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Rule2022-03348

Auction of Construction Permits for Full Power Television Stations; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 112

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

Published

February 18, 2022

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 full power television (TV) stations. The Auction 112 Procedures Public Notice summarized here is intended to familiarize potential applicants with details of the procedures, terms, and conditions governing participation in Auction 112, as well as an overview of the post-auction application and payment processes.

Full Text

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<title>Federal Register, Volume 87 Issue 34 (Friday, February 18, 2022)</title>
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[Federal Register Volume 87, Number 34 (Friday, February 18, 2022)]
[Rules and Regulations]
[Pages 9250-9270]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-03348]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 73

[AU Docket No. 21-449; DA 22-125; FR ID 71977]

Auction of Construction Permits for Full Power Television
Stations; Notice and Filing Requirements, Minimum Opening Bids, Upfront
Payments, and Other Procedures for Auction 112

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 full power television (TV)
stations. The Auction 112 Procedures Public Notice summarized here is
intended to familiarize potential applicants with details of the
procedures, terms, and conditions governing participation in Auction
112, as well as an overview of the post-auction application and payment
processes.

DATES: Applications to participate in Auction 112 must be submitted
before 6:00 p.m. Eastern Time (ET) on March 30, 2022. Upfront payments
for Auction 112 must be received by 6:00 p.m. ET on May 6, 2022.
Bidding in Auction 112 is scheduled to start on June 7, 2022.

FOR FURTHER INFORMATION CONTACT:
General Auction 112 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
Auction 112 Legal Information: Mary Lovejoy or Andrew McArdell at
(202) 418-0660.
Licensing Information: Shaun Maher at (202) 418-2324 or Kevin
Harding at (202) 418-7077.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal
Communication Commission's (Commission or FCC) document, Auction 112
Procedures Public Notice, in AU Docket No. 21-449; DA 21-125, released
on February 10, 2022. The complete text of this document, including
attachments and any related documents, is available on the Commission's
website at <a href="http://www.fcc.gov/auction/112">http://www.fcc.gov/auction/112</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#e3a5a0a0d6d3d7a3858080cd848c95">[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 112 Procedures Public Notice, the Office of
Economics and Analytics (OEA) and the Media Bureau (MB) establish the
procedures and minimum opening bid amounts to be used for Auction 112,
an auction of construction permits for full power television (TV)
stations. Bidding in this auction is scheduled to start on June 7,
2022. The Auction 112 Procedures Public Notice provides details
regarding the procedures, terms, conditions, dates, and deadlines
governing participation in Auction 112 bidding, as well as an overview
of the post-auction application and payment processes.

B. Background and Relevant Authority

2. On November 19, 2021, OEA and MB released a public notice
seeking comment on competitive bidding procedures to be used in Auction
112. One party filed comments in response to the Auction 112 Comment
Public Notice, 86 FR 68203, December 1, 2021, and one party filed a
reply. In the Auction 112 Procedures Public Notice, OEA and MB resolve
all open issues raised in the Auction 112 Comment Public Notice.
Auction 112 will proceed pursuant to the procedures described in the
Auction 112 Procedures Public Notice, which have been adopted in
accordance with 47 U.S.C. 309(j)(3).
3. Other Commission rules and decisions provide the underlying
authority for the procedures OEA and MB adopt for Auction 112. Auction
112 applicants must familiarize themselves thoroughly with the
Commission's general competitive bidding rules, including Commission
decisions in proceedings regarding competitive bidding procedures,
application requirements, and obligations of Commission licensees.
Prospective applicants should also familiarize themselves with the
Commission's television broadcast service and

[[Page 9251]]

competitive bidding requirements contained in part 73 of the
Commission's rules, 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 112 Procedures Public Notice and any future public
notices that may be released in this proceeding.
4. 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 112.

C. Construction Permits To Be Offered in Auction 112

5. Auction 112 will offer 27 construction permits for TV stations.
The construction permits that will be available in Auction 112 are
listed in Attachment A to the Auction 112 Procedures Public Notice.
6. The construction permits that will be available in Auction 112
are for channel allotments contained in the Table of Television
Allotments (TV Table) and assigned at the indicated communities for
which there currently is not a licensee. Each construction permit
awarded will be for one of the allotted-but-unlicensed channels
currently contained in the TV Table.

D. Auction Specifics

1. Auction Title and Start Date
7. This auction of construction permits for TV stations will be
referred to as ``Auction 112.'' Bidding in Auction 112 is scheduled to
begin on Tuesday, June 7, 2022. Pre-auction dates and deadlines are
listed below.
8. The initial schedule for bidding rounds will be announced by
public notice at least one week before the bidding starts in Auction
112. Unless otherwise announced, bidding on all construction permits
will be conducted on each business day until bidding has stopped on all
construction permits.
2. Auction Dates and Deadlines
9. The following dates and deadlines apply to Auction 112:

Auction Tutorial Available (via internet)......... No later than February 25, 2022.
Short-Form Application (FCC Form 175) Filing March 17, 2022, 12:00 p.m. ET.
Window Opens.
Short-Form Application (FCC Form 175) Filing March 30, 2022, 6:00 p.m. ET.
Window Deadline.
Upfront Payments (via wire transfer).............. May 6, 2022, 6:00 p.m. ET.
Mock Auction...................................... June 3, 2022.
Bidding Begins in Auction 112..................... June 7, 2022.

