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Rule2021-21559

Auction of Construction Permits for Low Power Television and TV Translator Stations; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 111

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Published

October 5, 2021

Issuing agencies

Federal Communications Commission

Abstract

This document summarizes the procedures, deadlines, and upfront payment and minimum opening bid amounts for the upcoming auction of construction permits for new or modified low power television and TV translator stations. The Auction 111 Procedures Public Notice summarized here is intended to familiarize potential applicants with details of the procedures, terms, and conditions governing participation in Auction 111, as well as an overview of the post-auction application and payment process.

Full Text

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<title>Federal Register, Volume 86 Issue 190 (Tuesday, October 5, 2021)</title>
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[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Rules and Regulations]
[Pages 54852-54871]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21559]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 73, and 74

[AU Docket No. 21-284; DA 21-1176; FR ID 50840]

Auction of Construction Permits for Low Power Television and TV
Translator Stations; Notice and Filing Requirements, Minimum Opening
Bids, Upfront Payments, and Other Procedures for Auction 111

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes the procedures, deadlines, and
upfront payment and minimum opening bid amounts for the upcoming
auction of construction permits for new or modified low power
television and TV translator stations. The Auction 111 Procedures
Public Notice summarized here is intended to familiarize potential
applicants with details of the procedures, terms, and conditions
governing participation in Auction 111, as well as an overview of the
post-auction application and payment process.

DATES: Applications to participate in Auction 111 must be submitted
before 6 p.m. Eastern Time (ET) on November 9, 2021. Upfront payments
for Auction 111 must be received by 6 p.m. ET on January 25, 2022.
Bidding in Auction 111 is scheduled to start on February 23, 2022.

FOR FURTHER INFORMATION CONTACT:
General Auction 111 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
Auction 111 Legal Information: Lyndsey Grunewald or Scott Mackoul
at (202) 418-0660.
Licensing Information: Shaun Maher at (202) 418-2324 or Mark
Colombo at (202) 418-7611.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
document, Auction 111 Procedures Public Notice, in AU Docket No. 21-
284; DA 21-1176, released on September 21, 2021. The complete text of
this document, including attachments and any related document, 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 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#97d1d4d4a2a7a3d7f1f4f4b9f0f8e1">[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 111 Procedures Public Notice, the Office of
Economics and Analytics (OEA) and the Media Bureau (MB) establish the
procedures to be used for Auction 111, 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). Auction 111 is a closed auction; only those parties listed
in Attachment A to the Auction 111 Procedures Public Notice are
eligible to file applications to participate in Auction 111 and to
complete the remaining steps to become qualified to bid.

B. Background and Relevant Authority

2. Auction 111 will resolve groups of pending mutually exclusive
(MX) engineering proposals for up to 17 new or modified LPTV/translator
station construction permits. The MX groups and engineering proposals
listed in Attachment A to the Auction 111 Procedures 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 47 CFR
74.787(a)(3) 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.
3. 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 Procedures 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. The remaining
MX group listed in Attachment A to the Auction 111 Procedures Public
Notice consists of two displacement relief applications filed pursuant
to a special displacement application filing window opened in

[[Page 54853]]

2018 by the Incentive Auction Task Force and MB for eligible licensees
and permittees of LPTV/translator stations displaced by Auction 1000.
4. 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
Procedures 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.
5. On July 9, 2021, OEA and MB released the Auction 111 Comment
Public Notice, 86 FR 37972, July 19, 2021, seeking comment on
competitive bidding procedures to be used in Auction 111 to resolve the
applications that remained MX after this settlement period. OEA and MB
received no comments in response to the Auction 111 Comment Public
Notice. In the Auction 111 Procedures Public Notice, OEA and MB
resolved all open issues raised in the Auction 111 Comment Public
Notice. Auction 111 will proceed pursuant to the procedures described
in the Auction 111 Procedures Public Notice.
6. Other Commission rules and decisions provide the underlying
authority for the procedures OEA and MB adopted for Auction 111. 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. Applicants should also familiarize
themselves with the Commission's rules relating to the LPTV and TV
translator services, as well as Commission orders concerning
competitive bidding for broadcast construction permits. Applicants must
also be thoroughly familiar with the procedures, terms and conditions
contained in the Auction 111 Procedures Public Notice and any future
public notices that may be released in this proceeding or that relate
to the construction permits being offered in Auction 111 or the LPTV/
translator services.
7. 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
information to applicants. Pursuant to the Commission's rules, OEA and
MB 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 111.

C. Construction Permits and Parties Eligible To Participate in Auction
111

8. Attachment A to the Auction 111 Procedures Public Notice lists
the pending applications for LPTV/translator station construction
permits that will be assigned 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 an application to participate in the auction (FCC
Form 175), referred to as a short-form application. Only the LPTV/
translator station applicants listed in Attachment A to the Auction 111
Procedures Public Notice are eligible to file a short-form application
for Auction 111. An applicant listed in Attachment A to the Auction 111
Procedures Public Notice may become qualified to bid in Auction 111
only if it complies with the auction filing, qualification, and payment
requirements described in the Auction 111 Procedures Public Notice, 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 Procedures Public Notice. As noted in 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
Procedures Public Notice.
9. A copy of the Auction 111 Procedures Public Notice has been sent
by email and overnight delivery to the contact address listed on each
LPTV/translator station application listed in Attachment A of the
Auction 111 Procedures 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
obligated to maintain the accuracy of this information pursuant to 47
CFR 1.65. Each party that is eligible to file a short-form application
in Auction 111 should 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. These addresses should also
be locations that are capable of accepting packages that require
signatures.
10. Section 73.3572(b) of the Commission's rules prohibits the
transfer or assignment of an application for a new LPTV/translator
station construction permit. Any change in ownership to an applicant
for a new LPTV/translator station construction permit listed in
Attachment A to the Auction 111 Procedures Public Notice that has
resulted in a change in control of the applicant, or a situation where
the original party or parties to the application do not retain more
than 50 percent ownership interest in the application as originally
filed, is considered a major amendment to the application and will
result in the application being considered newly filed. If the LPTV/
translator station application is considered newly-filed, the applicant
will not be eligible to file a short-form application for Auction 111
and its pending application will be dismissed.
11. In accordance with the Commission's rules, the LPTV/translator
station applicants listed in Attachment A to the Auction 111 Procedures
Public Notice may withdraw or make minor amendments to their pending
LPTV/translator station applications or enter into legal or engineering
settlement agreements until 6:00 p.m. ET on November 9, 2021, the
deadline for filing short-form applications in Auction 111. As
mentioned in the Auction 111 Comment Public Notice, if such actions (1)
are submitted prior to the short-form application filing deadline, (2)
are fully in accordance with the Communications Act of 1934, as amended
(the Act) and the Commission's rules, as determined by Commission
staff, and (3) completely resolve the mutual exclusivity, then the
subject MX group will be removed from Auction 111 and the remaining
engineering proposal(s) will be processed under standard licensing

[[Page 54854]]

procedures. Additional details regarding making filings to resolve
mutual exclusivity prior to the short-form application filing deadline
are provided below.
12. Shortly after the short-form application filing deadline, OEA
and MB will release a public notice identifying the remaining mutually
exclusive applications that will be resolved through competitive
bidding in Auction 111. As provided in 47 CFR 73.5002(d), these
mutually exclusive applicants will then be given one final limited
opportunity to resolve mutual exclusivity by the filing of technical
amendments, dismissal requests, and requests for approval of universal
settlements. Due to the prohibited communications rule, which starts at
the short-form application filing deadline, applicants in Auction 111
will not be able to communicate with each other for the purpose of
resolving conflicts outside of this limited settlement period. As noted
in 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 this limited settlement opportunity, an applicant in
Auction 111 cannot obtain a construction permit without placing a bid,
even if no other auction applicant for that particular construction
permit becomes qualified to bid or in fact places a bid.

