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Proposed Rule2021-15146

Auction of Construction Permits for Low Power Television and TV Translator Stations; Comment Sought on Competitive Bidding Procedures for Auction 111

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Published

July 19, 2021

Issuing agencies

Federal Communications Commission

Abstract

The Office of Economics and Analytics and the Media Bureau announce a closed auction of construction permits for new or modified low power television (LPTV) stations and TV translator stations (collectively, LPTV/translator stations). This document seeks comment on the procedures to be used for this auction, which is designated as Auction 111.

Full Text

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<title>Federal Register, Volume 86 Issue 135 (Monday, July 19, 2021)</title>
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[Federal Register Volume 86, Number 135 (Monday, July 19, 2021)]
[Proposed Rules]
[Pages 37972-37981]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-15146]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 73

[AU Docket No. 21-284; DA 21-801; FR ID 37717]

Auction of Construction Permits for Low Power Television and TV
Translator Stations; Comment Sought on Competitive Bidding Procedures
for Auction 111

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; proposed auction procedures.

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SUMMARY: The Office of Economics and Analytics and the Media Bureau
announce a closed auction of construction permits for new or modified
low power television (LPTV) stations and TV translator stations
(collectively, LPTV/translator stations). This document seeks comment
on the procedures to be used for this auction, which is designated as
Auction 111.

DATES: Comments are due on or before August 3, 2021, and reply comments
are due on or before August 13, 2021. Bidding in this auction is
expected to commence in February 2022.

ADDRESSES: Interested parties may file comments or reply comments in AU
Docket No. 21-284. Comments may be filed using the Commission's
Electronic Comment Filing System (ECFS). All filings in response to the
Auction 111 Comment Public Notice must refer to AU Docket No. 21-284.
<bullet> Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS at <a href="https://www.fcc.gov/ecfs/">https://www.fcc.gov/ecfs/</a>.
<bullet> Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
<bullet> Filings in response to the Public Notice can be sent by
commercial courier or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission
<bullet> Commercial deliveries (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Dr.,
Annapolis Junction, MD 20701.
<bullet> U.S. Postal Service first-class, Express, or Priority mail
must be addressed to 45 L Street NE, Washington, DC 20554.
<bullet> Until further notice, the Commission no longer accepts any
hand or messenger delivered filings. This is a temporary measure taken
to help protect the health and safety of individuals, and

[[Page 37973]]

to mitigate the transmission of COVID-19.
<bullet> Email: Commenters are asked to also submit a copy of their
comments and reply comments electronically to the following address:
<a href="/cdn-cgi/l/email-protection#a4c5d1c7d0cdcbca959595e4c2c7c78ac3cbd2">[email&#160;protected]</a>.
<bullet> People with Disabilities: To request materials in
accessible formats (braille, large print, electronic files, audio
format) for people with disabilities, send an email to <a href="/cdn-cgi/l/email-protection#32545151070206725451511c555d44">[email&#160;protected]</a>
or call the Consumer and Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).

FOR FURTHER INFORMATION CONTACT:
Auction legal questions: Lyndsey Grunewald, (202) 418-0660,
<a href="/cdn-cgi/l/email-protection#5e1227303a2d3b2770192c2b303b293f323a1e383d3d70393128">[email&#160;protected]</a>, or Scott Mackoul, (202) 418-0660,
<a href="/cdn-cgi/l/email-protection#df8cbcb0ababf192bebcb4b0aab39fb9bcbcf1b8b0a9">[email&#160;protected]</a>.
General auction questions: Auction Hotline at (717) 338-2868.
LPTV/translator station service questions: Shaun Maher (legal),
(202) 418-2324, <a href="/cdn-cgi/l/email-protection#8edde6effbe0a0c3efe6ebfccee8ededa0e9e1f8">[email&#160;protected]</a>, or Mark Colombo (technical
questions), (202) 418-7611, <a href="/cdn-cgi/l/email-protection#2f624e5d44016c404340424d406f494c4c01484059">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice
(Auction 111 Comment Public Notice), AU Docket No. 21-284, DA 21-801,
adopted on July 9, 2021, and released on July 9, 2021. The Auction 111
Comment Public Notice includes the following attachments: Attachment A,
Construction Permits in Auction 111. The complete text of the Auction
111 Comment Public Notice, including its attachments, is available on
the Commission's website at <a href="http://www.fcc.gov/auction/111">http://www.fcc.gov/auction/111</a> or by using
the search function for AU Docket No. 21-284 on the Commission's 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" class="__cf_email__" data-cfemail="b7f1f4f4828783f7d1d4d499d0d8c1">[email&#160;protected]</a> or by
calling the Consumer & Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).

I. Introduction

1. By the Auction 111 Comment Public Notice, the Office of
Economics and Analytics (OEA) and the Media Bureau (MB), announce a
closed auction of construction permits for new or modified low power
television (LPTV) stations and TV translator stations (collectively
referred to as LPTV/translator stations) and seek comment on the
procedures to be used for this auction. The bidding for the auction,
which is designated as Auction 111, is expected to commence in February
2022.
2. OEA and MB has sent a copy of the Auction 111 Comment Public
Notice by email and overnight delivery to the contact address listed on
each LPTV/translator station application listed in Attachment A of the
Auction 111 Comment Public Notice. Future public notices in this
proceeding may be provided directly to each applicant listed in
Attachment A at this contact address as well. Each applicant is
reminded that pursuant to Sec. 1.65 of the Commission's rules, it is
obligated to maintain the accuracy of this information. 47 CFR 1.65.
OEA and MB ask each party that is eligible to file a short-form
application in Auction 111 to make sure that the contact address
provided in its LPTV/translator station application is accurate and is
a location capable of accepting packages. After the deadline for filing
short-form applications (FCC Form 175) to participate in Auction 111,
Auction 111-related materials will be sent to auction applicants at the
contact addresses in their short-form applications.

