have de facto as well as de jure control of the entity
claiming the bidding credit. 47 C.F.R. § 73.5007. Typically, de jure control is evidenced by ownership of at least
50.1 percent of an entity's voting stock or equivalent level of interest in cases where the bidder is not a corporate
entity. De facto control is determined on a case-by-case basis.
18 Broadcast First Reconsideration Order, 14 FCC Rcd at 8764 § 75; 47 C.F.R. § 73.5007.
10 See 47 C.F.R. § 73.5008(b).
110 74, See Minnesota Christian Broadcasters, Inc., Memorandum Opinion and Order, FCC 03-5, 18 FCC Red 614
(2003), aff’d sub nom. Carol DeLaHunt v. FCC, No. 03-1029, slip op. (D.C. Cir. Feb. 4, 2004) (unpublished opinion
available at 2004 WL 288606 (D.C. Cir.) and Minnesota Christian Broadcasters, Inc. v. FCC, 411 F.3d 283 (D.C.
Cir. 2005) (“Minnesota Christian Broadcasters”).
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Federal Communications Commission DA 12-1865
D. Application Requirements
67. In addition to the ownership information required pursuant to sections 1.2105 and 1.2112,
applicants seeking a New Entrant Bidding Credit are required to establish on their short-form applications
that they satisfy the eligibility requirements to qualify for the bidding credit.''' In those cases, a
certification under penalty of perjury must be provided in completing the short-form application. An
applicant claiming that it qualifies for a 35 percent New Entrant Bidding Credit must certify that neither it
nor any of its attributable interest holders have any attributable interests in any other media of mass
communications. An applicant claiming that it qualifies for a 25 percent New Entrant Bidding Credit
must certify that neither it nor any of its attributable interest holders has any attributable interests in more
than three media of mass communications, and must identify and describe such media of mass
communications.
1. Bidding Credits
68. Applicants that qualify for the New Entrant Bidding Credit, as specified in the applicable
rule,'"? are eligible for a bidding credit that represents the amount by which a bidder’s winning bid is
discounted. The size of a New Entrant Bidding Credit depends on the number of ownership interests in
other media of mass communications that are attributable to the bidder-entity and its attributable interest-
holders:
e A 35 percent bidding credit will be given to a winning bidder if it, and/or any individual or entity
with an attributable interest in the winning bidder, has no attributable interest in any other media
of mass communications, as defined in section 73.5008;
e A 25 percent bidding credit will be given to a winning bidder if it, and/or any individual or entity
with an attributable interest in the winning bidder, has an attributable interest in no more than
three mass media facilities, as defined in section 73.5008;
e No bidding credit will be given if any of the commonly owned mass media facilities serve the
same area as the broadcast permit proposed in the auction, as defined in section 73.5007(b), or if
the winning bidder, and/or any individual or entity with an attributable interest in the winning
bidder, has attributable interests in more than three mass media facilities. For purposes of
determining whether a broadcast permit offered in this auction is in the “same area” as an
applicant’s existing mass media facilities, the coverage area of the to-be-auctioned facility is
calculated using maximum class facilities at the allotment reference coordinates, not any
applicant-specified preferred site coordinates.''*
69. Bidding credits are not cumulative; qualifying applicants receive either the 25 percent or
the 35 percent bidding credit, but not both. Attributable interests are defined in section 73.3555 and
note 2 of that section.''* Applicants should note that unjust enrichment provisions apply to a winning
bidder that utilizes a bidding credit and subsequently seeks to assign or transfer control of its license or
construction permit to an entity not qualifying for the same level of bidding credit. "°
1I See 47 C.F.R. §§ 1.2105(a), 73.3555 and Note 2, 73.5007, 73.5008.
> See 47 C.F.R. §§ 73.5007, 73.5008.
3 See 47 C.F.R. § 73.5007.
* Policies to Promote Rural Radio Service and to Streamline Allotment and Assignment Procedures, MB Docket
No. 09-52, First Report and Order and Further Notice of Proposed Rule Making, FCC 10-24, 25 FCC Red 1583,
1609 1 52 (2010) (“Rural First Report and Order”). See 47 C.F.R. § 73.5007 & Note 1.
> See 47 C.F.R. § 73.5008.
6 See 47 C.F.R. § 73.5007(c).
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2. Installment Payments
70. Installment payments will not be available in Auction 94.
E. Ownership Disclosure Requirements
71. The Commission specified in the Broadcast First Report and Order that, for purposes of
determining eligibility to participate in a broadcast auction, all applicants must comply with the uniform
Part 1 ownership disclosure standards and provide information required by sections 1.2105 and 1.2112 of
the Commission’s rules.''’ Specifically, in completing the short-form application, applicants will be
required to fully disclose information on the real party- or parties-in-interest and ownership structure of
the applicant, including both direct and indirect ownership interests of 10 percent or more. The
ownership disclosure standards for the short-form application are prescribed in sections 1.2105 and
1.2112 of the Commission’s rules.''® Each applicant is responsible for ensuring that information
submitted in its short-form application is complete and accurate.
72. In certain circumstances, an applicant’s most current ownership information on file with
the Commission, if in an electronic format compatible with the short-form application (FCC Form 175)
(such as information submitted in an on-line FCC Form 602 or in an FCC Form 175 filed for a previous
auction using the FCC Auction System), will automatically be entered into their short-form application.
Each applicant must carefully review any information automatically entered to confirm that it is complete
and accurate as of the deadline for filing the short-form application. Any information that needs to be
corrected or updated must be changed directly in the short-form application.
F. Provisions Regarding Former and Current Defaulters
73. Current defaulters or delinquents are not eligible to participate in Auction 94, but former
defaulters or delinquents can participate so long as they are otherwise qualified and, as discussed in
Section HI.D.3. below, make upfront payments that are fifty percent more than would otherwise be
necessary. An applicant is considered a “current defaulter” or a “current delinquent” when it, any of its
affiliates, any of its controlling interests, or any of the affiliates of its controlling interests, is in default on
any payment for any Commission construction permit or license (including a down payment) or is
delinquent on any non-tax debt owed to any Federal agency as of the filing deadline for short-form
applications. An applicant is considered a “former defaulter” or a “former delinquent” when it, any of its
affiliates, any of its controlling interests, or any of the affiliates of its controlling interests, have defaulted
on any Commission construction permit or license or been delinquent on any non-tax debt owed to any
Federal agency, but have since remedied all such defaults and cured all of the outstanding non-tax
delinquencies.
74. On the short-form application, an applicant must certify under penalty of perjury that it,
its affiliates, its controlling interests, and the affiliates of its controlling interests, as defined by section
17 47 C.F.R. § 1.2105 requires the disclosure on the short-form application of the applicant’s ownership information
as set forth in 47 C.F.R. §§ 1.2105 and 1.2112.
118 Section 73.5002 of the Commission’s rules specifies the bidding procedures, certification requirements and the
communication prohibition rules applicable to mutually exclusive applications for commercial broadcast services
subject to auction. Subsection (b) of that rule requires the timely submission of short-form applications, along with
the required certifications, information and exhibits, pursuant to the provisions of 47 C.F.R. § 1.2105(a) and any
Commission public notices. 47 C.F.R. § 1.2105 requires the disclosure on the short-form application of the
applicant’s ownership information as set forth in 47 C.F.R. §§ 1.2105 and 1.2112.
' 47 C.F.R. §§ 1.2105(a)(2)(x), (xi), 1.2105(b)(1), and 1.2106(a); see Part 1 Fifth Report and Order, 15 FCC Red
at 15317 4 42 & n.142 (“If any one of an applicant’s controlling interests or their affiliates...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
it[s] FCC Form 175, the applicant will not be able to make the certification required by section 1.2105(a)(2)(x)...and
will not be eligible to participate in Commission auctions.”).
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1.2110 of the Commission’s rules,'”’ are not in default on any payment for a Commission construction
permit or license (including down payments) and that it is not delinquent on any non-tax debt owed to any
Federal agency.'”' Each applicant must also state under penalty of perjury whether it, its affiliates, its
controlling interests, and the affiliates of its controlling interests, have ever been in default on any
Commission construction permit or license or have ever been delinquent on any non-tax debt owed to any
Federal agency.'” Prospective applicants 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.
75; Applicants are encouraged to review the Bureaus’ previous guidance on default and
delinquency disclosure requirements in the context of the short-form application process.” For example,
it has been determined that, to the extent that Commission rules permit late payment of regulatory or
application fees accompanied by late fees, such debts will become delinquent for purposes of sections
1.2105(a) and 1.2106(a) only after the expiration of a final payment deadline.'** Therefore, with respect
to regulatory or application fees, the provisions of sections 1.2105(a) and 1.2106(a) regarding default and
delinquency in connection with competitive bidding are limited to circumstances in which the relevant
party has not complied with a final Commission payment deadline.'” Parties are also encouraged to
consult with the Wireless Telecommunications Bureau’s Auctions and Spectrum Access Division staff if
they have any questions about default and delinquency disclosure requirements.
76. The Commission considers outstanding debts owed to the United States Government, in
any amount, to be a serious matter. The Commission adopted rules, including a provision referred to as
the “red light rule,” that implement its obligations under the Debt Collection Improvement Act of 1996,
which governs the collection of debts owed to the United States.'”° Under the red light rule, applications
and other requests for benefits filed by parties that have outstanding debts owed to the Commission will
not be processed. In the same rulemaking order, the Commission explicitly declared, however, that its
competitive bidding rules “are not affected” by the red light rule.'*’ As a consequence, the Commission’s
adoption of the red light rule does not alter the applicability of any of its competitive bidding rules,
120 47 C.F.R. § 1.2110.
121 47 C.F.R. § 1.2105(a)(2)(x); see also Part 1 Fifth Report and Order, 15 FCC Red at 15317 4 42 & n.142.
122 47 C.F.R. § 1.2105(a)(2)(xi); see also Part 1 Fifth Report and Order, 15 FCC Red at 15317 $ 42.
123 «Wireless Telecommunications Bureau Reminds Prospective Broadband PCS Spectrum Auction Applicants of
Default and Delinquency Disclosure Requirements,” Public Notice, DA 04-3491, 19 FCC Red 21920 (WTB 2004)
(“Auction Default Disclosure Public Notice”). This public notice may be found at
http://wireless. fec.gov/auctions/58/.
124 Letter to Cheryl A. Tritt, Esq., from Margaret Wiener, Chief, Auctions and Spectrum Access Division, Wireless
Telecommunications Bureau, DA 04-3685, 19 FCC Red 22907 (WTB 2004) (clarifying the term “debt” or “non-tax
debt” as referenced in 47 C.F.R. §§ 1.2105(a) and 1.2106(a)). This letter may be found at
http://wireless. fec.gov/auctions/58/.
125 Eyen where Commission rules expressly permit late payment, subject to payment of an additional late fee, and do
not impose a final payment deadline, the Commission may in some cases issue a demand for payment by a date
certain. See 47 C.F.R. § 1.1164(a). Failure to comply with the terms of a demand letter in the time period specified
may render the subject debt delinquent, notwithstanding rules generally permitting late payment.