II. Applying To Participate in Auction 111

A. Resolving Mutual Exclusivity Prior to the Short-Form Application
Filing Deadline

13. The parties listed in Attachment A to the Auction 111
Procedures Public Notice may avoid resolving their mutual exclusivity
through competitive bidding by instead resolving their mutual
exclusivity, prior to the short-form application filing deadline, by
means of requests to dismiss the pending LPTV/translator station
applications, unilateral engineering amendments to such applications,
legal settlement, or engineering settlement. Any unilateral amendments
or amendments pursuant to a settlement agreement made to the pending
LPTV/translator station applications must be minor, as defined by the
applicable rules, and must not create new mutual exclusivities or
application conflicts. Any legal or engineering settlement agreements
must be filed with the Commission for approval and must include the
documentation required by 47 CFR 73.3525. All amendments to pending
applications and any requests for approval of settlement agreements, as
well as accompanying documentation, must be submitted by filing an
amended FCC Form 2100--Schedule C in the Media Bureau's Licensing and
Management System (LMS) by 6:00 p.m. ET on November 9, 2021. OEA and MB
encourage the parties listed in Attachment A to the Auction 111
Procedures Public Notice that are interested in resolving their mutual
exclusivity to initiate and complete negotiations, and make any
necessary filings, well ahead of the short-form application filing
deadline. Applicants, however, should avoid both entering into a
settlement agreement for a construction permit prior to the short-form
application deadline and filing a short-form application covering that
same construction permit. Such a situation could raise issues with
regard to the applicant's compliance with the prohibited communications
rule.
14. As mentioned above, if a unilateral engineering amendment or
legal or engineering settlement (1) is submitted for approval in
accordance with the procedures described above by 6:00 p.m. ET on
November 9, 2021, (2) is fully in accordance with the Act and the
Commission's rules, as determined by Commission staff, and (3)
completely resolves the mutual exclusivity, then the subject MX group
will be removed from Auction 111 and the remaining engineering
proposal(s) will be processed under standard licensing procedures. If
no such filing is made, and therefore the engineering proposals in an
MX group remain mutually exclusive as of the short-form application
filing deadline, then 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, MB will dismiss the
mutually exclusive long-form application of any party eligible to
participate in Auction 111 that fails to submit a short-form
application. Accordingly, if only one member of an MX group submits a
short-form application, and thus all other long-form applications in
that MX group are dismissed, that short-form application is not
mutually exclusive for auction purposes and the relevant construction
permit will not be included in Auction 111. In that case, the
engineering proposal of the party that submitted a short-form
application will be treated as a singleton and processed under standard
licensing procedures. OEA and MB note that, 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. If a party to a settlement agreement files a short-form
application, that settlement agreement may need to be disclosed in its
short-form application pursuant to 47 CFR 1.2105(a)(2)(viii) or may be
a prohibited joint bidding agreement pursuant to 47 CFR
1.2105(a)(2)(ix).

B. General Information Regarding Short-Form Applications

15. 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 licenses or permits. 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
111 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 111 is determined based on an applicant's short-
form application and certifications and on the applicant's upfront
payment. After bidding closes, in the second phase of the process, each
winning bidder in Auction 111 must file an amendment to its pending
long-form application listed in Attachment A to the Auction 111
Procedures Public Notice for each permit it wins in the auction.
16. A party seeking to participate in Auction 111 must file an FCC
Form 175 electronically via the Auction Application System prior to
6:00 p.m. ET on November 9, 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
will be used to determine whether the applicant is eligible for the
claimed bidding credit. The Auction 111 Procedures Public Notice
describes more fully the information disclosures and certifications
required in the short-form application. An applicant that files an FCC
Form 175 for Auction 111 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--6:00 p.m. ET on November 9, 2021.
17. An Auction 111 applicant bears full responsibility for
submitting an accurate, complete, and timely short-

[[Page 54855]]

form application. Pursuant to the Commission's competitive bidding
rules, you must make a series of certifications under penalty of
perjury on your FCC Form 175 related to the information provided in
your application and your participation in the auction, and you must
confirm that you are legally, technically, financially, and otherwise
qualified to hold a license. If you fail to make the required
certifications in your FCC Form 175 by the filing deadline, then your
application will be deemed unacceptable for filing and cannot be
corrected after the filing deadline.
18. Submitting an FCC Form 175 (and any amendments thereto)
constitutes a representation by the certifying official that you are an
authorized representative of the applicant with authority to bind the
applicant, that you have 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.
19. Applicants are cautioned that requests for confidential
treatment of required information submitted in FCC Form 175 will not be
routinely granted because this information bears on each applicant's
qualifications. 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.
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 111 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 construction permits
selected. 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. Additional details regarding certain information required to be
submitted in the FCC Form 175 are provided in the Auction 111
Procedures Public Notice. You should also consult the Commission's
rules to ensure that all required information is included in your
short-form application. To the extent the information in the Auction
111 Procedures Public Notice does not address your specific operating
structure, or if you need additional information or guidance concerning
the described disclosure requirements, you should review the
educational materials for Auction 111 (see the Education section of the
Auction 111 website at <a href="http://www.fcc.gov/auction/111">www.fcc.gov/auction/111</a>) and use the contact
information provided in the Auction 111 Procedures Public Notice to
consult with Commission staff to better understand the information you
must submit in your short-form application.

C. Authorized Bidders

23. An applicant must designate at least one authorized bidder, and
no more than three, in its FCC Form 175. The Commission's rules
prohibit an individual from serving as an authorized bidder for more
than one auction applicant or being listed as an authorized bidder in
more than one FCC Form 175 application.

D. Permit Selection

24. Only those parties listed in Attachment A to the Auction 111
Procedures Public Notice are eligible to submit short-form applications
and only with regard to the construction permit(s) covered by the
party's pending, long-form application(s) listed in Attachment A to the
Auction 111 Procedures Public Notice. For each eligible party, the
Auction Application System will only display on your FCC Form 175 the
construction permits for which you are eligible to apply to bid. You
must, however, affirmatively select on your FCC Form 175 the
construction permit(s) on which you want to bid. You should carefully
review and verify your construction permit selections before the
deadline for submitting your FCC Form 175, because permit selections
cannot be changed after the initial auction application filing
deadline. The FCC auction bidding system will not accept bids on
construction permits that were not selected on the bidder's FCC Form
175.

E. 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 LPTV/TV translator station construction
permits 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 most circumstances, if a party filing a
short-form application has entered into a settlement agreement
regarding a construction permit listed in Attachment A to the Auction
111 Procedures Public Notice, regardless of whether the party has
selected that construction permit on its short-form application or not,
that settlement agreement should be identified and briefly described in
its FCC Form 175. 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 it controls) is a party. If, after the
FCC Form 175 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.

[[Page 54856]]

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 construction permits being auctioned that addresses or
communicates, directly or indirectly, bidding at the auction, bidding
strategies, including arrangements regarding price or the specific
construction permits on which to bid, and any such arrangement relating
to the post-auction market structure. The general prohibition on joint
bidding arrangements excludes certain agreements, including those that
are solely operational in nature, as defined in 47 CFR
1.2105(a)(2)(ix)(A)-(C).
28. 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.
29. 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.
30. Applicants should bear in mind that a winning bidder will be
required to disclose in its post-auction amendment to its pending long-
form 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 settlement agreement, 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 permits being auctioned that address or communicate
directly or indirectly bids (including specific prices), bidding
strategies (including the specific permits 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.

F. Ownership Disclosure Requirements

31. Each applicant must comply with the ownership disclosure
requirements and provide information required by 47 CFR 1.2105 and
1.2112. 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 47 CFR 1.2105 and 1.2112. These
interest holders may differ from the types of attributable interest
holders that are required to be reported by broadcast applicants under
part 73 of the Commission's rules in conjunction with licensing and
assignment and transfer of facilities or reporting of ownership
information, such as insulated interest holders and holders of non-
voting stock/equity in the applicant. Each applicant is responsible for
ensuring that information submitted in its short-form application is
complete and accurate.
32. 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. 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.

G. Foreign Ownership Disclosure Requirements

33. Section 310 of the Act requires the Commission to review
foreign investment in radio station licenses and imposes specific
restrictions on who may hold certain types of radio licenses. 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 47 U.S.C. 310(b), then it may seek to
participate in Auction 111 only if it has filed a petition for
declaratory ruling with the Media Bureau 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 47 U.S.C. 310 or has filed a petition for
declaratory ruling requesting Commission approval to exceed the
applicable foreign ownership limit or benchmark in 47 U.S.C. 310(b)
that is pending before, or has been granted by, the Commission.

H. Prohibited Communications and Compliance With Antitrust Laws

34. The rules prohibiting certain communications set forth in 47
CFR 1.2105(c) and 73.5002(d) and (e) apply to each applicant that files
an FCC Form 175 in Auction 111. Section 1.2105(c)(1) of the
Commission's rules provides that, subject to specified exceptions,
after the deadline for filing a short-form application, all applicants
are prohibited from cooperating or collaborating with respect to,
communicating with or disclosing, to each other in any manner the
substance of their own, or each other's, or any other applicant's 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 Sec. 1.2105(c)
35. An applicant for purposes of this rule includes the officers
and directors of the applicant, all controlling interests in the entity
submitting the FCC Form 175, as well as all holders of interests
amounting to 10% or more of that entity. A party that submits an
application becomes an applicant under the rule at the short-form
application filing deadline, and that status does not change based on
later developments, including failure to become a qualified bidder.
2. Prohibition Applies Until Down Payment Deadline
36. The prohibition in 47 CFR 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