II. Construction Permits Offered and Application Processing

A. Construction Permits To Be Offered in Auction 111

3. Auction 111 will resolve groups of pending mutually exclusive
(MX) engineering proposals for up to 17 new or modified LPTV/translator
station construction permits. Auction 111 is a closed auction; only
those individuals or entities listed in Attachment A to the Auction 111
Comment Public Notice are eligible to participate in this auction with
respect to the construction permit(s) for which each is listed.
4. The MX groups and engineering proposals listed in Attachment A
to the Auction 111 Comment Public Notice consist of applications for
new LPTV/translator stations, or major changes to existing stations,
that were accepted on a first-come, first-served basis (i.e., rolling
one-day windows), pursuant to Sec. 74.787(a)(3) of the Commission's
rules and displacement relief applications filed pursuant to a special
filing window for eligible LPTV/translator stations displaced by the
broadcast television spectrum incentive auction (Auction 1000). Any
LPTV/translator station applications for new facilities, major changes
to existing facilities, or displacement relief that are mutually
exclusive with one another must be resolved via the Commission's part 1
and part 73 competitive bidding rules. In 2009, MB began accepting
applications for new rural digital LPTV/translator stations on a
limited basis and then later froze those filings. All but one of the MX
groups listed in Attachment A to the Auction 111 Comment Public Notice
consist of applications for new or modified rural digital LPTV/
translator stations that were submitted on the first day that MB began
accepting such applications. With regard to the remaining MX group,
Auction 1000, which repurposed 84 megahertz of the 600 MHz band
spectrum, resulted in the channel reassignments of certain full power
and Class A television stations, and in turn displaced certain LPTV/
translator stations. In 2018, the Incentive Auction Task Force and MB
opened a special displacement application filing window for eligible
licensees and permittees of LPTV/translator stations displaced by
Auction 1000 to apply for new channels. The remaining MX group listed
in Attachment A to the Auction 111 Comment Public Notice consists of
two displacement relief applications filed pursuant to this special
displacement application filing window.
5. In order to facilitate resolution of pending mutually exclusive
LPTV/translator station applications before initiating competitive
bidding procedures, and given the passage of time since the
applications were filed, MB announced that it would withhold action on
certain MX applications for new or modified LPTV/translator stations,
including each application listed in Attachment A to the Auction 111
Comment Public Notice, from June 1, 2020 to July 31, 2020, in order to
provide applicants with an opportunity to resolve mutual exclusivity
through settlement or technical modification of their engineering
proposals. MB advised each applicant that, absent resolution of its
mutual exclusivity, its application would be subject to the
Commission's competitive bidding procedures.
6. The 17 MX groups listed in Attachment A to the Auction 111
Comment Public Notice are the groups of 24 applicants that filed 40
applications that remain MX after the filing window closed, and OEA and
MB will now proceed to resolve these mutually exclusive LPTV/translator
station proposals by competitive bidding in Auction 111. Attachment A
to the Auction 111 Comment Public Notice also lists, for each proposal
in each MX group, the applicant name, FCC Registration Number (FRN),
file number, facility identification number, community of license, and
the channel requested in the relevant construction permit application.

B. Application Processing and Limited Auction Settlement Period

7. Attachment A to the Auction 111 Comment Public Notice lists the
pending LPTV/translator station

[[Page 37974]]

applications that will be resolved through Auction 111 unless the
applicants resolve their mutual exclusivity by entering into settlement
agreements or making minor amendments to their pending applications
before the deadline for filing short-form applications (FCC Form 175)
to participate in Auction 111, which will be announced in a future
public notice. Specifically, if a member of an MX group withdraws its
application on its own initiative or files a unilateral engineering
amendment, or if members of the MX group enter into and submit a
settlement agreement and supporting documentation that the Commission
staff determines to be fully in accordance with the Communications Act
of 1934, as amended (Act) and the Commission's rules, and such actions
completely resolve the mutual exclusivity prior to the short-form
application deadline, that MX group will be removed from Auction 111
and the remaining engineering proposal(s) will be processed under
standard licensing procedures.
8. Conversely, if an MX group listed in Attachment A to the Auction
111 Comment Public Notice remains mutually exclusive as of the short-
form application filing deadline, each applicant in that MX group must
timely file a short-form application in order to avoid dismissal of its
pending LPTV/translator station application. Specifically, if any
member of an MX group that remains mutually exclusive as of the short-
form application filing deadline fails to submit a timely short-form
application, that party will have its pending application for a new or
modified LPTV/translator station dismissed for failure to prosecute.
Likewise, if only one member of an MX group that remains mutually
exclusive as of the short-form application filing deadline submits a
short-form application, the MX group will be removed from the auction
and the engineering proposal of the party that submitted a short-form
application will be treated as a singleton application and processed
under standard licensing procedures. If an applicant forgoes filing a
short-form application pursuant to an agreement with mutually exclusive
applicants, such settlement agreement must be submitted to MB for
approval in accordance with Sec. 73.3525 of the Commission's rules.
9. After the short-form application filing deadline, OEA and MB
will release a public notice identifying the mutually exclusive
applications for Auction 111. As provided in section 73.5002(d) of the
Commission's rules, these mutually exclusive applicants will then be
given a limited opportunity to resolve mutual exclusivity of the
Commission's rules by the filing of technical amendments, dismissal
requests, and requests for approval of universal settlements. The
specific dates of the settlement period will be announced in the public
notice identifying the MX applications, but will only last, at most,
two weeks. Due to the Commission's competitive bidding rule prohibiting
certain communications, 47 CFR 1.2105(c), applicants in Auction 111
will not be able to communicate after the short-form application
deadline with each other for the purpose of resolving conflicts outside
of this limited settlement period.
10. An applicant listed in Attachment A to the Auction 111 Comment
Public Notice may become qualified to bid in Auction 111 only if it
complies with the auction filing, qualification, and payment
requirements, and otherwise complies with applicable rules, policies,
and procedures. Each listed applicant may become a qualified bidder
only for those construction permits specified for that applicant in
Attachment A to the Auction 111 Comment Public Notice. Each of the
engineering proposals within each MX group are directly mutually
exclusive with one another; therefore, no more than one construction
permit will be awarded through Auction 111 for each MX group identified
in Attachment A to the Auction 111 Comment Public Notice. Under the
Commission's established precedent, once two or more short-form
applications are accepted for an MX group, mutual exclusivity exists
for the relevant construction permit for auction purposes. Unless the
mutual exclusivity is resolved during the limited settlement
opportunity mentioned above, an applicant in Auction 111 cannot obtain
a construction permit without placing a bid, even if no other applicant
for that particular construction permit becomes qualified to bid or in
fact places a bid.

III. Implementation of Part 1 and Part 73 Competitive Bidding Rules and
Requirements

11. Consistent with the provisions of section 309(j)(3)(E)(i) of
the Act, and to ensure that potential bidders have adequate time to
familiarize themselves with the specific rules that will govern the
day-to-day conduct of an auction, OEA and MB seek comment on a variety
of auction-specific procedures relating to the conduct of Auction 111.
12. The Commission's part 1 and part 73 competitive bidding rules
require each applicant seeking to bid to acquire a construction permit
in a broadcast auction to provide certain information in a short-form
application (FCC Form 175), including ownership details and numerous
certifications. The competitive bidding rules in part 1, subpart Q, and
part 73 also contain a framework for the implementation of a
competitive bidding design, application and certification procedures,
reporting requirements, and the prohibition of certain communications.