3. Requirements for Participation
10. Those wishing to participate in Auction 112 must:
<bullet> Submit a short-form application (FCC Form 175)
electronically prior to 6:00 p.m. ET on March 30, 2022, following the
electronic filing procedures set forth in the FCC Form 175
Instructions.
<bullet> Submit a sufficient upfront payment and an FCC Remittance
Advice Form (FCC Form 159) by 6:00 p.m. ET on May 6, 2022, following
the procedures and instructions set forth in Attachment B to the
Auction 112 Procedures Public Notice.
<bullet> Comply with all provisions outlined in the Auction 112
Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auction 112

A. General Information Regarding Short-Form Applications

11. A short-form application, or FCC Form 175, provides information
that the Commission uses to determine whether the applicant has the
legal, technical, and/or 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
112 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 112 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 112 must file a more comprehensive post-
auction, long-form application FCC Form 2100, Schedule A, in the Media
Bureau's Licensing and Management System (LMS) for the construction
permits it wins in the auction.
12. A party seeking to participate in Auction 112 must file an FCC
Form 175 electronically via the Auction Application System prior to
6:00 p.m. ET on March 30, 2022, 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. Below OEA and MB describe more fully the information
disclosures and certifications required in the short-form application.
Each Auction 112 applicant 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 March 30, 2022.
13. An Auction 112 applicant bears full responsibility for
submitting an accurate, complete, and timely short-form application.
Pursuant to the Commission's competitive bidding rules, an applicant
must make a series of certifications under penalty of perjury on its
FCC Form 175 related to the information provided in its application and
its participation in the auction, and an applicant must confirm that it
is legally, technically, financially, and otherwise qualified to hold a
permit. Additionally, each participant in Auction 112 must certify that
it has read the Auction 112 Procedures Public Notice and familiarized
itself both with the auction procedures and with the requirements for
obtaining a construction permit for a television broadcast station. If
an Auction 112 applicant fails to make the required certifications in
its FCC Form 175 by the filing deadline, then its application will be
deemed unacceptable for filing and cannot be corrected after the filing
deadline.
14. An applicant should note that submitting an FCC Form 175 (and
any amendments thereto) constitutes a representation by the certifying
official that he or she is an authorized representative of the
applicant with authority to bind the applicant, that he or she has read
the form's instructions

[[Page 9252]]

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.
15. Applicants are cautioned that, because the required information
submitted in FCC Form 175 bears on each applicant's qualifications,
requests for confidential treatment will not be routinely granted. The
Commission generally has held that it may publicly release confidential
business information where the party has put that information at issue
in a Commission proceeding or where the Commission has identified a
compelling public interest in disclosing the information. In this
regard, the Commission specifically has held that information submitted
in support of receiving bidding credits in auction proceedings should
be made available to the public.
16. No individual or entity may file 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.
17. 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 112 by
multiple entities controlled by the same individual or set of
individuals generally will not be permitted. Consistent with this
requirement, a broadcaster interested in bidding on more than one
construction permit cannot use two or more subsidiary entities to bid
separately on construction permits in separate markets, regardless of
whether each subsidiary were to select different construction permits
on its short-form application. Likewise, if an entity, individual, or
set of individuals hold controlling interests in multiple entities that
are interested in participating in Auction 112, regardless of whether
those entities have other, non-shared controlling or non-controlling
interests, those entities must participate in the auction through a
single bidding entity and only that bidding entity may file an auction
application. In that regard, the bidding entity must disclose in its
short-form application any joint ventures or other agreements or
arrangements with any commonly controlled, non-applicant entities
related to bidding in Auction 112. 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.
18. OEA and MB discuss below additional details regarding certain
information required to be submitted in the FCC Form 175. An applicant
should consult the Commission's rules to ensure that, in addition to
the materials described below, all required information is included in
its short-form application. To the extent the information in the
Auction 112 Procedures Public Notice does not address an applicant's
specific operating structure, or if the applicant needs additional
information or guidance concerning the described disclosure
requirements, the applicant should review the educational materials for
Auction 112 (see the Education section of the Auction 112 website at
<a href="http://www.fcc.gov/auction/112">www.fcc.gov/auction/112</a>) and use the contact information provided in
the Auction 112 Procedures Public Notice to consult with Commission
staff to better understand the information that it must submit in its
short-form application.

