Home/Federal/Federal Register/2021-12617

Rule2021-12617

Auction of Flexible-Use Service Licenses in the 3.45-3.55 GHz Band for Next-Generation Wireless Services; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 110; Bidding in Auction 110 Scheduled To Begin October 5, 2021

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published

June 23, 2021

Issuing agencies

Federal Communications Commission

Abstract

This document establishes the procedures to be used for Auction 110, the Auction of new flexible-use licenses in the 3.45-3.55 GHz band (the 3.45 GHz Service).

Full Text

<html>
<head>
<title>Federal Register, Volume 86 Issue 118 (Wednesday, June 23, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 118 (Wednesday, June 23, 2021)]
[Rules and Regulations]
[Pages 32775-32804]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-12617]

=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 27

[AU Docket No. 21-62; DA 21-655; FR ID 32766]

Auction of Flexible-Use Service Licenses in the 3.45-3.55 GHz
Band for Next-Generation Wireless Services; Notice and Filing
Requirements, Minimum Opening Bids, Upfront Payments, and Other
Procedures for Auction 110; Bidding in Auction 110 Scheduled To Begin
October 5, 2021

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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

SUMMARY: This document establishes the procedures to be used for
Auction 110, the Auction of new flexible-use licenses in the 3.45-3.55
GHz band (the 3.45 GHz Service).

DATES: Applications to participate in Auction 110 must be submitted
before 6 p.m. Eastern Time (ET) on July 21, 2021. Upfront payments for
Auction 110 must be received by 6 p.m. ET on September 9, 2021. Bidding
in Auction 110 is scheduled to start on October 5, 2021.

FOR FURTHER INFORMATION CONTACT:
General Auction 110 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
Auction 110 Legal Information: Mary Lovejoy or Andrew McArdell at
202-418-0660.
3.45 GHz Service Information: Joyce Jones at 202-418-1327.
3.45 GHz Service Technical Information: Ira Keltz, (202) 418-0616.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 110
Procedures Public Notice, released on June 9, 2021. The complete text
of the Auction 110 Procedures Public Notice, including attachments and
any related document, are available on the Commission's website at
<a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a> or by using the search function for AU Docket
No. 21-62, DA 21-655, on the Commission's Electronic Comment Filing
System (ECFS) web page at <a href="http://www.fcc.gov/ecfs">www.fcc.gov/ecfs</a>. Alternative formats are
available to persons with disabilities by sending an email to
<a href="/cdn-cgi/l/email-protection#3b7d78780e0b0f7b5d5858155c544d">[email&#160;protected]</a> or by calling the Consumer & Governmental Affairs Bureau
at (202) 418-0530 (voice), (202) 418-0432 (TTY).

I. General Information

A. Introduction

1. By the Auction 110 Procedures Public Notice, the Office of
Economics and Analytics (OEA), jointly with the Wireless
Telecommunications Bureau (WTB), establishes the procedures to be used
for Auction 110, the auction of new flexible-use licenses in the 3.45-
3.55 GHz band (the 3.45 GHz Service). Auction 110 is the Commission's
third scheduled auction of mid-band spectrum, which is intended to
further the deployment of fifth-generation (5G) wireless, the Internet
of Things (IoT), and other advanced spectrum-based services across the
country. The Auction 110 Procedures Public Notice continues to
implement section 905 of the Consolidated Appropriations Act, 2021,
which required the Commission to start an auction to grant new initial
licenses subject to flexible use in the 3450-3550 MHz (3.45 GHz) band
by December 31, 2021.
2. The bidding for new licenses in Auction 110 is scheduled to
commence on October 5, 2021. The Auction 110 Procedures Public Notice
provides details regarding the procedures, terms, conditions, dates,
and deadlines governing participation in Auction 110 bidding, as well
as an overview of the post-auction application and payment processes.

B. Background and Relevant Authority

3. In the 3.45 GHz Second Report and Order, 86 FR 17920, April 7,
2021, the Commission made available 100 megahertz of spectrum in the
3.45-3.55 GHz band for licensed use within the contiguous United
States. In that Order, the Commission allocated the 3.45-3.55 GHz band
for new non-federal fixed and mobile (except aeronautical mobile)
operations in the contiguous United States. Among other things, the
Commission authorized both fixed and mobile operations in the 3.45-3.55
GHz band using geographic area licensing, established licensing and
operating rules for the new 3.45 GHz Service, and decided to use its
competitive bidding rules to assign 3.45 GHz Service licenses.
4. On March 18, 2021, in accordance with section 309(j)(3) of the
Communications Act of 1934, as amended (Communications Act), the
Commission released a public notice seeking comment on certain
competitive bidding procedures and various other procedures to be used
in Auction 110. The Commission received comments from eight parties in
response to the Auction 110 Comment Public Notice, 86 FR 18000, April
07, 2021, and eight reply comments. In the Auction 110 Procedures
Public Notice, OEA and WTB resolve all open issues raised in the
Auction 110 Comment Public Notice and address the comments received.
5. Other Commission rules and decisions provide the underlying
authority for the procedures OEA and WTB adopt today for Auction 110.
Among other things, prospective applicants should familiarize
themselves with the Commission's general competitive bidding rules,
including recent amendments and clarifications thereto, as well as
Commission decisions regarding competitive bidding procedures,
application requirements, and obligations of Commission licensees.
Prospective applicants also should familiarize themselves with the
Commission's rules regarding the 3.45 GHz Service, as well as the
licensing and operating rules that are applicable to all part 27
services. In addition, applicants must be thoroughly familiar with the
procedures, terms, and conditions contained in the Auction 110
Procedures Public Notice and any future public notices that may be
released in this proceeding.
6. 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 its public notices at any time
and will issue public notices to convey any new or supplemental
generally applicable information to applicants. Pursuant to the
Commission's rules, OEA and WTB also retain the authority to implement
further procedures during the course of this auction. It is the
responsibility of all applicants to remain current with all Commission
rules and with all public notices pertaining to Auction 110.

C. Description of Licenses To Be Offered in Auction 110

7. Auction 110 will offer 4,060 new flexible-use licenses for
spectrum in the 3.45-3.55 GHz band throughout the contiguous United
States. The 100 megahertz of spectrum in this band will be licensed on
an unpaired basis and divided into ten 10-megahertz blocks in

[[Page 32776]]

partial economic area (PEA)-based geographic areas located in the
contiguous 48 states and the District of Columbia (PEAs 1-41, 43-211,
213-263, 265-297, 299-359, and 361-411). These 10-megahertz blocks are
designated as A through J.
8. All 3.45 GHz Service licenses will be issued for 15-year,
renewable license terms, and certain licenses are subject to
cooperative sharing requirements, as described in the 3.45 GHz Second
Report and Order and below, as well as any other conditions that may be
established in related proceedings. Interested parties will be able to
find additional information about the cooperative sharing requirements,
including information about the encumbrances in specific PEAs, on the
National Telecommunications and Information Administration's (NTIA)
3450-3550 MHz web page at <a href="https://www.ntia.doc.gov/category/3450-3550-mhz">https://www.ntia.doc.gov/category/3450-3550-mhz</a>. Interested parties can also find additional guidance and
information on federal/non-federal coordination procedures in the
public notice issued jointly by NTIA and the Commission. OEA and WTB
understand that the Department of Defense (DoD) will hold one or more
workshops to provide further information on transition and coordination
plans, as well as guidance on anticipated received power levels from
the DoD's high-powered operations, methods and means for sharing
proprietary and classified information (e.g., through ``Trusted
Agents''), and descriptions of potential national emergency scenarios.
9. Licensees may hold up to four 10-megahertz blocks (out of a
total of ten) in the 3.45-3.55 GHz band within any PEA at any given
time for the first four years after the close of the auction. A
licensee in the 3.45-3.55 GHz band may provide any services permitted
under terrestrial fixed or mobile, except aeronautical mobile,
allocations (as set forth in the non-Federal Government column of the
Table of Frequency Allocations in section 2.106 of the Commission's
rules, as modified by the 3.45 GHz Second Report and Order), so long as
it complies with the relevant licensing, operating, and technical
rules.

D. Auction Specifics

1. Auction Title and Start Date
10. The auction of licenses in the 3.45-3.55 GHz band will be
referred to as ``Auction 110.'' Bidding in Auction 110 will begin on
Tuesday, October 5, 2021. Pre-bidding dates and deadlines are listed
below. The initial schedule for bidding rounds in Auction 110 will be
announced by public notice at least one week before bidding begins.
11. Unless otherwise announced, bidding on all licenses will be
conducted on each business day until bidding has stopped on all
licenses.
2. Auction Dates and Deadlines
12. The following dates and deadlines apply to Auction 110:

Auction Application Tutorial Available (via internet): No later than
June 22, 2021
Short-Form Application (FCC Form 175)
Filing Window Opens July 8, 2021, 12 p.m. Eastern Time (ET)
Short-Form Application: (FCC Form 175)
Filing Window Deadline: July 21, 2021, 6 p.m. ET
Upfront Payments (via wire transfer): September 2, 2021, 6 p.m. ET
Bidding Tutorial Available (via internet): No later than September 16,
2021
Mock Auction: September 30, 2021
Bidding Begins in Auction 110: October 5, 2021
3. Requirements for Participation
13. Those wishing to participate in Auction 110 must:
<bullet> Submit a short-form application (FCC Form 175)
electronically prior to 6 p.m. ET on July 21, 2021, following the
electronic filing procedures set forth in the FCC Form 175
Instructions. OEA will prepare and make publicly available detailed
instructions for submitting an FCC Form 175 for Auction 110 (FCC Form
175 Instructions) in the Education section of the Auction 110 website
at <a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>.
<bullet> Submit a sufficient upfront payment and an FCC Remittance
Advice Form (FCC Form 159) by 6 p.m. ET on September 2, 2021, following
the procedures and instructions set forth in the FCC Form 159
Instructions.
<bullet> Comply with all provisions outlined in the Auction 110
Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auction 110

A. General Information Regarding Short-Form Applications

14. An application to participate in Auction 110, referred to as a
short-form application or FCC Form 175, provides information that the
Commission uses to determine whether the applicant has the legal,
technical, and financial qualifications to participate in a Commission
auction for spectrum licenses. The short-form application is the first
part of the Commission's two-phased auction application process. In the
first phase, a party seeking to participate in Auction 110 must file a
short-form application in which it certifies, under penalty of perjury,
that it is qualified to participate. Eligibility to participate in
Auction 110 is based on an applicant's short-form application and
certifications and on the applicant's submission of a sufficient
upfront payment for the auction. After bidding closes, in the second
phase of the process, each winning bidder must file a more
comprehensive post-auction, long-form application (FCC Form 601) for
the licenses it wins in the auction, and it must have a complete and
accurate ownership disclosure information report (FCC Form 602) on file
with the Commission. OEA and WTB remind applicants that being deemed
qualified to bid in Auction 110 does not constitute a determination
that a party is qualified to hold a Commission license or is eligible
for a designated entity bidding credit.
15. A party seeking to participate in Auction 110 must file an FCC
Form 175 electronically via the Auction Application System prior to 6
p.m. ET on July 21, 2021, following the procedures prescribed in the
FCC Form 175 Instructions. If an applicant claims eligibility for a
bidding credit, then the information provided in its FCC Form 175 as of
the filing date will be used to determine whether the applicant may
request the claimed bidding credit. Below OEA and WTB describe more
fully the information disclosures and certifications required in the
short-form application. An applicant that files an FCC Form 175 for
Auction 110 will be subject to the Commission's rule prohibiting
certain communications. An applicant is subject to the prohibition
beginning at the deadline for filing short-form applications--6 p.m. ET
on July 21, 2021. The prohibition will end for applicants on the post-
auction down payment deadline for Auction 110.
16. An applicant bears full responsibility for submitting an
accurate, complete, and timely short-form application. Pursuant to the
Commission's competitive bidding rules, each applicant must make a
series of certifications under penalty of perjury on its FCC Form 175
related to the information provided in its application and its
participation in the auction, and it must confirm that it is legally,
technically, financially, and otherwise qualified to hold a license.
Additionally, each participant in Auction 110 must certify that it has
read the Auction 110 Procedures Public Notice and has familiarized
itself both with the auction

[[Page 32777]]

procedures and with the requirements for obtaining a license and
operating facilities in the 3.45-3.55 GHz band). If an Auction 110
applicant fails to make the required certifications in its FCC Form 175
by the filing deadline, then its application will be deemed
unacceptable for filing and cannot be corrected after the filing
deadline.
17. An applicant should note that submitting an FCC Form 175 (and
any amendments thereto) constitutes a representation by the certifying
official that he or she is an authorized representative of the
applicant with authority to bind 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. Submitting 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.
18. Applicants are cautioned that, because the required information
submitted in FCC Form 175 bears on each applicant's qualifications,
requests for confidential treatment will not be routinely granted. The
Commission generally has held that it may publicly release confidential
business information where the party has put that information at issue
in a Commission proceeding or where the Commission has identified a
compelling public interest in disclosing the information. In this
regard, the Commission specifically has held that information submitted
in support of receiving bidding credits in auction proceedings should
be made available to the public.
19. An applicant must designate between one and three individuals
as authorized bidders in its FCC Form 175. The Commission's rules
prohibit an individual from serving as an authorized bidder for more
than one auction applicant.
20. No individual or entity may file more than one short-form
application or have a controlling interest in more than one short-form
application. If a party submits multiple short-form applications for an
auction, then only one application may form the basis for that party to
become qualified to bid in that auction.
21. Similarly, and consistent with the Commission's general
prohibition on joint bidding agreements, a party generally is permitted
to participate in a Commission auction only through a single bidding
entity. Accordingly, the filing of applications in Auction 110 by
multiple entities controlled by the same individual or set of
individuals generally will not be permitted. This restriction applies
across all applications, without regard to the geographic areas
selected. The Commission adopted a limited exception to the general
prohibition on the filing of multiple applications by commonly
controlled entities for qualified rural wireless partnerships and
individual members of such partnerships. 47 CFR 1.2105(a)(3). Under
this limited exception, each qualifying rural wireless partnership and
its individual members will be permitted to participate separately in
an auction. As noted by the Commission in adopting the prohibition on
applications by commonly controlled entities, this rule, in conjunction
with the prohibition against joint bidding agreements, protects the
competitiveness of the Commission's auctions.
22. After the initial short-form application filing deadline,
Commission staff will review all timely submitted applications for
Auction 110 to determine whether each application complies with the
application requirements and whether the applicant has provided all
required information concerning its qualifications for bidding. After
this review is completed, a public notice will be released announcing
the status of applications and identifying the applications that are
complete and those that are incomplete because of minor defects that
may be corrected. That public notice also will establish an application
resubmission filing window, during which an applicant may make
permissible minor modifications to its application to address
identified deficiencies. The public notice will include the deadline
for resubmitting modified applications. To become a qualified bidder,
an applicant must have a complete application (i.e., have timely filed
an application that is deemed complete after the deadline for
correcting any identified deficiencies), and must make a timely and
sufficient upfront payment. Qualified bidders will be identified by
public notice at least 10 days prior to the mock auction.
23. The Auction 110 Procedures Public Notice outlines below
additional details regarding certain information required to be
submitted in the FCC Form 175. An applicant should consult the
Commission's rules to ensure that, in addition to the materials
described below, all required information is included in its short-form
application. To the extent the information in the Auction 110
Procedures Public Notice does not address a potential applicant's
specific operating structure, or if the applicant needs additional
information or guidance concerning the described disclosure
requirements, the applicant should review the educational materials for
Auction 110 (see the Education section of the Auction 110 website at
<a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>) and/or use the contact information provided in
the Auction 110 Procedures Public Notice to consult with Commission
staff to better understand the information it must submit in its short-
form application.

B. License Area Selection

24. An applicant must select all of the license areas on which it
may want to bid from the list of available PEAs on its FCC Form 175. An
applicant must carefully review and verify its PEA selections before
the FCC Form 175 filing deadline because those selections cannot be
changed after the auction application filing deadline. An applicant is
not required to place bids on any or all of the license areas selected,
but the FCC Auction Bidding System (bidding system) will not accept
bids for blocks located in PEAs that the applicant did not select in
its FCC Form 175. The auction application system, however, will provide
an applicant the option to select all 406 available PEAs at one time
using an ``all PEAs'' feature.