A. Upfront Payments and Bidding Eligibility

13. In keeping with the usual practice in spectrum auctions, OEA
and MB propose that applicants be required to submit upfront payments
as a prerequisite to becoming qualified to bid. An upfront payment is a
refundable deposit made by an applicant to establish its eligibility to
bid on construction permits. Upfront payments that are related to the
specific construction permits 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 the bidding. As
required by 47 CFR 1.2106(a), a former defaulter must submit an upfront
payment equal to 50% more than the amount that would otherwise be
required.
14. OEA and MB seek comment on an appropriate upfront payment for
each construction permit being auctioned, taking into account such
factors as the efficiency of the auction process and the potential
value of similar construction permits. With these considerations in
mind, OEA and MB propose the upfront payments set forth in Attachment A
to the Auction 111 Comment Public Notice and seek comment on those
proposed upfront payment amounts.
15. OEA and MB further propose that the amount of the upfront
payment submitted by an applicant will determine its initial bidding
eligibility in bidding units, which are a measure of bidder eligibility
and bidding activity. OEA and MB propose to assign each construction
permit a specific number of bidding units, equal to one bidding unit
per dollar of the upfront payment listed in Attachment A to the Auction
111 Comment Public Notice. The number of bidding units for a given
construction permit is fixed and does not change during the auction as
prices change. If an applicant is found to be qualified to bid on more
than one permit being offered in Auction 111, such bidder may place
bids on multiple construction permits, provided that the total number
of bidding units associated with those construction permits does not
exceed that bidder's current

[[Page 37975]]

eligibility. A bidder cannot increase its eligibility during the
auction; it can only maintain its eligibility or decrease its
eligibility. In calculating its upfront payment amount and hence its
initial bidding eligibility, an applicant must determine the maximum
number of bidding units on which it may wish to bid (or hold
provisionally winning bids) in any single round and submit an upfront
payment amount covering that total number of bidding units. OEA and MB
request comment on these proposals.

B. Reserve Price or Minimum Opening Bids

16. As part of the pre-bidding process for each auction, OEA and MB
seek comment on the use of a minimum opening bid amount and/or reserve
price, as mandated by section 309(j) of the Act. OEA and MB propose to
establish minimum opening bid amounts for Auction 111. Based on its
experience in past broadcast auctions, the Commission has found that
setting a minimum opening bid amount judiciously is an effective
bidding tool for accelerating the competitive bidding process. In the
last auction of LPTV construction permits (Auction 104), OEA and MB
similarly proposed establishing minimum opening bids and not reserve
prices; no comments opposed that proposal, and it was adopted. Based on
all of these facts, OEA and MB propose establishing minimum opening
bids for Auction 111. OEA and MB do not propose to establish separate
reserve prices for any of the construction permits to be offered in
Auction 111 nor do they see any reason to propose an aggregate reserve
price for the auction.
17. For auctions of broadcast permits, the Commission generally
proposes minimum opening bid amounts determined by taking into account
the type of service and class of facility offered, market size,
population covered by the proposed broadcast facility, and recent
broadcast transaction data, to the extent such information is
available. Consideration of such factors for Auction 111 is complicated
by a dearth of such transaction data, the fact that a permittee may opt
to switch its intended use of such facility from LPTV to translator
operation, or vice versa, and the lack of accurate data on the
population that would be covered by each proposed facility. In Auction
104, the last auction of LPTV construction permits, OEA and MB proposed
minimum opening bid amounts based on the limited information available,
and received no comments suggesting changes to the minimum opening bid
amounts. OEA and MB followed a similar methodology used in Auction 104
to set the minimum opening bid amounts proposed in Attachment A to the
Auction 111 Comment Public Notice for each construction permit
available in Auction 111. OEA and MB seek comment on the minimum
opening bid amounts specified in Attachment A to the Auction 111
Comment Public Notice.
18. If commenters believe that these minimum opening bid amounts
will result in unsold construction permits or are not reasonable
amounts at which to start bidding, they should explain why this is so
and comment on the desirability of an alternative approach. Commenters
should support their claims with valuation analyses and suggested
amounts or formulas. In establishing the minimum opening bid amounts,
OEA and MB particularly seek comment on factors that could reasonably
have an impact on bidders' valuation of the broadcast spectrum,
including the type of service and class of facility offered, market
size, population covered by the proposed broadcast facility and any
other relevant factors. Commenters also may wish to address the general
role of minimum opening bids in managing the pace of the auction. For
example, commenters could compare using minimum opening bids--e.g., by
setting higher minimum opening bids to reduce the number of rounds it
takes for construction permits to reach their final prices--to other
means of controlling auction pace, such as changes to bidding
schedules, percentage increments, or activity requirements.

C. Auction Delay, Suspension, or Cancellation

19. For Auction 111, OEA and MB propose that at any time before or
during the bidding process they may delay, suspend, or cancel bidding
in the auction 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. Notification of any such delay, suspension, or cancellation
will be provided by public notice or through the FCC auction bidding
system's messages function. If bidding is delayed or suspended, the
auction may resume starting from the beginning of the current round or
from some previous round, or the auction may be cancelled in its
entirety. This authority will be exercised solely at the discretion of
OEA and MB, and not as a substitute for situations in which bidders may
wish to apply activity rule waivers. OEA and MB seek comment on this
proposal.

D. Interim Withdrawal Payment Percentage

20. As discussed below, OEA and MB propose not to allow bid
withdrawals in Auction 111. In the event bid withdrawals are permitted
in Auction 111, however, OEA and MB propose the interim bid withdrawal
payment be 20% of the withdrawn bid. A bidder that withdraws a
provisionally winning bid during an auction is subject to a withdrawal
payment equal to the difference between the amount of the withdrawn bid
and the amount of the winning bid in the same or a subsequent auction.
47 CFR 1.2104(g)(1). However, if a construction permit for which a bid
has been withdrawn does not receive a subsequent higher bid or winning
bid in the same auction, the Commission cannot calculate the final
withdrawal payment until that construction permit receives a higher bid
or winning bid in a subsequent auction. In such cases, when that final
withdrawal payment cannot yet be calculated, the Commission imposes on
the bidder responsible for the withdrawn bid an interim bid withdrawal
payment, which will be applied toward any final bid withdrawal payment
that is ultimately assessed.
21. The percentage amount of the interim bid withdrawal payment is
established in advance of bidding in each auction and may range from 3%
to 20% of the withdrawn bid amount. The Commission has determined that
the level of interim withdrawal payment in a particular auction will be
based on the nature of the service and the inventory of the licenses
being offered. The Commission noted specifically that a higher interim
withdrawal payment percentage is warranted to deter the anti-
competitive use of withdrawals when, for example, bidders will not need
to aggregate the licenses being offered in the auction or when there
are few synergies to be captured by combining licenses. In light of
these considerations with respect to the construction permits being
offered in this auction, OEA and MB propose to use the maximum interim
bid withdrawal payment percentage permitted by Sec. 1.2104(g)(1) in
the event bid withdrawals are allowed in this auction. OEA and MB
request comment on using 20% for calculating an interim bid withdrawal
payment amount in Auction 111 in the event that bidders would be
permitted to withdraw bids. Commenters advocating the use of bid
withdrawals should also address the

[[Page 37976]]

percentage of the interim bid withdrawal payment.