[[Page 54857]]

after the auction closes, which will be announced in a future public
notice.
37. After the short-form application filing deadline, OEA and MB
will announce a limited settlement period of no more than two weeks
during which this prohibition may be partially suspended for the
purpose of resolving mutual exclusivity through settlements. Outside of
this limited settlement period, and until this limited settlement
period is announced, the prohibition on certain communications remains
in effect.
3. Scope of Prohibition on Certain Communications; Prohibition on Joint
Bidding Agreements
38. Section 1.2105(c) of the Commission's rules prohibits certain
communications between auction applicants, regardless of whether the
applicants seek permits in the same geographic area or market. The rule
also prohibits any joint bidding arrangement, including arrangements
relating to the permits being auctioned that address or communicate,
directly or indirectly, bidding at the auction, bidding strategies,
including arrangements regarding price or the specific permits 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. An
applicant 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 its application and do not both
relate to the permits 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.
39. 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.
40. Parties subject to 47 CFR 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 determined that, where an individual serves as an
officer or 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 or director, which creates an
apparent violation of the rule.
41. Subject to the limited exceptions described above, 47 CFR
1.2105(c)(1) prohibits applicants from discussing or negotiating
settlement agreements and 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. Moreover, 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, other than settlement agreements,
during the prohibition period, provided that the communications
involved do not relate to both: (1) The licenses or permits being
auctioned and (2) bids or bidding strategies or post-auction market
structure.
42. Accordingly, business discussions and negotiations that are
unrelated to settlement agreements for the construction permits in
Auction 111 or bidding in Auction 111 and that do not convey
information about the bids or bidding strategies of an applicant,
including the post-auction market structure, 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 111 will not violate the
rule. In contrast, communicating, among other things, how a party will
participate, including whether or not a party plans to submit an
upfront payment and the upfront payment amount, specific bid amounts,
and/or whether or not the party is placing bids, would convey bids or
bidding strategies and would be prohibited.
43. While 47 CFR 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.
44. OEA and MB 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.
45. Likewise, when completing a short-form application, each
applicant should avoid any statements or disclosures that may violate
47 CFR 1.2105(c). Applicants also should be mindful that communicating
non-public application or bidding information publicly or privately to
another applicant may violate 47 CFR 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
46. 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 that any third party it
employs for advice pertaining to its bids or bidding

[[Page 54858]]

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.
47. As the Commission has noted in other broadcast 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.
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.
48. Applicants may discuss the short-form application or bids for
specific permits 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 to multiple
applicants regarding their applications after the short-form
application deadline, provided that no information pertaining to bids
or bidding strategies is conveyed to that individual from any of the
applicants the individual advises. No person may serve as an authorized
bidder for more than one applicant in Auction 111.
49. 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 this 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 violation of 47 CFR
1.2105. Similarly, an FCC Form 175 applicant's public statement of
intent not to place bids during bidding in Auction 111 could also
violate the rule.
5. Section 1.2105(c) Certifications
50. By electronically submitting its FCC Form 175, each applicant
in Auction 111 certifies its compliance with 47 CFR 1.2105(c) and
73.5002(d). 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
51. Section 1.2105(c)(4) requires that any applicant that makes or
receives a communication that appears to violate 47 CFR 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
52. A party reporting any information or communication pursuant to
47 CFR 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 47 CFR 1.2105(c). For example, reporting a prohibited
communication through ECFS or another Commission filing system that
allows public access to filed materials could violate the rule by
communicating prohibited information to other parties covered by the
rule.
53. An applicant 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 rule is designed to minimize the risk of inadvertent
dissemination of information in such reports. Any reports required by
47 CFR 1.2105(c) must be filed consistent with the instructions set
forth in the Auction 111 Procedures Public Notice. For Auction 111,
such reports must be filed with the Chief of the Auctions Division,
OEA, by the most expeditious means available. Any such report should be
submitted by email to the Auctions Division Chief at the following
email address: <a href="/cdn-cgi/l/email-protection#c0a1b5a3b4a9afaef1f1f180a6a3a3eea7afb6">[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#7c1d091f081513124d4d4d3c1a1f1f521b130a">[email&#160;protected]</a> or (202) 418-0660 for guidance.
54. Given the potential competitive sensitivity of information in
such a report, a party seeking to report 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 47 CFR 0.459. Such parties should
coordinate with the Auctions Division staff about the procedures for
submitting reports of prohibited communications.
8. Winning Bidders Must Disclose Terms of Agreements
55. Each applicant that is a winning bidder will be required to
provide, as part of its amendment to its long-form application, any
agreement or arrangement relating to the competitive bidding process
that it has entered into and a summary of the specific terms,
conditions, and parties involved in that agreement. Such agreements
must have been entered into prior to the filing deadline for short-form
applications. This disclosure requirement applies to any settlement
agreement, 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. Antitrust Laws
56. 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 47 CFR 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.

[[Page 54859]]

57. To the extent the Commission becomes aware of specific
allegations that suggest that violations of the federal antitrust laws
may have occurred, the Commission may refer such allegations to the
United States Department of Justice for investigation. If an applicant
is found to have violated the antitrust laws or the Commission's rules
in connection with its participation in the competitive bidding
process, then it may be subject to a forfeiture and may be prohibited
from participating further in Auction 111 and in future auctions, among
other sanctions.

I. New Entrant Bidding Credit

58. To promote the objectives of 47 U.S.C. 309(j) and further its
long-standing commitment to the diversification of broadcast facility
ownership, the Commission provides a tiered new entrant bidding credit
for broadcast auction applicants with no, or very few, other media
interests.
59. Applicants that qualify for the new entrant bidding credit are
eligible for a bidding credit in this auction that represents the
amount by which a bidder's winning bid is discounted. Eligibility for
the new entrant bidding credit must be specified in an applicant's
short-form application, which establishes that applicant's maximum
bidding credit eligibility for Auction 111. The size of a new entrant
bidding credit depends on the number of ownership interests in other
media of mass communications that are attributable to the bidder-entity
and its attributable interest-holders. A 35% bidding credit will be
given to a winning bidder if it, and/or any individual or entity with
an attributable interest in the winning bidder, has no attributable
interest in any other media of mass communications, as defined in 47
CFR 73.5008. A 25% bidding credit will be given to a winning bidder if
it, and/or any individual or entity with an attributable interest in
the winning bidder, has an attributable interest in no more than three
mass media facilities, as defined in 47 CFR 73.5008. No bidding credit
will be given if any of the commonly owned mass media facilities serve
the same area as the broadcast permit proposed in the auction, as
defined in 47 CFR 73.5007(b), or if the winning bidder, and/or any
individual or entity with an attributable interest in the winning
bidder, has attributable interests in more than three mass media
facilities.
60. Bidding credits are not cumulative; qualifying applicants
receive either the 25% or the 35% bidding credit, but not both.
61. The interests of the applicant, and of any individuals or
entities with an attributable interest in the applicant, in other media
of mass communications are considered when determining an applicant's
eligibility for the new entrant bidding credit. Attributable interests
are defined in 47 CFR 73.3555 and note 2 of that section. In Auction
111, the bidder's attributable interests, and thus, its maximum new
entrant bidding credit eligibility, are determined as of the short-form
application filing deadline. An applicant intending to divest a media
interest or make any other ownership change, such as resignation of
positional interests (officer or director) in order to avoid
attribution for purposes of qualifying for the new entrant bidding
credit, must have consummated such divestment transactions, or have
completed such ownership changes, by no later than the FCC Form 175
filing deadline. However events occurring after the short-form
application filing deadline, such as the acquisition of attributable
interests in media of mass communications, may cause diminishment or
loss of the bidding credit and, must be reported immediately.
62. Under broadcast attribution rules, those entities or
individuals with an attributable interest in a bidder include: (1) All
officers and directors of a corporate bidder; (2) any owner of 5% or
more of the voting stock of a corporate bidder; (3) all general
partners and limited partners of a partnership bidder, unless the
limited partners are sufficiently insulated; and (4) all members of a
limited liability company, unless sufficiently insulated.
63. In cases where an applicant's spouse or close family member
holds other media interests, such interests are not automatically
attributable to the bidder. The Commission decides attribution issues
in this context based on certain factors traditionally considered
relevant.
64. The eligibility standards for the new entrant bidding credit
include attribution of the media interests held by very substantial
investors in, or creditors of, an applicant claiming new entrant
status. Specifically, the attributable mass media interests held by an
individual or entity with an equity and/or debt interest in an
applicant shall be attributed to that bidder for purposes of
determining its eligibility for the new entrant bidding credit, if the
equity and debt interests, in the aggregate, exceed 33% of the total
asset value of the applicant, even if such an interest is non-voting.
65. The equity/debt plus (EDP) attribution standard was relaxed to
allow for higher investment opportunities in entities meeting the
definition of eligible entities, as defined in Note 2(i) of 47 CFR
73.3555. The Commission will allow the holder of an equity or debt
interest in the applicant to exceed the above-noted 33% threshold
without triggering attribution provided (1) the combined equity and
debt in the ``eligible entity'' is less than 50%; or (2) the total debt
in the ``eligible entity'' does not exceed 80% of the asset value, and
the interest holder does not hold any equity interest, option, or
promise to acquire an equity interest in the ``eligible entity'' or any
related entity.
66. Generally, media interests will be attributable for purposes of
the new entrant bidding credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules. Attributable interests held by a winning
bidder in existing low power television, television translator or FM
translator facilities, however, will not be counted among the
applicant's other mass media interests in determining its eligibility
for a new entrant bidding credit. A medium of mass communications is
defined in 47 CFR 73.5008(b). Full service noncommercial educational
stations, on both reserved and non-reserved channels, are included
among ``media of mass communications'' as defined in 47 CFR 73.5008(b).
1. Application Requirements
67. In addition to the ownership information required pursuant to
47 CFR 1.2105 and 1.2112, applicants seeking a new entrant bidding
credit are required to establish on their short-form applications that
they satisfy the eligibility requirements to qualify for the bidding
credit. In those cases, a certification under penalty of perjury must
be provided in completing the short-form application. An applicant
claiming that it qualifies for a 35% new entrant bidding credit must
certify that neither it nor any of its attributable interest holders
has any attributable interests in any other media of mass
communications. An applicant claiming that it qualifies for a 25% new
entrant bidding credit must certify that neither it nor any of its
attributable interest holders has any attributable interests in more
than three media of mass communications, and must identify and describe
such media of mass communications.