B. Certification That Applicant Has Read the Procedures Public Notice
and Familiarized Itself With Requirements

19. In the Auction 112 Comment Public Notice, OEA and MB sought
comment on a proposal to require each participant in Auction 112 to
certify in its short-form application, under penalty of perjury, that
it has read the public notice adopting procedures for the auction and
that it has familiarized itself both with the auction procedures and
with the requirements for obtaining a construction permit for a TV
station. As with other certifications required to be made in an auction
application, a failure to make the certification would render the
application unacceptable for filing, and the applicant will not be
found qualified to bid. OEA and MB proposed this requirement to help
ensure that each applicant has reviewed the procedures to become a
qualified bidder and participate in the auction process and that it has
investigated and assessed technical and business factors that may be
relevant to its use of the licenses being offered. OEA and MB expressed
the belief that this requirement would promote an applicant's
successful participation and minimize its risk of defaulting on its
auction obligations. No parties filed comments addressing this
proposal, and OEA and MB adopt it in the Auction 112 Procedures Public
Notice.
20. This certification is designed to bolster applicants' efforts
to educate themselves about the procedures for auction participation
and to ensure that, prior to submitting their short-form applications,
applicants understand their obligation to stay abreast of relevant,
forthcoming information. Familiarity with the Commission's rules and
procedures governing Auction 112 may also help bidders avoid the
consequences to them associated with defaults, which also cause harm to
other applicants and the public by reducing the efficiency of the
auction process and reducing the likelihood that the license will be
assigned to the bidder that values it the most. This certification,
along with the other certifications required pursuant to 47 CFR
1.2105(a), will promote submission of applications that meet the
Commission's requirements, thereby leading to a more efficient
application process.
21. A substantively similar requirement was recently instituted for
Auction 110, a Commission auction of flexible-use licenses in the 3.45-
3.55 GHz band. That requirement furthered a long-standing policy under
which the Commission expressly places a burden upon each applicant to
be thoroughly familiar with the procedures, terms, and conditions
contained in the relevant Procedures Public Notice and any future
public notices that may be released in the auction proceeding. While
the certification OEA and MB add refers to information regarding
auction procedures and licensing that is available at the time of
certification, potential auction applicants are on notice that their
educational efforts must continue even after their short-form
applications are filed. Commission staff routinely makes available
detailed educational materials, such as interactive, online tutorials
and technical guides, to enhance interested parties' comprehension of
the pre-bidding and bidding processes and to help minimize the need for
applicants to engage outside engineers, legal counsel, or other auction
experts.
22. For these reasons, OEA and MB will require each Auction 112
applicant to certify as follows in its short-form application: That the
applicant has read the public notice adopting procedures for the
auction and that it has familiarized itself both with the auction
procedures and with the requirements for obtaining a construction
permit for a television broadcast station.
23. An applicant must provide this certification under penalty of
perjury, consistent with 47 CFR 1.2105(a).

[[Page 9253]]

C. Authorized Bidders

24. 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

25. An applicant must select on its FCC Form 175 all of the
construction permits on which it may want to bid. An applicant must
carefully review and verify its construction permit selections before
the FCC Form 175 filing deadline because permit selections cannot be
changed after the initial auction application filing deadline. The FCC
Auction Bidding System (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

26. 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 TV 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
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.
27. 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.
28. 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.
29. 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 permits or 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.
30. 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.
31. Applicants should bear in mind that a winning bidder will be
required to disclose in its FCC Form 2100 post-auction application the
specific terms, conditions, and parties involved in any agreement
relating to the construction permits 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
construction permits being auctioned that address or communicate
directly or indirectly bids (including specific prices), bidding
strategies (including the specific construction 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

32. 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 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.
33. 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

34. The provisions in 47 U.S.C. 310 require the Commission to
review

[[Page 9254]]

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 112 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. Information Procedures During the Auction Process

35. Consistent with past practice in most recent Commission
spectrum auctions, OEA and MB adopt the proposal to limit information
available in Auction 112 in order to discourage unproductive and
anticompetitive strategic behavior. Accordingly, OEA and MB will not
identify bidders placing particular bids until after the bidding has
closed. While OEA and MB generally make available to the public
information provided in each applicant's FCC Form 175 following an
initial review by Commission staff, they will not make public until
after bidding has closed: (1) The construction permits that an
applicant selects for bidding in its short-form application, (2) the
amount of any upfront payment made by or on behalf of an applicant, (3)
any applicant's bidding eligibility, and (4) any other bidding-related
information that might reveal the identity of the bidder placing a bid.
36. The limited information procedures used in past auctions have
helped safeguard against potential anticompetitive behavior such as
retaliatory bidding and collusion. No commenters objected to this
proposal, and OEA and MB find nothing in the record to suggest that
they should not use those procedures for Auction 112. The competitive
benefits associated with limiting information disclosure support
adoption of such procedures and outweigh the potential benefits of full
disclosure.
37. After the close of each round of bidding in Auction 112, under
the limited information procedures (sometimes also referred to as
anonymous bidding), for each permit OEA and MB will make public its
current provisionally winning bid amount, the minimum acceptable bid
amount for the following round, and the amounts of all bids placed on
the permit during the round. These reports will be publicly accessible.
38. Throughout the auction, OEA and MB will provide bidders with
secure access to certain non-public bidding information while bidding
is ongoing. For example, bidders will be able to view their own level
of eligibility, both before and during the auction.
39. After the close of bidding, bidders' permit selections, upfront
payment amounts, bidding eligibility, bids, and other bidding-related
information will be made publicly available.
40. OEA and MB warn applicants that direct or indirect
communication to other applicants or the public disclosure of non-
public information (e.g., reductions in eligibility, identities of
bidders) could violate the Commission's rule prohibiting certain
communications. Therefore, to the extent an applicant believes that
such a disclosure is required by law or regulation, including
regulations issued by the U.S. Securities and Exchange Commission
(SEC), OEA and MB strongly urge that the applicant consult with
Commission staff in the Auctions Division before making such
disclosure.