E. Deficiency Payments and Additional Default Payment Percentage

22. 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 make full and timely final payment,
fails to submit a timely long-form application, or whose long-form
application is not granted for any reason, or is otherwise
disqualified) is liable for a default payment under Sec. 1.2104(g)(2)
of the rules. This payment consists of a deficiency payment, equal to
the difference between the amount of the Auction 111 bidder's winning
bid and the amount of the winning bid the next time a construction
permit covering the same spectrum is won in an auction, plus an
additional payment equal to a percentage of the defaulter's bid or of
the subsequent winning bid, whichever is less.
23. The Commission's rules provide that, in advance of each
auction, it will establish a percentage between 3% and 20% of the
applicable winning bid to be assessed as an additional default payment.
As the Commission has indicated, the level of this additional payment
in each auction will be based on the nature of the service and the
construction permits being offered.
24. For Auction 111, OEA and MB propose to establish an additional
default payment of 20%, which is consistent with the percentage in
prior auctions of broadcast construction permits. As the Commission has
noted, defaults weaken the integrity of the auction process and may
impede the deployment of service to the public, and an additional 20%
default payment will be more effective in deterring defaults than the
3% used in some earlier auctions. In light of these considerations, OEA
and MB propose for Auction 111 an additional default payment of 20% of
the relevant bid. OEA and MB seek comment on this proposal.

IV. Proposed Bidding Procedures

A. Simultaneous Multiple-Round Auction Design

25. OEA and MB propose to use the Commission's simultaneous
multiple-round auction format for Auction 111. As described further
below, this type of auction offers every construction permit for bid at
the same time and consists of successive bidding rounds in which
qualified bidders may place bids on individual construction permits.
Typically, bidding remains open on all construction permits until
bidding stops on every construction permit. OEA and MB seek comment on
this proposal.

B. Bidding Rounds

26. The Commission will conduct Auction 111 over the internet using
the FCC auction bidding system. A bidder will also have the option of
placing bids by telephone through a dedicated auction bidder line.
27. Under this proposal, Auction 111 will consist of sequential
bidding rounds, each followed by the release of round results. The
initial bidding schedule will be announced in a public notice to be
released at least one week before the start of bidding. Details on
viewing round results, including the location and format of
downloadable round results files, will be included in the same public
notice.
28. OEA and MB propose that the initial bidding schedule may be
adjusted in order to foster an auction pace that reasonably balances
speed with the bidders' need to study round results and adjust their
bidding strategies. Under this proposal, such changes may include the
amount of time for the bidding rounds, the amount of time between
rounds, or the number of rounds per day, depending upon bidding
activity and other factors. OEA and MB seek comment on this proposal.
Commenters on this issue should address the role of the bidding
schedule in managing the pace of the auction, specifically discussing
the tradeoffs in managing auction pace by bidding schedule changes, by
changing the activity requirement(s) or bid amount parameters, or by
using other means.

C. Stopping Rule

29. OEA and MB have discretion to establish stopping rules before
or during multiple round auctions in order to complete the auction
within a reasonable time. 47 CFR 1.2104(e). For Auction 111, OEA and MB
propose to employ a simultaneous stopping rule approach, which means
all construction permits remain available for bidding until bidding
stops on every construction permit. Specifically, bidding will close on
all construction permits after the first round in which no bidder
submits any new bid, applies a proactive activity rule waiver, or
withdraws any provisionally winning bid (if bid withdrawals are
permitted in this auction). Thus, under the proposed simultaneous
stopping rule, bidding would remain open on all construction permits
until bidding stops on every construction permit. Consequently, under
this approach, it is not possible to determine in advance how long the
bidding in this auction will last.
30. Further, OEA and MB propose to retain the discretion to
exercise any of the following stopping options during Auction 111: (1)
The auction would close for all construction permits after the first
round in which no bidder applies a waiver, no bidder withdraws a
provisionally winning bid (if withdrawals are permitted in this
auction), or no bidder places any new bid on a construction permit for
which it is not the provisionally winning bidder. Absent any other
bidding activity, a bidder placing a new bid on a construction permit
for which it is the provisionally winning bidder would not keep the
auction open under this modified stopping rule; (2) the auction would
close for all construction permits after the first round in which no
bidder applies a waiver, no bidder withdraws a provisionally winning
bid (if withdrawals are permitted in this auction), or no bidder places
any new bid on a construction permit that already has a provisionally
winning bid. Absent any other bidding activity, a bidder placing a new
bid on an FCC-held construction permit (a construction permit that does
not already have a provisionally winning bid) would not keep the
auction open under this modified stopping rule; (3) the auction would
close using a modified version of the simultaneous stopping rule that
combines (1) and (2); (4) the auction would close after a specified
number of additional rounds (special stopping rule) to be announced in
advance in the FCC auction bidding system. If this special stopping
rule is invoked, bids will be accepted in the specified final round(s),
after which the auction will close; and (5) the auction would remain
open even if no bidder places any new bid, applies a waiver, or
withdraws any provisionally winning bid (if withdrawals are permitted
in this auction). In this event, the effect will be the same as if a
bidder had applied a waiver. The activity rule will apply as usual, and
a bidder with insufficient activity will either lose bidding
eligibility or use a waiver.
31. OEA and MB propose to exercise these options only in certain
circumstances, for example, where the auction is proceeding unusually
slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable
period of time or will close prematurely. Before exercising these
options, OEA and MB are likely to attempt to change the pace of the
auction. For example, the pace of bidding may be adjusted by changing

[[Page 37977]]

the number of bidding rounds per day or the minimum acceptable bids.
OEA and MB propose to retain the discretion to exercise any of these
options with or without prior announcement during the auction. OEA and
MB seek comment on these proposals. Commenters should provide specific
reasons for supporting or objecting to these proposals.

D. Activity Rule

32. 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 purposes of the activity rule, the FCC auction
bidding system calculates a bidder's activity in a round as the sum of
the bidding units associated with any construction permits upon which
it places bids during the current round and the bidding units
associated with any construction permits for which it holds
provisionally winning bids. Bidders are required to be active on a
specific percentage of their current bidding eligibility during each
round of the auction. OEA and MB propose a single-stage auction with a
100% activity requirement. That is, in each bidding round, a bidder
desiring to maintain its current bidding eligibility will be required
to be active on 100% of its bidding eligibility. Thus, the activity
requirement would be satisfied when a bidder has bidding activity on
construction permits with bidding units that total 100% of its current
eligibility in the round. If the activity rule is met, then the
bidder's eligibility does not change in the next round. Failure to
maintain the requisite activity level will result in the use of an
activity rule waiver, if any remain, or a reduction in the bidder's
eligibility for the next round of bidding, possibly curtailing or
eliminating the bidder's ability to place additional bids in the
auction. OEA and MB seek comment on these activity requirements.
Commenters that oppose a 100% activity requirement are encouraged to
explain their reasons with specificity.