126 Amendment of Parts 0 and 1 of the Commission's Rules; Implementation of the Debt Collection Improvement
Act of 1996 and Adoption of Rules Governing Applications or Requests for Benefits by Delinquent Debtors, MD
Docket No. 02-339, Report and Order, FCC 04-72, 19 FCC Red 6540 (2004) (implementing Pub. L. No. 104-134,
110 Stat. 1321, 1358 (1996)) (“Debt Collection Report and Order”).
127 Debt Collection Report and Order, 19 FCC Red at 6541 n.11 (specifically mentions 47 C.F.R. §§ 1.2105(a)(2)(x)
and (xi) and states that “[t]hese rules are not affected by the red light rule.”).
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including the provisions and certifications of sections 1.2105 and 1.2106, with regard to current and
former defaults or delinquencies.
TI: Applicants are reminded, however, that the Commission’s Red Light Display System,
which provides information regarding debts currently owed to the Commission, may not be determinative
of an auction applicant’s ability to comply with the default and delinquency disclosure requirements of
section 1.2105.'** Thus, while the red light rule ultimately may prevent the processing of long-form
applications by auction winners, an auction applicant’s lack of current “red light” status is not necessarily
determinative of its eligibility to participate in an auction or of its upfront payment obligation.
78. Moreover, prospective applicants in Auction 94 should note that any long-form
applications filed after the close of bidding will be reviewed for compliance with the Commission’s red
light rule,'” and such review may result in the dismissal of a winning bidder’s long-form application.'*°
G. Optional Applicant Status Identification
79. Applicants owned by members of minority groups and/or women, as defined in section
1.2110(c)(3),'*' and rural telephone companies, as defined in section 1.2110(c)(4), ' may identify
themselves regarding this status in filling out their short-form applications. This applicant status
information is collected for statistical purposes only and assists the Commission in monitoring the
participation of “designated entities” in its auctions."
H. Noncommercial Educational Status Election
80. In the NCE Second Report and Order, the Commission held that applications for
noncommercial educational (“NCE”) FM stations on nonreserved spectrum, filed during an FM filing
window, will be returned as unacceptable for filing if mutually exclusive with any application for a
commercial station.'** Accordingly, if an FCC Form 175 filed during the Auction 94 filing window
identifying the application’s proposed station as noncommercial educational is mutually exclusive with
any application filed during that window for a commercial station," the NCE application will be returned
as unacceptable for filing.'°° For this reason, each prospective applicant in this auction should consider
8 duction Default Disclosure Public Notice, DA 04-3491, 19 FCC Red at 21920 (addressing relationship between
Commission’s Red Light Display System and short-form application default and delinquency disclosure
requirements for auction applicants).
12 Debt Collection Report and Order, 19 FCC Red at 6540. See 47 C.F.R. § 1.1114.
n Applicants that have their long-form application dismissed will be deemed to have defaulted and will be subject
to default payments under 47 C.F.R. §§ 1.2104(g) and 1.2109(c).
BI 47 C.F.R. § 1.2110(c)(3).
132 47 C.F.R. § 1.2110(c)(4).
133 Designated entities are defined as small businesses, businesses owned by members of minority groups and/or
women, and rural telephone companies. See 47 C.F.R. § 1.2110(a).
* NCE Second Report and Order, 18 FCC Red at 6699-6701 11 21-24. See also 47 C.F.R. § 73.5002(b).
Applications specifying the same FM station construction permit are considered mutually exclusive. Broadcast
First Report and Order, 13 FCC Red at 15979 n.166.
* In the NCE Second Report and Order, the Commission determined that short-form applications that do not
identify the facilities proposed in the FCC Form 175 as “noncommercial educational” will be considered, as a matter
of law, applications for commercial broadcast stations. NCE Second Report and Order, 18 FCC Rcd at 6700 {1 22.
3° NCE Second Report and Order, 18 FCC Red at 6699-6701 11 21-24. See also 47 C.F.R. § 73.5002(b).
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carefully if they wish to propose NCE operation for any FM station acquired in this auction. This NCE
election cannot be reversed after the initial application filing deadline.”
I. Minor Modifications to Short-Form Applications
81. After the deadline for filing initial applications, an Auction 94 applicant is permitted to
make only minor changes to its application. Permissible minor changes include, among other things,
deletion and addition of authorized bidders (to a maximum of three) and revision of addresses and
telephone numbers of the applicants and their contact persons. An applicant is not permitted to make a
major modification to its application (e.g., change of construction permit selection, change control of the
applicant, change the certifying official, claim eligibility for a higher percentage of bidding credit, or
change the identification of the application’s proposed facilities as noncommercial educational) after the
initial application filing deadline.'** Thus, any change in control of an applicant — resulting from a
merger, for example — will be considered a major modification, and the application will consequently be
dismissed.
82. If an applicant wishes to make permissible minor changes to its short-form application,
such changes should be made electronically to its short-form application using the FCC Auction System
whenever possible. For the change to be submitted and considered by the Commission, be sure to click
on the SUBMIT button. After the revised application has been submitted, a confirmation page will be
displayed stating the submission time, submission date, and a unique file number. "°
83. An applicant cannot use the FCC Auction System outside of the initial and resubmission
filing windows to make changes to its short-form application for other than administrative changes (e.g.,
changing certain contact information or the name of an authorized bidder). If these or other permissible
minor changes need to be made outside of these windows, the applicant must submit a letter briefly
summarizing the changes and subsequently update its short-form application in the FCC Auction System
once it is available. Moreover, after the filing window has closed, the system will not permit applicants to
make certain changes, such as the applicant’s legal classification and the identification of the
application’s proposed facilities as noncommercial educational.
84. Any letter describing changes to an applicant’s short-form application must be submitted
by e-mail to [email protected]. The e-mail summarizing the changes must include a subject or caption
referring to Auction 94 and the name of the applicant, for example, “Re: Changes to Auction 94 Short-
Form Application of ABC Corp.” The Bureaus request that parties format any attachments to e-mail as
Adobe” Acrobat” (pdf) or Microsoft® Word documents. Questions about short-form application
amendments should be directed to the Auctions and Spectrum Access Division at (202) 418-0660.
85. Any application amendment and related statements of fact must be certified by (1) the
applicant, if the applicant is an individual; (2) one of the partners if the applicant is a partnership; (3) an
officer, director, or duly authorized employee, if the applicant is a corporation; (4) a member who is an
officer, if the applicant is an unincorporated association; (5) the trustee, if the applicant is an amateur
137 47 CER. § 1.2105(b); see also NCE Second Report and Order, 18 FCC Rcd at 6700 § 22.
138 47 C.F.R. § 1.2105(b); see also Two Way Radio of Carolina, Inc., Memorandum Opinion and Order, FCC 99-
189, 14 FCC Red 12035 (1999) (“Two Way Radio”)(auction applicant not allowed to change its designated entity
status after application filing deadline).
139 We reiterate that, even if an applicant’s short-form application is dismissed, the applicant would remain subject
to the communication prohibitions of 47 C.F.R. § 1.2105(c) until the down-payment deadline, which will be
established after the auction closes.
140 The Bureaus advise applicants to print and retain a copy of this confirmation page.
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radio service club; or (6) a duly elected or appointed official who is authorized to make such certifications
under the laws of the applicable jurisdiction, if the applicant is a governmental entity.'*"
86. Applicants must not submit application-specific material through the Commission’s
Electronic Comment Filing System, which was used for submitting comments regarding Auction 94.
J. Maintaining Current Information in Short-Form Applications
87. Sections 1.65 and 1.2105(b) of the Commission’s rules require an applicant to maintain
the accuracy and completeness of information furnished in its pending application and in competitive
bidding proceedings to furnish additional or corrected information to the Commission within five days of
a significant occurrence,'”” or to amend a short form application no more than five days after the applicant
becomes aware of the need for the amendment.'*? Changes that cause a loss of or reduction in the
percentage of bidding credit specified on the originally-submitted application must be reported
immediately, and no later than five business days after the change occurs." If an amendment reporting
changes is a “major amendment,” as defined by section 1.2105, the major amendment will not be
accepted and may result in the dismissal of the application." As noted above, after the short-form filing
deadline, applicants may make only minor changes to their applications. For changes to be submitted and
considered by the Commission, be sure to click on the SUBMIT button in the FCC Auction System. In
addition, an applicant cannot update its short-form application using the FCC Auction System after the
initial and resubmission filing windows close. If information needs to be submitted pursuant to section
1.65 after these windows close, a letter briefly summarizing the changes must be submitted by e-mail to
[email protected]. This e-mail must include a subject or caption referring to Auction 94 and the name
of the applicant. The Bureaus request that parties format any attachments to e-mail as Adobe” Acrobat®
(pdf) or Microsoft” Word documents.
WI. PRE-AUCTION PROCEDURES
A. Online Auction Tutorial — Available January 28, 2013
88. On Monday, January 28, 2013, an educational auction tutorial will be available on the
Auction 94 web page for prospective bidders to familiarize themselves with the auction process.
This online tutorial will provide information about pre-auction procedures, completing short-form
applications, auction conduct, the FCC Auction Bidding System, auction rules, and broadcast services
rules. The tutorial will also provide an avenue to ask FCC staff questions about the auction, auction
procedures, filing requirements, and other matters related to this auction.
89. The Auction 94 online tutorial replaces the live bidder seminars that have been offered
for many previous auctions. The Bureaus believe parties interested in participating in this auction will
find the interactive, online tutorial a more efficient and effective way to further their understanding of the
141 See 47 C.F.R. § 1.917; see also 47 C.F.R. § 73.3513.
' We remind each applicant of its duty to continuously maintain the accuracy of information submitted in its
auction application. See, e.g., Vermont Telephone Company, supra note <91>.
18 47 C.F.R. §§ 1.65, 1.2105(b). See also Part 1 Procedural Amendments Order, 25 FCC Rcd at 523 § 8.
144 See 47 C.F.R. § 73.5007(a). See also Rural First Report and Order, 25 FCC Rcd at 1611-1614 49 57-63. For
example, if ownership changes result in the attribution of new interest holders that affect the applicant’s
qualifications for a new entrant bidding credit, such information must be clearly stated in the bidder’s amendment.
See Liberty Productions, 16 FCC Red at 12077-79 §§ 34-37. Events occurring after the application filing deadline,
such as the acquisition of attributable interests in media of mass communications, may also cause diminishment or
loss of the bidding credit, and must be reported immediately, and no later than five business days after the change
occurs.
145 47 C.F.R. § 1.2105(b)(2).
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auction process. The tutorial will allow viewers to navigate the presentation outline, review written notes,
listen to audio recordings of the notes, and search for topics using a text search function. Additional
features of this web-based tool include links to auction-specific Commission releases, e-mail links for
contacting Commission licensing and auctions staff, a timeline with deadlines for auction preparation, and
screen shots of the online application and bidding system. The tutorial will be accessible through a web
browser with Adobe Flash Player.'*°
90. The auction tutorial will be accessible from the FCC’s Auction 94 web page at
http://wireless.fcc.gov/auctions/94/ through an “Auction Tutorial” link. Once posted, this tutorial will
remain available and accessible anytime for reference in connection with the procedures outlined in this
Public Notice.
B. Short-Form Applications — Due Prior to 6:00 p.m. ET on February 6, 2013
91, In order to be eligible to bid in this auction, applicants must first follow the procedures
set forth in Attachment B to this Public Notice to submit a short-form application (FCC Form 175)
electronically via the FCC Auction System.'*’ This short-form application must be submitted prior to
6:00 p.m. ET on February 6, 2013. Late applications will not be accepted. No application fee is
required, but an applicant must submit a timely upfront payment to be eligible to bid."