[[Page 54860]]

2. Unjust Enrichment
68. Applicants should note that unjust enrichment provisions apply
to a winning bidder that utilizes a bidding credit and subsequently
seeks to assign or transfer control of its license or construction
permit to an entity not qualifying for the same level of bidding
credit.

J. Provisions Regarding Former and Current Defaulters

69. 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 111, 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 47 CFR
1.2105(a)(4)(i).
70. 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 47 CFR 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 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.
71. In addition to the Auction 111 Procedures Public Notice,
applicants should review previous guidance on default and delinquency
disclosure requirements in the context of the auction short-form
application process. Applicants may consult with Auctions Division
staff if they have any questions about default and delinquency
disclosure requirements.
72. The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission adopted rules, including a provision referred to as the red
light rule, that implement its obligations under the Debt Collection
Improvement Act of 1996, which governs the collection of debts owed to
the United States. Under the red light rule, applications and other
requests for benefits filed by parties that have outstanding debts owed
to the Commission will not be processed. 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 47 CFR 1.2105 and 1.2106, with regard
to current and former defaults or delinquencies.
73. 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 47 CFR 1.2105. Thus,
while the red light rule ultimately may prevent the processing of
amendments to 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, any long-form applications amended 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. Each applicant should 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, currently owes or was ever delinquent in the payment of non-
tax debt owed to any Federal agency.

K. Optional Applicant Status Identification

74. An applicant owned by members of minority groups and/or women,
as defined in 47 CFR 1.2110(c)(3), or that is a rural telephone
company, as defined in 47 CFR 1.2110(c)(4), may identify itself as such
in filling out its FCC Form 175. This applicant status information is
collected for statistical purposes only and assists the Commission in
monitoring the participation of various groups in its auctions.

L. Noncommercial Educational Status Election

75. 47 U.S.C. 309(j)(2)(C) exempts from competitive bidding
applications for construction permits for noncommercial educational
(NCE) broadcast. For purposes of Auction 111, this exemption applies to
a construction permit application for a new or modified LPTV/translator
station that will be owned and operated by a municipality and will
transmit only noncommercial programs for educational purposes.
Applications for such NCE stations are exempt from competitive bidding
in Auction 111. Accordingly, in the FCC Form 175, applicants will have
an opportunity to designate their status as an exempt NCE station
application under the definition specified in 47 U.S.C. 397(6)(B).
76. Applications for exempt NCE stations on non-reserved spectrum,
filed during an auction filing window, will be returned as unacceptable
for filing if mutually exclusive with any application for a commercial
station. If an FCC Form 175 identifies the application's proposed
station as an exempt noncommercial educational and that

[[Page 54861]]

application remains mutually exclusive with any short-form application
for a commercial station after the limited settlement period, the NCE
application will be returned as unacceptable for filing and the
applicant will not be provided with any further opportunity to become
eligible to bid in this auction. For this reason, each prospective
applicant in this auction should consider carefully whether it wishes
to propose operation as an exempt noncommercial educational station
under 47 U.S.C. 397(6)(B) for any LPTV/translator station acquired in
this auction. This exempt NCE election cannot be reversed after the
initial short-form application filing deadline. Short-form applications
that do not identify the facilities proposed in the FCC Form 175 as NCE
will be considered, as a matter of law, applications for commercial
broadcast stations.

M. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
77. After the initial short-form application filing deadline, an
Auction 111 applicant will be permitted to make only minor changes to
its FCC Form 175. 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 construction permit 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 FCC Form 175 filing deadline.
If an amendment reporting changes is a major amendment, as described in
47 CFR 1.2105(b)(2), the major amendment will not be accepted and may
result in the dismissal of the application. Questions about FCC Form
175 amendments should be directed to the Auctions Division at (202)
418-0660.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
78. Pursuant to 47 CFR 1.65, 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 111 or a pending LPTV/TV translator station
application. Consistent with the requirements for spectrum auctions, an
applicant for Auction 111 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. In accordance with the Commission's rules, an applicant's
obligation to make modifications to a pending auction application in
order to provide additional or corrected information continues beyond
the five-day period, even if the report is not made within the five-day
period. 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.
79. Additional information on the procedures for modifying an FCC
Form 175 appear in the Auction 111 Procedures Public Notice. 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.
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.

III. Preparing for Bidding in Auction 111

A. Due Diligence

80. Each potential bidder is solely responsible for investigating
and evaluating all technical and marketplace factors that may have a
bearing on the value of the construction permit(s) it is seeking in
Auction 111. The Commission makes no representations or warranties
about the use of this spectrum or these construction permits for
particular services. Each applicant should be aware that a Commission
auction represents an opportunity to become an FCC permittee in a
broadcast service, 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 construction permit or license
constitute a guarantee of business success.
81. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, each potential bidder should perform technical analyses
and/or refresh its previous analyses to assure itself that, should it
become a winning bidder for any Auction 111 construction permit, it
will be able to build and operate facilities that will fully comply
with all applicable technical and legal requirements. Stations in the
LPTV/translator services are licensed and operate on a secondary
interference basis. This means that they may not interfere with, and
must accept interference from, primary services including full power
television stations. As a result, the operating channel of an LPTV/
translator station may be displaced by a full power television station
and the LPTV/translator station will either have to relocate to a new
channel that does not cause interference or else discontinue operations
altogether. Each applicant should also inspect any prospective
transmitter sites located in, or near, the service area for which it
plans to bid, to confirm the availability of such sites, and to
familiarize itself with the Commission's rules regarding any applicable
federal, state, and local requirements, including the National
Environmental Policy Act (NEPA), the National Historic Preservation Act
(NHPA), and other environmental statutes.
82. Each applicant in Auction 111 should 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 to continue participating in the auction. Each
applicant is responsible for assessing the likelihood of the various
possible outcomes and for considering the potential impact on
construction permits available in this auction. The due diligence
considerations mentioned in the Auction 111 Procedures Public Notice do
not comprise an exhaustive list of steps that should be undertaken
prior to participating in Auction 111. As always, the burden is on the
potential bidder to determine how much research to undertake, depending
upon specific facts and circumstances related to its interests.
83. Applicants are solely responsible for identifying associated
risks and for investigating and evaluating the degree to which such
matters may affect their ability to bid on, otherwise acquire, or make
use of the construction permits available in Auction 111. Each
potential bidder is responsible for undertaking

[[Page 54862]]

research to ensure that any permits won in this auction will be
suitable for its business plans and needs. Each potential bidder must
undertake its own assessment of the relevance and importance of
information gathered as part of its due diligence efforts.
84. 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. Bidder Education

85. Before the opening of the short-form application filing window
for Auction 111, detailed educational information will be provided in
various formats to would-be participants on the Auction 111 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 111 website at <a href="http://www.fcc.gov/auction/111">www.fcc.gov/auction/111</a>. In addition, OEA will provide an online tutorial for the auction,
covering pre-auction procedures including completing a short-form
application in the FCC Auction Application System, and bidding
procedures including how to use the FCC auction bidding system. In
advance of the start of the mock auction, OEA will release a user guide
for the bidding system.
86. These materials will be accessible in the Education section of
the Auction 111 website at <a href="http://www.fcc.gov/auction/111">www.fcc.gov/auction/111</a>.

C. Short-Form Applications: Due Before 6:00 p.m. ET on November 9, 2021

87. In order to be eligible to bid in Auction 111, an applicant
must first 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, which are
available on the Education tab of the Auction 111 website at
<a href="http://www.fcc.gov/auction/111">www.fcc.gov/auction/111</a>. The short-form application will become
available with the opening of the initial filing window and must be
submitted prior to 6:00 p.m. ET on November 9, 2021. Late applications
will not be accepted. No filing fee is required to be paid at the time
of filing a short-form application.
88. Applications may be filed at any time beginning at noon ET on
November 1, 2021, until the filing window closes at 6:00 p.m. ET on
November 9, 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 November 9, 2021.
89. 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 telephony (TTY)). Hours of service are Monday through
Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to provide better
service to the public, all calls to Technical Support are recorded.