E. Activity Rule Waivers and Reducing Eligibility

33. For the proposed simultaneous multiple-round auction format,
OEA and MB propose that when a bidder's activity in the current round
is below the required minimum level, it may preserve its current level
of eligibility through an activity rule waiver, if the bidder has any
available. Consistent with prior Commission auctions of broadcast
construction permits, OEA and MB propose that each bidder in Auction
111 be provided with three activity rule waivers that may be used as
set forth below at the bidder's discretion during the course of the
auction.
34. An activity rule waiver applies to an entire round of bidding,
not to a particular construction permit. Activity rule waivers can be
either proactive or automatic. Activity rule waivers are primarily a
mechanism for a bidder to avoid the loss of bidding eligibility in the
event that exigent circumstances prevent it from bidding in a
particular round.
35. The FCC auction bidding system will assume that a bidder that
does not meet the activity requirement would prefer to use an activity
rule waiver (if available) rather than lose bidding eligibility.
Therefore, the system will automatically apply a waiver at the end of
any bidding round in which a bidder's activity level is below the
minimum required unless: (1) The bidder has no activity rule waiver
remaining; or (2) the bidder overrides the automatic application of a
waiver by reducing eligibility, thereby meeting the activity
requirement. If a bidder has no waivers remaining and does not satisfy
the required activity level, the bidder's current eligibility will be
permanently reduced, possibly curtailing or eliminating the ability to
place additional bids in the auction.
36. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the reduce eligibility function in
the FCC auction bidding system. In this case, the bidder's eligibility
would be permanently reduced to bring it into compliance with the
activity rule described above. Reducing eligibility is an irreversible
action; once eligibility has been reduced, a bidder cannot regain its
lost bidding eligibility.
37. Under the proposed simultaneous stopping rule, a bidder would
be permitted to apply an activity rule waiver proactively as a means to
keep the auction open without placing a bid. If a bidder proactively
applies an activity rule waiver (using the proactive waiver function in
the FCC auction bidding system) during a bidding round in which no bid
is placed or withdrawn (if bid withdrawals are permitted in this
auction), the auction will remain open and the bidder's eligibility
will be preserved. An automatic waiver applied by the FCC auction
bidding system in a round in which there is no new bid, no bid
withdrawal (if bid withdrawals are permitted in this auction), or no
proactive waiver would not keep the auction open. OEA and MB seek
comment on these proposals.

F. Bid Amount

38. OEA and MB propose that, in each round, a qualified bidder will
be able to place a bid on a given construction permit in any of up to
nine different amounts: The minimum acceptable bid amount or one of the
additional bid amounts. Bidders must have sufficient eligibility to
place a bid on the particular construction permit.
39. Minimum Acceptable Bid Amounts. The first of the acceptable bid
amounts is called the minimum acceptable bid amount. The minimum
acceptable bid amount for a construction permit will be equal to its
minimum opening bid amount until there is a provisionally winning bid
for the construction permit. Once there is a provisionally winning bid
for a construction permit, the minimum acceptable bid amount for that
construction permit will be equal to the amount of the provisionally
winning bid plus a specified percentage of that bid amount. The
percentage used for this calculation, the minimum acceptable bid
increment percentage, is multiplied by the provisionally winning bid
amount, and the resulting amount is added to the provisionally winning
bid amount. If, for example, the minimum acceptable bid increment
percentage is 10%, then the provisionally winning bid amount is
multiplied by 10%. The result of that calculation is added to the
provisionally winning bid amount, and that sum is rounded using the
Commission's standard rounding procedure for auctions as described in
the Auction 111 Comment Public Notice. If bid withdrawals are permitted
in this auction, in the case of a construction permit for which the
provisionally winning bid has been withdrawn, the minimum acceptable
bid amount will equal the second highest bid received for the
construction permit.
40. Additional Bid Amounts. Under this proposal, the Commission
will calculate the eight additional bid amounts using the minimum
acceptable bid amount and an additional bid increment percentage. The
minimum acceptable bid amount is multiplied by the additional bid
increment percentage, and that result (rounded) is the additional
increment amount. The first additional acceptable bid amount equals the
minimum acceptable bid amount plus the additional increment amount. The
second additional acceptable bid amount equals the minimum acceptable

[[Page 37978]]

bid amount plus two times the additional increment amount; the third
additional acceptable bid amount is the minimum acceptable bid amount
plus three times the additional increment amount; etc. If, for example,
the additional bid increment percentage is 5%, then the calculation of
the additional increment amount would be (minimum acceptable bid
amount) * (0.05), rounded. The first additional acceptable bid amount
equals (minimum acceptable bid amount) + (additional increment amount);
the second additional acceptable bid amount equals (minimum acceptable
bid amount) + (2*(additional increment amount)); the third additional
acceptable bid amount equals (minimum acceptable bid amount) +
(3*(additional increment amount)); etc.
41. For Auction 111, OEA and MB propose to use a minimum acceptable
bid increment percentage of 10%. This means that the minimum acceptable
bid amount for a construction permit will be approximately 10% greater
than the provisionally winning bid amount for the construction permit.
To calculate the additional acceptable bid amounts, OEA and MB propose
to use a bid increment percentage of 5%. OEA and MB seek comment on
these proposals.
42. Bid Amount Changes. OEA and MB propose to retain the discretion
to change the minimum acceptable bid amounts, the minimum acceptable
bid percentage, the additional bid increment percentage, and the number
of acceptable bid amounts if, consistent with past practice,
circumstances so dictate. OEA and MB propose to retain the discretion
to do so on a construction permit-by-construction permit basis. OEA and
MB also propose to retain the discretion to limit (a) the amount by
which a minimum acceptable bid for a construction permit may increase
compared with the corresponding provisionally winning bid, and (b) the
amount by which an additional bid amount may increase compared with the
immediately preceding acceptable bid amount. For example, a $1,000
limit could be set on increases in minimum acceptable bid amounts over
provisionally winning bids. In this example, if calculating a minimum
acceptable bid using the minimum acceptable bid increment percentage
results in a minimum acceptable bid amount that is $1,200 higher than
the provisionally winning bid on a construction permit, the minimum
acceptable bid amount would instead be capped at $1,000 above the
provisionally winning bid. OEA and MB seek comment on the circumstances
that would call for employing such a limit, factors to consider when
determining the dollar amount of the limit, and the tradeoffs in
setting such a limit or changing other parameters, such as changing the
minimum acceptable bid percentage, the bid increment percentage, or the
number of acceptable bid amounts. If OEA and MB exercise this
discretion, bidders would be notified by announcement in the FCC
auction bidding system during the auction.
43. OEA and MB seek comment on these proposals. If commenters
disagree with the proposal to begin the auction with nine acceptable
bid amounts per construction permit, they should suggest an alternative
number of acceptable bid amounts to use. Commenters may wish to address
the role of the minimum acceptable bids and the number of acceptable
bid amounts in managing the pace of the auction and the tradeoffs in
managing auction pace by changing the bidding schedule, activity
requirement, bid amounts, or by using other means.