C. Disclosure of Agreements and Bidding Arrangements

25. An applicant must provide in its FCC Form 175 a brief
description of, and identify each party to, any partnerships, joint
ventures, consortia or agreements, arrangements, or understandings of
any kind relating to the licenses being auctioned, including any
agreements that address or communicate directly or indirectly bids
(including specific prices), bidding strategies (including the specific
licenses on which to bid or not to bid), or the post-auction market
structure, to which the applicant, or any party that controls or is
controlled by the applicant, is a party. In connection with the
agreement disclosure requirement, the applicant must certify under
penalty of perjury in its FCC Form 175 that it has described, and
identified each party to, any such agreements, arrangements, or
understandings to which it (or any party that controls it or that
controls) is a party. As discussed below, an applicant may continue
negotiating, discussing, or communicating with respect to a new
agreement after the FCC Form 175 filing deadline, provided that the
communications involved do not relate both to the licenses being
auctioned and to bids or bidding strategies or post-auction market
structure. If, after the FCC Form 175

[[Page 32778]]

filing deadline, an auction applicant enters into any agreement
relating to the licenses being auctioned, then it is subject to these
same disclosure obligations. Each applicant must maintain the accuracy
and completeness of the information in its pending auction application.
26. For purposes of making the required agreement disclosures on
the FCC Form 175, if parties agree in principle on all material terms
prior to the application filing deadline, then each party to the
agreement that is submitting an auction application must provide a
brief description of, and identify the other party or parties to, the
agreement on its respective FCC Form 175, even if the agreement has not
been reduced to writing. Parties that have not agreed in principle by
the FCC Form 175 filing deadline should not describe, or include the
names of parties to, the discussions on their applications.
27. The Commission's rules generally prohibit joint bidding and
other arrangements involving auction applicants (including any party
that controls or is controlled by such applicants). For purposes of the
prohibition, a joint bidding arrangement includes any arrangement
relating to the licenses being auctioned that addresses or
communicates, directly or indirectly, bidding at the auction, bidding
strategies, including arrangements regarding price or the specific
licenses on which to bid, and any such arrangement relating to the
post-auction market structure.
28. This prohibition applies to joint bidding arrangements
involving two or more nationwide providers, as well as joint bidding
arrangements involving a nationwide provider and one or more non-
nationwide providers, where at least one party to the arrangement is an
applicant for the auction. In the Updating Part 1 Report and Order, 80
FR 56763, Sep. 18, 2015, the Commission stated that entities that
qualify as nationwide providers generally would be identified in
procedures public notices released before each auction. To that end,
and consistent with the Commission's decisions in recent spectrum
auctions, the Commission considers AT&T, T-Mobile, and Verizon to be
``nationwide providers'' for the purpose of implementing the
competitive bidding rules in Auction 110.
29. Under certain circumstances, a non-nationwide provider may
enter into an agreement to form a consortium or a joint venture (as
applicable) that results in a single party applying to participate in
an auction. Specifically, a designated entity (DE) can participate in
one consortium or joint venture in an auction, and non-nationwide
providers that are not designated entities may participate in an
auction through only one joint venture. While two or more non-
nationwide providers may participate in an auction through a joint
venture, a nationwide and a non-nationwide provider may not do so. A
non-nationwide provider may enter into only one agreement to form a
consortium or joint venture (as applicable), and such consortium or
joint venture shall be the exclusive bidding vehicle for its members in
the auction. The general prohibition on joint bidding arrangements
excludes certain agreements, including those that are solely
operational in nature, as defined in section 1.2105(a)(2)(ix)(A)-(C) of
the Commission's rules.
30. To implement the prohibition on joint bidding arrangements, the
Commission's rules require each applicant to certify in its short-form
application that it has disclosed any arrangements or understandings of
any kind relating to the licenses being auctioned to which it (or any
party that controls or is controlled by it) is a party. The applicant
must also certify that it (or any party that controls or is controlled
by it) has not entered and will not enter into any arrangement or
understanding of any kind relating directly or indirectly to bidding at
auction with, among others, any other applicant or a nationwide
provider.
31. Although the Commission's rules do not prohibit auction
applicants from communicating about matters that are within the scope
of an excepted agreement that has been disclosed in an FCC Form 175,
the Commission reminds applicants that certain discussions or exchanges
could nonetheless touch upon impermissible subject matters, and that
compliance with the Commission's rules will not insulate a party from
enforcement of the antitrust laws.
32. Applicants should bear in mind that a winning bidder will be
required to disclose in its FCC Form 601 post-auction application the
specific terms, conditions, and parties involved in any agreement
relating to the licenses being auctioned into which it had entered
prior to the time bidding was completed. This applies to any bidding
consortium, joint venture, partnership, or other agreement,
arrangement, or understanding of any kind entered into relating to the
competitive bidding process, including any agreements relating to the
licenses being auctioned that address or communicate directly or
indirectly bids (including specific prices), bidding strategies
(including the specific licenses on which to bid or not to bid), or the
post-auction market structure, to which the applicant, or any party
that controls or is controlled by the applicant, is a party.

D. Ownership Disclosure Requirements

33. Each applicant must comply with the applicable part 1 ownership
disclosure requirements and provide information required by sections
1.2105 and 1.2112, and, where applicable, section 1.2110, of the
Commission's rules. Specifically, in completing FCC Form 175, an
applicant must fully disclose information regarding the real party- or
parties-in-interest in the applicant or application and the ownership
structure of the applicant, including both direct and indirect
ownership interests of 10% or more, as prescribed in sections 1.2105
and 1.2112 and, where applicable, section 1.2110 of the Commission's
rules. Each applicant is responsible for ensuring that information
submitted in its short-form application is complete and accurate.
34. In certain circumstances, an applicant may have previously
filed an FCC Form 602 ownership disclosure information report or filed
an auction application for a previous auction in which ownership
information was disclosed. The most current ownership information
contained in any FCC Form 602 or previous auction application on file
with the Commission that used the same FCC Registration Number (FRN)
the applicant is using to submit its FCC Form 175 will automatically be
pre-filled into certain ownership sections on the applicant's FCC Form
175, if such information is in an electronic format compatible with FCC
Form 175. Applicants are encouraged to submit an FCC Form 602 ownership
report or update any ownership information on file with the Commission
in an FCC Form 602 ownership report prior to starting a short-form
application for Auction 110 to ensure that their most recent ownership
information is pre-filled into their short-form application. Each
applicant must carefully review any ownership information automatically
entered into its FCC Form 175, including any ownership attachments, to
confirm that all information supplied on FCC Form 175 is complete and
accurate as of the application filing deadline. Any information that
needs to be corrected or updated must be changed directly in FCC Form
175.

E. Foreign Ownership Disclosure Requirements

35. Section 310 of the Communications Act requires the

[[Page 32779]]

Commission to review foreign investment in radio station licenses and
imposes specific restrictions on who may hold certain types of radio
licenses. Section 310 applies to applications for initial radio
licenses, applications for assignments and transfers of control of
radio licenses, and spectrum leasing arrangements under the
Commission's secondary market rules. In completing FCC Form 175, an
applicant is required to disclose information concerning foreign
ownership of the applicant. If an applicant has foreign ownership
interests in excess of the applicable limit or benchmark set forth in
section 310(b), then it may seek to participate in Auction 110 as long
as it has filed a petition for declaratory ruling with the Commission
prior to the FCC Form 175 filing deadline. An applicant must certify in
its FCC Form 175 that, as of the deadline for filing its application to
participate in the auction, the applicant either is in compliance with
the foreign ownership provisions of section 310 or has filed a petition
for declaratory ruling requesting Commission approval to exceed the
applicable foreign ownership limit or benchmark in section 310(b) that
is pending before, or has been granted by, the Commission. Additional
information concerning foreign ownership disclosure requirements is
provided in the FCC Form 175 Instructions.

F. Information Procedures During the Auction Process

36. Consistent with past practice in many prior spectrum license
auctions, OEA and WTB adopt the Commission's proposal to limit
information available in Auction 110 in order to prevent the
identification of bidders placing particular bids until after the
bidding has closed. More specifically, OEA will not make public until
after bidding has closed: (1) The PEAs that an applicant selects for
bidding in its short-form application, (2) the amount of any upfront
payment made by or on behalf of an applicant for Auction 110, (3) any
applicant's bidding eligibility, and (4) any other bidding-related
information that might reveal the identity of the bidder placing a bid.
37. The limited information procedures used in past auctions have
helped safeguard against potential anticompetitive behavior such as
retaliatory bidding and collusion. No commenters objected to this
proposal, and OEA and WTB find nothing in the record to suggest
departure from the Commission's now-established practice of
implementing these procedures in wireless spectrum auctions. OEA and
WTB find that the competitive benefits associated with limiting
information disclosure support adoption of such procedures and outweigh
the potential benefits of full disclosure.
38. Once the bidding begins in Auction 110, under the limited
information procedures (sometimes also referred to as anonymous
bidding), information to be made public after each round of bidding
will include, for licenses in each geographic area, the supply, the
aggregate demand, the price at the end of the last completed round, and
the price for the next round. The identities of bidders placing
specific bids and the net bid amounts (reflecting bidding credits) will
not be disclosed until after the close of bidding.
39. Throughout the auction, bidders will have access to additional
information related to their own bidding and bidding eligibility
through the Commission's bidding system. For example, bidders will be
able to view their own level of eligibility, both before and during the
auction.
40. After the close of bidding, bidders' PEA selections, upfront
payment amounts, bidding eligibility, bids, and other bidding-related
actions will be made publicly available.
41. OEA and WTB warn applicants that direct or indirect
communication to other applicants or the public disclosure of non-
public information (e.g., reductions in eligibility, identities of
bidders) could violate the Commission's rule prohibiting certain
communications. Therefore, to the extent an applicant believes that
such a disclosure is required by law or regulation, including
regulations issued by the U.S. Securities and Exchange Commission
(SEC), OEA and WTB strongly urge that the applicant consult with the
Commission staff in the Auctions Division before making such
disclosure.

G. Prohibited Communications and Compliance With Antitrust Laws

42. The rules prohibiting certain communications set forth in
section 1.2105(c) apply to each applicant that files a short-form
application (FCC Form 175) in Auction 110. Section 1.2105(c)(1) of the
Commission's rules provides that, subject to specified exceptions,
``[a]fter the short-form application filing deadline, all applicants
are prohibited from cooperating or collaborating with respect to,
communicating with or disclosing, to each other or any nationwide
provider [of communications services] that is not an applicant, or, if
the applicant is a nationwide provider, any non-nationwide provider
that is not an applicant, in any manner the substance of their own, or
each other's, or any other applicants' bids or bidding strategies
(including post-auction market structure), or discussing or negotiating
settlement agreements, until after the down payment deadline. . . .''
1. Entities Subject to Section 1.2105(c)
43. An ``applicant'' for purposes of this rule includes all
``controlling interests'' in the entity submitting the FCC Form 175
auction application, as well as all holders of interests amounting to
10% or more of the entity (including institutional investors and asset
management companies), and all officers and directors of that entity.
Under section 1.2105(c), a party that submits an application becomes an
``applicant'' under the rule at the application deadline, and that
status does not change based on later developments. Thus, an auction
applicant that does not correct deficiencies in its application, fails
to submit a timely and sufficient upfront payment, or does not
otherwise become qualified, remains an ``applicant'' for purposes of
the rule and remains subject to the prohibition on certain
communications until the Auction 110 down payment deadline.
44. As the Commission proposed in the Auction 110 Comment Public
Notice, OEA and WTB consider AT&T, T-Mobile, and Verizon to be
``nationwide providers'' for the purposes of the prohibited
communications rule for Auction 110.
2. Prohibition Applies Until Down Payment Deadline
45. The prohibition in section 1.2105(c) on certain communications
begins at an auction's short-form application filing deadline and ends
at the auction's down payment deadline after the auction closes, which
will be announced in a future public notice.
3. Scope of Prohibition on Certain Communications; Prohibition on Joint
Bidding Agreements
46. Section 1.2105(c) of the Commission's rules prohibits certain
communications between applicants for an auction, regardless of whether
the applicants seek permits or licenses in the same geographic area or
market. The rule also applies to communications by applicants with non-
applicant nationwide providers of communications services and by
nationwide applicants with non-applicant non-nationwide providers. The
rule further prohibits ``joint bidding arrangements,'' including
arrangements relating to the permits or licenses being

[[Page 32780]]

auctioned that address or communicate, directly or indirectly, bidding
at the auction, bidding strategies, including arrangements regarding
price or the specific permits or licenses on which to bid, and any such
arrangements relating to the post-auction market structure. The rule
allows for limited exceptions for communications within the scope of
any arrangement consistent with the exclusion from the Commission's
rule prohibiting joint bidding, provided such arrangement is disclosed
on the applicant's auction application. Applicants may communicate
pursuant to any pre-existing agreements, arrangements, or
understandings relating to the licenses being auctioned that are solely
operational or that provide for the transfer or assignment of licenses,
provided that such agreements, arrangements, or understandings are
disclosed on their applications and do not both relate to the licenses
at auction and address or communicate bids (including amounts), bidding
strategies, or the particular permits or licenses on which to bid or
the post-auction market structure.
47. In addition to express statements of bids and bidding
strategies, the prohibition against communicating in any manner
includes public disclosures as well as private communications and
indirect or implicit communications. Consequently, an applicant must
take care to determine whether its auction-related communications may
reach another applicant. OEA and WTB remind applicants that they must
determine whether their communications with other parties are
permissible under the rule once the prohibition begins at the deadline
for submitting applications, even before the public notice identifying
applicants is released.
48. Parties subject to section 1.2105(c) should take special care
in circumstances where their officers, directors, and employees may
receive information directly or indirectly relating to any applicant's
bids or bidding strategies. Such information may be deemed to have been
received by the applicant under certain circumstances. For example,
Commission staff have found that, where an individual serves as an
officer and director for two or more applicants, the bids and bidding
strategies of one applicant are presumed to be conveyed to the other
applicant through the shared officer, which creates an apparent
violation of the rule.
49. Subject to the limited exceptions for communications within the
scope of any arrangement consistent with the exclusion from the
Commission's rule prohibiting joint bidding, section 1.2105(c)(1)
prohibits applicants from communicating with specified other parties
only with respect to ``their own, or each other's, or any other
applicant's bids or bidding strategies . . . .'' The Prohibited
Communications Guidance Public Notice, 80 FR 63215, Oct. 19, 2015,
released in advance of the broadcast incentive auction (Auction 1000)
reviewed the scope of the prohibition generally, as well as in that
specific auction's forward auction of spectrum licenses and reverse
auction to relinquish broadcast licenses. As the Commission explained
therein, a communication conveying ``bids or bidding strategies
(including post-auction market structure)'' must also relate to the
``licenses being auctioned'' in order to be covered by the prohibition.
Thus, the prohibition is limited in scope and does not apply to all
communications between or among the specified parties. The Commission
consistently has made clear that application of the rule prohibiting
communications has never required total suspension of essential ongoing
business. Entities subject to the prohibition may negotiate agreements
during the prohibition period, provided that the communications
involved do not relate to both: (1) The licenses being auctioned and
(2) bids or bidding strategies or post-auction market structure.
50. Accordingly, business discussions and negotiations that are
unrelated to bidding in Auction 110 and that do not convey information
about the bids or bidding strategies, including the post-auction market
structure, of an applicant are not prohibited by the rule. Moreover,
not all auction-related information is covered by the prohibition. For
example, communicating merely whether a party has or has not applied to
participate in Auction 110 will not violate the rule. In contrast,
communicating, among other things, how a party will participate,
including specific geographic areas selected, specific bid amounts,
and/or whether or not the party is placing bids, would convey bids or
bidding strategies and would be prohibited.
51. While section 1.2105(c) does not prohibit business discussions
and negotiations among auction applicants that are unrelated to the
auction, each applicant must remain vigilant not to communicate,
directly or indirectly, information that affects, or could affect, bids
or bidding strategies. Certain discussions might touch upon subject
matters that could convey price or geographic information related to
bidding strategies. Such subject areas include, but are not limited to,
management, sales, local marketing agreements, and other transactional
agreements.
52. OEA and WTB caution applicants that bids or bidding strategies
may be communicated outside of situations that involve one party
subject to the prohibition communicating privately and directly with
another such party. 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 found a
violation of the rule against prohibited communications when 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 it 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.
53. Likewise, when completing a short-form application, each
applicant should avoid any statements or disclosures that may violate
section 1.2105(c), particularly in light of the limited information
procedures in effect for Auction 110. Specifically, an applicant should
avoid including any information in its short-form application that
might convey information regarding its PEA selections, such as
referring to certain markets in describing agreements, including any
information in application attachments that will be publicly available
that may otherwise disclose the applicant's PEA selections, or using
applicant names that refer to licenses being offered.
54. Applicants also should be mindful that communicating non-public
application or bidding information publicly or privately to another
applicant may violate section 1.2105(c) even though that information
subsequently may be made public during later periods of the application
or bidding processes.
4. Communicating With Third Parties
55. Section 1.2105(c) does not prohibit an applicant from
communicating bids or bidding strategies to a third party, such as a
consultant or consulting firm, counsel, or lender. The applicant should
take appropriate steps, however, to ensure

[[Page 32781]]

that any third party it employs for advice pertaining to its bids or
bidding strategies does not become a conduit for prohibited
communications to other specified parties, as that would violate the
rule. For example, an applicant might require a third party, such as a
lender, to sign a non-disclosure agreement before the applicant
communicates any information regarding bids or bidding strategy to the
third party. Within third-party firms, separate individual employees,
such as attorneys or auction consultants, may advise individual
applicants on bids or bidding strategies, as long as such firms
implement firewalls and other compliance procedures that prevent such
individuals from communicating the bids or bidding strategies of one
applicant to other individuals representing separate applicants.
Although firewalls and/or other procedures should be used, their
existence is not an absolute defense to liability if a violation of the
rule has occurred.
56. As the Commission has noted in other spectrum auctions, in the
case of an individual, the objective precautionary measure of a
firewall is not available. As a result, an individual that is privy to
bids or bidding information of more than one applicant presents a
greater risk of becoming a conduit for a prohibited communication. OEA
and WTB will take the same approach to interpreting the prohibited
communications rule in Auction 110. OEA and WTB emphasize that whether
a prohibited communication has taken place in a given case will depend
on all the facts pertaining to the case, including who possessed what
information, what information was conveyed to whom, and the course of
bidding in the auction.
57. OEA and WTB remind potential applicants that they may discuss
the short-form application or bids for specific licenses or license
areas with the counsel, consultant, or expert of their choice before
the short-form application deadline. Furthermore, the same third-party
individual could continue to give advice after the short-form deadline
regarding the application, provided that no information pertaining to
bids or bidding strategies, including PEAs selected on the short-form
application, is conveyed to that individual.
58. 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, even though communicating that it has applied
to participate in the auction will not violate the rule, an applicant's
statement to the press that it intends to stop bidding in an auction
could give rise to a finding of a section 1.2105 violation. Similarly,
an applicant's public statement of intent not to place bids during
bidding in Auction 110 could also violate the rule.
5. Section 1.2105(c) Certifications
59. By electronically submitting its FCC Form 175 auction
application, each applicant for Auction 110 certifies its compliance
with section 1.2105(c) of the rules. The mere filing of a certifying
statement as part of an application, however, will not outweigh
specific evidence that a prohibited communication has occurred, nor
will it preclude the initiation of an investigation when warranted. Any
applicant found to have violated these communication prohibitions may
be subject to sanctions.
6. Duty To Report Prohibited Communications
60. Section 1.2105(c)(4) requires 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. 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.
7. Procedures for Reporting Prohibited Communications
61. A party reporting any information or communication pursuant to
sections 1.65, 1.2105(a)(2), or 1.2105(c)(4) 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 parties specified under the rule
through the use of Commission filing procedures that allow such
materials to be made available for public inspection.
62. Parties must file only a single report concerning a prohibited
communication and must file that report with the Commission personnel
expressly charged with administering the Commission's auctions. 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. 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 the Auction
110 Procedures Public Notice. For Auction 110, such reports must be
filed with the Chief of the Auctions Division, Office of Economics and
Analytics, by the most expeditious means available. Any such report
should be submitted by email to the Auctions Division Chief and sent to
<a href="/cdn-cgi/l/email-protection#6a0b1f091e0305045b5b5a2a0c0909440d051c">[email&#160;protected]</a>. If you choose instead to submit a report in hard
copy, contact Auctions Division staff at <a href="/cdn-cgi/l/email-protection#1170647265787e7f202021517772723f767e67">[email&#160;protected]</a> or (202)
418-0660 for guidance.
63. Given the potential competitive sensitivity of public
disclosure of information in such a report, 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. OEA and WTB encourage such
parties to coordinate with the Auctions Division staff about the
procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements
64. Each applicant that is a winning bidder will be required to
provide as part of its long-form application any agreement or
arrangement it has entered into and a summary of 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.
9. Additional Information Concerning Prohibition on Certain
Communications in Commission Auctions
65. A summary listing of documents issued by the Commission, OEA,
and WTB addressing the application of section 1.2105(c) is available on
the Commission's auction web page at <a href="http://www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications">www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications</a>.