D. Application Processing, Limited Settlement Opportunity, and Minor
Modifications

1. Public Notice of MX Groups and Limited Settlement Opportunity
90. After the initial short-form application filing deadline,
Commission staff will review all timely submitted applications for
Auction 111 to identify the MX Groups listed in Attachment A to the
Auction 111 Procedures Public Notice for which two or more short-form
applications were submitted and which are therefore subject to
competitive bidding procedures. Following this review, OEA and MB will
release a public notice identifying the remaining MX Groups in Auction
111. That public notice will also specify a settlement period, of no
more than 10 business days, for resolving mutual exclusivity by the
filing of technical amendments, dismissal requests, and requests for
approval of settlement agreements. Technical amendments submitted by
applicants to resolve their mutual exclusivities must be minor, as
defined by the applicable rules, and must not create any new mutual
exclusivity or other application conflict. Unless the mutual
exclusivity is resolved during this limited settlement opportunity, an
applicant in one of these MX Groups cannot obtain the construction
permit without placing a bid, even if no other auction applicant in
that MX Group becomes qualified to bid or in fact places a bid.
91. No more than one construction permit will be awarded through
Auction 111 for each MX group identified in Attachment A to the Auction
111 Procedures Public Notice. Likewise, any settlement reached during
this limited settlement opportunity may not result in more than one
surviving application for an LPTV/translator station construction
permit. Accordingly, partial settlements (i.e., settlements which
reduce the number of proposals in a group, but which do not completely
resolve the mutual exclusivity of that group) and engineering solutions
that completely resolve the mutual exclusivity of the group but result
in more than one surviving application will not be permitted. To
facilitate resolution of mutual exclusivity, the prohibited
communications rule will be suspended during the settlement period as
specified by future public notice(s). Discussions between applicants of
bids, bidding strategies, or settlements outside of any announced
settlement period would violate the Commission's prohibition on certain
communications by auction applicants.
92. Non-mutually exclusive applications will be listed in a
subsequent public notice to be released by OEA and MB. Such
applications will not proceed to auction, but will proceed in
accordance with instructions set forth in that public notice.
2. Public Notice of Applicants' Initial Application Status and
Opportunity for Minor Modifications
93. Commission staff will review all timely submitted applications
for Auction 111 that remain mutually exclusive after the limited
settlement period to determine whether each applicant has complied with
the application requirements and whether it has provided all required
information concerning its qualifications for bidding. After this
review is completed, OEA and MB will issue a public notice announcing
applicants' initial application status by identifying: (1) Those that
are complete; (2) those that are rejected; and (2) those that are
incomplete or deficient because of defects that may be corrected. That
public notice also will establish an

[[Page 54863]]

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 corrected applications and a copy of the public notice
will be sent by overnight delivery to the contact address listed in the
FCC Form 175 for each applicant. OEA and MB ask all applicants to make
sure that the contact address provided in its short-form application is
accurate and is a location capable of accepting packages that require a
signature. 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. To become a qualified bidder, an applicant must have a
complete application (i.e., have timely corrected any identified
deficiencies) and make a timely and sufficient upfront payment.
Qualified bidders will be identified by public notice at least 10 days
prior to the mock auction.
94. After the initial application filing deadline on November 9,
2021, applicants can make only minor modifications to their
applications. Major modifications 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 111.
95. 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#a9c8dccaddc0c6c7989898e9cfcaca87cec6df">[email&#160;protected]</a>.
3. Public Notice of Applicants' Final Application Status After Upfront
Payment Deadline
96. After Commission staff review resubmitted applications for
Auction 111 and evaluate upfront payments, OEA and MB will release a
public notice identifying applicants that have become qualified
bidders. Qualified bidders are those applicants with submitted FCC
Forms 175 that are deemed timely filed and complete and that have made
a sufficient upfront payment.

E. Upfront Payments

97. In order to be eligible to bid in Auction 111, a sufficient
upfront payment and a complete and accurate FCC Remittance Advice Form
(FCC Form 159, Revised 2/03) must be submitted before 6:00 p.m. ET on
January 25, 2022. 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 111 are provided in Attachment B to the Auction
111 Procedures Public Notice.
1. Making Upfront Payments by Wire Transfer for Auction 111
98. Upfront payments for Auction 111 must be wired to, and will be
deposited in, the U.S. Treasury.
99. Wire transfer payments for Auction 111 must be received before
6:00 p.m. ET on January 25, 2022. No other payment method is
acceptable. 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. Wire
transfer information is specified in the Making Upfront Payments by
Wire Transfer section of the Auction 111 Procedures Public Notice.
100. To meet the upfront payment deadline, an applicant's payment
must be credited to the Commission's account for Auction 111 before the
deadline.
101. Each applicant is responsible for ensuring timely submission
of its upfront payment and for timely filing of an accurate and
complete FCC Form 159. An applicant should coordinate with its
financial institution well ahead of the due date regarding its wire
transfer and allow sufficient time for the transfer to be initiated and
completed prior to the deadline. The Commission repeatedly has
cautioned auction participants about the importance of planning ahead
to prepare for unforeseen last-minute difficulties in making payments
by wire transfer. Each applicant also is responsible for obtaining
confirmation from its financial institution that its wire transfer to
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.
102. Please note the following information regarding upfront
payments: (1) All payments must be made in U.S. dollars; (2) all
payments must be made by wire transfer; and (3) upfront payments for
Auction 111 go to an account number different from the accounts used in
previous FCC auctions.
103. Failure to deliver a sufficient upfront payment as instructed
in the Auction 111 Procedures Public Notice 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
104. An accurate and complete FCC Form 159 (February 2003 edition)
must be sent to the FCC to accompany each upfront payment. At least one
hour before placing the order for the wire transfer (but on the same
business day), applicants must fax a completed Form 159 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#491b1b060e1e203b2c0f28312c3a092f2a2a672e263f">[email&#160;protected]</a>. On the fax
cover sheet or in the email subject header, write Wire Transfer--
Auction Payment for Auction 111.
3. Upfront Payments and Bidding Eligibility
105. The Commission has delegated authority to OEA and MB to
determine appropriate upfront payments for each construction permit
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

[[Page 54864]]

made by each applicant seeking to participate in bidding 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 bidding. In the Auction 111 Comment Public Notice, OEA
and MB proposed an upfront payment amount for each construction permit
and sought comment on the upfront payment amounts. OEA and MB received
no comments regarding the upfront payment amounts for Auction 111, and
OEA and MB adopted the upfront payment amounts proposed in Attachment A
of the Auction 111 Comment Public Notice.
106. An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the construction permits on which it will bid.
The upfront payment amount 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 on a
particular construction permit, a qualified bidder must have a current
eligibility level that meets or exceeds the number of bidding units
assigned to that construction permit. At a minimum, therefore, an
applicant's total upfront payment must be enough to establish
eligibility to bid on at least one of the construction permits selected
on its FCC Form 175 for Auction 111, or else the applicant will not
become qualified to participate in the auction. An applicant does not
have to make an upfront payment to cover all construction permits the
applicant selected on its FCC Form 175, rather only enough to cover the
maximum number of bidding units that are associated with construction
permits on which the applicant wishes to place bids and hold
provisionally winning bids in any given round. The total upfront
payment does not affect the total dollar amount the bidder may bid on
any given construction permit.
107. 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 order to make this
calculation, an applicant should add together the bidding units for all
construction permits on which it seeks to be active in any given round.
Applicants should check their calculations carefully, as there is no
provision for increasing a bidder's eligibility after the upfront
payment deadline.
108. An applicant that is a former defaulter, as described above,
must pay an upfront payment 50% greater than that required of an
applicant that is not a former defaulter. For purposes of this rule,
defaults and delinquencies of the applicant itself and its controlling
interests are included. If an applicant is a former defaulter, it must
calculate its upfront payment for all of its selected construction
permits by multiplying the number of bidding units on which it wishes
to be active (bid on or hold provisionally winning bids on) during a
given round by 1.5. In order to calculate the number of bidding units
to assign to former defaulters, the Commission will divide the upfront
payment received by 1.5 and round the result up to the nearest bidding
unit. If an applicant fails to submit a sufficient upfront payment to
establish eligibility to bid on at least one of the construction
permits selected on its FCC Form 175, the applicant will not be
eligible to participate in bidding in the auction. This applicant will
retain its status as an applicant in Auction 111 and will remain
subject to 47 CFR 1.2105(c) and 73.5002(d).