G. Provisionally Winning Bids

44. The FCC auction bidding system will determine provisionally
winning bids consistent with practice in past auctions. At the end of a
bidding round, the bidding system will determine a provisionally
winning bid for each construction permit based on the highest bid
amount received for that permit. The FCC auction bidding system will
advise bidders of the status of their bids when round results are
released. A provisionally winning bid will remain the provisionally
winning bid until there is a higher bid on the same construction permit
at the close of a subsequent round, unless the provisionally winning
bid is withdrawn (if bid withdrawals are permitted in this auction).
Provisionally winning bids at the end of the auction become the winning
bids. As a reminder, provisionally winning bids count toward activity
for purposes of the activity rule.
45. The FCC auction bidding system assigns a pseudo-random number
generated by an algorithm to each bid when the bid is entered. If
identical high bid amounts are submitted on a construction permit in
any given round (i.e., tied bids), the FCC auction bidding system will
use a pseudo-random number generator to select a single provisionally
winning bid from among the tied bids. The tied bid with the highest
pseudo-random number wins the tiebreaker and becomes the provisionally
winning bid. The remaining bidders, as well as the provisionally
winning bidder, can submit higher bids in subsequent rounds. However,
if the auction were to end with no other bids being placed, the winning
bidder would be the one that placed the provisionally winning bid. If
the construction permit receives any bids in a subsequent round, the
provisionally winning bid again will be determined by the highest bid
amount received for the construction permit.

H. Bid Removal and Bid Withdrawal

46. Bid Removal. The FCC auction bidding system allows each bidder
to remove any of the bids it placed in a round before the close of that
round. By removing a bid placed within a round, a bidder effectively
unsubmits the bid. In contrast to the bid withdrawal provisions
described below, a bidder removing a bid placed in the same round is
not subject to a withdrawal payment. Once a round closes, a bidder may
no longer remove a bid. Consistent with the design of the bidding
system, bidders in Auction 111 would be permitted to remove bids placed
in a round before the close of that round.
47. Bid Withdrawal. OEA and MB propose not to permit bidders in
Auction 111 to withdraw bids. When permitted in an auction, bid
withdrawals provide a bidder with the option of withdrawing bids placed
in prior rounds that have become provisionally winning bids. A bidder
would be able to withdraw its provisionally winning bids using the
withdraw function in the FCC auction bidding system. A bidder that
withdraws its provisionally winning bid(s), if permitted, is subject to
the bid withdrawal payment provisions of the Commission's rules. 47 CFR
1.2104(g), 1.2109.
48. The Commission has recognized that bid withdrawals may be a
helpful tool in certain circumstances for bidders seeking to
efficiently aggregate licenses or implement backup strategies. The
Commission has also acknowledged that allowing bid withdrawals may
encourage insincere bidding or increased opportunities for undesirable
strategic bidding in certain circumstances. The Commission stated that
this discretion should be exercised assertively, with consideration of
limiting the number of rounds in which bidders may withdraw bids, and
preventing bidders from bidding on a particular market if a bidder is
abusing the Commission's bid withdrawal procedures. In managing the
auction, therefore, OEA and MB have discretion to limit the number of
withdrawals to prevent bidding abuses.
49. Based on this guidance and on experience with past auctions of

[[Page 37979]]

broadcast construction permits, OEA and MB propose to prohibit bidders
from withdrawing any bid after the close of the round in which that bid
was placed. OEA and MB make this proposal in light of the site-specific
nature and wide geographic dispersion of the permits available in this
auction, which suggests that potential applicants for this auction may
have fewer incentives to aggregate permits through the auction process
(as compared with bidders in many auctions of wireless licenses). Thus,
OEA and MB believe that it is unlikely that bidders will have a need to
withdraw bids in this auction. Further, bid withdrawals, particularly
if they were made late in this auction, could result in delays in
licensing new broadcast stations and attendant delays in the offering
of new broadcast service to the public. OEA and MB comment on this
proposal to prohibit bid withdrawals in Auction 111. Commenters
advocating alternative approaches should support their arguments by
taking into account the construction permits offered, the impact of
auction dynamics and the pricing mechanism, and the effects on the
bidding strategies of other bidders.

V. Tutorial and Additional Information for Applicants

50. The Commission intends to provide additional information on the
bidding system and to offer demonstrations and other educational
opportunities for applicants in Auction 111 to familiarize themselves
with the FCC auction application system and the auction bidding system.
For example, OEA and MB intend to release an online tutorial that will
help applicants understand the procedures to be followed in the filing
of their auction short-form applications (FCC Form 175) and on the
bidding procedures for Auction 111.

VI. Procedural Matters

A. Paperwork Reduction Act

51. The Office of Management and Budget (OMB) has approved the
information collections in the Application to Participate in an FCC
Auction, FCC Form 175, OMB Control No. 3060-0600. The Auction 111
Comment Public Notice does not propose new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. Therefore, it does not contain any new or
modified information collection burden for small business concerns with
fewer than 25 employees pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198.