92. Applications may generally be filed at any time beginning at noon ET on January 28,
2013, until the filing window closes at 6:00 p.m. ET on February 6, 2013. Applicants are strongly
encouraged to file early and are responsible for allowing adequate time for filing their applications.
Applications can be updated or amended multiple times until the filing deadline on February 6, 2013.
93. An applicant must always click on the SUBMIT button on the “Certify & Submit” screen
to successfully submit its FCC Form 175 and any modifications; otherwise the application or changes to
the application will not be received or reviewed by Commission staff. Additional information about
accessing, completing, and viewing the FCC Form 175 is included in Attachment B. FCC Auctions
Technical Support is available at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-1255 (text
telephone (TTY)); hours of service are Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET. In order
to provide better service to the public, all calls to Technical Support are recorded.
C. Application Processing and Minor Corrections
94. After the deadline for filing FCC Form 175 applications, the Commission will process all
timely submitted applications to determine which are complete, and subsequently will issue a public
notice identifying (1) those that are complete; (2) those that are rejected; and (3) those that are incomplete
or deficient because of minor defects that may be corrected. The public notice will include the deadline
for resubmitting corrected applications.
95. Non-mutually exclusive applications will be listed in a subsequent public notice to be
released by the Bureaus. Such applications will not proceed to auction, but will proceed in accordance
with instructions set forth in that public notice.” All mutually exclusive applications will be considered
under the relevant procedures for conflict resolution. Mutually exclusive applications proposing
commercial stations will proceed to auction.
146 Most users will already have the Flash Player browser plug-in, which can be downloaded from
http://get.adobe.com/flashplayer/.
147 47 C.F.R. § 1.2105(a).
148 See Section III.D. “Upfront Payments — Due March 18, 2013,” below.
See 47 C.F.R. § 73.3573(f)(4).
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96. As described above, after the application filing deadline on February 6, 2013, applicants
can make only minor corrections to their applications.'*’ They will not be permitted to make major
modifications (e.g., change construction permit selection, change control of the applicant, change the
certifying official, claim eligibility for a higher percentage of bidding credit, or change identification of
the application’s proposed facilities as NCE).'*!
97. Commission staff will communicate only with an applicant’s contact person or certifying
official, as designated on the short-form application, unless the applicant’s certifying official or contact
person notifies the Commission in writing that applicant’s counsel or other representative is authorized to
speak on its behalf.'°* Authorizations may be sent by e-mail to [email protected].
D. Upfront Payments — Due March 18, 2013
98. In order to be eligible to bid in this auction, an upfront payment must be submitted and
accompanied by an FCC Remittance Advice Form (FCC Form 159). After completing its short-form
application, an applicant will have access to an electronic version of the FCC Form 159 that can be
printed and sent by fax to U.S. Bank in St. Louis, Missouri. All upfront payments must be made as
instructed in this Public Notice and must be received in the proper account at U.S. Bank before
6:00 p.m. ET on March 18, 2013.
1. Making Upfront Payments by Wire Transfer
99. Wire transfer payments must be received before 6:00 p.m. ET on March 18, 2013.'°? No
other payment method is acceptable.’ To avoid untimely payments, applicants should discuss
arrangements (including bank closing schedules) with their bankers 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. The following information will be needed:
ABA Routing Number: 081000210
Receiving Bank: U.S. Bank
1005 Convention Plaza
St. Louis, MO 63101
BENEFICIARY: FCC/Account # 152308790392
Originating Bank Information (OBI Field): (Skip one space between each information item)
“AUCTIONPAY”
APPLICANT FCC REGISTRATION NUMBER (FRN): (same as FCC Form 159, block 21)
PAYMENT TYPE CODE: (same as FCC Form 159, block 24A: “U094’)
FCC CODE 1: (same as FCC Form 159, block 28A: “94”)
PAYER NAME: (same as FCC Form 159, block 2)
LOCKBOX NO: # 979085
NOTE: The BNF and Lockbox number are specific to the upfront payments for this auction. Do not use
BNF or Lockbox numbers from previous auctions.
150 See Section ILI. “Minor Modifications to Short-Form Applications,” above.
151 47 C.F.R. § 1.2105(b); see also Two Way Radio, 14 FCC Red at 12035.
152 Tn no event, however, will the FCC send auction registration materials to anyone other than the contact person
listed on the applicant’s FCC Form 175 or respond to a request for replacement registration materials from anyone
other than the authorized bidder, contact person, or certifying official listed on the applicant’s FCC Form 175. See
Section I.F. “Auction Registration,” below.
153 An applicant must initiate the wire transfer through its bank, authorizing the bank to wire funds from the
applicant’s account to the Commission’s auction payment lockbox bank, the U.S. Bank in St. Louis, Missouri.
154 The Commission will not accept checks, credit cards, or automated clearing house (ACH) payments.
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100. At least one hour before placing the order for the wire transfer (but on the same business
day), applicants must fax a completed FCC Form 159 (Revised 2/03) to U.S. Bank at (314) 418-4232. On
the fax cover sheet, write “Wire Transfer — Auction Payment for Auction 94.” In order to meet the
upfront payment deadline, an applicant’s payment must be credited to the Commission's account for
Auction 94 before the deadline."
101. Each applicant is responsible for ensuring timely submission of its upfront payment and
for timely filing of an accurate and complete FCC Remittance Advice Form (FCC Form 159). An
applicant should coordinate with its financial institution well ahead of the due date regarding its wire
transfer and allow sufficient time for the transfer to be initiated and completed prior to the deadline. The
Commission repeatedly has cautioned auction participants about the importance of planning ahead to
prepare for unforeseen last-minute difficulties in making payments by wire transfer. Each applicant
also is responsible for obtaining confirmation from its financial institution that its wire transfer to
U.S. Bank was successful and from Commission staff that its upfront payment was timely received
and that it was deposited into the proper account. To receive confirmation from Commission staff,
contact Gail Glasser of the Office of Managing Director’s Auctions Accounting Group at (202) 418-0578,
or alternatively, Theresa Meeks at (202) 418-2945.
102. Please note the following information regarding upfront payments:
e All payments must be made in U.S. dollars.
e All payments must be made by wire transfer.
e Upfront payments for Auction 94 go to a lockbox number different from the lockboxes used
in previous FCC auctions.
e Failure to deliver a sufficient upfront payment as instructed by the March 18, 2013, deadline
will result in dismissal of the short-form application and disqualification from participation in
the auction.
2. FCC Form 159
103. An accurate and complete FCC Remittance Advice Form (FCC Form 159, Revised 2/03)
must be faxed to U.S. Bank to accompany each upfront payment. Proper completion of this form is
critical to ensuring correct crediting of upfront payments. Detailed instructions for completion of FCC
Form 159 are included in Attachment C. An electronic pre-filled version of the FCC Form 159 is
available after submitting the FCC Form 175. Payers using the pre-filled FCC Form 159 are responsible
for ensuring that all of the information on the form, including payment amounts, is accurate. The FCC
Form 159 can be completed electronically, but it must be filed with U.S. Bank by fax.
3. Upfront Payments and Bidding Eligibility
104. The Commission has delegated to the Bureaus the authority and discretion to determine
appropriate upfront payments for each auction.'°’ Upfront payments help deter frivolous or insincere
155 Letter to Lee G. Petro, from Margaret W. Wiener, Chief, Auctions and Spectrum Access Division, Wireless
Telecommunications Bureau, DA 10-1270, 25 FCC Red 9046 (Auc. Div. 2010).
136 See, e.g, Letter to David G. O’Neil, Esq. from Margaret W. Wiener, Chief, Auctions and Spectrum Access
Division, Wireless Telecommunications Bureau, DA 08-622, 23 FCC Red 4765 (Auc. Div. 2008); Letter to Patrick
Shannon, Esq., Counsel for Lynch 3G Communications Corp., from Margaret W. Wiener, Chief, Auctions and
Industry Analysis Division, Wireless Telecommunications Bureau, DA 03-1944, 18 FCC Red 11552 (WTB 2003).
157 Amendment of Part 1 of the Commission’s Rules — Competitive Bidding Proceeding, WT Docket No. 97-82,
Order, Memorandum Opinion and Order and Notice of Proposed Rule Making, FCC 97-60, 12 FCC Red 5686,
5697-98 1 16 (1997); see also Broadcast First Report and Order, 13 FCC Red at 15971 $ 134.
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bidding, and provide the Commission with a source of funds in the event that the bidder incurs liability
during the auction.
105. Applicants that are former defaulters, as described above, must pay upfront payments 50
percent greater than non-former defaulters.'** For purposes of this calculation, the “applicant” includes
the applicant itself, its affiliates, its controlling interests, and affiliates of its controlling interests, as
defined by section 1.2110 of the Commission’s rules.’
106. Applicants must make upfront payments sufficient to obtain bidding eligibility on the
construction permits on which they will bid. The Bureaus proposed, in the Auction 94 Comment Public
Notice, that the amount of the upfront payment would determine a bidder’s initial bidding eligibility, the
maximum number of bidding units on which a bidder may place bids.’ Under the Bureaus’ proposal, in
order to bid on a particular construction permit, a qualified bidder must have selected the construction
permit on its FCC Form 175 and must have a current eligibility level that meets or exceeds the number of
bidding units assigned to that construction permit. At a minimum, therefore, an applicant’s total
upfront payment must be enough to establish eligibility to bid on at least one of the construction
permits selected on its FCC Form 175, or else the applicant will not be eligible to participate in the
auction. An applicant does not have to make an upfront payment to cover all construction permits the
applicant selected on its FCC Form 175, but only enough to cover the maximum number of bidding units
that are associated with construction permits on which they wish to place bids and hold provisionally
winning bids in any given round.'*' The total upfront payment does not affect the total dollar amount the
bidder may bid on any given construction permit.
107. Inthe Auction 94 Comment Public Notice, the Bureaus proposed an upfront payment for
each construction permit, taking into account various factors related to the efficiency of the auction
process and the potential value of similar spectrum, and sought comment on this proposal. The Bureaus
received no comments on the proposal that the upfront payment amount would determine a bidder’s
initial bidding eligibility. The specific upfront payment amounts and bidding units for each construction
permit are set forth in Attachment A of this Public Notice.
108. In calculating its upfront payment amount, an applicant should determine the maximum
number of bidding units on which it may wish to be active (bid on or hold provisionally winning bids on)
in any single round, and submit an upfront payment amount covering that number of bidding units.’ In
order to make this calculation, an applicant should add together the bidding units for all construction
permits on which it seeks to be active in any given round. Applicants should check their calculations
carefully, as there is no provision for increasing a bidder’s eligibility after the upfront payment
deadline.
1S8 Part 1 Fifth Report and Order, 15 FCC Red at 15316-17 §§ 40-42; see also 47 C.F.R. § 1.2106(a); Section ILG.
“Provisions Regarding Former and Current Defaulters,” above.
15 47 C.F.R. § 1.2110(c).
160 Auction 94 Comment Public Notice at 17.
16l Provisionally winning bids are bids that would become final winning bids if the auction were to close after the
given round. See Section IV.B.4. “Provisionally Winning Bids,” below.
162 A qualified bidder’s maximum eligibility will not exceed the sum of the bidding units associated with the total
number of construction permits identified on its FCC Form 175. In some cases a qualified bidder's maximum
eligibility may be less than the amount of its upfront payment because the qualified bidder has either previously
been in default on a Commission construction permit or license or delinquent on non-tax debt owed to a Federal
agency (see 47 C.F.R. § 1.2106(a)), or has submitted an upfront payment that exceeds the total amount of bidding
units associated with the construction permits it selected on its FCC Form 175.