F. Auction Registration

109. All qualified bidders for Auction 111 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, the web address and instructions for accessing
and logging in to the auction bidding system, FCC assigned username
(User ID) for each authorized bidder, and the Auction Bidder Line phone
number.
110. Qualified bidders that do not receive this registration
mailing will not be able to submit bids. Therefore, if this mailing is
not received by the contact person for a qualified bidder by noon on
February 15, 2022, call the Auctions Hotline at (717) 338-2868. In no
event, however, will the Commission send auction registration materials
to anyone other than the contact person listed on the applicant's FCC
Form 175 or respond to a request for replacement registration materials
from anyone other than the authorized bidder, contact person, or
certifying official listed on the applicant's FCC Form 175. Receipt of
this registration mailing is critical to participating in the auction,
and each qualified bidder is responsible for ensuring it has received
all registration materials.
111. 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.

G. Remote Electronic Bidding via the FCC Auction Bidding System

112. Bidders will be able to participate in Auction 111 over the
internet using the FCC Auction Bidding System (bidding system) or by
telephonic bidding. Each applicant should indicate its bidding
preference--electronic or telephonic--on its FCC Form 175. 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.
113. Only qualified bidders are permitted to bid. Each qualified
bidder will be issued three SecurID[supreg] tokens, which the
Commission will provide at no charge. Each authorized bidder for a
qualified bidder must have an individually assigned SecurID[supreg]
token in order to access the bidding system, either by telephone or
over the internet. 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, bidding system web address, FCC
assigned username, and the telephonic bidding telephone number 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 111. Please note
that the SecurID[supreg] tokens can be recycled, and the Commission
requests that bidders return the tokens to the

[[Page 54865]]

FCC. Pre-addressed envelopes will be provided to return the tokens once
the auction has ended.
114. The Commission makes no warranties whatsoever, and shall not
be deemed to have made any warranties, with respect to the FCC Auction
Application System and the auction 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, loss of revenue, loss of business information, or any
other direct, indirect, or consequential damages) arising out of or
relating to the existence, furnishing, functioning, or use of the FCC
Auction Application System or the FCC auction 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 FCC auction systems.
115. 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 remedy 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 remedy 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.

H. Mock Auction

116. All qualified bidders will be eligible to participate in a
mock auction on February 17, 2022. The mock auction will enable
qualified bidders to become familiar with the FCC auction bidding
system and to practice submitting bids prior to the auction. OEA and MB
recommend that all qualified bidders, including all their authorized
bidders, participate to ensure 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 public notice announcing the qualified bidders for
Auction 111.
117. By public notice or by announcement through the FCC auction
bidding system, OEA and MB may delay, suspend, or cancel bidding in the
auction in the event of 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. In such cases, OEA and MB, in their sole discretion, may elect
to resume the auction starting from the beginning of the current round
or from some previous round, or cancel the auction in its entirety. OEA
and MB emphasize that they will exercise this authority solely at their
discretion, and not as a substitute for situations in which bidders may
wish to apply their activity rule waivers.

I. Environmental Review Requirements

118. Permittees or licensees must comply with the Commission's
rules for environmental review under the National Environmental Policy
Act, the National Historic Preservation Act, and other federal
environmental statutes. The construction of a broadcast facility is a
federal action, and the permittee or licensee must comply with the
Commission's environmental rules for each such facility. These
environmental rules require, among other things, that the permittee or
licensee consult with expert agencies having environmental
responsibilities, including the U.S. Fish and Wildlife Service, the
State Historic Preservation Office, the U.S. Army Corps of Engineers,
and the Federal Emergency Management Agency (through the local
authority with jurisdiction over floodplains). In assessing the effect
of facility construction on historic properties, the permittee or
licensee must follow the provisions of the FCC's Nationwide
Programmatic Agreement Regarding the Section 106 National Historic
Preservation Act Review Process. The permittee or licensee must prepare
environmental assessments for any facility that may have a significant
impact in or on wilderness areas, wildlife preserves, threatened or
endangered species, or designated critical habitats, historical or
archaeological sites, Indian religious sites, floodplains, and surface
features. In addition, the permittee or licensee must prepare
environmental assessments for facilities that include high intensity
white lights in residential neighborhoods or excessive radio frequency
emission.

IV. Bidding

119. The first round of bidding for Auction 111 will begin on
February 23, 2022. The initial bidding schedule will be announced in a
public notice listing the qualified bidders, which is released at least
one week before the start of bidding in the auction.

A. Auction Structure

1. Simultaneous Multiple Round Auction
120. All construction permits listed in Attachment A to the Auction
111 Procedures Public Notice will be auctioned in a single auction
using a simultaneous multiple-round auction format. This type of
auction offers every construction permit for bid at the same time and
consists of successive bidding rounds in which qualified bidders may
place bids on individual construction permits. Unless otherwise
announced, bids will be accepted on all construction permits in each
round of the auction until bidding stops on every construction permit.
2. FCC Auction Bidding System
121. All bidding will take place remotely either through the FCC
auction bidding system or by telephonic bidding. 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 ten minutes.
122. An Auction 111 bidder's ability to bid on specific
construction permits is determined by two factors: (1) The construction
permits selected by that applicant in its FCC Form 175 and (2) the
bidder's bidding eligibility measured in bidding units. The FCC auction
bidding system will allow bidders to submit bids on only those
construction permits the bidder selected on its FCC Form 175.
123. In order to access the bidding function of the FCC auction
bidding system, bidders must be logged in during a bidding round using
the passcode generated by the SecurID[supreg] token and a PIN created
by the bidder. Bidders are strongly encouraged to print a round summary
for each round after they have completed all of their activity for that
round.
3. Round Structure
124. The initial schedule of bidding rounds will be announced in
the public

[[Page 54866]]

notice listing the qualified bidders in the auction. Each bidding round
is followed by the release of round results. Multiple bidding rounds
may be conducted each day.
125. OEA and MB 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. OEA and MB may change the amount of time for
bidding rounds, the amount of time between rounds, or the number of
rounds per day, depending upon bidding activity and other factors.
4. Eligibility and Activity Rules
126. The amount of the upfront payment submitted by a bidder will
determine its initial bidding eligibility in terms of bidding units. A
bidder's bidding eligibility is the maximum number of bidding units on
which a bidder may be active (bid or hold provisionally winning bids)
in a given round. In Auction 111, each construction permit is assigned
a specific number of bidding units as listed in Attachment A to the
Auction 111 Procedures Public Notice. Bidding units assigned to each
construction permit do not change as prices rise during the auction.
Upfront payments are not attributed to specific construction permits.
Rather, a bidder may place bids on any of the construction permits
selected on its FCC Form 175 as long as the total number of bidding
units associated with those construction permits does not exceed the
bidder's current eligibility.
127. Eligibility cannot be increased during the auction; it can
only remain the same or decrease. Thus, in calculating its upfront
payment amount, 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. At a minimum, an applicant's
upfront payment must cover the bidding units for at least one of the
construction permits it selected on its short-form application. The
total upfront payment does not affect the total dollar amount a bidder
may bid on any given construction permit.
128. To ensure that an auction closes within a reasonable period of
time, an activity rule requires bidders to bid actively throughout the
auction, rather than wait until late in the auction before
participating. A bidder in Auction 111 will be required to be active on
100% of its current bidding eligibility during each round of the
auction. A bidder's activity level in a round is the sum of the bidding
units associated with construction permits covered by the bidder's new
bids in the current round and provisionally winning bids from the
previous round. That is, a bidder must either place a bid or be a
provisionally winning bidder during each round of the auction. 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, possibly curtailing or eliminating the bidder's ability to
place bids in subsequent rounds of the auction.
5. Activity Rule Waivers
129. Each bidder in the auction will have three activity rule
waivers, which are principally 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. Use of an activity rule
waiver preserves the bidder's eligibility despite its activity in the
current round being below the required minimum activity level. An
activity rule waiver applies to an entire round of bidding and not to a
particular construction permit. A bidder may use an activity rule
waiver in any round of the auction as long as the bidder has not used
all of its waivers.
130. 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, therefore meeting the activity
requirement. If the 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.
131. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the reduce eligibility function in
the FCC auction bidding system. In this case, the bidder's eligibility
will be permanently reduced to bring it into compliance with the
activity rule described above. Reducing eligibility is an irreversible
action once the round has closed, and a bidder cannot regain its lost
bidding eligibility.
132. Finally, a bidder may 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 bids are placed, 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 or a proactive waiver will not keep the auction open.
6. Stopping Rule
133. For Auction 111, OEA and MB will 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 a new bid or applies a proactive
waiver.
134. In certain circumstances, OEA and MB may employ the
alternative versions of the simultaneous stopping rule listed below for
Auction 111, 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, OEA and MB may adjust the pace of bidding by
changing the number of bidding rounds per day and/or the minimum
acceptable bids. OEA and MB retain the discretion to exercise any of
these options with or without prior announcement during the auction:
Option 1. The auction would close for all construction permits
after the first round in which no bidder applies a proactive waiver or
places a new bid on any construction permit on which it is not the
provisionally winning bidder. Thus, absent any other bidding activity,
a bidder placing a new bid on a construction permit for which it is the
provisionally winning bidder would not keep the auction open under this
modified stopping rule.
Option 2. The auction would close for all construction permits
after the first round in which no bidder applies a waiver or places any
new bid on any construction permit that already has a provisionally
winning bid. Thus, absent any other bidding activity, a bidder

[[Page 54867]]

placing a new bid on an FCC-held construction permit (a construction
permit that does not have a provisionally winning bid) would not keep
the auction open under this modified stopping rule.
Option 3. The auction would close using a modified version of the
simultaneous stopping rule that combines Option 1 and Option 2 above.
Option 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 OEA and MB invokes this special
stopping rule, it will accept bids in the specified final round(s),
after which the auction will close.
Option 5. The auction would remain open even if no bidder places a
new bid or applies a waiver. In this event, the effect will be the same
as if a bidder had applied a waiver. Thus, the activity rule will apply
as usual, and a bidder with insufficient activity will either lose
bidding eligibility or use a waiver.