B. Supplemental Initial Regulatory Flexibility Analysis

52. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), 5 U.S.C. 603, the Commission prepared Initial Regulatory
Flexibility Analyses (IRFAs) in connection with the Broadcast
Competitive Bidding Notice of Proposed Rulemaking (NPRM), 62 FR 65392,
December 12, 1997, and other Commission NPRMs (collectively,
Competitive Bidding NPRMs) pursuant to which Auction 111 will be
conducted. Final Regulatory Flexibility Analyses (FRFAs) likewise were
prepared in the Broadcast Competitive Bidding Order, 63 FR 48615,
September 11, 1998, and other Commission rulemaking orders
(collectively, Competitive Bidding Orders) pursuant to which Auction
111 will be conducted. The Office of Economics and Analytics (OEA), in
conjunction with the Media Bureau (MB), has prepared a Supplemental
Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the
possible significant economic impact on small entities of the policies
and rules addressed in the Auction 111 Comment Public Notice, to
supplement the Commission's Initial and Final Regulatory Flexibility
Analyses completed in the Competitive Bidding NPRMs and the Competitive
Bidding Orders pursuant to which Auction 111 will be conducted. Written
public comments are requested on the Supplemental IRFA. Comments must
be identified as responses to the Supplemental IRFA and must be filed
by the same filing deadlines for comments specified in the DATES
section of this document. The Commission will send a copy of the
Auction 111 Comment Public Notice, including the Supplemental IRFA, to
the Chief Counsel for Advocacy of the Small Business Administration
(SBA).
53. Need for, and Objectives of, the Public Notice. The proposed
procedures for the conduct of Auction 111 as described in the Auction
111 Comment Public Notice would constitute the more specific
implementation of the competitive bidding rules contemplated by parts 1
and 73 of the Commission's rules, adopted by the Commission in multiple
notice-and-comment rulemaking proceedings, including the Commission's
establishing in the underlying rulemaking orders additional procedures
to be used on delegated authority. More specifically, the Auction 111
Comment Public Notice seeks comment on proposed procedures, terms and
conditions governing Auction 111, and the post-auction application and
payment processes, as well as seeking comment on the minimum opening
bid amounts for the specified construction permits, and is fully
consistent with the underlying rulemaking orders, including the
Broadcast Competitive Bidding Order and other relevant competitive
bidding orders.
54. The Auction 111 Comment Public Notice provides notice of
proposed auction procedures and adequate time for Auction 111
applicants to comment on those proposed procedures. To promote the
efficient and fair administration of the competitive bidding process
for all Auction 111 participants, including small businesses, the
Auction 111 Comment Public Notice seeks comment on the following
proposed procedures: Establishment of an interim bid withdrawal
percentage of 20% of the withdrawn bid in the event bid withdrawals are
allowed in Auction 111; Establishment of an additional default payment
of 20% under Sec. 1.2104(g)(2) in the event that a winning bidder
defaults or is disqualified after the auction; use of a simultaneous
multiple-round auction format, consisting of sequential bidding rounds
with a simultaneous stopping rule (with discretion to exercise
alternative stopping rules under certain circumstances); retention by
OEA, in conjunction with MB, to exercise its discretion to delay,
suspend, or cancel bidding in Auction 111 for any reason that affects
the ability of the competitive bidding process to be conducted fairly
and efficiently; retention by OEA of discretion to adjust the bidding
schedule in order to manage the pace of Auction 111; a specific minimum
opening bid amount for each construction permit available in Auction
111; a specific number of bidding units for each construction permit; a
specific upfront payment amount for each construction permit;
establishment of a bidder's initial bidding eligibility in bidding
units based on that bidder's upfront payment through assignment of a
specific number of bidding units for each construction permit; use of
an activity requirement so that bidders must bid actively during the
auction rather than waiting until late in the auction before
participating; a single stage auction in which a bidder is required to
be active on 100% of its bidding eligibility in each round of the
auction; provision of three activity waivers for each qualified bidder
to allow it to preserve eligibility during the course of the auction;
use of minimum

[[Page 37980]]

acceptable bid amounts and additional bid increments, along with a
proposed methodology for calculating such amounts, while retaining
discretion to change their methodology if circumstances dictate; bid
removal procedures; and proposal to allow for bid removals (before the
close of a bidding round) but not allow bid withdrawals (after the
close of a bidding round).
55. Legal Basis. The Commission's statutory obligations to small
businesses participating in a spectrum auction under the Act are found
in sections 309(j)(3)(B) and 309(j)(4)(D). The statutory basis for the
Commission's competitive bidding rules is found in various provisions
of the Act, including 47 U.S.C. 154(i), 301, 303(e), 303(f), 303(r),
304, 307, and 309(j). The Commission has established a framework of
competitive bidding rules pursuant to which it has conducted auctions
since the inception of the auction program in 1994 and would conduct
Auction 111. The Commission has directed that OEA and MB, under
delegated authority, seek comment on a variety of auction-specific
procedures prior to the start of bidding in each auction.
56. Description and Estimate of the Number of Small Entities to
Which the Proposed Procedures Will Apply. The RFA directs agencies to
provide a description of and, where feasible, an estimate of the number
of small entities that may be affected by the proposed procedures, if
adopted. The RFA generally defines the term small entity as having the
same meaning as the terms small business, small organization, and small
government jurisdiction. 5 U.S.C. 601(6). In addition, the term small
business has the same meaning as the term small business concern under
the Small Business Act. A small business concern is one which: (1) Is
independently owned and operated, (2) is not dominant in its field of
operation, and (3) satisfies any additional criteria established by the
SBA. 15 U.S.C. 632.
57. The specific procedures and minimum opening bid amounts on
which comment is sought in the Auction 111 Comment Public Notice will
directly affect all applicants participating in Auction 111, in which
applicant eligibility is closed. Therefore, the specific competitive
bidding procedures and minimum opening bid amounts described in the
Auction 111 Comment Public Notice will affect only the 24 individuals
and entities listed in Attachment A to the Auction 111 Comment Public
Notice and that are the only parties eligible to complete the remaining
steps to become qualified to bid in Auction 111. These specific 24
Auction 111 individuals and entities include firms of all sizes.
58. The Television Broadcasting Economic Census category comprises
establishments primarily engaged in broadcasting images together with
sound. These establishments operate television broadcast studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in turn
broadcast the programs to the public on a predetermined schedule.
Programming may originate in their own studio, from an affiliated
network, or from external sources. The SBA has created the following
small business size standard for such businesses: Those having $41.5
million or less in annual receipts. 13 CFR 121.201, NAICS Code 515120.
The 2012 Economic Census reports that 751 firms in this category
operated that entire year. Of that number, 656 had annual receipts of
$25,000,000 or less, and 25 had annual receipts between $25,000,000 and
$49,999,999. Based on this data OEA and MB therefore estimate that the
majority of commercial television broadcasters are small entities under
the applicable SBA size standard.
59. Additionally, the Commission has estimated the number of
licensed commercial television stations to be 1,374. Of this total,
1,269 stations (or about 92.5%) had revenues of $41.5 million or less,
according to Commission staff review of the BIA Kelsey Inc. Media
Access Pro Television Database (BIA) in April 20, 2021 and therefore
these stations qualify as small entities under the SBA definition.
60. In addition, the Commission has estimated the number of
licensed noncommercial educational (NCE) television stations to be 384.
These stations are non-profit, and therefore considered to be small
entities.
61. There are also 2,371 LPTV stations, including Class A stations,
and 3,306 TV translators. Given the nature of these services, OEA and
MB presume that all of these entities qualify as small entities under
the SBA small business size standard.
62. The SBA size standard data, however, does not enable a
meaningful estimate of the number of small entities that may
participate in Auction 111.
63. In assessing whether a business entity qualifies as small under
the SBA definition, 13 CFR 121.103(a)(1), business control affiliations
must be included. Business concerns are affiliates of each other when
one concern controls or has the power to control the other, or a third
party or parties controls or has the power to control both. This
estimate therefore likely overstates the number of small entities that
might be affected by this auction because the revenue figures on which
this estimate is based does not include or aggregate revenues from
affiliated companies. Moreover, the definition of small business also
requires that an entity not be dominant in its field of operation and
that the entity be independently owned and operated. The estimate of
small businesses to which Auction 111 competitive bidding rules may
apply does not exclude any television station from the definition of a
small business on these bases and is therefore over-inclusive to that
extent. Furthermore, OEA and MB are unable at this time to define or
quantify the criteria that would establish whether a specific LPTV
station or TV translator is dominant in its field of operation.
64. Further, it is not possible to accurately develop an estimate
of how many of the 24 entities in this auction are small businesses
based on the number of small entities that applied to participate in
prior broadcast auctions, because that information is not collected
from applicants for broadcast auctions in which bidding credits are not
based on an applicant's size (as is the case in auctions of licenses
for wireless services). OEA and MB conclude, however, that the majority
of Auction 111 eligible bidders would likely meet the SBA's definition
of a small business concern.
65. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities. The Commission designed the
auction application process itself to minimize reporting and compliance
requirements for applicants, including small business applicants. To
participate in this auction parties will file streamlined, short-form
applications in which they certify under penalty of perjury as to their
qualifications. Eligibility to participate in bidding is based on an
applicant's short-form application and certifications, as well as its
upfront payment. In the second phase of the process, there are
additional compliance requirements for winning bidders. Thus, a small
business that fails to become a winning bidder does not need to satisfy
additional requirements of a winning bidder.
66. OEA and MB do not expect the processes and procedures proposed
in the Auction 111 Comment Public Notice will require small entities to
hire attorneys, engineers, consultants, or other professionals to
participate in