[[Page 32782]]

10. Antitrust Laws
66. 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)(4) 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 submits a short-form application. 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.
67. To the extent that Commission staff become aware of specific
allegations that suggest that violations of the federal antitrust laws
may have occurred, they 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,
then it may be subject to a forfeiture and may be prohibited from
participating further in Auction 110 and in future auctions, among
other sanctions.

H. Provisions for Small Businesses and Rural Service Providers

68. A bidding credit represents an amount by which a bidder's
overall payment across all the licenses won will be discounted, subject
to the caps discussed below. As set forth in section 1.2110 of the
Commission's rules, and as described below, these rule revisions
include, but are not limited to: (1) Adopting a two-pronged standard
for evaluating eligibility for small business benefits, (2)
establishing a new attribution rule for certain disclosable interest
holders of applicants claiming designated entity benefits, (3) updating
the gross revenue amounts defining eligibility for small business
benefits, (4) creating a separate bidding credit for eligible rural
service providers, and (5) establishing caps on the total amount of
designated entity benefits any eligible winning bidder may receive.
69. In Auction 110, designated entity bidding credits will be
available to applicants demonstrating eligibility for a small business
or a rural service provider bidding credit and subsequently winning
license(s). These bidding credits will not be cumulative--an applicant
is permitted to claim either a small business bidding credit or a rural
service provider bidding credit, but not both. Each applicant must also
certify that it is eligible for the claimed bidding credit in its FCC
Form 175. In addition to the information provided below, each applicant
should review carefully the Commission's decisions regarding the
designated entity provisions as well as the part 1 rules.
70. In particular, the Commission reminds applicants applying for
designated entity bidding credits that they should take due account of
the requirements of the Commission's rules and implementing orders
regarding de jure and de facto control of such applicants. These rules
include a prohibition, which applies to all applicants (whether they
seek bidding credits or not), against changes in ownership of the
applicant that would constitute an assignment or transfer of control.
This may, in some circumstances, include changes in officers or
directors. Applicants should not expect to receive any opportunities to
revise their ownership structure after the filing of their short- and
long-form applications, including making revisions to their agreements
or other arrangements with interest holders, lenders, or others in
order to address potential concerns relating to compliance with the
designated entity bidding credit requirements. This policy will help to
ensure compliance with the Commission's rules applicable to the award
of bidding credits prior to the conduct of the auction, which will
involve competing bids from those that do and do not seek bidding
credits, and thus preserves the integrity of the auction process. OEA
and WTB also believe that this will meet the Commission's objectives in
awarding licenses through the competitive bidding process.
1. Small Business Bidding Credit
71. For Auction 110, bidding credits will be available to eligible
small businesses and consortia thereof, subject to the caps discussed
below. Under the service rules applicable to the 3.45 GHz Service
licenses to be offered in Auction 110, the level of bidding credit
available is determined as follows:
<bullet> A bidder that qualifies as a ``small business''--i.e., one
with attributed average annual gross revenues that do not exceed $55
million for the preceding five years--is eligible to receive a 15%
discount on its overall payment.
<bullet> A bidder that qualifies as a ``very small business''--
i.e., one with attributed average annual gross revenues that do not
exceed $20 million for the preceding five years--is eligible to receive
a 25% discount on its overall payment.
72. In adopting this two-tiered approach in the 3.45 GHz Second
Report and Order, the Commission observed that this approach would
provide consistency and predictability for small businesses.
73. Small business bidding credits are not cumulative; an eligible
applicant may receive either the 15% or the 25% bidding credit on its
overall payment, but not both. The Commission's unjust enrichment
provisions also apply to a winning bidder that uses a bidding credit
and subsequently seeks to assign or transfer control of its license
within a certain period to an entity not qualifying for at least the
same level of small business bidding credit.
74. Each applicant claiming a small business bidding credit must
disclose the gross revenues for the preceding five years for each of
the following: (1) The applicant, (2) its affiliates, (3) its
controlling interests, and (4) the affiliates of its controlling
interests. The applicant must also submit an attachment that lists all
parties with which the applicant has entered into any spectrum use
agreements or arrangements for any licenses that may be won by the
applicant in Auction 110. In addition, to the extent that an applicant
has an agreement with any disclosable interest holder for the use of
more than 25% of the spectrum capacity of any license that may be won
in Auction 110, the applicant must disclose the identity and the
attributable gross revenues of any such disclosable interest holder.
This attribution rule will be applied on a license-by-license basis. As
a result, an applicant may be eligible for a bidding credit on some,
but not all, of the licenses for which it is bidding in Auction 110. If
an applicant is applying as a consortium of small businesses, then the
disclosures described in this paragraph must be provided for each
consortium member.
2. Rural Service Provider Bidding Credit
75. An eligible applicant may request a 15% discount on its overall
payment using a rural service provider bidding credit, subject to the
cap discussed below. To be eligible for a rural service provider
bidding credit, an applicant must: (1) Be a service provider that is in
the business of providing commercial communications services and,
together with its controlling interests, affiliates, and the affiliates
of its controlling

[[Page 32783]]

interests, has fewer than 250,000 combined wireless, wireline,
broadband, and cable subscribers; and (2) serve predominantly rural
areas. Rural areas are defined as counties with a population density of
100 or fewer persons per square mile. An applicant seeking a rural
service provider bidding credit must provide the number of subscribers
served as of the short-form application deadline. An applicant may
count any subscriber as a single subscriber even if that subscriber
receives more than one service.
76. Each applicant seeking a rural service provider bidding credit
must disclose the number of its subscribers, along with the number of
subscribers of its affiliates, controlling interests, and the
affiliates of its controlling interests. The applicant must also submit
an attachment that lists all parties with which the applicant has
entered into any spectrum use agreements or arrangements for any
licenses that may be won by the applicant in Auction 110. In addition,
to the extent that an applicant has an agreement with any disclosable
interest holder for the use of more than 25% of the spectrum capacity
of any license that may be won in Auction 110, the identity and the
attributable subscribers of any such disclosable interest holder must
be disclosed. Like applicants seeking eligibility for small business
bidding credits, eligible rural service providers may also form a
consortium. If an applicant is applying as a consortium of rural
service providers, then the disclosures described in this paragraph,
including the certification, must be provided for each consortium
member.
3. Caps on Bidding Credits
77. Eligible applicants claiming either a small business or rural
service provider bidding credit will be subject to specified caps on
the total amount of bidding credit discounts that they may receive. OEA
and WTB adopt the bidding credit caps for Auction 110 at the amounts
proposed by the Commission in the Auction 110 Comment Public Notice.
Specifically, OEA and WTB adopt a $25 million cap on the total amount
of bidding credit discounts that may be awarded to an eligible small
business, and a $10 million cap on the total amount of bidding credit
discounts that may be awarded to an eligible rural service provider.
Additionally, to create parity among eligible small businesses and
rural service providers competing against each other in smaller
markets, no winning designated entity bidder may receive more than $10
million in bidding credit discounts in total for licenses won in PEAs
with populations of 500,000 or less.
4. Attributable Interests
a. Controlling Interests and Affiliates
78. Pursuant to section 1.2110 of the Commission's rules, an
applicant's eligibility for designated entity benefits is determined by
attributing the gross revenues (for those seeking small business
benefits) or subscribers (for those seeking rural service provider
benefits) of the applicant, its affiliates, its controlling interests,
and the affiliates of its controlling interests. Controlling interests
of an applicant include individuals and entities with either de facto
or de jure control of the applicant. Typically, ownership of greater
than 50% of an entity's voting stock evidences de jure control. De
facto control is determined on a case-by-case basis based on the
totality of the circumstances. The following are some common indicia of
de facto control:
<bullet> The entity constitutes or appoints more than 50% of the
board of directors or management committee;
<bullet> the entity has authority to appoint, promote, demote, and
fire senior executives that control the day-to-day activities of the
licensee; and
<bullet> the entity plays an integral role in management decisions.
79. Additionally, for attribution purposes, officers and directors
of an applicant seeking a bidding credit are considered to have a
controlling interest in the applicant. Applicants should refer to
section 1.2110(c)(2) of the Commission's rules and the FCC Form 175
Instructions to understand how certain interests are calculated in
determining control for purposes of attributing gross revenues.
80. Affiliates of an applicant or controlling interest include an
individual or entity that: (1) Directly or indirectly controls or has
the power to control the applicant, (2) is directly or indirectly
controlled by the applicant, (3) is directly or indirectly controlled
by a third party that also controls or has the power to control the
applicant, or (4) has an identity of interest with the applicant. The
Commission's definition of an affiliate of the applicant encompasses
both controlling interests of the applicant and affiliates of
controlling interests of the applicant. For more information on the
application requirements regarding controlling interests and
affiliates, applicants should refer to sections 1.2110(c)(2) and (c)(5)
respectively, as well as the FCC Form 175 Instructions.
81. An applicant seeking a small business bidding credit must
demonstrate its eligibility for the bidding credit by: (1) Meeting the
applicable small business size standard, based on the controlling
interest and affiliation rules discussed in the Auction 110 Procedures
Public Notice; and (2) retaining control, on a license-by-license
basis, over the spectrum associated with the licenses for which it
seeks small business benefits. For purposes of the first prong of the
standard, applicants should note that control and affiliation may arise
through, among other things, ownership interests, voting interests,
management and other operating agreements, or the terms of any other
types of agreements--including spectrum lease agreements--that
independently or together create a controlling, or potentially
controlling, interest in the applicant's or licensee's business as a
whole. In addition, once an applicant demonstrates eligibility as a
small business under the first prong, it must also be eligible for
benefits on a license-by-license basis under the second prong. As part
of making the FCC Form 175 certification that it is qualified as a
designated entity under section 1.2110, an applicant is certifying that
it does not have any spectrum use or other agreements that would confer
either de jure or de facto control of any license it seeks to acquire
with bidding credits.
82. Applicants should note that, under this standard for evaluating
eligibility for small business bidding credits, if an applicant
executes a spectrum use agreement that does not comply with the
Commission's relevant standard of de facto control, then it will be
subject to unjust enrichment obligations for the benefits associated
with that particular license, as well as the penalties associated with
any violation of section 310(d) of the Communications Act and related
regulations, which require Commission approval of transfers of control.
If that spectrum use agreement (either alone or in combination with the
designated entity controlling interest and attribution rules described
above) goes so far as to confer control of the applicant's overall
business, then the gross revenues of the additional interest holders
will be attributed to the applicant, which could render the applicant
ineligible for all current and future small business benefits on all
licenses.
b. Limitation on Spectrum Use
83. Under section 1.2110(c)(2)(ii)(J) of the Commission's rules,
the gross revenues (or the subscribers, in the case of a rural service
provider) of an applicant's disclosable interest holder

[[Page 32784]]

are attributable to the applicant, on a license-by-license basis, if
the disclosable interest holder has an agreement with the applicant to
use, in any manner, more than 25% of the spectrum capacity of any
license won by the applicant and acquired with a bidding credit during
the five-year unjust enrichment period for the applicable license. For
purposes of this requirement, a disclosable interest holder of an
applicant seeking designated entity benefits is defined as any
individual or entity holding a 10% or greater interest of any kind in
the applicant, including but not limited to, a 10% or greater interest
in any class of stock, warrants, options, or debt securities in the
applicant or licensee. Any applicant seeking a bidding credit for
licenses won in Auction 110 will be subject to this attribution rule
and must make the requisite disclosures.
84. Certain disclosable interest holders may be excluded from this
attribution rule. Specifically, an applicant claiming the rural service
provider bidding credit may have spectrum license use agreements with a
disclosable interest holder, without having to attribute the
disclosable interest holder's subscribers, so long as the disclosable
interest holder is independently eligible for a rural service provider
credit and the use agreement is otherwise permissible under the
Commission's existing rules. If applicable, the applicant must attach
to its FCC Form 175 any additional information as may be required to
indicate any license (or license area) that may be subject to this
attribution rule or to demonstrate its eligibility for the exception
from this attribution rule. Consistent with the Commission's limited
information procedures, the Commission intends to withhold from public
disclosure all information contained in any such attachments until
after the close of Auction 110.
c. Exceptions From Attribution Rules for Small Businesses and Rural
Service Providers
85. Applicants claiming designated entity benefits may be eligible
for certain exceptions from the Commission's attribution rules. For
example, in calculating an applicant's gross revenues under the
controlling interest standard, the Commission will not attribute to the
applicant the personal net worth, including personal income, of its
officers and directors. However, to the extent that the officers and
directors of the applicant are controlling interest holders of other
entities, the gross revenues of those entities will be attributed to
the applicant. Moreover, if an officer or director operates a separate
business, then the gross revenues derived from that business would be
attributed to the applicant.
86. The Commission has also exempted from attribution to the
applicant the gross revenues of the affiliates of a rural telephone
cooperative's officers and directors, if certain conditions specified
in section 1.2110(b)(4)(iii) of the Commission's rules are met. An
applicant claiming this exemption must provide, in an attachment, an
affirmative statement that the applicant, affiliate and/or controlling
interest is an eligible rural telephone cooperative within the meaning
of section 1.2110(b)(4)(iii), and the applicant must supply any
additional information as may be required to demonstrate eligibility
for the exemption from the attribution rule.
87. An applicant claiming a rural service provider bidding credit
may be eligible for an exception from the Commission's attribution
rules as an existing rural partnership. To qualify for this exception,
an applicant must be a rural partnership providing service as of July
16, 2015, and each member of the rural partnership must individually
have fewer than 250,000 combined wireless, wireline, broadband, and
cable subscribers. Because each member of the rural partnership must
individually qualify for the bidding credit, by definition, a
partnership that includes a nationwide provider as a member will not be
eligible for the benefit.
88. Finally, a consortium of small businesses or rural service
providers may seek an exception from the Commission's attribution
rules. Under the Commission's rules, a consortium of small businesses
or rural service providers is a conglomerate organization composed of
two or more entities, each of which individually satisfies the
definition of small business or rural service provider. A consortium
must provide additional information for each member demonstrating each
member's eligibility for the claimed bidding credit in order to show
that the applicant satisfies the eligibility criteria for the bidding
credit. The gross revenue or subscriber information of each consortium
member will not be aggregated for purposes of determining the
consortium's eligibility for the claimed bidding credit. This
information must be provided, however, to ensure that each consortium
member qualifies for the bidding credit sought by the consortium.

I. Provisions Regarding Former and Current Defaulters

89. Pursuant to the rules governing competitive bidding, each
applicant must make certifications regarding whether it is a current or
former defaulter or delinquent. A current defaulter or delinquent is
not eligible to participate in Auction 110, but a former defaulter or
delinquent may participate so long as it is otherwise qualified and
makes an upfront payment that is 50% more than would otherwise be
necessary. Accordingly, each applicant must certify under penalty of
perjury on its FCC Form 175 that it, its affiliates, its controlling
interests, and the affiliates of its controlling interests 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. Additionally, an applicant must
certify under penalty of perjury whether it (along with its controlling
interests) has ever been in default on any payment for a Commission
construction permit or license (including down payments) or has ever
been delinquent on any non-tax debt owed to any Federal agency, subject
to the exclusions described below. For purposes of making these
certifications, the term ``controlling interest'' is defined in section
1.2105(a)(4)(i) of the Commission rules.
90. Under the Commission's rule regarding applications by former
defaulters, an applicant is considered a ``former defaulter'' or a
``former delinquent'' when, as of the FCC Form 175 deadline, the
applicant or any of its controlling interests has defaulted on any
Commission construction permit or license or has been delinquent on any
non-tax debt owed to any Federal agency, but has since remedied all
such defaults and cured all of the outstanding non-tax delinquencies.
For purposes of the certification under section 1.2105(a)(2)(xii), the
applicant may exclude from consideration any cured default on a
Commission construction permit or license or cured delinquency on a
non-tax debt owed to a Federal agency for which any of the following
criteria are met: (1) The notice of the final payment deadline or
delinquency was received more than seven years before the FCC Form 175
filing deadline, (2) the default or delinquency amounted to less than
$100,000, (3) the default or delinquency was paid within two quarters
(i.e., six months) after receiving the notice of the final payment
deadline or delinquency, or (4) the default or delinquency was the
subject of a legal or arbitration proceeding and

[[Page 32785]]

was cured upon resolution of the proceeding. With respect to the first
exclusion, notice to a debtor may include notice of a final payment
deadline or notice of delinquency and may be express or implied
depending on the origin of any Federal non-tax debt giving rise to a
default or delinquency. Additionally, for the third exclusion, the date
of receipt of the notice of a final default deadline or delinquency by
the intended party or debtor will be used for purposes of verifying
receipt of notice.
91. In addition to the Auction 110 Procedures Public Notice,
applicants are encouraged to review previous guidance on default and
delinquency disclosure requirements in the context of the auction
short-form application process. Parties are also encouraged to consult
with Auctions Division staff if they have any questions about default
and delinquency disclosure requirements.
92. The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission has previously 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. When
adopting that rule, 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,
including the provisions and certifications of sections 1.2105 and
1.2106, with regard to current and former defaults or delinquencies.
93. OEA and WTB remind each applicant, however, that any indication
in 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 whether it may be subject
to an increased upfront payment obligation). Moreover, a prospective
applicant in Auction 110 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. OEA and WTB
encourage each applicant to carefully review all records and other
available Federal agency databases and information sources to determine
whether the applicant, or any of its affiliates, or any of its
controlling interests, or any of the affiliates of its controlling
interests, owes or was ever delinquent in the payment of non-tax debt
owed to any Federal agency.