I. Prohibited Communications and Compliance With Antitrust Laws

41. The rules prohibiting certain communications set forth in 47
CFR 1.2105(c) and 73.5002(d) and (e) apply to each ``applicant'' in
Auction 112. The provisions in 47 CFR 1.2105(c)(1) provide 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 Section 1.2105(c)
42. 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.
Thus, an auction applicant that does not correct deficiencies in its
application, fails to submit a timely and sufficient upfront payment,
or does not otherwise become qualified, remains an ``applicant'' for
purposes of the rule and remains subject to the prohibition on certain
communications until the applicable down payment deadline.
2. Prohibition Applies Until Down Payment Deadline
43. 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 after the auction closes, which
will be announced in a future public notice.
3. Scope of Prohibition on Certain Communications; Prohibition on Joint
Bidding Agreements
44. The provisions in 47 CFR 1.2105(c) prohibit 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 short-form
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.
45. In addition to express statements of bids and bidding
strategies, the prohibition against communicating ``in

[[Page 9255]]

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. Applicants are reminded
that the prohibition on communications between applicants begins at the
deadline for submitting short-form applications and before the public
notice identifying applicants is released. Special care should be taken
with regard to any public disclosures or private communications
regarding bids or bidding strategies during the period following the
short-form application deadline when the identity of other applicants
is not known.
46. 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
47. Subject to the limited exceptions for communications within the
scope of any arrangement consistent with the exclusion from the
Commission's rule prohibiting joint bidding, 47 CFR 1.2105(c)(1)
prohibits applicants from communicating with specified other parties
only with respect to ``their own, or each other's, or any other
applicant's bids or bidding strategies . . . .'' The Prohibited
Communications Guidance Public Notice, 80 FR 63215, October 19, 2015,
released in advance of the broadcast incentive auction (Auction 1000)
reviewed the scope of the prohibition generally, as well as specific
variations on the prohibition that were unique to Auction 1000. As the
Commission explained therein, a communication conveying ``bids or
bidding strategies (including post-auction market structure)'' must
also relate to the ``licenses being auctioned'' in order to be covered
by the prohibition. Thus, the prohibition is limited in scope and does
not apply to all communications between or among the specified parties.
The Commission consistently has made clear that application of the rule
prohibiting communications has never required total suspension of
essential ongoing business. Entities subject to the prohibition may
negotiate agreements during the prohibition period, provided that the
communications involved do not relate to both: (1) The licenses or
permits being auctioned and (2) bids or bidding strategies or post-
auction market structure.
48. Accordingly, business discussions and negotiations that are
unrelated to bidding in Auction 112 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 112 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 or intends to place bids,
would convey bids or bidding strategies and would be prohibited.
49. 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.
50. 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.
51. Likewise, when completing a short-form application, each
applicant should avoid any statements or disclosures that may violate
47 CFR 1.2105(c), particularly in light of the limited information
procedures in effect for Auction 112. Specifically, an applicant should
avoid including any information in its short-form application that
might convey information regarding its permit selections, such as
referring to certain markets in describing agreements, including any
information in application attachments that will be publicly available
that may otherwise disclose the applicant's permit selections, or using
applicant names that refer to permits being offered.
52. 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
53. The provisions in 47 CFR 1.2105(c) do 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 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

[[Page 9256]]

liability if a violation of the rule has occurred.
54. 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. OEA
and MB emphasize that whether a prohibited communication has taken
place in a given case will depend on all the facts pertaining to the
case, including who possessed what information, what information was
conveyed to whom, and the course of bidding in the auction.
55. OEA and MB remind potential applicants that they 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. OEA
and MB remind potential applicants, however, that no person may serve
as an authorized bidder for more than one applicant in Auction 112.
56. 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 or a statement on social media that
it intends to stop bidding or does not intend to bid at all in an
auction could give rise to a finding of a 47 CFR 1.2105 violation.
Similarly, an FCC Form 175 applicant's public statement of intent not
to place bids during bidding in Auction 112 could also violate the
rule.
5. Section 1.2105(c) Certifications
57. By electronically submitting its FCC Form 175, each applicant
in Auction 112 certifies its compliance with 47 CFR 1.2105(c) and
73.5002(d) of the rules. If an applicant has a non-controlling interest
with respect to more than one application, then the applicant must
certify that it has established internal control procedures to preclude
any person acting on behalf of the applicant from possessing
information about the bids or bidding strategies of more than one
applicant or communicating such information with respect to either
applicant to another person acting on behalf of and possessing such
information regarding another applicant. 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
58. The provision in 47 CFR 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
59. A party reporting any information or communication pursuant to
47 CFR 1.65 or 1.2105(a)(2) or (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.
60. 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 112 Procedures Public Notice. For Auction 112,
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#2140544255484e4f101013614742420f464e57">[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#42233721362b2d2c737370022421216c252d34">[email&#160;protected]</a> or (202) 418-0660 for guidance prior to making any
filing.
61. 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. OEA and MB
encourage such parties to coordinate with the Auctions Division staff
about the procedures for submitting reports of prohibited
communications.
8. Winning Bidders Must Disclose Terms of Agreements
62. Each applicant that is a winning bidder will be required to
provide, as part of 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. This 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. Additional Information Concerning Rule Prohibiting Certain
Communications in Commission Auctions
63. A summary listing of documents issued by the Commission and OEA
addressing the application of 47 CFR 1.2105(c) is available on the
Commission's auction web page at <a href="http://www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications">www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications</a>.
10. Antitrust Laws
64. 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

[[Page 9257]]

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.
65. 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 112 and in future auctions, among
other sanctions.