[[Page 37981]]

Auction 111 and comply with the procedures ultimately adopted because
of the information, resources, and guidance the Commission makes
available to potential and actual participants. For example, the
Commission intends to release an online tutorial that will help
applicants understand the procedures for filing the auction short-form
application (FCC Form 175). The Commission also intends to make
information on the bidding system available and to offer demonstrations
and other educational opportunities for applicants in Auction 111 to
familiarize themselves with the FCC auction application system and the
auction bidding system. By providing these resources as well as the
resources discussed below, OEA and MB expect small business entities
who use the available resources to experience lower participation and
compliance costs. Nevertheless, while OEA and MB cannot quantify the
cost of compliance with the proposed procedures, they do not believe
that the costs of compliance will unduly burden small entities that
choose to participate in the auction because the proposals for Auction
111 are similar in many respects to the procedures in recent auctions
conducted by the Commission.
67. Steps Taken to Minimize the Significant Economic Impact on
Small Entities, and Significant Alternatives Considered. The RFA
requires an agency to describe any significant, specifically small
business, alternatives that it has considered in reaching its proposed
approach, which may include the following four alternatives (among
others): (1) The establishment of differing compliance or reporting
requirements or timetables that take into account the resources
available to small entities; (2) the clarification, consolidation, or
simplification of compliance and reporting requirements under the rule
for such small entities; (3) the use of performance rather than design
standards; and (4) an exemption from coverage of the rule, or any part
thereof, for such small entities. 5 U.S.C. 603(c)(1)-(4).
68. The Commission has taken steps to minimize any economic impact
of its auction procedures on small businesses through, among other
things, the many resources it provides potential auction participants.
Small entities and other auction participants may seek clarification of
or guidance on complying with competitive bidding rules and procedures,
reporting requirements, and the FCC's auction bidding system. An FCC
Auctions Hotline provides access to Commission staff for information
about the auction process and procedures. The FCC Auctions Technical
Support Hotline is another resource which provides technical assistance
to applicants, including small entities, on issues such as access to or
navigation within the electronic FCC Form 175 and use of the FCC's
auction bidding system. Small entities may also use the web-based,
interactive online tutorial produced by Commission staff to familiarize
themselves with auction procedures, filing requirements, bidding
procedures, and other matters related to an auction.
69. The Commission also makes various databases and other sources
of information, including the Auctions program websites and copies of
Commission decisions, available to the public without charge, providing
a low-cost mechanism for small entities to conduct research prior to
and throughout the auction. Prior to and at the close of Auction 111,
the Commission will post public notices on the Auctions website, which
articulate the procedures and deadlines for the auction. The Commission
makes this information easily accessible and without charge to benefit
all Auction 111 applicants, including small entities, thereby lowering
their administrative costs to comply with the Commission's competitive
bidding rules.
70. Prior to the start of bidding, eligible bidders will be given
an opportunity to become familiar with auction procedures and the
bidding system by participating in a mock auction. Further, the
Commission intends to conduct Auction 111 electronically over the
internet using its web-based auction system that eliminates the need
for bidders to be physically present in a specific location. Qualified
bidders also have the option to place bids by telephone. These
mechanisms are made available to facilitate participation in Auction
111 by all eligible bidders and may result in significant cost savings
for small business entities that use these alternatives. Moreover, the
adoption of bidding procedures in advance of the auction, consistent
with statutory directive, is designed to ensure that the auction will
be administered predictably and fairly for all participants, including
small entities.
71. Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rules. None.

C. Deadlines and Filing Procedures

72. Interested parties may file comments or reply comments on or
before the dates indicated in the DATES section of this summary in AU
Docket No. 21-248. Comments may be filed using the Commission's
Electronic Comment Filing System (ECFS).
73. Ex Parte Requirements. This proceeding has been designated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. 47 CFR 1.1200(a), 1.1206. Persons making ex parte
presentations must file a copy of any written presentation or a
memorandum summarizing any oral presentation within two business days
after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations
are reminded that memoranda summarizing the presentations must (1) list
all persons attending or otherwise participating in the meeting at
which the ex parte presentation was made, and (2) summarize all data
presented and arguments made during the presentation. If the
presentation consisted in whole or in part of the presentation of data
or arguments already reflected in the presenter's written comments,
memoranda, or other filings in the proceeding, the presenter may
provide citations to such data or arguments in his or her prior
comments, memoranda, or other filings (specifying the relevant page
and/or paragraph numbers where such data or arguments can be found) in
lieu of summarizing them in the memorandum. Documents shown or given to
the Commission staff during ex parte meetings are deemed to be written
ex parte presentations and must be filed consistent with section Sec.
1.1206(b). In proceedings governed by Sec. 1.49(f) or for which the
Commission has made available a method of electronic filing, written ex
parte presentations and memoranda summarizing oral ex parte
presentations, and all attachments thereto, must be filed through the
Electronic Comment Filing System available for that proceeding, and
must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission's ex parte rules.

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2021-15146 Filed 7-16-21; 8:45 am]
BILLING CODE 6712-01-P

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