J. Optional Applicant Status Identification

94. 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 FCC Form 175 applications. This applicant
status information is collected for statistical purposes only and
assists the Commission in monitoring the participation of various
groups in its auctions.

K. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
95. After the initial FCC Form 175 filing deadline, an Auction 110
applicant will be permitted to make only minor changes to its
application consistent with the Commission's rules. Examples of minor
changes include the deletion or addition of authorized bidders (to a
maximum of three) and the revision of addresses and telephone numbers
of the applicant, its responsible party, and its contact person. Major
modification to an FCC Form 175 (e.g., change of PEA selection, certain
changes in ownership that would constitute an assignment or transfer of
control of the applicant, change in the required certifications, change
in applicant's legal classification that results in a change in
control, or change in claimed eligibility for a higher percentage of
bidding credit) will not be permitted after the initial FCC Form 175
filing deadline. If an amendment reporting changes is a ``major
amendment,'' as described in section 1.2105(b)(2), the major amendment
will not be accepted and may result in the dismissal of the
application.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
96. Pursuant to section 1.65 of the Commission's rules, each
applicant has a continuing obligation to maintain the accuracy and
completeness of information furnished in a pending application,
including a pending application to participate in Auction 110.
Consistent with the requirements for spectrum auctions, an applicant
for Auction 110 must furnish additional or corrected information to the
Commission within five business days after a significant occurrence, or
amend its FCC Form 175 no more than five business days after the
applicant becomes aware of the need for the amendment. An applicant is
obligated to amend its pending application even if a reported change
may result in the dismissal of the application because it is
subsequently determined to be a major modification.
3. Modifying an FCC Form 175
97. As noted above, a party seeking to participate in Auction 110
must file an FCC Form 175 electronically via the FCC's Auction
Application System. During the initial filing window, an applicant will
be able to make any necessary modifications to its FCC Form 175 in the
Auction Application System. An applicant that has certified and
submitted its FCC Form 175 before the close of the initial filing
window may continue to make modifications as often as necessary until
the close of that window; however, the applicant must re-certify and
re-submit its FCC Form 175 before the close of the initial filing
window to confirm and effect its latest application changes. After each
submission, a confirmation page will be displayed stating the
submission time and submission date.
98. An applicant will also be allowed to modify its FCC Form 175 in
the Auction Application System, except for certain fields, during the
resubmission filing window and after the release of the public notice
announcing the qualified bidders for an auction. During these times, if
an applicant needs to make permissible minor changes to its FCC Form
175 or must make changes in order to maintain the accuracy and
completeness of its application pursuant to sections 1.65 and
1.2105(b)(4), then it must make the change(s) in the Auction
Application System and re-certify and re-submit its application to
confirm and effect the change(s).
99. An applicant's ability to modify its FCC Form 175 in the
Auction Application System will be limited between the closing of the
initial filing

[[Page 32786]]

window and the opening of the application resubmission filing window,
and between the closing of the resubmission filing window and the
release of the public notice announcing the qualified bidders for an
auction. During these periods, an applicant will be able to view its
submitted application, but will be permitted to modify only the
applicant's address, responsible party address, and contact information
(e.g., name, address, telephone number, etc.) in the Auction
Application System. An applicant will not be able to modify any other
pages of the FCC Form 175 in the Auction Application System during
these periods. If, during these periods, an applicant needs to make
other permissible minor changes to its FCC Form 175, or changes to
maintain the accuracy and completeness of its application pursuant to
sections 1.65 and 1.2105(b)(4), then the applicant must submit a letter
briefly summarizing the changes to its FCC Form 175 via email to
<a href="/cdn-cgi/l/email-protection#82e3f7e1f6ebedecb3b3b2c2e4e1e1ace5edf4">[email&#160;protected]</a>. The email summarizing the changes must include a
subject line referring to Auction 110 and the name of the applicant,
for example, ``Re: Changes to Auction 110 Auction Application of XYZ
Corp.'' Any attachments to the email must be formatted as Adobe[supreg]
Acrobat[supreg] (PDF) or Microsoft[supreg] Word documents. An applicant
that submits its changes in this manner must subsequently modify,
certify, and submit its FCC Form 175 application(s) electronically in
the Auction Application System once it is again open and available to
applicants.
100. Applicants should also note that even at times when the
Auction Application System is open and available to applicants, the
system will not allow an applicant to make certain other permissible
changes itself (e.g., correcting a misstatement of the applicant's
legal classification, name, or certifying official). If an applicant
needs to make a permissible minor change of this nature, then it must
submit a written request by email to the Auctions Division Chief, via
<a href="/cdn-cgi/l/email-protection#2140544255484e4f101011614742420f464e57">[email&#160;protected]</a> requesting that the Commission manually make the
change on the applicant's behalf. Once Commission staff has informed
the applicant that the change has been made in the Auction Application
System, the applicant must then re-certify and re-submit its FCC Form
175 in the Auction Application System to confirm and effect the
change(s).
101. As with filing the FCC Form 175, any amendment(s) to the
application and related statements of fact must be certified by an
authorized representative of the applicant with authority to bind the
applicant. Applicants should note that submission of any such amendment
or related statement of fact constitutes a representation by the person
certifying that he or she is an authorized representative with such
authority and that the contents of the amendment or statement of fact
are true and correct.
102. Applicants must not submit application-specific material
through the Commission's Electronic Comment Filing System. Further, as
discussed above, parties submitting information related to their
applications should use caution to ensure that their submissions do not
contain confidential information or communicate information that would
violate section 1.2105(c) or the limited information procedures adopted
for Auction 110. An applicant seeking to submit, outside of the Auction
Application System, information that might reflect non-public
information, such as an applicant's PEA selection(s), upfront payment
amount, or bidding eligibility, should consider including in its email
a request that the filing or portions of the filing be withheld from
public inspection until the end of the prohibition on certain
communications pursuant to section 1.2105(c).
103. Questions about FCC Form 175 amendments should be directed to
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 110

A. Due Diligence

104. OEA and WTB 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
licenses that it is seeking in Auction 110 and that it is required to
certify, under penalty of perjury, that it has read the Auction 110
Procedures Public Notice and has familiarized itself with the auction
procedures and the service rules for the 3.45-3.55 GHz band. The
Commission makes no representations or warranties about the use of this
spectrum or these licenses for particular services. Each applicant
should be aware that a Commission auction represents an opportunity to
become a Commission licensee, subject to certain conditions and
regulations. This includes the established authority of the Commission
to alter the terms of existing licenses by rulemaking, which is equally
applicable to licenses awarded by auction. A Commission auction does
not constitute an endorsement by the Commission of any particular
service, technology, or product, nor does a Commission license
constitute a guarantee of business success.
105. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, OEA and WTB encourage each potential bidder to perform
technical analyses and/or refresh its previous analyses to assure
itself that, should it become a winning bidder for any Auction 110
license, it will be able to build and operate facilities that will
fully comply with all applicable technical and legal requirements. OEA
and WTB urge each applicant to inspect any prospective sites for
communications facilities located in, or near, the geographic 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 (NEPA), the National Historic Preservation Act
(NHPA), and other environmental statutes.
106. OEA and WTB also encourage each applicant in Auction 110 to
continue to conduct its own research throughout the auction in order to
determine the existence of pending or future administrative or judicial
proceedings that might affect its decision on continued participation
in the auction. Lockheed Martin Corporation has filed a request for
waiver of certain Commission rules that is currently pending before the
Commission. Additionally, three Petitions for Reconsideration of the
3.45 GHz Second Report and Order are currently pending before the
Commission. If the Commission acts on any of these pending matters
prior to the auction, we will provide updated information for potential
bidders as necessary. Each applicant is responsible for assessing the
likelihood of the various possible outcomes and for considering the
potential impact on licenses available in an auction. The due diligence
considerations mentioned in the Auction 110 Procedures Public Notice do
not constitute an exhaustive list of steps that should be undertaken
prior to participating in Auction 110. As always, the burden is on the
potential bidder to determine how much research to undertake, depending
upon the specific facts and circumstances related to its interests. For
example, applicants should pay particular attention to the framework
adopted in the 3.45 GHz Second Report and Order that requires new
flexible-use licensees to reimburse secondary, non-federal
radiolocation operators for the relocation costs associated with their
transitions into the 2.9-3.0 GHz band and cooperative

[[Page 32787]]

sharing requirements for certain licenses.
107. Applicants in Auction 110 should carefully consider the impact
of the aggregation limit in the 3.45 GHz Service, discussed further in
Section III.B.4, below. In particular, applicants should consider
whether any of their own attributable interest holders have permissible
overlapping interests in another applicant that could further limit the
number of licenses that each applicant may hold in a given PEA. For
example, a single individual or entity may be permitted to hold a non-
controlling interest of 10% or more in multiple applicants, but the
combined holdings of those applicants in any PEA may not exceed the
four-license aggregation limit.
108. 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 licenses available in Auction 110. Each potential bidder is
responsible for undertaking research to ensure that any licenses won in
the 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.
109. 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.

B. Licensing Considerations

1. Transition of Incumbent Operations
110. Potential applicants in Auction 110 should consider carefully
the process for transitioning incumbent Federal and non-Federal
radiolocation and amateur operations out of the 3.45-3.55 GHz band and
to the cooperative sharing requirements within the band when developing
business plans, assessing market conditions, and evaluating the
availability of equipment for 3.45 GHz Service operations. Each
applicant should follow closely releases from the Commission concerning
these issues and consider carefully the technical and economic
implications for commercial use of the 3.45-3.55 GHz band.
a. Cooperative Sharing in the 3.45-3.55 GHz Band
111. The 3.45-3.55 GHz band will operate using a cooperative
sharing framework under which existing federal users are prohibited
from causing harmful interference to non-federal operations, except in
limited circumstances and in locations where current incumbent federal
systems will remain indefinitely in the band. Under the following
circumstances, non-federal systems are not entitled to protection
against harmful interference from federal operations (and limited
restrictions may be placed on non-federal operations); (1) in
``Cooperative Planning Areas'' identified by the DoD in which it
anticipates that federal operations will continue after the assignment
of flexible use licenses in the band; and (2) in ``Periodic Use Areas''
that overlap with certain Cooperative Planning Areas, in which the DoD
will need episodic access to all or a portion of the band in specific,
limited geographic areas. Cooperative Planning Areas and Periodic Use
Areas are coordination areas, rather than exclusion areas, meaning that
commercial operations within their boundaries are not precluded. Under
this framework, incumbent federal operations and new flexible use
operations must coordinate with each other to facilitate shared use of
the band in these specified areas and during specified time periods as
described in the 3.45 GHz Second Report and Order.
b. AIA's Petition for Reconsideration and Lockheed Martin Corporation's
Waiver Request
112. We note that one of the pending petitions for reconsideration,
filed by the Aerospace Industries Association, seeks adoption of a
coordination framework for certain existing federal contractor
facilities and that Lockheed Martin Corporation has filed a request for
waiver of certain Commission rules across the lower 75 megahertz of the
3.45-3.55 GHz Band related to its Experimental Radio Service licenses
and operations between midnight and 8:00 a.m. ET. Potential bidders
should be aware that if relief substantially similar to that sought by
Lockheed were granted, it would affect coordination requirements and
spectrum use in blocks A through H in PEAs 41, 44, and 227 for the
duration of time of any such grant.
c. Relocation of Secondary Non-Federal Radiolocation Operations
113. In addition to the federal users operating in the 3.45-3.55
GHz band, the 3.3-3.55 GHz band is currently used by secondary non-
federal radiolocation licensees that will be relocated to the 2.9-3.0
GHz band no later than 180 days after the flexible-use licenses won in
Auction 110 are granted. In order to facilitate the expeditious
clearing of the 3.3-3.55 GHz band, in the 3.45 GHz Second Report and
Order, the Commission adopted a requirement that licensees in the new
3.45 GHz Service reimburse the current 3.3-3.55 licensees for their
reasonable costs related to the relocation of their operations to the
2.9-3.0 GHz band. Auction 110 winning bidders will be required to pay
these reimbursement costs in addition to their winning bid amounts. For
additional information about cost-sharing and reimbursement procedures
related to the licenses offered in Auction 110, potential bidders
should review carefully the 3.45 GHz Second Report and Order.
d. Commercial Spectrum Enhancement Act/Spectrum Act Requirements and
Aggregate Reserve Price
114. The spectrum in the 3.45-3.55 GHz band is covered by a
Congressional mandate that requires auction proceeds to be used to fund
the estimated relocation or sharing costs of incumbent federal
entities. In 2004, the Commercial Spectrum Enhancement Act (CSEA)
established a Spectrum Relocation Fund (SRF) to reimburse eligible
federal agencies operating on certain frequencies that have been
reallocated from federal to non-federal use for the cost of relocating
their operations. The CSEA, as amended by the Spectrum Act, requires
that the total cash proceeds from any auction of eligible frequencies
must equal at least 110% of the estimated relocation or sharing costs
provided to the Commission by NTIA, and it prohibits the Commission
from concluding any auction of eligible frequencies that falls short of
this amount. The Commission's rules therefore require that the
establishment of a reserve price in order to meet the CSEA's
requirement that Auction 110's total cash proceeds amount to at least
110% of the NTIA's estimate of the relevant relocation or sharing
costs.
115. NTIA provides the Commission with an estimate of eligible
federal entities' relocation or sharing costs and the timelines for
such relocation or sharing pursuant to the requirements of

[[Page 32788]]