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Example: Upfront Payments and Bidding Flexibility
Construction
Permit
MM-FM664-A Harrison, MI
Market Name Bidding Units Upfront Payment
MM-FM742-A Tigerton, WI
If a bidder wishes to bid on both construction permits in a round, it must have selected both on its FCC
Form 175 and purchased at least 12,500 bidding units (7,500 + 5,000) of bidding eligibility. If it only
wishes to bid on one, but not both, purchasing 7,500 bidding units would meet the eligibility
requirement for either construction permit. The bidder would be able to bid on either construction
permit, but not both at the same time. If the bidder purchased only 5,000 bidding units, the bidder
would have enough eligibility for the Tigerton, WI construction permit but not for the Harrison, MI
construction permit.
109. Ifan applicant is a former defaulter, it must calculate its upfront payment for all of its
identified construction permits by multiplying the number of bidding units on which it wishes to be active
by 1.5.'° In order to calculate the number of bidding units to assign to former defaulters, the
Commission will divide the upfront payment received by 1.5 and round the result up to the nearest
bidding unit.'“
E. Applicant’s Wire Transfer Information for Purposes of Refunds of Upfront
Payments
110. To ensure that refunds of upfront payments are processed in an expeditious manner, the
Commission is requesting that all pertinent information listed below be supplied. Applicants can provide
the information electronically during the initial short-form application filing window after the form has
been submitted. (Applicants are reminded that information submitted as part of an FCC Form 175 will be
available to the public; for that reason, wire transfer information should not be included in an FCC Form
175.) Wire Transfer Instructions can also be faxed to the FCC, Financial Operations, Auctions
Accounting Group, Attn: Gail Glasser, at (202) 418-2980. Eligibility for refunds is discussed in Section
V.E., below. All refunds will be returned to the payer of record as identified on the FCC Form 159 unless
the payer submits written authorization instructing otherwise. For additional information, please call Gail
Glasser at (202) 418-0578.
Name of Bank
ABA Number
Address of Bank
Contact and Telephone Number
Account Number to Credit
Name of Account Holder
FCC Registration Number (FRN)
Correspondent Bank (if applicable)
ABA Number
Account Number
16 47 C.F.R. § 1.2106(a).
164 Tf a former defaulter fails to submit a sufficient upfront payment to establish eligibility to bid on at least one of
the construction permits selected on its FCC Form 175, the applicant will not be eligible to participate in the auction.
Broadcast First Report and Order, 13 FCC Red at 15979-80 § 153. This applicant will retain its status as an
applicant in Auction 94 and will remain subject to 47 C.F.R. §§ 1.2105(c) and 73.5002(d). See Star and Northeast
Review Order, 22 FCC Red at 8943.
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F. Auction Registration
111. Approximately ten days before the auction, the Bureaus will issue a public notice
announcing all qualified bidders for the auction. Qualified bidders are those applicants with submitted
FCC Form 175 applications that are deemed timely-filed, accurate, and complete, provided that such
applicants have timely submitted an upfront payment that is sufficient to qualify them to bid.
112. All qualified bidders are automatically registered for the auction. Registration materials
will be distributed prior to the auction by overnight mail. The mailing will be sent only to the contact
person at the contact address listed in the FCC Form 175 and will include the SecurID” tokens that will
be required to place bids, the “Integrated Spectrum Auction System (ISAS) Bidder’s Guide,” and the
Auction Bidder Line phone number.
113. Qualified bidders that do not receive this registration mailing will not be able to submit
bids. Therefore, if this mailing is not received by noon on Wednesday, April 17, 2013, call the Auctions
Hotline at (717) 338-2868. Receipt of this registration mailing is critical to participating in the auction,
and each applicant is responsible for ensuring it has received all of the registration material.
114. In the event that SecurID” tokens are lost or damaged, only a person who has been
designated as an authorized bidder, the contact person, or the certifying official on the applicant’s short-
form application may request replacements. To request replacement of these items, call Technical
Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-1255 (TTY).
G. Remote Electronic Bidding
115. |The Commission will conduct this auction over the Internet, and telephonic bidding will
be available as well. Only qualified bidders are permitted to bid. Each applicant should indicate its
bidding preference — electronic or telephonic — on its FCC Form 175. In either case, each authorized
bidder must have its own SecurID® token, which the Commission will provide at no charge. Each
applicant with one authorized bidder will be issued two SecurID® tokens, while applicants with two or
three authorized bidders will be issued three tokens. For security purposes, the SecurID® tokens, the
telephonic bidding telephone number, and the “Integrated Spectrum Auction System (ISAS)
Bidder’s Guide” are only mailed to the contact person at the contact address listed on the FCC
Form 175. Each SecurID” token is tailored to a specific auction. SecurID" tokens issued for other
auctions or obtained from a source other than the FCC will not work for Auction 94.
116. Please note that the SecurID® tokens can be recycled, and the Bureaus encourage bidders
to return the tokens to the FCC. Pre-addressed envelopes will be provided to return the tokens once
bidding has closed.
H. Mock Auction — April 19, 2013
117. All qualified bidders will be eligible to participate in a mock auction on Friday, April 19,
2013. The mock auction will enable bidders to become familiar with the FCC Auction System prior to
the auction. The Bureaus strongly recommend that all bidders participate in the mock auction. Details
will be announced by public notice.
IV. AUCTION
118. The first round of bidding for Auction 94 will begin on Tuesday, April 23, 2013. The
initial bidding schedule will be announced in a public notice listing the qualified bidders, which is
released approximately 10 days before the start of the auction.
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A. Auction Structure
1. Simultaneous Multiple Round Auction
119. Inthe Auction 94 Comment Public Notice, the Bureaus proposed to auction all
construction permits in Auction 94 in a single auction using the Commission’s standard simultaneous
multiple-round auction format.’ This type of auction offers every construction permit for bid at the
same time and consists of successive bidding rounds in which eligible bidders may place bids on
individual construction permits. A bidder may bid on, and potentially win, any number of construction
permits. The Bureaus received no comment on this proposal, and this proposal is adopted. Unless
otherwise announced, bids will be accepted on all construction permits in each round of the auction until
bidding stops on every construction permit.
2. Eligibility and Activity Rules
120. As discussed above, the Bureaus will use upfront payments to determine initial
(maximum) eligibility (as measured in bidding units) for Auction 94.'° The amount of the upfront
payment submitted by a bidder determines initial bidding eligibility, the maximum number of bidding
units on which a bidder may be active. As noted earlier, each construction permit is assigned a specific
number of bidding units as listed in Attachment A. Bidding units assigned to each construction permit do
not change as prices rise during the auction. Upfront payments are not attributed to specific construction
permits. Rather, a bidder may place bids on any of the construction permits selected on its FCC Form
175 as long as the total number of bidding units associated with those construction permits does not
exceed its current eligibility.
121. In order to ensure that an auction closes within a reasonable period of time, an activity
rule requires bidders to bid actively throughout the auction, rather than wait until late in the auction before
participating. Bidders are required to be active on a specific percentage of their current bidding eligibility
during each round of the auction. A bidder’s activity level in a round is the sum of the bidding units
associated with construction permits covered by the bidder’s new and provisionally winning bids.'”’ In
the Auction 94 Comment Public Notice, the Bureaus proposed a 100 percent activity requirement.
122. Mark Jones comments on upfront payments and the proposed 100 percent activity rule.
With respect to upfront payments Mr. Jones urges that we require each applicant to submit an upfront
payment equal to the total of the upfront payment amounts for all of the permits they select on FCC Form
175. Mr. Jones argues that such a requirement would diminish defaults by eliminating non-serious
bidders, would be fairer to other bidders by allowing them to determine the competition they face would
favor smaller companies and new entrants, and would give the Commission a more realistic idea of which
permits were not of interest to potential bidders. Mr. Jones also requests that we not adopt the 100
percent activity requirement. He argues that the lower activity requirements in prior auctions gave a
bidder more flexibility. In Mr. Jones’s view, a lower activity requirement, at least in earlier rounds,
would result in more permits being sold, because bidders would not place bids on less desirable permits
merely to maintain bidding eligibility.’
123. | We decline Mr. Jones’s request to require an upfront payment covering of all the permits
selected by an applicant in its FCC Form 175. Allowing each applicant to submit an upfront payment that
covers the maximum number of bidding units on which it may wish to be active in any given round
' duction 94 Comment Public Notice at { 8.
16 See Section III.D.3. “Upfront Payments and Bidding Eligibility,” above.
16 Provisionally winning bids are bids that would become final winning bids if the auction were to close after the
given round. See Section IV.B.4. “Provisionally Winning Bids,” below.
168 Jones Comments, 11 1-2.
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affords bidders the flexibility to pursue backup strategies — not unlike having an activity requirement
below 100%.
124. With regard to the activity requirements, the Bureaus acknowledge Mr. Jones’s point that
using an activity requirement of less than 100%, as we have done for some previous auctions of FM
broadcast construction permits, would provide bidders with more flexibility to pursue backup strategies, if
they so desire. Accordingly, we do not adopt our proposal to have a 100% activity requirement. Instead,
the Bureaus adopt two activity requirements: an 80% requirement for the beginning of the auction and a
95% requirement that will be used later in the auction. The Bureaus will implement these requirements
using two “auction stages.”
125. Stage One: During the first stage of the auction, a bidder desiring to maintain its current
bidding eligibility will be required to be active on licenses representing at least 80 percent of its current
bidding eligibility in each bidding round. Failure to maintain the required activity level will result in the
use of an activity rule waiver or, if the bidder has no activity rule waivers remaining, a reduction in the
bidder’s bidding eligibility in the next round.” During Stage One, reduced eligibility for the next round
will be calculated by multiplying the bidder’s current round activity (the sum of bidding units of the
bidder’s provisionally winning bids and bids during the current round) by five-fourths (5/4).
126. Stage Two: During the second stage of the auction, a bidder desiring to maintain its
current bidding eligibility is required to be active on 95 percent of its current bidding eligibility. Failure
to maintain the required activity level will result in the use of an activity rule waiver or, if the bidder has
no activity rule waivers remaining, a reduction in the bidder’s bidding eligibility in the next round.
During Stage Two, reduced eligibility for the next round will be calculated by multiplying the bidder’s
current round activity (the sum of bidding units of the bidder’s provisionally winning bids and bids during
the current round) by twenty-nineteenths (20/19).
CAUTION: Since activity requirements increase in Stage Two, bidders must carefully check
their activity during the first round following a stage transition to ensure that they are meeting the
increased activity requirement. This is especially critical for bidders that have provisionally
winning 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
activity level by logging into the FCC Auction System
127. | When the Bureaus move the auction from Stage One to Stage Two, we will first alert
bidders by announcement in the bidding system. The Bureaus have the discretion to further alter the
activity requirements before and/or during the auction as circumstances warrant.
3. Activity Rule Waivers
128. Inthe Auction 94 Comment Public Notice, the Bureaus proposed that each bidder in the
auction be provided with three activity rule waivers.'”” The Bureaus received no comments on this issue.