J. New Entrant Bidding Credit

66. 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.
67. 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 112. 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:
<bullet> 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;
<bullet> 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;
<bullet> 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.
68. Bidding credits are not cumulative; qualifying applicants
receive either the 25% or the 35% bidding credit, but not both.
69. 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
112, 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. Each prospective bidder is reminded, however, that
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. OEA and MB remind each applicant of
its duty to continuously maintain the accuracy of information submitted
in its auction application.
70. Under broadcast attribution rules, those entities or
individuals with an attributable interest in a bidder include:
<bullet> All officers and directors of a corporate bidder;
<bullet> any owner of 5% or more of the voting stock of a corporate
bidder;
<bullet> all general partners and limited partners of a partnership
bidder, unless the limited partners are sufficiently insulated; and
<bullet> all members of a limited liability company, unless
sufficiently insulated.
71. 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.
72. In the New Entrant Bidding Credit Reconsideration Order, 64 FR
44856, August 18, 1999, the Commission further refined the eligibility
standards for the new entrant bidding credit, judging it appropriate to
attribute the media interests held by very substantial investors in, or
creditors of, an applicant claiming new entrant status. Specifically,
the attributable mass media interests held by an individual or entity
with an equity and/or debt interest in an applicant shall be attributed
to that 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.
73. In the Diversity Order, 76 FR 7719, February 11, 2011, the
Commission relaxed the equity/debt plus attribution standard, to allow
for higher investment opportunities in entities meeting the definition
of ``eligible entities.'' An ``eligible entity'' is defined in Note
2(i) of 47 CFR 73.3555. Pursuant to the Diversity Order, 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.
74. 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
75. 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

[[Page 9258]]

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.
2. Unjust Enrichment
76. 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.

K. Provisions Regarding Former and Current Defaulters

77. 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 112, 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).
78. 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.
79. In addition to the Auction 112 Procedures Public Notice, OEA
and MB encourage applicants to review previous guidance on default and
delinquency disclosure requirements in the context of the auction
short-form application process. Parties are also encouraged to consult
with Auctions Division staff if they have any questions about default
and delinquency disclosure requirements.
80. 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.
81. OEA and MB remind each applicant, however, that the
Commission's Red Light Display System, which provides information
regarding debts currently owed to the Commission, may not be
determinative of an auction applicant's ability to comply with the
default and delinquency disclosure requirements of 47 CFR 1.2105. Thus,
while the red-light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's lack of
current ``red light'' status is not necessarily determinative of its
eligibility to participate in an auction (or whether it may be subject
to an increased upfront payment obligation). Moreover, a prospective
applicant in Auction 112 should note that any long-form applications
filed after the close of bidding will be reviewed for compliance with
the Commission's red-light rule, and such review may result in the
dismissal of a winning bidder's long-form application. OEA and MB
encourage each applicant to carefully review all records and other
available Federal agency databases and information sources to determine
whether the applicant, or any of its affiliates, or any of its
controlling interests, or any of the affiliates of its controlling
interests, currently owes or was ever delinquent in the payment of non-
tax debt owed to any Federal agency.

L. Optional Applicant Status Identification

82. 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.

M. Noncommercial Educational Status Election

83. In the NCE Second Report and Order, 68 FR 26220, May 15, 2003,
the Commission held that applications for noncommercial educational
(NCE) broadcast 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.
Accordingly, if an FCC Form 175 filed during the Auction

[[Page 9259]]

112 filing window identifying the application's proposed station as
noncommercial educational is mutually exclusive with any application
filed during that window for a commercial station, the NCE application
will be returned as unacceptable for filing 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 NCE
operation for any television broadcast station acquired in this
auction. This NCE election cannot be reversed after the initial
application filing deadline.

N. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
84. After the initial short-form application filing deadline, an
Auction 112 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 modifications 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
85. 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 112. Consistent with the requirements for
spectrum auctions, an applicant for Auction 112 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.
3. Modifying an FCC Form 175
86. As noted above, a party seeking to participate in Auction 112
must file an FCC Form 175 electronically via the FCC's Auction
Application System. During the short-form application filing window, an
applicant will be able to make any necessary modifications to its FCC
Form 175 in the Auction Application System. An applicant that has
certified and submitted its FCC Form 175 before the short-form
application filing deadline may continue to make modifications as often
as necessary until the filing deadline; however, the applicant must re-
certify and re-submit its FCC Form 175 before the filing deadline in
order to confirm and effect any application changes. After each
submission, a confirmation page will be displayed stating the
submission time and submission date.
87. An applicant will also be allowed to modify its FCC Form 175 in
the Auction Application System, except for certain fields, during the
resubmission filing window and after the release of the public notice
announcing the qualified bidders for an auction. During these times, if
an applicant needs to make permissible minor changes to its FCC Form
175 or must make changes in order to maintain the accuracy and
completeness of its application pursuant to 47 CFR 1.65 and
1.2105(b)(4), then it must make the change(s) in the Auction
Application System and re-certify and re-submit its application to
confirm and effect the change(s).
88. An applicant's ability to modify its FCC Form 175 in the
Auction Application System will be limited between the closing of the
initial filing window and the opening of the application resubmission
filing window, and between the closing of the resubmission filing
window and the release of the public notice announcing the qualified
bidders for an auction. During these periods, an applicant will be able
to view its submitted application, but will be permitted to modify only
the applicant's address, responsible party address, and contact
information (e.g., name, address, telephone number, etc.) in the
Auction Application System. An applicant will not be able to modify any
other pages of the FCC Form 175 in the Auction Application System
during these periods. If, during these periods, an applicant needs to
make other permissible minor changes to its FCC Form 175, or changes to
maintain the accuracy and completeness of its application pursuant to
47 CFR 1.65 and 1.2105(b)(4), then the applicant must submit a letter
briefly summarizing the changes to its FCC Form 175 via email to
<a href="/cdn-cgi/l/email-protection#84e5f1e7f0edebeab5b5b6c4e2e7e7aae3ebf2">[email&#160;protected]</a>. The email summarizing the changes must include a
subject line referring to Auction 112 and the name of the applicant,
for example, ``Re: Changes to Auction 112 Auction Application of XYZ
Corp.'' Any attachments to the email must be formatted as Adobe[supreg]
Acrobat[supreg] (PDF) or Microsoft[supreg] Word documents. An applicant
that submits its changes in this manner must subsequently modify,
certify, and submit its FCC Form 175 application(s) electronically in
the Auction Application System once it is again open and available to
applicants.
89. Applicants should also note that even at times when the Auction
Application System is open and available to applicants, the system will
not allow an applicant to make certain other permissible changes itself
(e.g., correcting a misstatement of the applicant's legal
classification, name, or certifying official). If an applicant needs to
make a permissible minor change of this nature, then it must submit a
written request by email to the Auctions Division Chief, via
<a href="/cdn-cgi/l/email-protection#1e7f6b7d6a7771702f2f2c5e787d7d30797168">[email&#160;protected]</a> requesting that the Commission manually make the
change on the applicant's behalf. Once Commission staff has informed
the applicant that the change has been made in the Auction Application
System, the applicant must then re-certify and re-submit its FCC Form
175 in the Auction Application System to confirm and effect the
change(s).
90. As with filing the FCC Form 175, any amendment(s) to the
application and related statements of fact must be certified by an
authorized representative of the applicant with authority to bind the
applicant. Applicants should note that submission of any such amendment
or related statement of fact constitutes a representation by the person
certifying that he or she is an authorized representative with such
authority and that the contents of the amendment or statement of fact
are true and correct.
91. Applicants must not submit application-specific material
through the Commission's Electronic Comment

[[Page 9260]]

Filing System. Further, as discussed above, parties submitting
information related to their applications should use caution to ensure
that their submissions do not contain confidential information or
communicate information that would violate 47 CFR 1.2105(c) or the
limited information procedures adopted for Auction 112. An applicant
seeking to submit, outside of the Auction Application System,
information that might reflect non-public information, such as an
applicant's upfront payment amount, or bidding eligibility, should
consider including in its email a request that the filing or portions
of the filing be withheld from public inspection until the end of the
prohibition on certain communications pursuant to 47 CFR 1.2105(c).
92. Questions about FCC Form 175 amendments should be directed to
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 112

A. Due Diligence

93. OEA and MB remind each potential bidder that it is solely
responsible for investigating and evaluating all technical and
marketplace factors that may have a bearing on the value of the
construction permit(s) it is seeking in Auction 112 and that it is
required to certify, under penalty of perjury, that it has read the
Auction 112 Procedures Public Notice and has familiarized itself both
with the auction procedures and with the requirements for obtaining a
construction permit for a TV station. 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 permits or 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.
94. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, OEA and MB encourage each potential bidder to perform
technical analyses and/or refresh its previous analyses to assure
itself that, should it become a winning bidder for any Auction 112
construction permit, it will be able to build and operate facilities
that will fully comply with all applicable technical and legal
requirements. OEA and MB also urge each applicant to 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.
95. OEA and MB also encourage each applicant in Auction 112 to
continue to conduct its own research throughout the auction in order to
determine the existence of pending or future administrative or judicial
proceedings that might affect its decision 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 112 Procedures Public
Notice do not comprise an exhaustive list of steps that should be
undertaken prior to participating in Auction 112. 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.
96. 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 112. Each
potential bidder is responsible for undertaking research to ensure that
any permits won in this auction will be suitable for its business plans
and needs. Each potential bidder must undertake its own assessment of
the relevance and importance of information gathered as part of its due
diligence efforts.
97. 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

98. Before the opening of the short-form application filing window
for Auction 112, detailed educational information will be provided in
various formats to would-be participants on the Auction 112 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 112 website at <a href="http://www.fcc.gov/auction/112">www.fcc.gov/auction/112</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.
99. OEA and MB believe that parties interested in participating in
Auction 112 will find the interactive, online tutorial an efficient and
effective way to further their understanding of the application and
bidding processes. The online tutorial will allow viewers to navigate
the presentation outline, review written notes, and listen to audio of
the notes. Additional features of this web-based tool include links to
auction-specific Commission releases, email links for contacting
Commission staff, and screen shots of the online application and
bidding systems. The online tutorial will be accessible in the
Education section of the Auction 112 website at <a href="http://www.fcc.gov/auction/112">www.fcc.gov/auction/112</a>. Once posted, the tutorial will remain continuously accessible.