the CSEA. On January 14, 2021, NTIA provided to the Commission an
estimate of $13,432,140,300 for the relocation or sharing costs of the
incumbent Federal entities currently operating in the 3.45-3.55 GHz
band. Accordingly, for Auction 110, OEA and WTB establish a single
aggregate reserve price to ensure that total cash proceeds from the
auction equal at least $14,775,354,330, or 110% of NTIA's estimate.
116. OEA and WTB adopt procedures that have been used in past
Commission auctions to determine whether the reserve price is met in
Auction 110. Although total cash proceeds from Auction 110 will not be
known precisely before the conclusion of the auction, these procedures
will provide a careful, conservative estimate of whether total cash
proceeds meet the reserve price after each bidding round in the clock
phase.
117. As in many services, the Commission has established for this
auction bidding credits for small business and rural service providers.
Winning bidders claiming such credits may pay less than the amount of
their winning bids for any licenses won. In the CSEA/Part 1 Declaratory
Ruling, the Commission determined that ``total cash proceeds'' for
purposes of meeting the CSEA's requirement means winning bids net of
any applicable bidding credit discounts at the end of bidding. Thus,
whether the CSEA's total cash proceeds requirement has been met depends
on whether winning bids, net of any applicable bidding credit
discounts, equal, in aggregate, at least 110% of estimated relocation
costs.
118. As in prior Commission auctions, OEA will assess whether the
reserve price is met--whether the auction will generate sufficient
total cash proceeds--based on bids in the clock phase of the auction
and not the assignment phase. Total cash proceeds from assignment phase
payments are expected to be small relative to those from the clock
phase and therefore less likely to contribute significantly to meeting
the reserve price. Given that assignment phase payments will be
determined using a second-price rule, an individual bidder will have
little ability to boost net winning bids in the assignment phase in
order to meet the reserve price. OEA and WTB do not wish to require
bidders or Commission staff to invest the additional time in the
assignment phase if ultimately no licenses will be assigned.
119. Whether winning bidders in the clock phase claim any bidding
credits that may reduce total cash proceeds to less than gross winning
bids only can be determined with certainty at the close of the clock
phase of bidding. However, OEA will estimate whether the reserve is met
during the clock phase by assuming conservatively that for a category
in a PEA with excess demand, blocks will be won by the bidders with the
highest bidding credit percentages, to the extent that such bidders
still demand blocks in that category in that PEA. In order to make
bidders aware of whether the reserve is likely to be met while they are
still bidding in the clock phase, OEA and will indicate on the Public
Reporting System (PRS) whether estimated total cash proceeds based on
the bids in the most recently completed round would satisfy the
reserve. If the reserve has not yet been met, OEA will make available
only to bidders information on the shortfall between the reserve and
the estimated total cash proceeds, rounded up to the nearest million.
These procedures are designed to avoid a potential situation where
the reserve price is assumed to be met, but, when bidding credits are
considered, final net winning bids later prove insufficient. For a
category in a PEA without excess demand, the requirement will be
evaluated based on a true calculation of net revenue after bid
processing, rather than on the estimate, since information on how to
apply bidding credits precisely will be available in that case.
120. These procedures are designed to avoid a potential situation
where the reserve price is assumed to be met, but, when bidding credits
are considered, final net winning bids later prove insufficient. For a
category in a PEA without excess demand, the requirement will be
evaluated based on a true calculation of net revenue after bid
processing, rather than on the estimate, since information on how to
apply bidding credits precisely will be available in that case.
2. International Coordination
121. Potential bidders seeking licenses for geographic areas
adjacent to the Canadian and Mexican borders should be aware that the
use of the 3.45 GHz Service frequencies they acquire in Auction 110 are
subject to current and future agreements with the governments of Canada
and Mexico.
122. The Commission routinely works with the United States
Department of State and Canadian and Mexican government officials to
ensure the efficient use of the spectrum as well as interference-free
operations in the border areas near Canada and Mexico. Until such time
as any adjusted agreements, as needed, between the United States,
Mexico, and/or Canada can be agreed to, operations in the 3.45-3.55 GHz
band must not cause harmful interference across the border, consistent
with the terms of the agreements currently in force.
3. Environmental Review Requirements
123. Licensees must comply with the Commission's rules for
environmental review under the NEPA, the NHPA, and other environmental
statutes. Licensees and other applicants that propose to build certain
types of communications facilities for licensed service must follow
Commission procedures implementing obligations under NEPA and NHPA
prior to constructing the facilities. Under NEPA, a licensee or
applicant must assess if certain environmentally sensitive conditions
specified in the Commission's rules are relevant to the proposed
facilities, and prepare an environmental assessment when applicable. If
an environmental assessment is required, then facilities may not be
constructed until environmental processing is completed. Under NHPA, a
licensee or applicant must follow the procedures in section 1.1320 of
the Commission's rules, the Nationwide Programmatic Agreement for
Collocation of Wireless Antennas and the Nationwide Programmatic
Agreement Regarding the Section 106 National Historic Preservation Act
Review Process. Compliance with section 106 of the NHPA requires tribal
consultation, and if construction of the communications facilities
would have adverse effects on historic or tribally significant
properties, an environmental assessment must be prepared.
4. Spectrum Aggregation Limit
124. In the 3.45 GHz Second Report and Order, the Commission
adopted a spectrum aggregation limit for flexible-use licenses in the
3.45 GHz Service that allows any entity to hold a maximum of 40
megahertz (i.e., four blocks out of ten) in any PEA at any point in
time for four years post-auction. For purposes of spectrum attribution
to a particular entity, all controlling interests and non-controlling
interests of 10% or more, including institutional investors and asset
management companies, are attributable. In addition, interests of less
than 10% are attributable if the interest confers de facto control,
including but not limited to partnership and other ownership interests
and any stock interest in a licensee.
125. Consistent with this limit on the number of blocks that a
single entity can hold in any single PEA, the bidding system will limit
to four the number of blocks that a bidder can demand in any given PEA
at any point in the auction.

[[Page 32789]]

Therefore, in each bidding round, a bidder will have the opportunity to
bid for a total of up to four blocks of spectrum per PEA. This spectrum
aggregation limit will apply across both categories in PEAs that
contain Cat1 and Cat2 blocks. As a result, no single entity will be
permitted to bid on, for example, two Cat1 blocks and three Cat2 blocks
within a single PEA. An aggregation limit of four blocks furthers the
Commission's interest in promoting greater diversity in participation
in the 3.45 GHz Service by ensuring that, if licenses for all blocks in
a PEA are awarded, there will be at least three winning bidders in the
PEA.
126. The bidding system will not, however, prevent an entity from
bidding on more licenses than it may otherwise be permitted to hold
under the relevant attribution rules. Applicants should therefore
encouraged to conduct the necessary due diligence prior to the short-
form application deadline to determine whether any of its attributable
interest holders have attributable interests in other potential auction
participants, which may limit each applicant's ability to hold up to
four licenses in a single PEA. Bidders are reminded, however, that
section 1.2105(c) of the competitive bidding rules, 47 CFR 1.2105(c),
prohibits certain communications between auction participants beginning
at the short-form application deadline and continuing until the
deadline for winning bidders to make down payments.

C. Bidder Education

127. Before the opening of the short-form filing window for Auction
110, detailed educational information will be provided in various
formats to would-be participants on the Auction 110 web page.
Specifically, OEA will provide various materials on the pre-bidding
processes in advance of the opening of the short-form application
window, beginning with the release of step-by-step instructions for
completing the FCC Form 175, which OEA will make available in the
Education section of the Auction 110 website at <a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>. In addition, OEA will provide an online application procedures
tutorial for the auction, covering information on pre-bidding
preparation, completing short-form applications, and the application
review process.
128. In advance of the start of the mock auction, OEA will provide
educational materials on the bidding procedures for Auction 110,
beginning with the release of a user guide for the bidding system and
bidding system file formats, followed by an online bidding procedures
tutorial. OEA and WTB recognize the importance of these materials to
applicants' and bidders' comprehension of the bidding procedures
adopted herein. Accordingly, the educational materials shall be
released as soon as reasonably possible to provide potential applicants
and bidders with time to understand them and ask questions before
bidding begins.
129. OEA and WTB believe that parties interested in participating
in Auction 110 will find the interactive, online tutorials an efficient
and effective way to further their understanding of the application and
bidding processes. The online tutorials will allow viewers to navigate
the presentation outline, review written notes, and listen to audio of
the notes. Additional features of this web-based tool include links to
auction-specific Commission releases, email links for contacting
Commission staff, and screen shots of the online application and
bidding systems. The online tutorials will be accessible in the
Education section of the Auction 110 website at <a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>. Once posted, the tutorials will remain continuously accessible.

D. Short-Form Applications: Due Before 6 p.m. ET on July 21, 2021

130. In order to be eligible to bid in Auction 110, an applicant
must first follow the procedures to submit a short-form application
(FCC Form 175) electronically via the Auction Application System,
following the instructions set forth in the FCC Form 175 Instructions.
The short-form application will become available with the opening of
the initial filing window and must be submitted prior to 6 p.m. ET on
July 21, 2021. Late applications will not be accepted. No application
fee is required for short-form applications.
131. Applications may be filed at any time beginning at noon ET on
July 8, 2021, until the filing window closes at 6 p.m. ET on July 21,
2021. Applicants are strongly encouraged to file early and are
responsible for allowing adequate time for filing their applications.
There are no limits or restrictions on the number of times an
application can be updated or amended until the initial filing deadline
on July 21, 2021.
132. An applicant must always click on the CERTIFY & 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 provided in the FCC Form 175 Instructions. Applicants
requiring technical assistance should contact FCC Auctions Technical
Support 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 a.m. to 6 p.m. ET. In order to provide better service to
the public, all calls to Technical Support are recorded.

E. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and
Opportunity for Minor Modifications
133. After the deadline for filing auction applications, the
Commission will process all timely submitted applications to determine
whether each applicant has complied with the application requirements
and provided all information concerning its qualifications for bidding.
OEA will issue a public notice with applicants' initial application
status, identifying: (1) Those that are complete; and (2) those that
are incomplete or deficient because of defects that may be corrected.
The public notice will include the deadline for resubmitting corrected
applications and an electronic copy of the public notice will be sent
by email to the contact address listed in the FCC Form 175 for each
applicant. In addition, each applicant with an incomplete application
will be sent information on the nature of the deficiencies in its
application, along with the name and contact information of a
Commission staff member who can answer questions specific to the
application.
134. After the initial application filing deadline on July 21,
2021, applicants can make only minor modifications to their
applications. Major modifications (e.g., change of PEA selection,
certain changes in ownership that would constitute an assignment or
transfer of control of the applicant, change in the required
certifications, change in applicant's legal classification that results
in a change in control, or change in claimed eligibility for a higher
percentage of bidding credit) will not be permitted. After the deadline
for resubmitting corrected applications, an applicant will have no
further opportunity to cure any deficiencies in its application or
provide any additional information that may affect Commission staff's
ultimate determination of whether and to what extent the applicant is
qualified to participate in Auction 110.

[[Page 32790]]

135. Commission staff 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 Commission staff in writing that another representative
is authorized to speak on the applicant's behalf. Authorizations may be
sent by email to <a href="/cdn-cgi/l/email-protection#bbdaced8cfd2d4d58a8a8bfbddd8d895dcd4cd">[email&#160;protected]</a>.
2. Public Notice of Applicants' Final Application Status After Upfront
Payment Deadline
136. After Commission staff reviews resubmitted applications and
upfront payments, OEA will release a public notice identifying
applicants that have become qualified bidders for the auction. A
Qualified Bidders Public Notice will be issued before bidding in the
auction begins. Qualified bidders are those applicants with submitted
FCC Form 175 applications that are deemed timely filed and complete and
that have made a sufficient upfront payment.

F. Upfront Payments

137. In order to be eligible to bid in Auction 110, a sufficient
upfront payment and a complete and accurate FCC Remittance Advice Form
(FCC Form 159, Revised 2/03) must be submitted before 6 p.m. ET on
September 2, 2021. After completing its short-form application, an
applicant will have access to an electronic pre-filled version of the
FCC Form 159. An accurate and complete FCC Form 159 must accompany each
payment. Proper completion of this form is critical to ensuring correct
crediting of upfront payments. Payers using the pre-filled FCC Form 159
are responsible for ensuring that all the information on the form,
including payment amounts, is accurate. Instructions for completing FCC
Form 159 for Auction 110 are provided below.
1. Making Upfront Payments by Wire Transfer for Auction 110
138. Upfront payments for Auction 110 must be wired to, and will be
deposited in, the U.S. Treasury.
139. Wire transfer payments for Auction 110 must be received before
6 p.m. ET on September 22, 2021. An applicant must initiate the wire
transfer through its bank, authorizing the bank to wire funds from the
applicants account to the proper account in the U.S. Treasury. No other
payment method is acceptable. The Commission will not accept checks,
credit cards, or automated clearing house (ACH) payments. To avoid
untimely payments, applicants should discuss arrangements (including
bank closing schedules and other specific bank wire transfer
requirements, such as an in-person written request before a specified
time of day) with their bankers several days before they plan to make
the wire transfer, and must allow sufficient time for the transfer to
be initiated and completed before the deadline. The following
information will be needed:
ABA Routing Number: 021030004.
Receiving Bank: TREAS NYC, 33 Liberty Street, New York, NY 10045.
Beneficiary: FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.
Account Number: 827000001001.
Originating Bank Information (OBI Field): (Skip one space between
each information item).
``AUCTIONPAY''
Applicant FCC Registration Number (FRN): (Use the same FRN as used
on the applicant's FCC Form 159, block 21).
Payment Type Code: (Same as FCC Form 159, block 24A: ``U110'').

Note: The beneficiary account number (BNF Account Number) is
specific to the upfront payments for Auction 110. Do not use a BNF
Account Number from a previous auction.

140. At least one hour before placing the order for the wire
transfer (but on the same business day), applicants must print and fax
a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843.
Alternatively, the completed form can be scanned and sent as an
attachment to an email to <a href="/cdn-cgi/l/email-protection#dd8f8f929a8ab4afb89bbca5b8ae9dbbbebef3bab2ab">[email&#160;protected]</a>. On the fax cover sheet
or in the email subject header, write ``Wire Transfer--Auction Payment
for Auction 110''. To meet the upfront payment deadline, an applicant's
payment must be credited to the Commission's account for Auction 110
before the deadline.
141. Each applicant is responsible for ensuring timely submission
of its upfront payment and for timely filing of an accurate and
complete 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. Among other things, OEA and WTB
caution each applicant to plan ahead regarding any potential delays in
its or its financial institution's ability to complete wire transfers
due to the COVID-19 pandemic. 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 the U.S.
Treasury was successful and from Commission staff that its upfront
payment was timely received and that it was deposited into the proper
account. As a regulatory requirement, the U.S. Treasury screens all
payments from all financial institutions before deposits are made
available to specified accounts. If wires are suspended, the U.S.
Treasury may direct questions regarding any transfer to the financial
institution initiating the wire. Each applicant must take care to
assure that any questions directed to its financial institution(s) are
addressed promptly. To receive confirmation from Commission staff,
contact Scott Radcliffe of the Office of Managing Director's Revenue &
Receivables Operations Group/Auctions at (202) 418-7518 or Theresa
Meeks at (202) 418-2945.
142. Please note the following information regarding upfront
payments:
<bullet> All payments must be made in U.S. dollars.
<bullet> All payments must be made by wire transfer.
<bullet> Upfront payments for Auction 110 go to an account number
different from the accounts used in previous FCC auctions.
143. Failure to deliver a sufficient upfront payment as instructed
by the upfront payment deadline will result in dismissal of the short-
form application and disqualification from participation in the
auction.
2. Completing and Submitting FCC Form 159
144. The following information supplements the standard
instructions for FCC Form 159 (Revised 2/03) and is provided to help
ensure correct completion of FCC Form 159 for upfront payments for
Auction 110. Applicants need to complete FCC Form 159 carefully,
because:
<bullet> Mistakes may affect bidding eligibility; and
<bullet> Lack of consistency between information provided in FCC
Form 159 (Revised 2/03), FCC Form 175, long-form application (FCC Form
601), and correspondence about an application may cause processing
delays.
145. Therefore, appropriate cross-references between the FCC Form
159 Remittance Advice and the short-form application (FCC Form 175) are
described below.

[[Page 32791]]

------------------------------------------------------------------------
Block number Required information
------------------------------------------------------------------------
1............................ LOCKBOX #--Leave Blank.
2............................ Payer Name--Enter the name of the person
or company making the payment. If the
applicant itself is the payer, this
entry would be the same name as in FCC
Form 175.
3............................ Total Amount Paid--Enter the amount of
the upfront payment associated with the
FCC Form 159 (Revised 2/03).
4-8.......................... Street Address, City, State, ZIP Code--
Enter the street mailing address (not
Post Office box number) where mail
should be sent to the payer. If the
applicant is the payer, these entries
would be the same as FCC Form 175 from
the Applicant Information section.
9............................ Daytime Telephone Number--Enter the
telephone number of a person
knowledgeable about this upfront
payment.
10........................... Country Code--For addresses outside the
United States, enter the appropriate
postal country code (available from the
Mailing Requirements Department of the
U.S. Postal Service).
11........................... Payer FRN--Enter the payer's 10-digit FCC
Registration Number (FRN) registered in
the Commission Registration System
(CORES).
21........................... Applicant FRN (Complete only if applicant
is different than payer)--Enter the
applicant's 10-digit FRN registered in
CORES.
24A.......................... Payment Type Code--Enter ``U110''.
25A.......................... Quantity--Enter the number ``1''.
26A.......................... Fee Due--Amount of Upfront Payment.
27A.......................... Total Fee--Will be the same amount as
26A.
28A.......................... FCC Code 1--Enter the number ``110''
(indicating Auction 110).
------------------------------------------------------------------------

Notes:
<bullet> Do not use Remittance Advice (Continuation Sheet), FCC
Form 159-C, for upfront payments.
<bullet> If applicant is different from the payer, complete
blocks 13 through 21 for the applicant, using the same information
shown on FCC Form 175. Otherwise leave them blank.
<bullet> No signature is required on FCC Form 159 for auction
payments.
<bullet> Since credit card payments will not be accepted for
upfront payments for an auction, leave Section E blank.

3. Upfront Payments and Bidding Eligibility
146. The Commission has delegated authority to OEA and WTB to
determine appropriate upfront payments for each license being
auctioned, taking into account such factors as the efficiency of the
auction process and the potential value of similar licenses. An upfront
payment is a refundable deposit made by each applicant seeking to
participate in bidding to establish its eligibility to bid on licenses.
Upfront payments that are related to the inventory of licenses being
auctioned protect against frivolous or insincere bidding and provide
the Commission with a source of funds from which to collect payments
owed at the close of bidding.
147. Applicants that are former defaulters must pay upfront
payments 50% greater than non-former defaulters. For purposes of
classification as a former defaulter or a former delinquent, defaults
and delinquencies of the applicant itself and its controlling interests
are included. For this purpose, the term ``controlling interest'' is
defined in 47 CFR 1.2105(a)(4)(i).
148. An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the generic blocks on which it will bid. OEA and
WTB adopt the Commission's proposal to set upfront payments based on
MHz-pops, and that the amount of the upfront payment submitted by an
applicant will determine its initial bidding eligibility, the maximum
number of bidding units on which a bidder may place bids in any single
round. In order to bid for a block, qualified bidders must have a
current eligibility level that meets or exceeds the number of bidding
units assigned to that generic block in a PEA. At a minimum, therefore,
an applicant's total upfront payment must be enough to establish
eligibility to bid on at least one block in one of the PEAs selected on
its FCC Form 175 for Auction 110, or else the applicant will not become
qualified to participate in the auction. The total upfront payment does
not affect the total dollar amount the bidder may bid.
149. In the Auction 110 Comment Public Notice, the Commission
proposed to require applicants to submit upfront payments based on
$0.03 per MHz-pop for PEAs 1-50 and $0.01 per MHz-pop for all other
PEAs, subject to a minimum of $500. In response to concerns raised by
commenters that calculating upfront payments and bidding units with a
significant structural break between the top 50 markets and markets
just outside of the top 50 has the potential to create distortions in
bidding behavior, OEA and WTB will forgo the discrete break in
calculation amounts for large and small markets for upfront payment and
bidding unit amounts.
150. Accordingly, OEA and WTB adopt upfront payments for a generic
block in a PEA based on $0.01 per MHz-pop for all PEAs. The results of
these calculations will be rounded using the Commission's standard
rounding procedures for auctions: 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 $1,000 are rounded to the
nearest $10. The upfront payment amount per block in each PEA is set
forth in the ``Attachment A'' file on the Auction 110 website at
<a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>.
151. OEA and WTB also adopt the Commission's proposal to assign
each generic block in a PEA a specific number of bidding units, equal
to one bidding unit per $100 of the upfront payment. The number of
bidding units per block in each PEA is set forth in the ``Attachment
A'' file that lists the upfront payment amounts. The number of bidding
units for one block in a given PEA is fixed, since it is based on the
MHz-pops in the block, and it does not change during the auction as
prices change. Thus, in calculating its upfront payment amount, an
applicant must determine the maximum number of bidding units on which
it may wish to bid in any single round and submit an upfront payment
amount for the auction covering that number of bidding units. 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, or has
submitted an upfront payment that exceeds the total amount of bidding
units associated with the license areas it selected on its FCC Form
175. In order to make this calculation, an applicant should add
together the bidding units for the number of blocks in PEAs 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.