B. Bidding Procedures

1. Minimum Opening Bids and Acceptable Bid Amounts
135. Section 309(j) of the Communications Act of 1934 calls upon
the Commission to prescribe methods by which a reasonable reserve price
will be required or a minimum opening bid established when applications
for FCC licenses or construction permits are subject to auction (i.e.,
because they are mutually exclusive), unless the Commission determines
that a reserve price or minimum opening bid is not in the public
interest. Consistent with this mandate, the Commission directed the
Bureaus to seek comment on the use of a minimum opening bid and/or
reserve price prior to the start of each auction. Among other factors,
OEA and MB must consider the amount of spectrum being auctioned, levels
of incumbency, the availability of technology to provide service, the
size of the geographic service areas, the extent of interference with
other spectrum bands, and any other relevant factors that could have an
impact on the spectrum being auctioned.
136. For Auction 111, there will be no reserve prices for specific
construction permits listed in Attachment A to the Auction 111
Procedures Public Notice that are different from minimum opening bid
amounts. This is consistent with previous broadcast spectrum auctions.
137. In the Auction 111 Comment Public Notice, OEA and MB sought
comment on specifically proposed minimum opening amounts for each
construction permit listed in Attachment A to the Auction 111
Procedures Public Notice, reasoning that a minimum opening bid, which
has been used in other broadcast auctions, is an effective tool for
accelerating the competitive bidding process. Specifically, a minimum
opening bid was proposed for each construction permit by taking into
account various factors relating to the efficiency of the auction and
the potential value of the spectrum, including the type of service and
class of facility offered, market size, population covered by the
proposed broadcast facility, industry cash flow data, and recent
broadcast transactions.
138. OEA and MB received no comments on the proposed minimum
opening bids, and therefore they adopted the minimum opening bid
amounts proposed in the Auction 111 Comment Public Notice. The specific
minimum opening bid amounts for each of the construction permits are
specified in Attachment A to the Auction 111 Procedures Public Notice.
139. 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 FCC auction bidding system interface will list the nine acceptable
bid amounts for each construction permit.
140. To calculate the first of the acceptable bid amounts, OEA and
MB will 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 eight additional
acceptable bid amounts, OEA and MB will use an additional bid increment
percentage of 5%.
141. In Auction 111, the minimum acceptable bid amount for a
construction permit will be equal to its minimum opening bid amount
until there is a provisionally winning bid for the construction permit.
After there is a provisionally winning bid for a construction permit,
the minimum acceptable bid amount will be calculated by multiplying the
provisionally winning bid amount by one plus the minimum acceptable bid
percentage--i.e., provisionally winning bid amount * 1.10, rounded.
Under the Commission's standard rounding procedure 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 $1000 are rounded to the nearest $10.
142. In Auction 111, the FCC auction bidding system will calculate
the eight additional bid amounts by multiplying the minimum acceptable
bid amount by the additional bid increment percentage of 5%, 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 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. Because the additional bid increment
percentage is 5%, the calculation of the additional increment amount is
(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.
143. OEA and MB retain the discretion to change the minimum
acceptable bid amounts, the minimum acceptable bid increment
percentage, the additional bid increment percentage, and the number of
acceptable bid amounts if it determines that circumstances so dictate,
consistent with past practice. OEA and MB also retain the discretion to
do so on a construction permit-by-construction permit basis. OEA and MB
also 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, OEA and MB could set a
$1,000 limit on increases in minimum acceptable bid amounts over
provisionally winning bids. Thus, if calculating a minimum acceptable
bid using the minimum acceptable bid 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 typically exercise this
discretion based on its monitoring of ongoing bidding. If OEA and MB

[[Page 54868]]

exercise this discretion, they will alert bidders by announcement in
the FCC auction bidding system during the auction.
2. Provisionally Winning Bids
144. Consistent with practice in past auctions, the FCC auction
bidding system at the end of each bidding round will determine a
provisionally winning bid for each construction permit based on the
highest bid amount received for that permit. A provisionally winning
bid will remain the provisionally winning bid until there is a higher
bid on the same construction permit at the close of a subsequent round.
Provisionally winning bids at the end of the auction become the winning
bids.
145. OEA and MB will use a pseudo-random number generator to select
a single provisionally winning bid if identical high bid amounts are
submitted on a construction permit in a given round (i.e., tied bids).
The FCC auction bidding system will assign a pseudo-random number to
each bid upon submission. 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 close 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.
146. As a reminder, provisionally winning bids count toward
activity for purposes of the activity rule.
3. Bid Removal and Bid Withdrawal
147. Each qualified bidder has the option of removing any bids
placed in a round provided that such bids are removed before the close
of that bidding round. By removing a bid within a round, a bidder
effectively ``unsubmits'' the bid. A bidder removing a bid placed in
the same round is not subject to withdrawal payments. Removing a bid
will affect a bidder's activity because a removed bid no longer counts
toward bidding activity for the round. Once a round closes, a bidder
may no longer remove a bid.
148. In recognition of the site-specific nature and wide geographic
dispersion of the permits available in this auction, as well as its
experience with past auctions of broadcast construction permits,
qualified bidders are prohibited from withdrawing any bid after close
of the round in which that bid was placed. Bidders are cautioned to
select bid amounts carefully because no bid withdrawals will be
allowed, even if a bid was mistakenly or erroneously made.
4. Bidding Results
149. Bids placed during a round will not be made public until the
conclusion of that round. After a round closes, OEA and MB will compile
reports of all bids placed, current provisionally winning bids, new
minimum acceptable bid amounts for the following round, whether the
construction permit is FCC-held, and bidder eligibility status (bidding
eligibility and activity rule waiver), and post the reports for public
access.
5. Auction Announcements
150. 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 FCC
auction bidding system.

V. Post-Auction Procedures

151. The public notice announcing the close of the bidding and
auction results will be released shortly after bidding has ended in
Auction 111. That public notice will also establish the deadlines for
submitting down payments, final payments, and amendments to long-form
applications.

A. Down Payments

152. 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 111, 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).

B. Final Payments

153. 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. Winning Bidder Amendments to Long-Form Applications

154. Because each party eligible to apply for Auction 111 has
already filed an application for a new or modified LPTV/translator
station (FCC Form 2100, Schedule C (Schedule for a Construction Permit
for a LPTV or TV Translator Broadcast Station) of FCC Form 2100
(Application for Media Bureau Video Service Authorization)), a winning
bidder will not be required to submit a separate long-form application
following close of bidding in Auction 111, but instead will be required
to submit a minor amendment to its previously filed LPTV/Translator
station application by a deadline to be determined after the close of
the auction. Amendments must be filed electronically in the Media
Bureau's Licensing and Management System (LMS) available at <a href="https://enterpriseefiling.fcc.gov/dataentry/login.html">https://enterpriseefiling.fcc.gov/dataentry/login.html</a>. Winning bidders'
applications, as amended, will be placed on public notice, triggering
the appropriate period for the filing of petitions to deny. A winning
bidder claiming new entrant status must include an exhibit
demonstrating its eligibility for the bidding credit. Further
instructions will be provided to winning bidders in the auction closing
public notice.

D. Default and Disqualification

155. 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 47 CFR
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 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.
156. 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. The additional default payment for Auction
111 is 20% of the applicable bid.
157. Finally, in the event of a default, the Commission has the
discretion to re-auction the construction permit or offer it to the
next highest bidder (in descending order) at its final bid amount. In
addition, if a default or disqualification involves gross misconduct,
misrepresentation, or bad faith by an applicant, then the Commission
may declare the applicant and its principals ineligible to bid in
future auctions and may take any other action that it deems necessary,
including institution of proceedings to

[[Page 54869]]

revoke any existing authorizations held by the applicant.

E. Refund of Remaining Upfront Payment Balance

158. All refunds of upfront payment balances will be returned to
the payer of record as identified on the FCC Form 159 unless the payer
submits written authorization instructing otherwise.
159. This written authorization must comply with the refund
instructions provided in the Auction 111 Procedures Public Notice.
160. The refund request must be submitted by fax to the Revenue &
Receivables Operations Group/Auctions at (202) 418-2843, or by email to
<a href="/cdn-cgi/l/email-protection#0b5959444c5c62796e4d6a736e784b6d6868256c647d">[email&#160;protected]</a>.