129. Therefore, the Bureaus adopt this proposal to provide bidders with three activity rule
waivers. Bidders may use an activity rule waiver in any round during the course of the auction. Use of
an activity rule waiver preserves the bidder’s eligibility despite its activity in the current round being
below the required minimum activity level. An activity rule waiver applies to an entire round of bidding
and not to a particular construction permit. Waivers can be either proactive or automatic and are
principally a mechanism for auction participants to avoid the loss of bidding eligibility in the event that
exigent circumstances prevent them from placing a bid in a particular round.
' See Section IV.A.3. “Activity Rule Waivers,” below.
170 duction 94 Comment Public Notice at 23.
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130. The FCC Auction System assumes that a bidder with insufficient activity would prefer to
apply an activity rule waiver (if available) rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver at the end of any bidding round in which a bidder’s activity level is below
the minimum required unless (1) the bidder has no activity rule waivers remaining or (2) the bidder
overrides the automatic application of a waiver by reducing eligibility. If no waivers remain and the
activity requirement is not satisfied, the FCC Auction System will permanently reduce the bidder’s
eligibility, possibly curtailing or eliminating the ability to place additional bids in the auction.
131. 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 round by using the “reduce eligibility” function in the FCC Auction System. In this
case, the bidder’s eligibility is permanently reduced to bring it into compliance with the activity rule
described above. Reducing eligibility is an irreversible action; once eligibility has been reduced, a bidder
will not be permitted to regain its lost bidding eligibility, even if the round has not yet closed.
132. Finally, a bidder may apply an activity rule waiver proactively as a means to keep the
auction open without placing a bid. Ifa proactive waiver is applied (using the “apply waiver” function in
the FCC Auction System) during a bidding round in which no bids are placed, the auction will remain
open and the bidder’s eligibility will be preserved. However, an automatic waiver applied by the FCC
Auction System in a round in which there are no new bids or proactive waivers will not keep the auction
open. A bidder cannot submit a proactive waiver after bidding in a round, and applying a proactive
waiver will preclude it from placing any bids in that round. Applying a waiver is irreversible; once a
bidder submits a proactive waiver, the bidder cannot unsubmit the waiver even if the round has not
yet ended.
4. Auction Stopping Rules
133. For Auction 94, the Bureaus proposed to employ a simultaneous stopping rule approach,
which means all construction permits remain available for bidding until bidding stops simultaneously on
every construction permit.'”' More specifically, bidding will close on all construction permits after the
first round in which no bidder submits any new bids or applies a proactive waiver.
134. | We also sought comment on alternative versions of the simultaneous stopping rule for
Auction 94:
Option 1. The auction would close for all construction permits after the first round in which no
bidder applies a proactive waiver or places any new bids on any construction permit on which it
is not the provisionally winning bidder. Thus, absent any other bidding activity, a bidder placing
a new bid on a construction permit for which it is the provisionally winning bidder would not
keep the auction open under this modified stopping rule.
Option 2. The auction would close for all construction permits after the first round in which no
bidder applies a waiver or places any new bids on any construction permit that is not FCC held.
Thus, absent any other bidding activity, a bidder placing a new bid on a construction permit that
does not already have a provisionally winning bid (an “FCC-held” construction permit) would not
keep the auction open under this modified stopping rule.
Option 3. The auction would close using a modified version of the simultaneous stopping rule
that combines (a) and (b) above.
Option 4. The auction would end after a specified number of additional rounds. If the Bureaus
invoke this special stopping rule, it will accept bids in the specified final round(s), after which
the auction will close.
171 duction 94 Comment Public Notice at {9 12-14.
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Option 5. The auction would remain open even if no bidder places any new bids or applies a
waiver. In this event, the effect will be the same as if a bidder had applied a waiver. Thus, the
activity rule will apply as usual, and a bidder with insufficient activity will either lose bidding
eligibility or use a waiver.
135. | We proposed to exercise these options only in certain circumstances, for example, where
the auction is proceeding unusually slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable period of time or will close
prematurely.'” Before exercising these options, we are likely to attempt to change the pace of the
auction. For example, the Bureaus may adjust the pace of bidding by changing the number of bidding
rounds per day and/or the minimum acceptable bids.'” We proposed to retain the discretion to exercise
any of these options with or without prior announcement during the auction.' We received no comment
on these proposals and adopt them for Auction 94.
5. Auction Delay, Suspension, or Cancellation
136. Inthe Auction 94 Comment Public Notice, the Bureaus proposed that, by public notice or
by announcement during the auction, they may delay, suspend, or cancel the auction in the event of
natural disaster, technical obstacle, administrative or weather necessity, evidence of an auction security
breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of
competitive bidding.’ We received no comment on this issue.
137. Because this approach has proven effective in resolving exigent circumstances in
previous auctions, the Bureaus adopt these proposals regarding auction delay, suspension, or cancellation.
By public notice or by announcement during the auction, we may delay, suspend, or cancel the auction in
the event of natural disaster, technical obstacle, administrative or weather necessity, evidence of an
auction security breach or unlawful bidding activity, or for any other reason that affects the fair and
efficient conduct of competitive bidding. In such cases, the Bureaus, in their sole discretion, may elect to
resume the auction starting from the beginning of the current round or from some previous round, or
cancel the auction in its entirety. Network interruption may cause the Bureaus to delay or suspend the
auction. We emphasize that we will exercise of this authority solely at our discretion, and not as a
substitute for situations in which bidders may wish to apply their activity rule waivers.
B. Bidding Procedures
1. Round Structure
138. The initial schedule of bidding rounds will be announced in the public notice listing the
qualified bidders, which is released approximately 10 days before the start of the auction. Each bidding
round is followed by the release of round results. Multiple bidding rounds may be conducted each day.
139. The Bureaus have the 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. We may change the amount of time for the bidding rounds, the amount of time
between rounds, or the number of rounds per day, depending upon bidding activity and other factors.
2. Reserve Price and Minimum Opening Bids
140. Section 309(j) of the Act calls upon the Commission to prescribe methods by which a
reasonable reserve price will be required or a minimum opening bid established when applications for
172 Td. at] 14.
'8 Id.
"14 Tq,
175 Td. at 115.
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FCC licenses or construction permits are subject to auction (i.e., because they are mutually exclusive),
unless the Commission determines that a reserve price or minimum opening bid is not in the public
interest.'”° Consistent with this mandate, the Commission directed the Bureaus to seek comment on the
use of a minimum opening bid and/or reserve price prior to the start of each auction.” Among other
factors, we must consider the amount of spectrum being auctioned, levels of incumbency, the availability
of technology to provide service, the size of the geographic service areas, the extent of interference with
other spectrum bands, and any other relevant factors that could have an impact on the spectrum being
auctioned." The Commission concluded that the Bureaus should have the discretion to employ either or
both of these mechanisms for future auctions.'”
141. = Inthe Auction 94 Comment Public Notice, the Bureaus did not propose to establish
reserve prices for the construction permits in Auction 94. This is consistent with policy applied in earlier
broadcast spectrum auctions. We did, however, propose to establish minimum opening bids for each
construction permit, reasoning that a minimum opening bid, which has been used in other auctions, is an
effective tool for accelerating the competitive bidding process.'*’ Specifically, a minimum opening bid
was proposed for each construction permit by taking into account various factors relating to the efficiency
of the auction and the potential value of the spectrum, including the type of service and class of facility
offered, market size, population covered by the proposed FM broadcast facility, industry cash flow data,
and recent broadcast transactions. We sought comment on the proposed minimum opening bids.
142. H&D requests that the minimum opening bids (and corresponding upfront payment
amounts) for the construction permits at Oak Harbor, Washington (Channel 277A, MM-FM1057-A) and
Sedro-Woolley, Washington (Channel 289A, MM-FM1058-A) be reduced from $25,000 to $14,500, and
from $45,000 to $8,500, respectively.'*' H&D contends that both of these channels will be affected by
Canadian stations and will have to reduce power toward Canada. H&D therefore asks the Bureaus to
recalculate the minimum opening bid amounts based on the total interference-free population that could
be served by a facility at the respective allotment sites. For the Oak Harbor allotment, using 2010 U.S.
Census data, our analysis indicates that the population within the standard 60 dBu contour would be
approximately 131,100, while the population within the interference-free service area would be
approximately 84,600. For the Sedro-Woolley allotment, our analysis indicates that the population within
the standard 60 dBu contour would be approximately 322,000, while the population within the
interference-free service area would be approximately 23,000. Recognizing the unique information of
internationally-short-spaced allotments and the resultant impact on interference-free service which those
allotments will provide, the Bureaus therefore agree that reduction of the proposed minimum opening bid
amounts for the Oak Harbor and Sedro-Woolley allotments is warranted. After further consideration of
the specific circumstances concerning these two construction permits, we adopt a minimum opening bid
for MM-FM1057-A, at Oak Harbor, Washington, of $15,000 and a minimum opening bid for MM-
FM1058-A, at Sedro-Woolley, Washington, of $5,000.
143. Similarly, Radio Pacific requests that the minimum opening bid (and corresponding
upfront payment amount) for the construction permit at Sequim, Washington (Channel 237A, MM-
FM1059-A) be reduced from $20,000 to $2,500. Radio Pacific contends that this channel will be affected
by a Canadian station and will have to reduce power. Radio Pacific therefore asks the Bureaus to
' 47 U.S.C. § 309(j)(4)(F).
177 Part 1 Third Report and Order, FCC 97-413, 13 FCC Rcd at 455-56 § 141.
18 Td.
1 Td.
180 Auction 94 Comment Public Notice at 126.
18 H&D (Oak Harbor) Comments at 1; H&D (Sedro-Woolley) Comments at 1.
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recalculate the minimum opening bid amount based on the total interference-free population that could be
served by a facility at the allotment site. For the Sequim allotment, using 2010 U.S. Census data, our
analysis indicates that the population within the 60 dBu contour would be approximately 110,600, while
the population within the interference-free service area would be approximately 9,000. For the reasons
discussed above, the Bureaus agree that reduction of the proposed minimum opening bid amount for the
Sequim construction permit is warranted. Accordingly, we adopt a minimum opening bid for MM-
FM1059-A, at Sequim, Washington, of $1,500.
144. For the rest of the construction permits, the Bureaus adopt the minimum opening bid
amounts proposed in the Auction 94 Comment Public Notice. The specific minimum opening bid
amounts for all the construction permits available in Auction 94 are again specified in Attachment A to
this Public Notice.
3. Bid Amounts
145. Inthe Auction 94 Comment Public Notice, the Bureaus proposed that in each round, an
eligible bidder will be able to place a bid on a given construction permit in any of up to nine different
amounts.'*’ Under the proposal, the FCC Auction System interface will list the nine acceptable bid
amounts for each construction permit.'*’ The Bureaus received no comments on this proposal; therefore,
it is adopted.
146. The first of the acceptable bid amounts is called the minimum acceptable bid amount.
The minimum acceptable bid amount for a construction permit will be equal to its minimum opening bid
amount until there is a provisionally winning bid for the construction permit. After there is a
provisionally winning bid for a permit, the minimum acceptable bid amount will be a certain percentage
higher. That is, the minimum acceptable bid amount will be calculated by multiplying the provisionally
winning bid amount times one plus the minimum acceptable bid percentage. For example, if the
minimum acceptable bid percentage is 10 percent, the minimum acceptable bid amount will equal
(provisionally winning bid amount) * (1.10), rounded.'™
147. Inthe Auction 94 Comment Public Notice, we proposed to use a minimum acceptable bid
percentage of 10 percent. We did not receive any comments on this proposal. Our experience in previous
broadcast auctions assures us that a minimum acceptable bid percentage of 10 percent is sufficient to
ensure active bidding. Therefore, we will begin the auction with a minimum acceptable bid percentage of
10 percent.