C. Short-Form Applications: Due Before 6:00 p.m. ET on March 30, 2022

100. In order to be eligible to bid in Auction 112, 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. 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 March 30,
2022. Late applications will not be accepted. No

[[Page 9261]]

filing fee is required to be paid at the time of filing a short-form
application.
101. Applications may be filed at any time beginning at noon ET on
March 17, 2022, until the filing window closes at 6:00 p.m. ET on March
30, 2022. 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 March 30, 2022]
102. 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 and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and
Opportunity for Minor Modifications
103. Commission staff will review all timely submitted applications
for Auction 112 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 (3) those that are
incomplete or deficient because of defects that may be corrected. This
public notice also will establish an application resubmission filing
window, during which an applicant may make permissible minor
modifications to its application to address identified deficiencies.
The public notice will include the deadline for resubmitting 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 each applicant 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.
104. After the initial application filing deadline on March 30,
2022, 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 112.
105. 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#ec8d998f98858382dddddeac8a8f8fc28b839a">[email&#160;protected]</a>.
2. Public Notice of Applicants' Final Application Status After Upfront
Payment Deadline
106. After Commission staff review resubmitted applications for
Auction 112 and evaluate upfront payments, OEA and MB will release a
public notice identifying applicants that have become qualified
bidders. A Qualified Bidders Public Notice will be issued before
bidding in the auction begins. 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

107. In order to be eligible to bid in Auction 112, a sufficient
upfront payment and a complete and accurate FCC Remittance Advice Form
(FCC Form 159) must be submitted before 6:00 p.m. ET on May 6, 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 (February 2003 edition) 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 112 are provided
in Attachment B to the Auction 112 Procedures Public Notice.
1. Making Upfront Payments by Wire Transfer for Auction 112
108. Upfront payments for Auction 112 must be wired to, and will be
deposited in, the U.S. Treasury.
109. Wire transfer payments for Auction 112 must be received before
6:00 p.m. ET on May 6, 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. The following
information will be needed:
ABA Routing Number: 021030004.
Receiving Bank: TREAS NYC, 33 Liberty Street, New York, NY 10045.
Beneficiary: FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.
Beneficiary Account Number: 827000001002.
Originating Bank Information (OBI Field): (Skip one space between
each information item).

``Auctionpay''.

Applicant FCC Registration Number (FRN): (use the same FRN as used
on the applicant's FCC Form 159, block 21).

Payment Type Code: (same as FCC Form 159, block 24A: ``U112'').

Note: The beneficiary account number (BNF Account Number) is
specific to the upfront payments for Auction 112. Do not use a BNF
Account Number from a previous auction.

110. At least one hour before placing the order for the wire
transfer (but on the same business day), applicants must print and fax
a completed FCC Form 159 to the FCC at (202) 418-2843. Alternatively,
the completed form can

[[Page 9262]]

be scanned and sent as an attachment to an email to
<a href="/cdn-cgi/l/email-protection#b1e3e3fef6e6d8c3d4f7d0c9d4c2f1d7d2d29fd6dec7">[email&#160;protected]</a>. On the fax cover sheet or in the email subject
header, write ``Wire Transfer--Auction Payment for Auction 112.'' To
meet the upfront payment deadline, an applicant's payment must be
credited to the Commission's account for Auction 112 before the
deadline.
111. 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.
112. Please note the following information regarding upfront
payments:
<bullet> All payments must be made in U.S. dollars.
<bullet> All payments must be made by wire transfer.
<bullet> Upfront payments for Auction 112 go to an account number
different from the accounts used in previous FCC auctions.
113. Failure to deliver a sufficient upfront payment as instructed
herein 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
114. An accurate and complete FCC Form 159 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#0a5858454d5d63786f4c6b726f794a6c6969246d657c">[email&#160;protected]</a>. On the fax cover sheet
or in the email subject header, write ``Wire Transfer--Auction Payment
for Auction 112.''
3. Upfront Payments and Bidding Eligibility
115. 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 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 112 Comment Public Notice, OEA and MB proposed an upfront
payment amount for each construction permit and sought comment on the
upfront payment amounts. Although OEA and MB received no comments
regarding the upfront payment amounts for Auction 112, they adopt
upfront payment amounts that are 25% lower than those proposed in
Attachment A of the Auction 112 Comment Public Notice so as to align
the upfront payment amounts with the reduced minimum opening bids that
are adopted below.
116. An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the construction permits on which it will bid.
OEA and MB proposed in the Auction 112 Comment Public Notice that the
amount of the upfront payment submitted by an applicant will determine
its initial bidding eligibility, the maximum number of bidding units on
which a bidder may place bids in any single round. Under that proposal,
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 112, 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.
117. OEA and MB received no comments on the proposals that the
upfront payment amount would determine a bidder's initial eligibility
and to assign each construction permit a specific number of bidding
units, equal to one bidding unit per one thousand dollars of the
upfront payment. Therefore, OEA and MB adopt these proposals. Each
applicant's upfront payment amount will determine that bidder's initial
bidding eligibility.
118. 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.
A qualified bidder's maximum eligibility will not exceed the sum of the
bidding units associated with the total number of construction permits
selected on its FCC Form 175. In some cases, a qualified bidder's
maximum eligibility may be less than the amount of its upfront payment
because the qualified bidder has either previously been in default on a
Commission construction permit or license or delinquent on non-tax debt
owed to a Federal agency, or has submitted an upfront payment that
exceeds the total amount of bidding units associated with the
construction permits it selected on its FCC Form 175. Applicants should
check their calculations carefully, as there is no provision for
increasing a bidder's eligibility after the upfront payment deadline.
119. 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

[[Page 9263]]

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.