[[Page 32792]]

Table 1--Upfront Payments, Bidding Eligibility, and Bidding Flexibility
Example
------------------------------------------------------------------------
Upfront
PEA Bidding units payment
------------------------------------------------------------------------
PEA058--Bloomington, IN................. 1,070 $107,000
PEA064--South Bend, IN.................. 950 95,000
------------------------------------------------------------------------
If a bidder wishes to bid on one block in both of the above PEAs in a
round, it must have selected both PEAs on its FCC Form 175 and
purchased at least 2,020 bidding units (1,070 + 950) of bidding
eligibility. If a bidder only wishes to bid on a block in one of these
PEAs, but not both, purchasing 1,070 bidding units would meet the
eligibility requirement for a block in either PEA. The bidder would be
able to bid on a block in either PEA, but not both at the same time.
If the bidder purchased only 950 bidding units, the bidder would have
enough eligibility to bid for a block in PEA064 but not for one in
PEA058.

152. If an applicant is a former defaulter, it must calculate its
upfront payment for the maximum amount of generic blocks in each PEA on
which it plans to bid 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
calculate the number of bidding units a non-former defaulter would get
for the upfront payment received, divide that number by 1.5, and round
the result up to the nearest bidding unit. If a former defaulter fails
to submit a sufficient upfront payment to establish eligibility to bid
on at least one generic block in a PEA, the applicant will not be
eligible to participate in Auction 110. The applicant, however, will
retain its status as an applicant in Auction 110 and will remain
subject to 47 CFR 1.2105(c).

G. Auction Registration

153. All qualified bidders for Auction 110 are automatically
registered for the auction. Registration materials will be distributed
prior to the auction by overnight delivery. 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[supreg] tokens that will be
required to place bids.
154. Qualified bidders that do not receive this registration
mailing will not be able to submit bids. Therefore, any qualified
bidder for Auction 110 that has not received this mailing by noon on
September 8, 2021, should 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 the registration materials.
155. In the event that a SecurID [supreg] token is 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 a replacement. To request a replacement,
call the Auction Bidder Line at the telephone number provided in the
registration materials or the Auction Hotline at (717) 338-2868.

H. Remote Electronic Bidding via the FCC Auction Bidding System

156. Bidders will be able to participate in Auction 110 over the
internet using the FCC Auction Bidding System (bidding system). During
the assignment phase only, bidders will have the option of placing bids
by telephone through a dedicated auction bidder line. Please note that
telephonic bid 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 10 minutes. The toll-free telephone
number for the auction bidder line will be provided to qualified
bidders prior to the start of bidding in the auction.
157. Only qualified bidders are permitted to bid. Each authorized
bidder must have his or her own SecurID [supreg] token, which the
Commission will provide at no charge. Each applicant will be issued
three SecurID [supreg] tokens. A bidder cannot bid without his or her
SecurID [supreg] token. In order to access the bidding function of the
bidding system, bidders must be logged in during the bidding round
using the passcode generated by the SecurID [supreg] token and a
personal identification number (PIN) created by the bidder. Bidders are
strongly encouraged to print a bid summary for each round after they
have completed all their activity for that round. For security
purposes, the SecurID [supreg] tokens and a telephone number for
bidding questions are only mailed to the contact person at the contact
address listed on the FCC Form 175. Each SecurID [supreg] token is
tailored to a specific auction. SecurID [supreg] tokens issued for
other auctions or obtained from a source other than the FCC will not
work for Auction 110. Please note that the SecurID [supreg] tokens can
be recycled, and the Commission requests that bidders return the tokens
to the FCC. Pre-addressed envelopes will be provided to return the
tokens once the auction has ended.
158. The Commission makes no warranties whatsoever, and shall not
be deemed to have made any warranties, with respect to the bidding
system, including any implied warranties of merchantability or fitness
for a particular purpose. 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 use, revenue, or business information,
or any other direct, indirect, or consequential damages) arising out of
or relating to the existence, furnishing, functioning, or use of the
bidding system. Moreover, no obligation or liability will arise out of
the Commission's technical, programming, or other advice or service
provided in connection with the bidding system.
159. To the extent an issue arises with the bidding system itself,
the Commission will take all appropriate measures to resolve such
issues quickly and equitably. Should an issue arise that is outside the
bidding system or attributable to a bidder, including, but not limited
to, a bidder's hardware, software, or internet access problem that
prevents the bidder from submitting a bid prior to the end of a round,
the Commission shall have no obligation to resolve or remediate such an
issue on behalf of the bidder. Similarly, if an issue arises due to
bidder error using the bidding system, the Commission shall have no
obligation to resolve or remediate such an issue on behalf of the
bidder. Accordingly, after the close of a bidding round, the results of
bid processing will not be altered absent evidence of any failure in
the bidding system.

I. Mock Auction

160. All qualified bidders will be eligible to participate in a
mock auction for the clock phase. Only those bidders that are qualified
to participate in Auction 110 will be eligible to participate in the
mock auction. The mock auction, which will begin on

[[Page 32793]]

September 30, 2021, will enable qualified bidders to become familiar
with the bidding system and to practice submitting bids prior to the
auction. OEA and WTB recommend that all qualified bidders, including
all their authorized bidders, participate to assure that they can log
in to the bidding system and gain experience with the bidding
procedures. Participating in the mock auction may reduce the likelihood
of a bidder making a mistake during the auction. Details regarding the
mock auction will be announced in the Qualified Bidders Public Notice
for Auction 110.
161. After the clock phase of the auction concludes, a separate
mock auction for the assignment phase will be held for those qualified
bidders that won generic blocks in the clock phase.

J. Auction Delay, Suspension, or Cancellation

162. At any time before or during the bidding process, OEA, in
conjunction with WTB, may delay, suspend, or cancel bidding in Auction
110 in the event of a natural disaster, technical obstacle, network
interruption, 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. This approach has proven effective in resolving exigent
circumstances in previous auctions and OEA and WTB find no reason to
depart from it here. OEA will notify participants of any such delay,
suspension, or cancellation by public notice and/or through the bidding
system's announcement function. If the bidding is delayed or suspended,
then OEA may, in its sole discretion, 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. OEA and WTB emphasize
that they will exercise this authority at their discretion.

K. Fraud Alert

163. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use Auction 110 to
deceive and defraud unsuspecting investors. Common warning signals of
fraud include the following:
<bullet> 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.
<bullet> 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.
<bullet> The amount of investment is less than $25,000.
<bullet> 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.
164. 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:
<bullet> The FCC's Consumer Call Center at (888) 225-5322 or by
visiting <a href="http://www.fcc.gov/general/frauds-scams-and-alerts-guides">www.fcc.gov/general/frauds-scams-and-alerts-guides</a>.
<bullet> the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting
<a href="http://www.consumer.ftc.gov/articles/0238-investment-risks">www.consumer.ftc.gov/articles/0238-investment-risks</a>.
<bullet> the SEC at (202) 942-7040 or by visiting <a href="http://www.sec.gov/investor">www.sec.gov/investor</a>.
165. Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National Fraud
Information Center at (202) 835-0618.

IV. Bidding Procedures

166. OEA and WTB will conduct Auction 110 using an ascending clock
auction design with two phases. The first phase of the auction--the
clock phase--will consist of successive clock bidding rounds in which
bidders indicate their demands for a number of generic license blocks
in specific categories and PEAs. In the second phase--the assignment
phase--winning clock phase bidders will have the opportunity to bid for
their preferred combinations of frequency-specific license assignments,
consistent with their clock phase winnings, in a series of sealed-bid
rounds conducted by PEA or, in some cases, PEA group.
167. In conjunction with WTB, OEA will release shortly updated
technical guides that provide the mathematical details of the adopted
auction design and algorithms for the clock and assignment phases of
Auction 110. The information in the updated technical guides, which are
available in the Education section of the Auction 110 website
(<a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>), supplements the decisions in the Auction 110
Procedures Public Notice. The Auction 110 Clock Phase Technical Guide
details the adopted procedures for the clock phase of Auction 110. The
Auction 110 Assignment Phase Technical Guide details the adopted
procedures for the assignment phase.

A. Clock Phase

1. Clock Auction Design
168. Under the bidding procedures that OEA and WTB adopt, during
the clock phase of Auction 110, bidders will indicate their demands for
generic license blocks in a bidding category in specific geographic
areas--in this case, PEAs. There may be one or two bidding categories
in a given PEA. The clock auction format will proceed in a series of
rounds, with bidding being conducted simultaneously for all spectrum
blocks in all PEAs available in the auction. During each bidding round,
the bidding system will announce a per-block clock price for each
category in each PEA. Qualified bidders will submit, for each category
and PEA for which they wish to bid, the number of blocks they seek at
the clock price associated with the current round. Bidding rounds will
be open for predetermined periods of time. Bidders will be subject to
activity and eligibility rules that govern the pace at which they
participate in the auction.
169. As proposed, for each product--a category in a PEA--the clock
price for a generic license block will increase from round to round if
bidders indicate total demand for blocks in that product that exceeds
the number of blocks available. The bidding rounds will continue until,
for all products, the total number of blocks that bidders demand does
not exceed the supply of available blocks.
170. If the aggregate reserve price to satisfy the CSEA requirement
has been met at the time that the clock phase bidding stops, those
bidders indicating demand for a product at the final clock phase price
will be deemed winning bidders, and the auction will proceed to the
assignment phase. If the reserve price has not been met at the time
bidding stops in the clock phase, the auction will end, and no licenses
will be assigned.
171. Following the clock phase, if the reserve price has been met,
the assignment phase will offer clock phase winners the opportunity to
bid an additional amount for licenses with specific frequencies. All
winning bidders, regardless of whether they bid in the assignment
phase, will be

[[Page 32794]]

assigned licenses for contiguous blocks within a category in a PEA. In
addition, if in a PEA there are one or more bidders with clock phase
winnings in both categories, one of the bidders will be assigned
frequency blocks that are contiguous across the two categories.
2. Generic License Blocks in Two Bidding Categories
172. As established in the 3.45 GHz Second Report and Order, the
3.45-3.55 GHz band will be licensed in uniform 10-megahertz sub-blocks
in each of the 406 PEAs in the contiguous United States. In most PEAs,
new licensees generally will have unrestricted use of all ten frequency
blocks. In other areas, specifically in PEAs that wholly or in part
cover Cooperative Planning Areas or Periodic Use Areas, licensees must
coordinate with incumbent federal operations in the band, as
established in the 3.45 GHz Second Report and Order. In some of the
PEAs where coordination is required, all ten blocks will be subject to
the same restrictions. In others, the restrictions may vary depending
upon the frequency block--specifically, in some PEAs subject to
coordination with federal incumbents, the A through D blocks may be
subject to different restrictions than the E through J blocks. As set
forth in the 3.45 GHz Second Report and Order, the lower 40 megahertz
of the band--between 3450-3490 MHz corresponding to the A through D
blocks--are affected differently than the upper 60 megahertz in certain
PEAs in the band. In the event Lockheed is granted relief substantially
similar to that sought in its waiver request, the A through H blocks
will be subject to different conditions than the I and J blocks in the
three affected PEAs. See Lockheed Waiver Request.
173. Categories. The Commission adopts the proposal to establish
categories for bidding such that all the blocks within a category in a
PEA are similar in terms of any requirements or restrictions. For the
reasons proposed by the Commission, OEA and WTB adopt bidding
categories as follows: In the PEAs where all ten blocks are the same--
i.e., all ten generally are unrestricted or all ten are subject to the
same restrictions--the ten generic blocks will be considered Category
1, or ``Cat1,'' blocks. In the PEAs subject to coordination with
federal incumbents where the restrictions differ according to the
frequency, the four blocks A through D will be considered Category 1,
or ``Cat1,'' while the six blocks E through J will be considered
Category 2, or ``Cat2,'' for bidding. In PEAs with two categories, we
designate certain blocks as Cat1 and other blocks as Cat2 simply to
denote that for these licenses the coordination requirements in a PEA
differ between the two categories. For all licenses, we caution
potential bidders to investigate carefully the restrictions that may
apply to a given PEA. In particular, we note that DoD has created a
workbook that specifically describes the coordination requirements for
each Cooperative Planning Area and Periodic Use Area. In 334 PEAs,
there will be ten generic blocks of a single Cat1 product, and in 72
PEAs, there will be two products. OEA and WTB also note that in the
three PEAs that encompass the areas subject to Lockheed's pending
waiver request, the eight blocks A through H would be considered Cat1
while the two blocks I and J would be considered Cat2 for bidding
should relief substantially similar to that sought by Lockheed be
granted.
174. This approach to determining bidding categories differs
somewhat from the approach the Commission has taken in prior clock
auctions, in that the coordination requirements on blocks in a given
category in a given PEA may differ from the requirements on the same
category of blocks in a different PEA. For example, the Cat1 blocks in
one PEA may be unrestricted while the Cat1 blocks in another PEA may
require some degree of coordination. Similarly, the restrictions on
Cat2 blocks will likely vary from PEA to PEA. In previous auctions,
blocks in a given bidding category generally have been subject to the
same use requirements in all PEAs, but because the restrictions in this
auction differ so widely from PEA to PEA, that approach is not
feasible. Importantly, however, for Auction 110, within any given PEA,
the blocks within a category can be considered generic, and bidding in
the clock phase will determine a single price that will apply to each
generic block in a category in a PEA.
175. This approach for bidding on generic blocks in two categories
is based on the close similarity of the blocks within each bidding
category within a PEA. To the extent a bidder has a preference for
licenses for specific frequencies, the bidder may bid for its preferred
blocks in the assignment phase. However, a bidder for a generic block
in a category will not be assured that it will be assigned, or not be
assigned, any particular frequency block.
176. Limit on number of blocks per bidder. In the 3.45 GHz Second
Report and Order, the Commission adopted a spectrum aggregation limit
for flexible-use licenses in the 3.45 GHz band of a maximum of 40
megahertz (i.e., four blocks out of ten) in any PEA at any point in
time for four years post-auction. Consistent with this limit on the
number of blocks that a single entity can hold in any single PEA, the
bidding system will limit to four the number of blocks that a bidder
can demand in any given PEA at any point in the auction. Therefore, in
each bidding round, a bidder will have the opportunity to bid for a
total of up to four blocks of spectrum per PEA. This spectrum
aggregation limit will apply across both categories in PEAs that
contain Cat1 and Cat2 blocks. As a result, no single entity will be
permitted to bid on, for example, two Cat1 blocks and three Cat2 blocks
within a single PEA. More specifically, the bidding system will not
permit bids to be submitted that, if fully applied, would result in the
bidder demanding more than four blocks in the PEA. Further, the system
will not fully apply submitted bids if doing so would result in the
bidder demanding more than four blocks in the PEA. For example, a
requested increase in one category may not be applied if a requested
reduction in the other category cannot be applied because of
insufficient aggregate demand.
177. An aggregation limit of four blocks will further the
Commission's interest in promoting greater diversity in participation
in the 3.45 GHz band by ensuring that, if licenses for all blocks in a
PEA are awarded, there will be at least three winning bidders in the
PEA.
3. Bidding Rounds
178. As proposed, Auction 110 will consist of sequential bidding
rounds, each followed by the release of round results. OEA and WTB will
conduct bidding simultaneously for all spectrum blocks in both bidding
categories for all PEAs available in the auction. In the first bidding
round of Auction 110, a bidder will indicate, for each product, the
number of generic license blocks it demands at the minimum opening bid
price.
179. The initial bidding schedule will be announced in a public
notice to be released at least one week before the start of bidding.
OEA will retain the discretion to adjust 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. Such adjustments may include changes in the amount of time
for bidding rounds, the amount of time between rounds, or the number of
rounds per day, and will depend upon bidding activity and other
factors.
180. Auction 110 will be conducted over the internet. A bidder will
be able