148. The eight additional bid amounts are calculated using the minimum acceptable bid
amount and a bid increment percentage, which need not be the same as the percentage used to calculate
the minimum acceptable amount. The first additional acceptable bid amount equals the minimum
acceptable bid amount times one plus the bid increment percentage, rounded. If, for example, the bid
increment percentage is 5 percent, the calculation is (minimum acceptable bid amount) * (1 + 0.05),
rounded, or (minimum acceptable bid amount) * 1.05, rounded; the second additional acceptable bid
amount equals the minimum acceptable bid amount times one plus two times the bid increment
percentage, rounded, or (minimum acceptable bid amount) * 1.10, rounded; the third additional
acceptable bid amount equals the minimum acceptable bid amount times one plus three times the bid
'® Bidders must have sufficient eligibility to place a bid on the particular construction permit. See Section III.D.3
“Upfront Payments and Bidding Eligibility,” above.
'S Tn the event of duplicate bid amounts due to rounding, the FCC Auction System will omit the duplicates and will
list fewer acceptable bid amounts for the license.
184 Results above $10,000 are rounded to the nearest $1,000; results below $10,000 but above $1,000 are rounded to
the nearest $100; and results below $1000 are rounded to the nearest $10.
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increment percentage, rounded, or (minimum acceptable bid amount) * 1.15, rounded; etc. We will round
the results of these calculations using the standard rounding procedures for auctions.'*°
149. Inthe Auction 94 Comment Public Notice, the Bureaus proposed to use a bid increment
percentage of 5 percent, and received no comment on this issue. We believe that a bid increment
percentage of 5 percent will give bidders the flexibility to speed up the pace of the auction, if appropriate.
We therefore adopt this proposal, and will begin the auction with a bid increment percentage of 5 percent.
150. The Bureaus proposed to retain the discretion to change the minimum acceptable bid
amounts, the minimum acceptable bid percentage, the bid increment percentage, and the number of
acceptable bid amounts if we determine that circumstances so dictate. Further, the Bureaus proposed to
retain the discretion to do so on a construction permit-by-construction permit basis. We also proposed to
retain the discretion to limit (a) the amount by which a minimum acceptable bid for a construction permit
may increase compared with the corresponding provisionally winning bid, and (b) the amount by which
an additional bid amount may increase compared with the immediately preceding acceptable bid amount.
For example, the Bureaus could set a $10,000 limit on increases in minimum acceptable bid amounts over
provisionally winning bids. Thus, if calculating a minimum acceptable bid using the minimum
acceptable bid percentage results in a minimum acceptable bid amount that is $12,000 higher than the
provisionally winning bid on a construction permit, the minimum acceptable bid amount would instead be
capped at $10,000 above the provisionally winning bid.
151. The Bureaus did not receive any comments on their proposal to retain the discretion to
change bid amounts as described above if they determine that circumstances so dictate. The Bureaus
adopt this proposal. If we exercise this discretion, we will alert bidders by announcement in the FCC
Auction System during the auction.
4. Provisionally Winning Bids
152. At the end of each bidding round, a “provisionally winning bid” will be determined based
on the highest bid amount received for each construction permit. A provisionally winning bid will remain
the provisionally winning bid until there is a higher bid on the same construction permit at the close of a
subsequent round. Provisionally winning bids at the end of the auction become the winning bids.
Bidders are reminded that provisionally winning bids count toward activity for purposes of the activity
tule.
153. Inthe Auction 94 Comment Public Notice, the Bureaus proposed to use a random number
generator to select a single provisionally winning bid in the event of identical high bid amounts being
submitted on a construction permit in a given round (i.e., tied bids).'*” No comments were received on
this proposal.
154. Hence, the Bureaus adopt the tied bids proposal described above. The FCC Auction
System will assign a random number to each bid upon submission. The tied bid with the highest random
number wins the tiebreaker, and becomes the provisionally winning bid. Bidders, regardless of whether
they hold a provisionally winning bid, can submit higher bids in subsequent rounds. However, if the
auction were to end with no other bids being placed, the winning bidder would be the one that placed the
provisionally winning bid.
5. Bidding
155. All bidding will take place remotely either through the FCC Auction System or by
telephonic bidding. There will be no on-site bidding during Auction 94. Please note that telephonic bid
185 py
186 Section IV.A.2. “Eligibility and Activity Rules,” above.
187 duction 94 Comment Public Notice at 34.
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assistants are required to use a script when entering 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. The length of a call to place a telephonic bid may vary; please allow a minimum of ten minutes.
156. A bidder’s ability to bid on specific construction permits is determined by two factors:
(1) the construction permits selected on the bidder’s FCC Form 175 and (2) the bidder’s eligibility. The
bid submission screens will allow bidders to submit bids on only those construction permits the bidder
selected on its FCC Form 175.
157. In order to access the bidding function of the FCC Auction System, bidders must be
logged in during the bidding round using the passcode generated by the SecurID® token and a personal
identification number (“PIN”) created by the bidder. Bidders are strongly encouraged to print a “round
summary” for each round after they have completed all of their activity for that round.
158. In each round, eligible bidders will be able to place bids on a given construction permit in
any of up to nine pre-defined bid amounts.'** For each construction permit, the FCC Auction System will
list the acceptable bid amounts in a drop-down box.'® Bidders use the drop-down box to select from
among the acceptable bid amounts. The FCC Auction System also includes an “upload” function that
allows text files containing bid information to be uploaded.
159. Until a bid has been placed on a construction permit, the minimum acceptable bid amount
for that permit will be equal to its minimum opening bid amount. Once there are bids on a permit,
minimum acceptable bids for the following round will be determined as described in Section IV.B.3,
above.
160. During a round, an eligible bidder may submit bids for as many construction permits as it
wishes (providing that it is eligible to bid on the specific permits), remove bids placed in the current
bidding round, or permanently reduce eligibility. If multiple bids are submitted for the same construction
permit in the same round, the system takes the last bid entered as that bidder’s bid for the round. Bidding
units associated with construction permits for which the bidder has removed bids do not count towards
current activity.
6. Bid Removal and Bid Withdrawal
161. In the Auction 94 Comment Public Notice, the Bureaus proposed bid removal
procedures." We proposed to provide each bidder with the option of removing any bids placed in a
round provided that such bids are removed before the close of that bidding round. By using the “remove
bids” function in the FCC Auction 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 withdrawal payments.
Removing a bid will affect a bidder’s activity because a removed bid no longer counts toward bidding
activity for the round. The Bureaus received no comments on this issue of bid removals. These removal
procedures will enhance bidder flexibility during the auction. Therefore, the Bureaus adopt their
proposed procedures to permit bid removals for Auction 94. Once a round closes, a bidder may no longer
remove a bid.
162. Inthe Auction 94 Comment Public Notice, the Bureaus proposed to prohibit bidders from
withdrawing any bids after the round in which the bids were placed has closed.'®' This proposal was
made in recognition of the site-specific nature and wide geographic dispersion of the permits available in
'88 Bidders must have sufficient eligibility to place a bid on the particular construction permit. See Section III.D.3.
“Upfront Payments and Bidding Eligibility,” above.
19 See Section IV.B.3. “Bid Amounts,” above.
' Auction 94 Comment Public Notice at | 36.
1 Td. at 99 37-39.
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this auction. Our experience with auctions generally, and with past FM auctions in particular, convinces
us that bid withdrawals are unnecessary in FM broadcast auctions. Because of the stand-alone nature of
FM facilities, it is not necessary for bidders to aggregate facilities being offered in the same FM auction
in order to realize full value from those facilities, or to put the spectrum to effective and efficient use. On
the other hand, evidence suggests that some bidders may have used bid withdrawals improperly in prior
auctions to keep new FM facilities out of the hands of competitors, thus delaying implementation of new
service. The Bureaus received one comment in favor of the proposal not to allow bid withdrawals,” and
no comments in opposition. Accordingly, the Bureaus will prohibit bid withdrawals in Auction 94.
Bidders are cautioned to select bid amounts carefully because no bid withdrawals will be allowed, even if
a bid was mistakenly or erroneously made.
WE Round Results
163. Reports reflecting bidders’ identities for Auction 94 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.
164. Bids placed during a round will not be made public until the conclusion of that round.
After a round closes, the Bureaus will compile reports of all bids placed, current provisionally winning
bids, new minimum acceptable bid amounts for the following round, whether the construction permit is
FCC held, and bidder eligibility status (bidding eligibility and activity rule waivers), and post the reports
for public access.
8. Auction Announcements
165. | The Commission will use auction announcements to report necessary information such as
schedule changes. All auction announcements will be available by clicking a link in the FCC Auction
System.
V. POST-AUCTION PROCEDURES
166. Shortly after bidding has ended, the Commission will issue a public notice declaring the
auction closed, identifying the winning bidders, and establishing the deadlines for submitting down
payments, final payments, and the long-form applications (FCC Forms 301).
A. Down Payments
167. | Within ten business days after release of the auction closing public 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 Commission for Auction 94 to twenty percent of the net amount of its winning bids
(gross bids less any applicable new entrant bidding credits). ”
B. Final Payments
168. Each winning bidder will be required to submit the balance of the net amount of its
winning bids within ten business days after the applicable deadline for submitting down payments.'”*
C. Long-Form Application (FCC Form 301)
169. The Commission’s rules'® currently provide that within thirty days following the close of
bidding and notification to the winning bidders, unless a longer period is specified by public notice,
12 Tones Comments, 1 3.
' 47 C.F.R. § 1.2107(b).
19% 47 C.F.R. § 1.2109(a).
195 47 C.F.R. § 73.5005(a).
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winning bidders must electronically submit a properly completed long-form application (FCC Form 301,
Application for Construction Permit for Commercial Broadcast Station), and required exhibits for each
construction permit won through Auction 94.'°° Winning bidders claiming new entrant status must
include an exhibit demonstrating their eligibility for the bidding credit.” Further instructions on these
and other filing requirements will be provided to winning bidders in the auction closing public notice.
D. Default and Disqualification
170. Any winning 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 section 1.2104(g)(2).'°* This payment consists of a deficiency payment, equal to the
difference between the amount of the Auction 94 bidder’s winning bid and the amount of the winning bid
the next time a construction permit covering the same spectrum is won in an auction, plus an additional
payment equal to a percentage of the defaulter’s bid or of the subsequent winning bid, whichever is less.
171. | The percentage of the applicable bid to be assessed as an additional payment for defaults
in a particular auction is established in advance of the auction. Accordingly, in the Auction 94 Comment
Public Notice, the Bureaus proposed to set the additional default payment for this auction at twenty
percent of the applicable bid. We received no comments on this proposal, and it is therefore adopted.
172. Finally, in the event of a default, the Commission has the discretion to re-auction the
construction permit or offer it to the next highest bidder (in descending order) at its final bid amount.
In addition, if a default or disqualification involves gross misconduct, misrepresentation, or bad faith by
an applicant, the Commission may declare the applicant and its principals ineligible to bid in future
auctions, and may take any other action that it deems necessary, including institution of proceedings to
revoke any existing authorizations held by the applicant.”