VI. Procedural Matters

A. Paperwork Reduction Act

161. The Office of Management and Budget (OMB) has approved the
information collections in the Application to Participate in an FCC
Auction, FCC Form 175. The Auction 111 Procedures Public Notice does
not contain 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. Congressional Review Act

162. The Commission has determined, and Administrator of the Office
of Information and Regulatory Affairs, Office of Management and Budget,
concurs, that these rules are ``non-major'' under the Congressional
Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the
Auction 111 Procedures Public Notice in a report to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act, 5 U.S.C. 801(a)(1)(A).

C. Supplemental Final Regulatory Flexibility Analysis

163. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), 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. In this proceeding, a
Supplemental Initial Regulatory Flexibility Analysis (Supplemental
IRFA) was incorporated in the Auction 111 Comment Public Notice. The
Commission sought written public comment on the proposals in the
Auction 111 Comment Public Notice, including comments on the
Supplemental IRFA. The Supplemental Final Regulatory Flexibility
Analysis (Supplemental FRFA) supplements the FRFAs in the Competitive
Bidding Orders to reflect the actions taken in the Auction 111
Procedures Public Notice and conforms to the RFA.
164. Need for, and Objectives of, the Public Notice. The procedures
for the conduct of Auction 111 as described in the Auction 111
Procedures Public Notice implement the Commission's competitive bidding
rules, which have been adopted by the Commission in multiple notice-
and-comment rulemaking proceedings. More specifically, the Auction 111
Procedures Public Notice provides an overview of the procedures, terms,
and conditions governing Auction 111, and the post-auction application
and payment processes, as well as setting the minimum opening bid
amount for each of the LPTV/translator station construction permits
that are subject to being assigned by competitive bidding.
165. To promote the efficient and fair administration of the
competitive bidding process for all Auction 111 participants, including
small businesses, in the Auction 111 Procedures Public Notice, OEA and
MB announce the following procedures: (1) Use of a simultaneous
multiple-round auction format, consisting of sequential bidding rounds
with a simultaneous stopping procedure (with discretion to exercise
alternative stopping rules under certain circumstances); (2) a specific
upfront payment amount for each construction permit; (3) a specific
minimum opening bid amount for each construction permit; (4) a specific
number of bidding units for each construction permit; (5) a bidder's
initial bidding eligibility will be based on the amount of that
bidder's upfront payment; (6) use of an activity requirement in which a
bidder is required to be active on 100% of its bidding eligibility in
each round of the auction so that bidders must bid actively during the
auction rather than waiting until late in the auction before
participating; (7) provision of three activity waivers for each
qualified bidder to allow it to preserve bidding eligibility during the
course of the auction; (8) use of minimum acceptable bid amounts and
additional acceptable increments, along with the methodology for
calculating such amounts; (9) a procedure for breaking ties if
identical high bid amounts are submitted on one permit in a given
round; (10) a prohibition on bid withdrawals while allowing for bid
removals (before the close of a bidding round); (11) establishment of
an additional default payment percentage of 20% of the applicable bid
in the event that a winning bidder defaults or is disqualified after
the auction; (12) retention by OEA and MB to exercise 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; and (13) retention of discretion by OEA to
adjust the bidding schedule in order to manage the pace of Auction 111.
166. Summary of Significant Issues Raised by Public Comments in
Response to the IRFA. There were no comments filed that specifically
addressed the procedures and policies proposed in the Supplemental
IRFA.
167. Response to Comments by the Chief Counsel for Advocacy of the
Small Business Administration. Pursuant to the Small Business Jobs Act
of 2010, which amended the RFA, the Commission is required to respond
to any comment filed by the Chief Counsel for Advocacy of the Small
Business Administration (SBA), and to provide a detailed statement of
any change made to the proposed procedures as a result of those
comments. The Chief Counsel did not file any comments in response to
the procedures that were proposed in the Auction 111 Comment Public
Notice.
168. Description and Estimate of the Number of Small Entities to
Which the 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 rules adopted herein. The RFA
generally defines the term small entity as having the same meaning as
the terms small business, small organization, and small governmental
jurisdiction. 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;

[[Page 54870]]

and (3) satisfies any additional criteria established by the SBA.
169. The specific competitive bidding procedures and minimum
opening bid amounts described in the Auction 111 Procedures Public
Notice will 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 parties listed in Attachment A to the Auction 111 Procedures 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 parties include firms of all sizes.
170. Television Broadcasting. This 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. 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.
171. 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) on April 20, 2021, and therefore
these stations qualify as small entities under the SBA definition.
172. 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.
173. 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.
174. OEA and MB note, however, that the SBA size standard data does
not enable them to make a meaningful estimate of the number of small
entities that may participate in Auction 111.
175. In assessing whether a business entity qualifies as small
under the SBA definition, business control affiliations must be
included. The 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.
176. OEA and MB also note that they are unable to accurately
develop an estimate of how many of the 24 parties 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.
177. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities. For Auction 111, no new
reporting, recordkeeping, or other compliance requirements for small
entities or other auction applicants were proposed. The Commission
designed the auction application process itself to minimize reporting
and compliance requirements for applicants, including small business
applicants. For all spectrum auctions, in the first part of the
Commission's two-phased auction application process, parties desiring
to participate in an auction 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 auction application
process, there are additional compliance requirements for winning
bidders. Thus, a small business that fails to become a winning bidder
does not need to provide the additional showings and more detailed
demonstrations required of a winning bidder.
178. Auction 111 applicants, including small entities, will become
qualified to bid in Auction 111 only if they comply with the following:
(1) Submission of a short-form application that is timely and is found
to be substantially complete, and (2) timely submission of a sufficient
upfront payment for at least one of the construction permits that the
applicant selected on its FCC Form 175. In accordance with the terms of
47 CFR 1.2105(b)(2), an applicant whose application is found to contain
deficiencies will have a limited opportunity to bring its application
into compliance with the Commission's competitive bidding rules during
a resubmission window. In addition, each Auction 111 applicant must
maintain the accuracy of its previously filed short-form application
electronically using the FCC Auction Application System.
179. In the second phase of the process, there are additional
compliance requirements only applicable to winning bidders. As with
other winning bidders, any small entity that is a winning bidder will
be required to comply with the terms of the following rules, among
others: (1) 47 CFR 1.2107(b), by submitting as a down payment within 10
business days after release of the auction closing public notice
sufficient funds (in addition to its upfront payment) to bring its
total amount of money on deposit with the Commission for Auction 111 to
20% of the amount of its winning bid or bids; (2) 47 CFR 1.2109(a), by
submitting within 10 business days after the down payment deadline the
balance of the amount for each of its winning bids; and (3) 47 CFR
73.5005(a), by electronically filing an amended long-form application
and required exhibits for each construction permit won through Auction
111.
180. Further, as required by 47 CFR 1.2105(c), reports concerning
prohibited communications must be filed with the Chief of the Auctions
Division, as

[[Page 54871]]

detailed in the Auction 111 Procedures Public Notice.
181. 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.
182. OEA and MB intend that the procedures adopted in the Auction
111 Procedures Public Notice to facilitate participation in Auction 111
will result in both operational and administrative cost savings for
small entities and other auction participants. In light of the numerous
resources that will be available from the Commission to small entities
and other auction participants at no cost, the processes and procedures
announced in the Auction 111 Procedures Public Notice should minimize
any economic impact of the auction processes and procedures on small
entities and should result in both operational and administrative cost
savings for small entities and other auction participants. For example,
prior to the beginning of bidding in this auction, the Commission will
hold a mock auction to allow qualified bidders the opportunity to
familiarize themselves with both the processes and systems that will be
used in Auction 111. During the auction, participants will be able to
access and participate in bidding via the internet using a web-based
system, or telephonically, providing two cost-effective methods of
participation and avoiding the cost of travel for in-person
participation. Further, small entities as well as other auction
participants will be able to avail themselves of a telephone hotline
for assistance with auction processes and procedures as well as a
technical support telephone hotline to assist with issues such as
access to or navigation within the electronic FCC Form 175 and use of
the FCC's auction bidding system. In addition, all auction
participants, including small business entities, will have access to
various other sources of information and databases through the
Commission that will aid in both their understanding and participation
in the process. These mechanisms are made available to facilitate
participation by all qualified bidders and may result in significant
cost savings for small business entities that utilize these mechanisms.
These resources, coupled with the description and communication of the
bidding procedures before bidding begins in Auction 111, should ensure
that the auction will be administered predictably, efficiently and
fairly, thus providing certainty for small entities as well as other
auction participants.
183. Notice to SBA. The Commission will send a copy of the Auctions
111 Procedures Public Notice, including the Supplemental FRFA, to the
Chief Counsel for Advocacy of the SBA.

Federal Communications Commission.
William Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2021-21559 Filed 10-4-21; 8:45 am]
BILLING CODE 6712-01-P

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