[[Page 32795]]

to submit its bids using the bidding system's upload function, which
allows bid files in a comma-separated values (CSV) text format to be
uploaded. The bidding system will not allow bids to be submitted unless
the bidder selected the PEAs on its FCC Form 175, the bidder has
sufficient bidding eligibility, and the bids, if applied, are
consistent with the aggregation limit of 40 megahertz in a PEA.
181. During each round of the bidding, a bidder will also be able
to remove bids placed in the current bidding round. If a bidder
modifies its bids for blocks in a PEA in a round, the system will take
the last bid submission as that bidder's bid for the round. No bids may
be withdrawn after the close of a round. Unlike an auction conducted
using the Commission's simultaneous multiple-round auction format,
there are no provisionally winning bids in a clock auction. As a
result, the concept of bid withdrawals as used in simultaneous
multiple-round auctions does not apply to a clock auction.
4. Stopping Rule
182. OEA and WTB adopt a simultaneous stopping rule for Auction
110, under which all blocks in all PEAs will remain available for
bidding until the bidding stops in every PEA. Specifically, bidding
will close for all blocks after the first round in which there is no
excess demand in any product. Excess demand is calculated as the
difference between the number of blocks of aggregate demand and supply.
Under this approach, it is not possible to determine in advance how
long Auction 110 will last.
5. Availability of Bidding Information
183. OEA and WTB adopt the proposal to make public after each clock
phase bidding round, for each category in each PEA: The supply, the
aggregate demand, the posted price of the last completed round, and the
clock price for the next round. The posted price of the previous round
is, generally, the start-of-round price if supply exceeds demand; the
clock price of the previous round if demand exceeds supply; or the
price at which a reduction caused demand to equal supply. The
identities of bidders demanding blocks in a specific category or PEA
will not be disclosed until after Auction 110 concludes (i.e., after
the close of bidding).
184. OEA will also make public after each clock phase bidding round
whether the reserve price has been met, that is, whether the estimated
total cash proceeds based on the bids in the most recently completed
round would satisfy the CSEA requirement. If the reserve has not yet
been met, each bidder will be informed about the shortfall between the
reserve and the estimated total cash proceeds, rounded up to the
nearest million. This shortfall information will not be publicly
available during the auction.
185. Each bidder will have access to additional information related
to its own bidding and bid eligibility. Specifically, after the bids of
a round have been processed, the bidding system will inform each bidder
of the number of blocks it holds after the round (its processed demand)
for every product and its eligibility for the next round.
186. Limiting the availability of bidding information during the
auction balances the Commission's interest in providing bidders with
sufficient information about the status of their own bids and the
general level of bidding in all areas and license categories to allow
them to bid confidently and effectively, while restricting the
availability of information that may facilitate identification of
bidders placing particular bids, which could potentially lead to
undesirable strategic bidding.
6. Activity Requirement, Contingent Bidding Limit, and Missing Bids
187. Activity requirement. To ensure that the auction closes within
a reasonable period of time, an activity rule requires bidders to bid
actively throughout the auction, rather than wait until late in the
auction before participating. For this clock auction, a bidder's
activity in a round for purposes of the activity rule will be the sum
of the bidding units associated with the bidder's demands as applied by
the auction system during bid processing. Bidders are required to be
active on a specific percentage (the activity requirement percentage)
of their current bidding eligibility during each round of the auction.
Failure to maintain the requisite activity level will result in a
reduction in the bidder's eligibility, possibly curtailing or
eliminating the bidder's ability to place bids in subsequent rounds of
the auction.
188. OEA and WTB adopt the proposal to require that bidders
maintain a fixed, high level of activity in each round of Auction 110
in order to maintain bidding eligibility. Specifically, bidders must be
active on between 90% and 100% of their bidding eligibility in all
clock rounds, with the specific percentage within this range to be set
for each round. Thus, the activity rule will be satisfied when a bidder
has bidding activity on blocks with bidding units that total 90% to
100% of its current eligibility in the round. OEA will set the activity
requirement percentage initially at 95%. If the activity rule is met,
then the bidder's eligibility will not change for the next round. If
the activity rule is not met in a round, the bidder's eligibility will
be reduced. Bidding activity will be based on the bids that are applied
by the FCC auction bidding system. That is, if a bidder requests a
reduction in the quantity of blocks it demands in a product, but the
bidding system cannot apply the request because demand would fall below
the available supply, then the bidder's activity will reflect its
unreduced demand. Under the ascending clock auction format, the FCC
auction bidding system will not allow a bidder to reduce the quantity
of blocks it demands in an individual product if the reduction would
result in aggregate demand falling below (or further below) the
available supply of blocks in the product.
189. OEA will retain the discretion to change the activity
requirement percentage during the auction. The bidding system would
announce any such change in advance of the round in which it would take
effect, giving bidders adequate notice to adjust their bidding
strategies.
190. Contingent bidding limit. Because a bidder's eligibility for
the next round is calculated based on the bidder's demands as applied
by the auction system during bid processing, a bidder's eligibility may
be reduced even if the bidder submitted bids with activity that exceeds
the required activity for the round. This may occur, for example, if
the bidder bids to reduce its demand in PEA X by two blocks (with 10
bidding units each) and bids to increase its demand by one block (with
20 bidding units) in PEA Y. If the bidder's demand can only be reduced
by one block in PEA X (because there is only one block of excess
demand), the increase in PEA Y cannot be applied, and absent other
bidding activity the bidder's eligibility would be reduced. To help a
bidder avoid potentially having its eligibility reduced as a result of
submitted bids that could not be applied during bid processing, as
proposed, OEA and WTB adopt procedures to allow a bidder to submit bids
with associated bidding activity greater than its current bidding
eligibility. For example, depending upon the bidder's overall bidding
eligibility and the contingent bidding percentage, a bidder could
submit an ``additional'' bid or bids that would be considered (in price
point order with its other bids) and applied as available

[[Page 32796]]

eligibility permits during the bid processing. However, OEA and WTB
emphasize that even under these additional procedures, the bidder's
activity as applied by the auction system during bid processing will
not exceed the bidder's current bidding eligibility. That is, if a
bidder submits bids with associated bidding units exceeding 100% of its
current bidding eligibility, its processed activity cannot exceed its
eligibility.
191. Under these procedures, after Round 1 a bidder may submit bids
with bidding units totaling up to a contingent bidding limit equal to
the bidder's current bidding eligibility for the round times a
percentage (the contingent bidding percentage) equal to or greater than
100%. The Commission has previously referred to the contingent bidding
limit as the activity upper limit, and similarly, to the contingent
bidding percentage as the activity limit percentage. OEA and WTB modify
those terms to remind bidders that bids submitted using the contingent
bidding limit will be applied only under certain circumstances. For
Round 1, the contingent bidding limit would be 100% of the bidder's
initial bidding eligibility. OEA and WTB adopt an initial contingent
bidding percentage of 120% to apply beginning in Round 2. This limit
will be subject to change in subsequent rounds within a range of 100%
to 140%. In any bidding round, the auction bidding system will advise
the bidder of its current bidding eligibility, its required bidding
activity, and its contingent bidding limit. The Auction 110 Clock Phase
Technical Guide provides examples of use of the contingent bidding
limit, and bidders are encouraged to review them.
192. As with the activity requirement percentage, OEA will retain
the discretion to change the contingent bidding percentage during the
auction and will announce any such changes in advance of the round in
which they would take effect.
193. Missing bids. Under the clock auction format, bidders are
required to indicate their demands in every round, even if their
demands at the new round's prices are unchanged from the previous
round. Missing bids--bids that are not reconfirmed--are treated by the
auction bidding system as requests to reduce to a quantity of zero
blocks for the product. If these requests are applied, or applied
partially, then a bidder's bidding activity, and its bidding
eligibility for the next round, may be reduced. in which they would
take effect.
194. For Auction 110, OEA and WTB will not provide for activity
rule waivers to preserve a bidder's eligibility. OEA and WTB note that
the procedures to permit a bidder to submit bids with bidding activity
greater than its eligibility, within the precise limits set forth
above, will address some of the circumstances under which a bidder
risks losing bidding eligibility and otherwise could wish to use a
bidding activity waiver, while minimizing any potential adverse impacts
on bidder incentives to bid sincerely and on the price setting
mechanism of the clock auction. This approach not to allow waivers is
consistent with the ascending clock auction procedures used in other
FCC clock auctions. The clock auction relies on precisely identifying
the point at which demand decreases to equal supply to determine
winning bidders and final prices. Allowing waivers would create
uncertainty with respect to the exact level of bidder demand and would
interfere with the basic clock price-setting and winner determination
mechanism. Moreover, uncertainty about the level of demand would affect
the way bidders' requests to reduce demand are processed by the bidding
system, as addressed below.
7. Acceptable Bids
a. Minimum Opening Bids
195. As is typical for each auction, the Commission sought comment
on the use of a minimum opening bid amount and/or reserve price, as
mandated by section 309(j) of the Communications Act. OEA and WTB will
establish minimum opening bid amounts for Auction 110. The bidding
system will not accept bids lower than the minimum opening bids for
each product. Based on the Commission's experience in past auctions,
setting minimum opening bid amounts judiciously is an effective tool
for accelerating the competitive bidding process.
196. For Auction 110, the Commission proposed to calculate minimum
opening bid amounts based on bandwidth and license area population
using a tiered approach under which the calculation would vary by
market population. The Commission proposed minimum opening bid amounts
for a block in a PEA based on $0.06 per MHz-pop for PEAs 1-50 and $0.02
per MHz-pop for all other PEAs, subject to a minimum of $1000.
197. Based on comments in the record, however, OEA and WTB adopt
revised, lower minimum opening bid amounts for Auction 110.
Specifically, OEA and WTB adopt minimum opening bid amounts for a block
in a PEA based on $0.03 per MHz-pop for PEAs 1-50, $0.006 per MHz-pop
for PEAs 51-100, and $0.003 per MHz-pop for all other PEAs, subject to
a minimum of $1000. These minimum opening bid amounts are set forth in
the ``Attachment A'' file on the Auction 110 website at <a href="http://www.fcc.gov/auction/110">www.fcc.gov/auction/110</a>.
b. Clock Price Increments
198. OEA and WTB adopt the proposed procedures regarding clock
price increments for Auction 110. Accordingly, after bidding in the
first round and before each subsequent round, the bidding system will
announce the start-of-round price (also referred to as the posted price
of the previous round) and the clock price for the upcoming round--that
is, the lowest price and the highest price at which bidders can specify
the number of blocks they demand during the round. As long as aggregate
demand for blocks in the product exceeds the supply of blocks, the
start-of-round price will be equal to the clock price from the prior
round. If demand equaled supply at a price in a previous round, then
the start-of-round price for the next round will be equal to the price
at which demand equaled supply. If demand was less than supply in the
previous round, then the start-of-round price for the next round will
not increase.
199. OEA will set the clock price for blocks in a specific product
for a round by adding a percentage increment to the start-of-round
price. For example, if the start-of-round price for a block of a given
product is $10,000, and the percentage increment is 20%, then the clock
price for the round will be $12,000. The result of the clock price
calculation will be rounded as follows: results above $10,000 will be
rounded up to the nearest $1,000, and results below $10,000 will be
rounded up to the nearest $100. OEA will set the initial increment
percentage at 10%, and may adjust the increment within a range of 5% to
20% inclusive, as rounds continue. The total dollar amount of the
increment (the difference between the clock price and the start-of-
round price) will be capped at a certain amount. OEA will set this cap
on the increment initially at $50 million and may adjust the cap as
rounds continue. The proposed 5% to 20% increment range and cap will
allow OEA to set a percentage that manages the auction pace and takes
into account bidders' needs to evaluate their bidding strategies while
moving the auction along quickly.
c. Intra-Round Bids
200. As proposed, OEA and WTB will permit a bidder to make intra-
round bids by indicating a point between the

[[Page 32797]]

start-of-round price and the clock price at which its demand for blocks
changes. In placing an intra-round bid, a bidder will indicate a
specific price and a (different) quantity of blocks it demands if,
after bids for the round are processed, the price for blocks should
increase beyond that intra-round amount.
201. An intra-round bid gives the bidder the flexibility to
indicate that it wants to change its demand at a price lower than the
clock price. However, intra-round bids will be optional; a bidder may
choose to express its demands only at the clock prices. Permitting
intra-round bids allows the auction system to use relatively large
increments, thereby speeding the auction, without running the risk that
a jump in the clock price will overshoot the market clearing price--the
point at which demand for blocks equals the available supply.
8. Bids To Change Demand, Bid Types, and Bid Processing
202. Under the ascending clock auction format the Commission
proposed for Auction 110, and which OEA and WTB adopt, a bidder will
indicate in each round the number of blocks in each product that it
demands at a given price, subject to the in-band limit of four
discussed above.
203. A bidder that is willing to maintain the same demand for a
product (relative to its demands from the previous round as processed
by the bidding system) at the new clock price would bid for that
quantity at the clock price, indicating that it is willing to pay up to
that price, if need be, for the specified quantity. Bids to maintain
demand will always be applied by the auction bidding system. A bidder
that wishes to change the quantity it demands would bid at the clock
price or at an intra-round price, depending upon the point at which its
demands change.
204. For example, if a bidder has processed demand for two blocks
entering a round in which the start-of-round price is $2,000 and the
clock price is $2,500, but it is only willing to buy one block if the
price should increase above $2,100, the bidder can submit an intra-
round bid indicating a bid quantity of one at a price of $2,100. Or, if
the bidder is not willing to pay more than the start-of-round price of
$2,000 for any blocks, it can submit an intra-round bid requesting a
quantity of zero at the start-of-round price of $2,000.
205. To facilitate bidding for multiple blocks in a PEA, bidders
will be permitted to make two types of bids: Simple bids and switch
bids. A ``simple'' bid indicates a desired quantity of blocks in a
product at a price (either the clock price or an intra-round price). A
``switch'' bid allows the bidder to request to move its demand for a
quantity of blocks from Cat1 to Cat2, or vice versa, within the same
PEA at a price for the ``from'' category (either the clock price or an
intra-round price). ``Switch'' bids are allowed only in PEAs with two
categories.
206. OEA and WTB will not incorporate any form of package bidding
procedures into the clock phase of Auction 110. Package bidding would
add complexity to the bidding process, and OEA and WTB do not see
significant benefit from such procedures, given the clock auction and
assignment phase format OEA and WTB adopt. A bidder may bid on multiple
blocks in a PEA (up to the limit of four) and in multiple PEAs. As set
forth below, the assignment phase will assign contiguous blocks to
winners of multiple blocks in a category in a PEA and give bidders an
opportunity to express their preferences for specific frequency blocks,
thereby facilitating aggregations of licenses. Also as set forth below,
if there are one or more bidders that win blocks in both categories,
the assignment phase bidding system will assign blocks that are
contiguous across the categories to one such bidder.
207. OEA and WTB adopt bid processing procedures that the auction
bidding system will use, after each bidding round, to process bids to
change demand to determine the processed demand of each bidder for each
product and a posted price for each product that will serve as the
start-of-round price for the next round.
a. No Excess Supply Rule for Bids To Reduce Demand
208. Under the ascending clock auction format, the FCC auction
bidding system will not allow a bidder to reduce the quantity of blocks
it demands in a product if the reduction would result in aggregate
demand falling below (or further below) the available supply of blocks
in the product. Therefore, if a bidder submits a simple bid to reduce
the number of blocks for which it has processed demand as of the
previous round, the bidding system will treat the bid as a request to
reduce demand that will be applied only if the ``no excess supply''
rule would be satisfied. Similarly, if a bidder submits a switch bid to
move its demand for a quantity of blocks from Cat1 to Cat2 within the
same PEA, the FCC auction bidding system will treat the bid as a
request that will be applied only if the ``no excess supply'' rule
would be satisfied for Cat1 in the PEA.
b. Eligibility Rule and Aggregation Limit for Bids To Increase Demand
209. The bidding system will not allow a bidder to increase the
quantity of blocks it demands in a product if the total number of
bidding units associated with the bidder's demand exceeds the bidder's
bidding eligibility for the round. Therefore, if a bidder submits a
simple bid to increase the number of blocks for which it has processed
demand as of the previous round, the bidding system will treat the bid
as a request to increase demand that will be applied only if it would
not cause the bidder's activity to exceed its eligibility. The
eligibility rule for bids to increase demand does not apply to switch
bids because the bidder's processed activity does not change when a
switch bid is applied.
210. In addition, in light of the in-band aggregation limit of 40
megahertz in a PEA established by the 3.45 GHz Second Report and Order,
the bidding system will not permit a bidder to increase the number of
blocks it demands in a PEA if its total demand in the PEA would exceed
four blocks.
c. Partial Application of Bids
211. Under the bid processing procedures OEA and WTB adopt, as in
all previous FCC spectrum auctions using the clock auction format, a
bid (simple bid or switch bid) that involves a reduction from the
bidder's previous demands can be applied partially--that is, reduced by
fewer blocks than requested in the bid--if excess demand is
insufficient to support the entire reduction. Accordingly, the bidding
system will apply a bidder's request to reduce demand as much as
possible consistent with the no excess supply rule. A switch bid may be
applied partially, but the increase in demand in the ``to'' category
will always match in quantity the reduction in the ``from'' category. A
simple bid to increase a bidder's demand may be applied partially if
the total number of bidding units associated with the bidder's demand
exceeds the bidder's bidding eligibility for the round, or if fully
applying the bid would violate the aggregation limit. Therefore, the
bidding system will accommodate a bidder's request to increase demand
as much as possible consistent with the aggregation limit and as long
as the bidder's activity does not exceed its eligibility.
d. Processed Demand
212. As proposed, OEA and WTB adopt procedures to determine the
order