199
E. Refund of Remaining Upfront Payment Balance
173. After the auction, applicants that are not winning bidders or are winning bidders whose
upfront payment exceeded the total net amount of their winning bids may be entitled to a refund of some
or all of their upfront payment. All refunds will be returned to the payer of record, as identified on the
FCC Form 159, unless the payer submits written authorization instructing otherwise. Bidders that drop
out of the auction completely (have exhausted all of their activity rule waivers and have no remaining
bidding eligibility) may request a refund of their upfront payments before the close of the auction.
174. Bidders are encouraged to file their refund information electronically using the Refund
Information icon found on the Auction Application Manager page or through the Wire Transfer for
Refund Purposes link available on the Auction Application Submit Confirmation page in the FCC
Auction System. If an applicant has completed the refund instructions electronically, the refund will be
196 vi ‘ eer f : : MR.
The Commission’s rules also provide that a winning bidder in a commercial broadcast spectrum auction is
required to submit an application filing fee with its post-auction long-form application. See 47 C.F.R. § 1.2107(c).
We reject MET’ s request to delay the auction until after the Commission addresses petitions for reconsideration in
docket 86-285 that seek changes to the filing fee requirement for post-auction long-form applications. MEI
Comments at 5-6. The Commission and courts have consistently rejected requests to stay Commission auctions
based on matters pending before the Commission. See, e.g., Alpine, 23 FCC Rcd at 10,488 1 18. Of course, auction
winners will be required to comply with the Commission’s resolution of any pending issues in that proceeding.
197 47 C.F.R. §§ 1.2112(b) and 73.5005.
18 47 C.F.R. § 1.2104(g)(2).
1 47 C.F.R. §§ 1.2109(b) and (c).
20 47 C.F.R. § 1.2109(d).
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sent automatically. If an applicant has not completed the refund instructions electronically, the applicant
must send a written request including the following information:
Name, address, contact and phone number of Bank
ABA Number
Account Number to Credit
Name of Account Holder
FCC Registration Number (FRN)
The refund request can be submitted by fax to the Auctions Accounting Group at (202) 418-2980 or by
mail to:
Federal Communications Commission
Financial Operations
Auctions Accounting Group
Gail Glasser
445 12th Street, SW, Room 1-C864
Washington, DC 20554
NOTE: Refund processing generally takes up to two weeks to complete. Bidders with questions about
refunds should contact Gail Glasser at (202) 418-0578.
VI. CONTACT INFORMATION
175.
General Auction Information
General Auction Questions
Auction Process and Procedures
Contact Information Table:
Auction 94 Process and Procedures
Auction 94 Legal Information
Auction Rules, Policies, Regulations, including
Reports of Section 1.2105(c) Violations and
Application Major Modifications
Licensing Information
Service Rules, Policies, Regulations
Licensing Issues, Engineering Issues
Due Diligence, Incumbency Issues
Technical Support
Electronic Filing
FCC Auction System (Hardware/Software
Issues)
FCC Auctions Hotline
(888) 225-5322, option two; or
(717) 338-2868
Hours of service: 8:00 a.m. — 5:30 p.m. ET,
Monday through Friday
Auctions and Spectrum Access Division
(202) 418-0660
Jeff Crooks (Analyst)
Linda Sanderson (Project Manager)
Auctions and Spectrum Access Division
(202) 418-0660
Howard Davenport (Attorney)
Audio Division (202) 418-2700
Lisa Scanlan (Attorney)
Tom Nessinger (Attorney)
FCC Auctions Technical Support Hotline
(877) 480-3201, option nine; or (202) 414-1250
(202) 414-1255 (TTY)
Hours of service: 8:00 a.m. — 6:00 p.m. ET,
Monday through Friday
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Payment Information FCC Auctions Accounting Branch
Wire Transfers Gail Glasser at (202) 418-0578, or alternatively,
Refunds Theresa Meeks at (202) 418-2945, or
(202) 418-2980 (fax)
Auction Bidder Line Will be furnished only to qualified bidders
FCC Copy Contractor Best Copy and Printing, Inc
Additional Copies of 445 12th Street, SW, Room CY-B402
Commission Documents Washington, DC 20554
(800) 378-3160
http://www.bepiweb.com
Press Information Cecilia Sulhoff (202) 418-0587
FCC Forms (800) 418-3676 (outside Washington, DC)
(202) 418-3676 (in the Washington area)
http://www.fcc.gov/formpage.html
Accessible Formats Consumer and Governmental Affairs Bureau
Braille, large print, electronic files, or (202) 418-0530 or (202) 418-0432 (TTY)
audio format for people with disabilities fec504@fcc. gov
Small Businesses Office of Communications Business
Additional information for small and Opportunities
disadvantaged businesses (202) 418-0990
http://www. fec.gov/ocbo/
FCC Internet Sites http://www.fec.gov
http://wireless.fcc.gov/auctions
http://www.fec.gov/mb
—FCC-
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ATTACHMENT A
Auction 94 — Auction of FM Broadcast Construction Permits
This page was intentionally inserted as a placeholder for Attachment A, which is available as a separate
file.
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ATTACHMENT B
Short-Form Application Filing Instructions
This attachment provides instructions on submitting a short-form application and an upfront payment to
participate in Auction 94. It also includes instructions for interested parties wishing to view the short-
form applications filed.
I. Application Preparation and Submission
Among other requirements, each applicant to participate in this auction must submit its short-form
application (FCC Form 175) electronically, via the FCC Auction System. Short-form applications for
Auction 94 must be submitted and confirmed prior to 6:00 p.m. ET on Wednesday, February 6,
2013. Late applications or unconfirmed submissions of electronic data will not be accepted.
Applicants are reminded that all information required in connection with applications to participate in
spectrum license auctions is necessary to determine each applicant’s qualifications, and as such will be
available for public inspection. Accordingly, unnecessary sensitive information, such as Taxpayer
Identification Numbers or Social Security Numbers, should not be included in short-form applications.
Applicants may request information submitted not be made routinely available for public inspection
following the procedures set forth in section 0.459 of the Commission’s Rules.””' Such requests must be
included as an attachment to the applicant’s FCC Form 175 and identify the specific information to which
the request applies. Because the required information bears on each applicant’s qualifications,
confidentiality requests will not be routinely granted.”
Applicants may make multiple changes to their short-form applications until the close of the filing
window. However, they must press the SUBMIT button in the FCC Auction System for the changes to
be submitted and considered by the Commission.
A. Minimum Software Requirements
The following software, at a minimum, is required to use the FCC Integrated Spectrum Auction System:
e Web Browser, either of the following is recommended:
= Microsoft" Internet Explorer 7.0. Your browser must have either Microsoft VM or Java Plug-
In Version 1.6 installed.
= Mozilla” Firefox” 3.5, with Sun Microsystems’ Java Plug-In Version 1.6.
To obtain the Java Plug-In, point your browser at
http://www.oracle.com/technetwork/java/javase/downloads/index.html and click the Download
button in the JRE column under Java Platform, Standard Edition.
e PDF Viewer: Adobe Acrobat Reader 5.0 or higher (available at http:/(www.adobe.com)
e Minimum Screen Resolution: 1024 x 768
Currently, the Apple” Mac OS® is not supported.
21 47 C.F.R. § 0.459.
202 47 C.F.R. § 0.459(a).
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B. Logging On
To submit a short-form application (FCC Form 175) electronically via the Internet, an applicant should
start its web browser and point it to either http://auctions.fcc.gov/ (primary location) or
http://auctions2.fec.gov/ (secondary location). Once on the FCC Integrated Spectrum Auction System
page, the applicant may log in to create a short-form application using its FCC Registration Number
(“FRN”) and password.
C. Application Filing Instructions
The short-form application (FCC Form 175) requests information needed to determine whether an
applicant qualifies to participate in competitive bidding for Commission licenses or construction
permits.°°? Pursuant to section 1.2105(a), the FCC Form 175 must be submitted electronically.
Applicants must submit required information as entries in the data fields of the FCC Form 175 whenever
a data field is available for that information. Attachments should not be used to provide information that
can be supplied within the data fields of the FCC Form 175.
The screens comprising FCC Form 175 consist of six series, each requesting six separate types of
information: 1) Applicant Information; 2) Permit Selection; 3) New Entrant Bidding Credit Eligibility; 4)
Agreements; 5) Ownership; and 6) Certify and Submit. In addition, Summary screens, a seventh series,
appear prior to the Certify and Submit screens. The Summary screens provide an overview of an
applicant’s FCC Form 175 that facilitates reviewing and revising specific information, as well as an
automated check for certain inconsistencies and omissions in submitted information.
To simplify filling out FCC Form 175, certain initial information applicants provide is used to determine
what additional information is needed, and what subsequent screens will appear to collect that
information. For example, a corporate applicant, unlike an individual applicant, must identify a corporate
officer or director responsible for the application (sometimes called a responsible party). If an applicant
identifies itself as an individual, no additional information is needed regarding an additional responsible
party, and screens requesting responsible party information will not appear. However, if the applicant
identifies itself as a corporation, subsequent screens in the FCC Form 175 will ask for responsible party
information.
Applicants must fill out FCC Form 175 by following the instructions below. Additional help in filling out
FCC Form 175 can be accessed in two ways: 1) by clicking on the Help link in the upper right of any
screen, which will open Auction Application Online Filing Help; or 2) by clicking on the text of any
Common Question link appearing on the right side of the screen. The common questions displayed
relate to the current screen and vary from screen to screen. In the event the assistance provided by these
sources is insufficient, applicants should use the contact information provided in this Public Notice to
obtain additional assistance.”
1. Applicant Information
The Applicant Information screens are the first series of screens in FCC Form 175, in which the applicant
will provide basic information including:
e the applicant’s legal classification (e.g., individual, corporation, rural telephone cooperative, etc.)
e optional information regarding the applicant’s status as a minority- or woman-owned business or a
tural telephone company
203 See generally, 47 C.F.R. § 1.2105.
204 See Section VI. “Contact Information,” above.
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e Whether the application identifies proposed facilities as Noncommercial Educational. This response
(yes or no) is mandatory.”
e the applicant’s name, which will be used as the bidder name during the auction””®
e citizenship for individuals, or jurisdiction of formation for legal entities
e for applicants classified as legal entities (e.g., corporations and partnerships), the name of and
information regarding the entity’s responsible individual”
e the name, address, telephone and fax number of a contact person who will communicate with the
Commission regarding the applicant’s FCC Form 175°
e the names of up to three persons authorized to bid for the applicant in the auction”
e the applicant’s preference for electronic or telephonic bidding
e whether the applicant claims a new entrant bidding credit and the percentage claimed"
Each screen will specify the information that the applicant must provide. Please note the following with
respect to particular information requested:
e Applicants must indicate their legal classification before continuing to subsequent screens,
because the legal classification will determine which subsequent screens will appear.
e P.O. Boxes may not be used for an applicant’s address.
e To simplify filling out the FCC Form 175, an applicant that has the same address as its contact
person can click on the COPY APPLICANT ADDRESS button to automatically fill in the
contact person’s address. P.O. Boxes may not be used for a contact person’s address.
e Applicants must identify at least one authorized bidder. While applicants may change their
authorized bidders at a later date, only those bidders listed on the FCC Form 175 will be
authorized to place bids for the applicant during the auction.
e Any qualified bidder may bid either via the Internet or by telephone during the auction.