[[Page 32798]]

in which the bidding system will process bids after a round ends. Bids
to maintain demand are considered first and always applied. The bidding
system will then process bids to change demand in order of price point,
where the price point represents the percentage of the bidding interval
for the round. For example, if the start-of-round price is $5,000 and
the clock price is $6,000, a price of $5,100 will correspond to the 10%
price point, since it is 10% of the bidding interval between $5,000 and
$6,000. The bidding system will first consider intra-round bids in
ascending order of price point and then bids at the clock price. The
system will consider bids at the lowest price point across all PEAs,
then look at bids at the next price point in all areas, and so on. If
there are multiple bids at a single price point, the system will
process those bids in order of a bid-specific pseudo-random number. As
it considers each submitted bid during bid processing, the bidding
system will determine the extent to which there is excess demand in
each PEA at that point in the processing in order to determine whether
a bidder's request to reduce demand can be applied. Likewise, the
auction bidding system will evaluate the activity associated with the
bidder's most recently determined demands at that point in the
processing to determine whether a request to increase demand can be
applied.
213. Because in any given round some bidders may request to
increase demands for licenses while others may request reductions, the
price point at which a bid is considered by the bidding system can
affect whether it is applied. Bids not applied because of insufficient
aggregate demand or insufficient eligibility will be held in a queue
and considered, again in order, if there should be excess demand or
sufficient eligibility later in the processing after other bids are
processed.
214. Therefore, once a round closes, the bidding system will
process bids to change demand by first considering the bid submitted at
the lowest price point and determining the maximum extent to which that
bid can be applied given bidders' demands as determined at that point
in the bid processing. If the bid can be applied (either in full or
partially), the number of blocks the bidder holds at that point in the
processing will be adjusted, and aggregate demand will be recalculated
accordingly. If the bid cannot be applied in full, the unfulfilled bid,
or portion thereof, will be held in a queue to be considered later
during bid processing for that round. The bidding system will then
consider the bid submitted at the next highest price point, applying it
in full, in part, or not at all, given the most recently determined
demands of bidders. Any unfulfilled requests will again be held in the
queue, and aggregate demand will again be recalculated. Every time a
bid or part of a bid is applied, the unfulfilled bids held in the queue
will be reconsidered, in the order of the original price points of the
bids (and by pseudo-random number, in the case of tied price points).
The auction bidding system will not carry over unfulfilled bid requests
to the next round, however. The bidding system will advise bidders of
the status of their bids when round results are released.
e. Price Determination
215. OEA and WTB further adopt bid processing procedures that will
determine, based on aggregate demand, the posted price for each product
for the round, which will serve as the start-of-round price for the
next round. The uniform price for all of the blocks in a product will
increase from round to round as long as there is excess demand for
blocks in the product but will not increase if aggregate demand does
not exceed the available supply of blocks.
216. Under these procedures, if at the end of a round the aggregate
demand for blocks in the product exceeds the supply of blocks, the
posted price will equal the clock price for the round. If a reduction
in demand was applied during the round and caused demand in the product
to equal supply, the posted price will be the price at which the
reduction was applied. If aggregate demand is less than or equal to
supply and no bid to reduce demand was applied for the product, then
the posted price will equal the start-of-round price for the round. The
range of acceptable bid amounts for the next round will be set by
adding the percentage increment to the posted price.
217. When a bid to reduce demand can be applied only partially, the
uniform price for the product will stop increasing at that point, since
the partial application of the bid will result in demand falling to
equal supply. Hence, a bidder that makes a bid to reduce demand that
cannot be fully applied will not face a price for the remaining demand
that is higher than its bid price.
218. After the bids of the round have been processed, if the
stopping rule has not been met, the FCC auction bidding system will
announce clock prices to indicate a range of acceptable bids for the
next round. Each bidder will be informed of its processed demand and
the extent of excess demand for blocks in each product.
9. Winning Bids in the Clock Phase
219. Under the clock auction format for Auction 110, if the reserve
price to meet the CSEA requirement is met in the clock phase, bidders
with processed demand for a product at the time the stopping rule is
met will become the winning bidders of licenses corresponding to that
number of blocks and will be assigned specific frequencies in the
assignment phase. The final clock phase price for a generic block in a
product will be the posted price for the final round. This and other
Auction 110 bid processing details are addressed in the Auction 110
Clock Phase Technical Guide.

B. Assignment Phase

220. Following the conclusion of the clock phase, if the reserve
price to satisfy the CSEA requirement has been met, the assignment
phase will follow. As proposed, in the assignment phase, in a series of
bidding rounds, each clock phase winning bidder will have the
opportunity to indicate its preferences for specific frequency licenses
corresponding to the generic blocks it won in each category in the
clock phase. As proposed, a bidder will be assigned contiguous
frequencies for blocks it wins within each category and PEA regardless
of whether it chooses to bid in the assignment phase. As set forth
below, OEA and WTB adopt an additional assignment procedure to address
commenter concerns that the procedures, as proposed, did not take
contiguity across categories into account.
1. Sequencing and Grouping of PEAs
221. As proposed, OEA will sequence assignment rounds to make it
easier for bidders to incorporate frequency assignments from previously
assigned areas into their bid preferences for other areas, recognizing
that bidders winning multiple blocks of licenses generally will prefer
contiguous blocks across adjacent PEAs. To that end, OEA will conduct
rounds for the largest markets first to enable bidders to establish a
``footprint'' from which to work.
222. Specifically, OEA will conduct a separate assignment round for
each of the top 20 PEAs and to conduct these assignment rounds
sequentially, beginning with the largest PEA. Once the top 20 PEAs have
been assigned, OEA will conduct, for each Regional Economic Area
Grouping (REAG), a series of assignment rounds for the remaining PEAs
within that region.

[[Page 32799]]

223. Further, the bidding system will group into a single market
for assignment any non-top 20 PEAs within a REAG in which the same
winning bidders will be assigned the same number of blocks in each
category, and all are subject to the small markets bidding cap or all
are not subject to the cap. Grouping in this way may also help maximize
contiguity across PEAs.
224. OEA will sequence the assignment rounds within a REAG in
descending order of population for a PEA group or individual PEA. The
bidding for the different REAGs will be conducted in parallel in order
to reduce the total amount of time required to complete the assignment
phase.
2. Acceptable Bids and Bid Processing
225. Under the bidding procedures OEA and WTB adopt, in each
assignment round a bidder will be asked to assign a price to one or
more possible frequency assignments for which it wishes to express a
preference, consistent with its winnings for generic blocks in the
clock phase. The price will represent a maximum payment that the bidder
is willing to pay, in addition to the price established in the clock
phase for the generic blocks, for the frequency-specific license or
licenses in its bid. In PEAs where there are two categories and a
bidder won generic blocks in both categories, a bidder will submit its
preferences for blocks won in Cat1 and Cat2 separately, rather than
submitting bids for preferences that include blocks in both categories.
That is, if a bidder won one block in Cat1 and two blocks in Cat2, it
will not be able to submit a single bid amount for an assignment that
includes both categories. Instead, it will submit its bid or bids for
assignments in Cat1 separately from its bid or bids for assignments in
Cat2.
226. In response to numerous comments requesting that the
Commission implement procedures that would prioritize contiguous
assignments across categories, OEA and WTB modify the procedures
proposed in the Auction 110 Comment Public Notice to ensure that, in
PEAs with both Cat1 and Cat2 blocks, if one or more bidders win blocks
in both categories in the clock phase, one of those bidders will be
assigned licenses that are contiguous across the categories.
Specifically, in each assignment round, prior to implementing the
proposed optimization procedures separately for each category in the
PEA or PEA group, the bidding system will first determine if there are
one or more bidders with winnings in both categories. If there are, the
bidding system will assign blocks that are contiguous across the
categories to one such bidder. To do so, the bidding system will
consider the sum of each such bidder's bid for its Cat1 option that
includes the highest-frequency block (D) and its bid for the Cat2
option that includes the lowest-frequency block (E). The bidder with
the highest bid total will be assigned licenses that are contiguous
across the categories (i.e., that include blocks D and E and any other
blocks contiguous to D and/or E that the bidder won. The bidder's
assignment payment will be the price of the bidder with the second-
highest total bid for options that include blocks that are contiguous
across categories.
227. Once the bidding system has determined whether there is at
least one bidder with cross-category winnings and if so, has assigned
licenses to one of those bidders, the system will, as proposed, use an
optimization approach to determine the winning frequency assignment for
the remaining blocks in each category in each PEA or PEA group. The
auction system will select the assignment that maximizes the sum of bid
amounts among all assignments that satisfy the contiguity requirements
within categories. Furthermore, if multiple blocks in a category in a
PEA remain unsold, the unsold licenses will be contiguous.
228. The additional price a bidder will pay for a specific
frequency assignment (above the clock phase price) in a given category
will be calculated consistent with a generalized ``second price''
approach--that is, the winner will pay a price that would be just
sufficient to result in the bidder receiving that same winning
frequency assignment while ensuring that no group of bidders is willing
to pay more for an alternative assignment where each bidder is assigned
contiguous spectrum within that category. This price will be less than
or equal to the price the bidder indicated it was willing to pay for
the assignment. OEA will determine prices in this way because it
facilitates bidding strategy for the bidders, encouraging them to bid
their full value for the assignment, knowing that if the assignment is
selected, they will pay no more than would be necessary to ensure that
the outcome is competitive.
3. Information Available to Bidders During the Assignment Phase
229. After the clock phase concludes but before bidding begins in
the assignment phase, the bidding system will provide to each
assignment phase bidder a menu of bidding options consisting of
possible configurations of frequency-specific licenses on which it can
bid. These bidding options will be consistent with the bidder's clock-
phase winnings but will not take into account the winnings of other
bidders. The bidding system will also announce the order in which
assignment rounds will take place and indicate which PEAs will be
grouped together for bidding. The bidding system will provide clock
phase winning bidders with this information as soon as possible and
will announce a schedule of assignment phase rounds that will commence
no sooner than five business days later.
230. After each assignment round, the bidding system will inform
each bidder of its own assignment and assignment payment for each
assignment category for each PEA or PEA group assigned in the round.
The bidding system will also provide each bidder with its current total
payment, which is calculated as the sum of the bidder's total clock
payment across all PEAs and the bidder's assignment payments for the
PEAs for which an assignment round has already completed. During the
assignment rounds this information will provide the bidder a running
estimate of the dollar amount it will owe at the end of the auction. A
bidder that is claiming a bidding credit will also be informed about
its current bidding credit discount and whether the discount has been
capped.

C. Final Auction Payment Calculations

231. When all assignment rounds have been completed, a bidder's
final auction payment takes into account the sum of final clock phase
prices across all licenses that it won, the sum of all of the bidder's
assignment payments, and any claimed bidding credits. Specifically, if
a bidder is not claiming a bidding credit, its final payment is
determined by summing the final clock phase prices across all licenses
that it won and its assignment payments across all PEAs or PEA groups.
232. If a bidder claims a bidding credit, a bidding credit discount
is calculated by applying the bidder's bidding credit percentage to the
sum of the bidder's clock payments and assignment payments, capping the
bidding credit discount if it exceeds the applicable caps for small
businesses, rural service providers, and small markets. The resulting
bidding credit discount is subtracted from the sum of the bidder's
clock payments and assignment payments to determine the final payment
for a bidder with a bidding credit.

[[Page 32800]]

D. Calculating Individual ``Per-License'' Prices

233. While final auction payments for winning bidders will be
calculated with bidding credit caps and assignment payments applied on
an aggregate basis, rather than to individual licenses, the bidding
system will also calculate a ``per-license'' price for each license.
Such individual prices may be needed if a licensee later incurs
license-specific obligations, such as unjust enrichment payments.
234. After the assignment phase, the auction bidding system will
determine a net and gross post-auction price for each license that a
bidder won by apportioning assignment payments and bidding credit
discounts (only applicable for the net price) across all the bidder's
licenses. To calculate the gross per-license price, the auction bidding
system will apportion the assignment payment to licenses in proportion
to the final clock phase price of the blocks that the bidder is
assigned in that assignment category and PEA (or PEA group).
Mathematical details of these procedures, including how the system
apportions the assignment payment for an assignment that is contiguous
across the two categories, are given in the Auction 110 Assignment
Phase Technical Guide. To calculate the net price, the auction bidding
system will first apportion any applicable bidding credit discounts to
each PEA or PEA group in proportion to the gross payment for that
market. Then, for each PEA or PEA group, the auction bidding system
will apportion the assignment payment and the discount to licenses in
proportion to the final clock phase price of the blocks that the bidder
is assigned in that assignment category for that PEA (or PEA group).

E. Auction Results

235. The bidding system will determine winning bidders as described
in Section IV.A.9 (Winning Bids in the Clock Phase), above. After
release of the public notice announcing auction results, the public
will be able to view and download bidding and results data through the
FCC Public Reporting System (PRS).

F. Auction Announcements

236. Commission staff will use auction announcements to report
necessary information, such as schedule changes, to bidders. All
auction announcements will be available by clicking a link in the
bidding system.

V. Post-Auction Procedures

237. The public notice announcing the close of the bidding and
auction results will be released shortly after bidding has ended in
Auction 110. This public notice will also establish the deadlines for
submitting down payments, final payments, and the long-form
applications (FCC Form 601) for the auction.

A. Down Payments

238. The Commission's rules provide that, unless otherwise
specified by public notice, within ten business days after the release
of the auction closing public notice for Auction 110, 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 to 20% of the net amount of its winning bids (less any
bidding credits, if applicable). Because it is not possible to know
when bidding in Auction 110 will end, and thus whether post-auction
payments will be due in late 2021 or early 2022, some commenters
request that OEA and WTB announce before the bidding begins that down
payments will be due in early 2022. Commission staff have previously
recognized that uncertainties regarding the year in which down payments
will be due could affect potential applicants from a capital planning
perspective, and that this could in turn affect auction participation.
Acknowledging that such uncertainties may be presented under the
current schedule for Auction 110, OEA and WTB exercise their discretion
under the Commission's rules to set the down payment deadline for
Auction 110 to be the later of January 7, 2022, or ten business days
after release of the auction closing public notice.

B. Final Payments

239. Each winning bidder will be required to submit the balance of
the net amount for each of its winning bids within 10 business days
after the deadline for submitting down payments.

C. Long-Form Application (FCC Form 601)

240. The Commission's rules provide that, within 10 business days
after release of the auction closing public notice, winning bidders
must electronically submit a properly completed post-auction
application (FCC Form 601), including the necessary filing fee of
$3,175, for the license(s) they won through the auction. The filing fee
will be required only if the recently amended section 1.1102 of the
Commission's rules is in effect by the post-auction application
deadline.
241. A winning bidder claiming eligibility for a small business
bidding credit or a rural service provider bidding credit must
demonstrate its eligibility for the bidding credit sought in its FCC
Form 601 post-auction application. Further instructions on these and
other filing requirements will be provided to winning bidders in the
auction closing public notice for Auction 110.
242. Winning bidders organized as bidding consortia must comply
with the FCC Form 601 post-auction application procedures set forth in
section 1.2107(g) of the Commission's rules. Specifically, license(s)
won by a consortium must be applied for as follows: (a) An individual
member of the consortium or a new legal entity comprising two or more
individual consortium members must file for licenses covered by the
winning bids; (b) each member or group of members of a winning
consortium seeking separate licenses will be required to file a
separate FCC Form 601 for its/their respective license(s) in their
legal business name; (c) in the case of a license to be partitioned or
disaggregated, the member or group filing the applicable FCC Form 601
shall include the parties' partitioning or disaggregation agreement
with the FCC Form 601; and (d) if a DE credit is sought (either small
business or rural service provider), the applicant must meet the
applicable eligibility requirements in the Commission's rules for the
credit.

D. Ownership Disclosure Information Report (FCC Form 602)

243. Within 10 business days after release of the auction closing
public notice for Auction 110, each winning bidder must also comply
with the ownership reporting requirements in sections 1.913, 1.919, and
1.2112 of the Commission's rules by submitting an ownership disclosure
information report for wireless telecommunications services (FCC Form
602) with its FCC Form 601 post-auction application.
244. If a winning bidder already has a complete and accurate FCC
Form 602 on file in the FCC's Universal Licensing System (ULS), then it
is not necessary to file a new report, but the winning bidder must
certify in its FCC Form 601 application that the information on file
with the Commission is complete and accurate. If the winning bidder
does not have an FCC Form 602 on file, or if the form on file is not
complete and accurate, then the winning bidder must submit a new one.
245. When a winning bidder submits an FCC Form 175, ULS
automatically creates an ownership record. This record is not an FCC
Form 602, but it may be used to pre-fill the FCC Form 602 with the
ownership information

[[Page 32801]]

submitted on the winning bidder's FCC Form 175 application. A winning
bidder must review the pre-filled information and confirm that it is
complete and accurate as of the filing date of the FCC Form 601 post-
auction application before certifying and submitting the FCC Form 602.
Further instructions will be provided to winning bidders in the auction
closing public notice.

E. Tribal Lands Bidding Credit

246. A winning bidder that intends to use its license(s) to deploy
facilities and provide services to federally recognized tribal lands
that have a wireline penetration rate equal to or below 85% is eligible
to receive a tribal lands bidding credit as set forth in sections
1.2107(e) and 1.2110(f)(3) of the Commission's rules. A tribal lands
bidding credit is in addition to, and separate from, any other bidding
credit for which a winning bidder may qualify.
247. Unlike other bidding credits that are requested prior to the
auction, a winning bidder applies for the tribal lands bidding credit
after the auction when it files its FCC Form 601 post-auction
application. When initially filing the post-auction application, the
winning bidder will be required to inform the Commission whether it
intends to seek a tribal lands bidding credit, for each license won in
the auction, by checking the designated box(es). After stating its
intent to seek a tribal lands bidding credit, the winning bidder will
have 180 days from the close of the post-auction application filing
window to amend its application to select the specific tribal lands to
be served and provide the required tribal government certifications.
Licensees receiving a tribal lands bidding credit are subject to
performance criteria as set forth in section 1.2110(f)(3)(vii). For
additional information on the tribal lands bidding credit, including
how the amount of the credit is calculated, applicants should review
the Commission's rulemaking proceeding regarding tribal lands bidding
credits and related public notices.

F. Default and Disqualification

248. Any winning bidder that defaults or is disqualified after the
close of an auction (i.e., fails to remit the required down payment by
the specified deadline, fails to submit a timely long-form application,
fails to make a full and timely final payment, or is otherwise
disqualified) is liable for default payments as described in section
1.2104(g)(2). A default payment consists of a deficiency payment, equal
to the difference between the amount of the bidder's winning bid and
the amount of the winning bid the next time a license 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.
249. 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. OEA and WTB adopt the Commission's proposal
to set the additional default payment for Auction 110 at 15% of the
applicable bid for winning bids. The bidding system will calculate
individual per-license prices that are separate from final auction
payments, which are calculated on an aggregate basis.
250. Finally, in the event of a default, the Commission has the
discretion to re-auction the license or offer it to the next highest
bi

[…truncated; see source link]

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on June 23, 2021.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.