Specifying a preference for electronic or telephonic bidding assists the Commission in
determining the staff required in this auction for telephonic bidding.
e Any application for a noncommercial educational station that is mutually exclusive with
any application for a commercial station will be returned as unacceptable for filing."
aoo Any application for a noncommercial educational station that is mutually exclusive with any application for a
commercial station will be returned as unacceptable for filing. See NCE Second Report and Order, 18 FCC Rcd at
6699-6701 11 21-24. Applications specifying the same FM station construction permit are considered mutually
exclusive. Broadcast First Report and Order, 13 FCC Rcd at 15979 n.166.
208 See 47 CFR. § 1.2105(a)(2)(ii)(A).
207 Section 1.2105(a)(2) requires that the name and title of an officer or director be reported if the applicant is a
corporation. This rule requires disclosure of the name and title of a responsible person if a partner is not a natural
person.
208 ECC personnel will communicate only with an applicant’s contact person or certifying official, as designated on
the applicant’s FCC Form 175, unless the applicant’s certifying official or contact person notifies the Commission in
writing that applicant’s counsel or other representative is authorized to speak on its behalf. Authorizations may be
sent by e-mail to auction94@fec. gov.
20 See 47 CFR. § 1.2105(a)(2)(iii).
210 See 47 C.F.R. §§ 1.2105(a)(2)(iv), 73.5002(b), 73.5007 and 73.5008.
211 See NCE Second Report and Order, 18 FCC Rcd at 6699-6701 {ff 21-24.
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2. Permit Selection
The Permit Selection screens make up the second series of screens in FCC Form 175. In these screens,
the applicant will identify the construction permits offered on which they may wish to bid during the
auction. While an applicant is not obligated to bid on all construction permits that it selects, it will not be
able to bid on construction permits that it has not selected on its FCC Form 175.””” Be advised that there
is no opportunity to change this list after the short-form application filing deadline.
To participate in an auction, applicants must select at least one construction permit. Until a construction
permit is selected, the applicant cannot submit the FCC Form 175. An applicant’s permit selections
cannot be changed after the initial filing window has closed. Therefore, during the initial filing window it
is important to carefully review the construction permit selections to make sure all permits on which the
applicant may wish to bid have been selected.
The Permit Selection screens contain a list of all available construction permits in the auction. Applicants
can navigate within this screen by selecting the individual page links or the “Previous” and “Next”
buttons above and below the list of available permits. In addition, pre-defined filters can be used to
narrow down the list of permits to be selected and saved. Specifically, construction permits can be
selected by: (1) clicking the check box next to the construction permit name, then selecting the “Save
Selected Items” button; (2) clicking the “Save All Items” button to save all available construction permits;
or (3) clicking the “Save All Filtered Items” button after applying a filter. Once the applicant has
successfully saved a construction permit, the word “Saved” will appear next to the permit name to
confirm it has been saved with the application.
Construction Permits can be removed by: (1) clicking the check box (to uncheck) next to a previously
saved construction permit, then selecting the “Remove Selected Items” button; (2) clicking the “Remove
All Items” button to remove all previously saved construction permits; or (3) clicking the “Remove All
Filtered Items” button after applying a filter. Removed construction permits will not have the word
“Saved” next to the permit name.
Applicants may view all saved construction permits by either clicking the Edit Icon next to “View Saved
Items” at the top-right corner of the list, or by clicking the “CONTINUE” button at the bottom of the
page.
Once construction permits have been saved, the View/Edit Permit Selections screen will be the first screen
displayed when navigating to the Permit Selection step. This screen lists all construction permits the
applicant has selected and saved for the auction. To select a new construction permit or remove a
previously selected permit, an applicant can click the Edit Icon next to “Return to Permit Selection” at
the top-right corner of the list, which will return it to the original Select Permits screen, as described
above.
The reference coordinates are also displayed for each listed FM allotment. Once the applicant has
selected and added an FM permit, the reference coordinates are followed by an “Edit” icon.
Clicking this icon produces a screen on which the applicant can change the reference coordinate
values to preferred site coordinates.”"* If the applicant previously has selected construction permits, the
initial Permit Selection screen will be the View/Edit Permit Selections screen. This screen lists the
construction permits previously selected for this auction. To select a new construction permit or remove a
212 47 C.F.R. § 1.2105(a)(2)(i).
*13 See Broadcast First Report and Order, 13 FCC Rcd at 15974-75 § 142 & n.153.
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previously selected permit, click the Edit icon next to Change Selection at the top-right corner of the list.
This will take you to the original Select Permits screen, described above.
3. New Entrant Bidding Credit Eligibility
The New Entrant Eligibility screens are the third series of screens in FCC Form 175. On the initial screen
of this series, applicants indicate whether they are claiming the New Entrant Bidding Credit and, if so,
whether they are claiming a 25 percent or 35 percent New Entrant Bidding Credit. Applicants should
ensure bidding credit information is consistent with the bidding credit eligibility information provided on
the first Applicant Information screen.
Applicants not seeking a New Entrant Bidding Credit will continue to the next series of screens.
The Commission’s relaxed equity/debt plus (“EDP”) attribution standard,” adopted as the basis for the
New Entrant Bidding Credit to allow for higher investment opportunities in entities meeting the definition
of “eligible entities,”’'* will be unavailable in Auction 94, as discussed previously in this Public Notice.”'°
Applicants seeking a 35 percent New Entrant Bidding Credit do not need to provide any additional
information in the Form 175 regarding their claimed New Entrant Bidding Credit. Such applicants will
continue to the next series of screens.
Applicants claiming a 25 percent New Entrant Bidding Credit must provide additional information
regarding existing mass media facilities in which the applicant, or any individual or entity with an
attributable interest in the applicant, has an attributable interest.” Applicants must identify:
the existing mass media facility or facilities;
the individual or entity with an attributable interest in the existing mass media facility;
the attributable interest in the facility; and
whether any broadcast facilities proposed by the applicant in this auction are in the ‘same area’ as
existing mass media facilities, as defined by applicable Commission rules. See 47 C.F.R. §§
73.5007, 73.5008.
e Inthe event that the applicant indicates that any of the broadcast facilities proposed in its
application for this auction are in the ‘same area’ as the identified existing mass media facility,
the applicant must continue to an additional screen where the applicant must indicate which
broadcast facility it proposed in the auction is in the ‘same area’ as the identified existing mass
media facility. Applicants must note that, for purposes of determining whether a broadcast
facility identified for bidding in the auction is in the “same area” as an applicant’s existing mass
media facilities, the coverage area of the auction facility is calculated using maximum class
facilities at the allotment reference coordinates, not applicant-specified preferred site
coordinates.”"*®
214 Diversity Order, 23 FCC Red at 5922.
215 An “eligible entity” is defined in 47 C.F.R. § 73.3555, Note 2(i).
216 Section ILC. “New Entrant Bidding Credit,” above.
217 : . . . .
Full-service noncommercial educational stations, on both reserved and nonreserved channels, are included
among “media of mass communications” as defined in section 73.5008(b). See Minnesota Christian Broadcasters,
18 FCC Rcd at 614.
2
8 Rural First Report and Order, 25 FCC Rcd at 1609 1 52.
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Once the applicant has identified all relevant existing mass media facilities, and all broadcast facilities
proposed in its application that are located in the ‘same area’ as each relevant existing mass media
facility, it will continue to the View/Edit All Facilities screen. This screen lists the applicant’s claimed
New Entrant Bidding Credit of 25 percent, the relevant existing mass media facilities, and the Auction 94
broadcast facilities proposed by the applicant in the ‘same area’ as each relevant existing mass media
facility. From this screen, options include:
e Clicking the Edit icon or the Modify bidding credit selection link to return to the initial New
Entrant bidding credit eligibility screen.
e Modifying information about relevant mass media facilities by clicking on them.
e Clicking the Delete This Facility link to delete a facility and identified proposed broadcast
facilities in the ‘same area.’
e Modifying information regarding a proposed broadcast facility by clicking on its identifier.
e Clicking the Remove icon next to information about a particular proposed broadcast facility in
the ‘same area’ to remove the corresponding facility.
e Clicking the Add a proposed ‘Same Area’ Facility to [an existing mass media facility] link to
add a new broadcast facility proposed in the application that is located in the ‘same area.’
e Clicking the CREATE NEW MASS MEDIA FACILITY button to add additional mass media
facilities.
When all relevant existing mass media facilities, and proposed broadcast facilities in the ‘same area’ as
each relevant existing mass media facility, have been identified, click the CONTINUE button.
4. Agreements
The Agreements screens are the fourth series of screens in FCC Form 175. In these screens, applicants
will provide information regarding auction-related agreements subject to disclosure under the
Commission’s rules.”"°
On the first screen, applicants must state whether the applicant has any agreements that are subject to
disclosure under the Commission’s rules by responding “Yes” or “No” to a question asking whether the
applicant has entered into a partnership, joint venture, consortia, or other agreement, arrangement or
understanding of any kind relating to the construction permits being auctioned, including any such
agreement relating to the post-auction market structure. When two applicants in this auction share one
officer, or one director, or one individual with specified ownership interests,” it is at this point in each
application that the two applicants can indicate that there is a sharing of this one individual (officer,
director, or owner) by responding to this “agreement” question with a “Yes.”””!
20 47 C.F.R. § 1.2105(a)(2)(viii).
ae Applicants are reminded that, for purposes of the communication prohibitions of 47 C.F.R. § 1.2105(c), section
1.2105(c)(7)(i) defines “applicant” as including all officers and directors of the entity submitting a short-form
application to participate in the auction, all controlling interests of that entity, as well as all holders of partnership
and other ownership interests and any stock interest amounting to 10 percent or more of the entity, or outstanding
stock, or outstanding voting stock of the entity submitting a short-form application.
221 As explained in the discussion above about the communication prohibitions of section 1.2105(c), the failure to
report an agreement in both short-form applications when a specified individual is involved with two applicants in
(continued....)
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If an applicant answers “No,” the applicant will continue to the Ownership series of screens, described
below. If the applicant answers “Yes,” the applicant will continue with additional Agreements screens.
In the additional Agreements screens, applicants must provide an identifying name for the agreement and
must identify the parties, other than the applicant, to the agreement. The agreement identifier can be a
brief description of the agreement or a simple reference name; however, each agreement identifier must
be unique. Neither the name of the agreement nor its description should indicate construction permit
designations for this auction.
Applicants may provide FRNs for the other parties to the agreement, if available. While providing the
FRN is optional, it helps prevent identification errors resulting from parties having similar names or a
single party using multiple names.
Up to three parties to the agreement (not including the applicant) can be identified on a single screen.
Additional parties can be added by clicking the ADD MORE PARTIES button. In the event of an error,
the name of a party and its associated FRN can be deleted from the form by clicking on the RESET
button. After identifying all parties to a particular agreement, click the FINISH THIS AGREEMENT
button.
The next screen, the View/Edit Agreements screen, lists the agreements and parties to each agreement that
already have been entered. From this screen, the following options are available:
e Clicking the Edit icon or the Agreements link to return to the initial Agreements screen
regarding whether or not the applicant has any agreements.
e Modifying agreement identifiers by clicking on them.
e Clicking the Delete This Agreement link to delete an agreement and associated parties.
e Modifying information regarding a particular party to an agreement by clicking on the party’s
name.
e Clicking the Remove icon next to information about a particular party to remove that
corresponding party.
e Clicking the Add Party to This Agreement link to add a new party to an agreement.
e Clicking the CREATE NEW AGREEMENT button to add additional agreements.
When all agreements and the parties to each agreement have been identified, the applicant should click
the CONTINUE button.
(Continued from previous page)
the
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