F. Auction Registration

120. All qualified bidders for Auction 112 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.
121. 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
May 31, 2022, call the Auctions Hotline at (717) 338-2868. 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.
122. 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

123. Bidders will be able to participate in Auction 112 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.
124. Only authorized bidders bidding on behalf of a qualified
bidder will be 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 of 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 112. Please note that the SecurID[supreg] tokens can
be recycled, and the Commission requests that bidders return the tokens
to the FCC. Pre-addressed envelopes will be provided to return the
tokens once the auction has ended.
125. 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.
126. 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

127. All qualified bidders will be eligible to participate in a
mock auction on June 3, 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 Qualified Bidders Public Notice for Auction 112

I. Auction Delay, Suspension, or Cancellation

128. In the Auction 112 Comment Public Notice, OEA and MB proposed
that, at any time before or during the bidding process, OEA, in
conjunction with 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. OEA and MB received no comments on this proposal.
129. Because this approach has proven effective in resolving
exigent circumstances in previous auctions, OEA and MB adopt these
proposals regarding auction delay, suspension, or cancellation. By
public notice or by announcement through the FCC auction

[[Page 9264]]

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, in its 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.

J. Environmental Review Requirements

130. 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

131. The first round of bidding for Auction 112 will begin on June
7, 2022. The initial bidding schedule will be announced in a public
notice listing the qualified bidders, which will be released at least
one week before the start of bidding in the auction.

A. Auction Structure

1. Simultaneous Multiple Round Auction
132. In the Auction 112 Comment Public Notice, OEA and MB proposed
to auction all construction permits listed in Attachment A to the
Auction 112 Procedures Public Notice 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. OEA and MB received no comments on
this proposal, and this proposal is adopted. Unless otherwise
announced, bids will be accepted on all construction permits in each
round of the auction until bidding stops on every construction permit.
2. Round Structure
133. Limited information about the results of a round will be made
public after the conclusion of the round. Specifically, after a round
closes, OEA and MB will make available for each construction permit its
current provisionally winning bid amount, the minimum acceptable bid
amount for the following round, the amounts of all bids placed on the
construction permit during the round, and whether the license is FCC-
held. The reports will be publicly accessible. Moreover, after Auction
112 closes, OEA and MB will make available complete reports of all bids
placed during each round of the auction, including bidder identities.
134. As in past Commission spectrum auctions, bidders will have
secure access to certain non-public bidding information while bidding
is ongoing. Specifically, after each round ends, and before the next
round begins, OEA and MB will make the following information available
to individual bidders:
<bullet> The bidder's activity, based on all bids in the previous
round; and
<bullet> Summary statistics of the bidder's bidding/bid-related
actions in each round, including the construction permits on which it
bid and the price it bid for each of those construction permits, the
result of each of its bids, whether it has any provisionally winning
bids, and remaining activity rule waivers.
135. Limiting the availability of bidding information during the
auction balances the Commission's interest in providing bidders with
sufficient information about the status of their own bids and bidding
across all construction permits to allow them to bid confidently and
effectively, while restricting the availability of information that may
facilitate identification of bidders placing particular bids, which
could potentially lead to undesirable strategic bidding.
3. Round Structure
136. The initial schedule of bidding rounds will be announced in
the public 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.
137. In the Auction 112 Comment Public Notice, OEA and MB proposed
to 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 received no comments on the proposal, and they adopt it for
Auction 112. 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
138. As discussed above, 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. As noted earlier, each
construction permit is assigned a specific number of bidding units, as
listed in Attachment A to the Auction 112 Procedures Public Notice. The
bidding unit amounts listed in Attachment A of the Auction 112
Procedures Public Notice are 25% lower than the bidding unit amounts
proposed in Attachment A of the Auction 112 Comment Public Notice. OEA
and MB adopt these adjusted bidding unit amounts to correspond with the
reduced upfront payments adopted above. 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

[[Page 9265]]

construction permits does not exceed the bidder's current eligibility.
139. 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. OEA and MB received no
comments on the bidding eligibility proposals, and these proposals are
adopted.
140. To ensure that an auction closes within a reasonable period of
time, an activity rule requires bidders to bid actively throughout the
auction, rather than wait until late in the auction before
participating. Bidders are required to be active (bid or hold
provisionally winning bids) on a specific percentage of their current
bidding eligibility during each round of the auction. A bidder's
activity level in a round is the sum of the bidding units associated
with construction permits covered by the bidder's new bids in the
current round and provisionally winning bids from the previous round.
Bidding units associated with construction permits for which the bidder
has removed bids do not count towards current activity. Provisionally
winning bids are bids that would become final winning bids if the
auction were to close after the given round.
141. OEA and MB received no comments on the eligibility and
activity rules proposal. Therefore, in order to ensure that the auction
closes within a reasonable period of time, OEA and MB adopt the
following activity requirement as proposed: A bidder is required to be
active on 100% of its current eligibility during each round of the
auction. 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
142. In the Auction 112 Comment Public Notice, OEA and MB proposed
that each bidder in the auction be provided with 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. OEA and MB received no
comments on this issue.
143. Therefore, OEA and MB adopt this proposal to provide bidders
with three activity rule waivers. 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.
144. 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.
145. 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.
146. 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
147. For Auction 112, OEA and MB proposed to employ a simultaneous
stopping rule approach, which means all construction permits remain
available for bidding until bidding stops on every construction permit.
Specifically, bidding will close on all construction permits after the
first round in which no bidder submits a new bid or applies a proactive
activity rule waiver.
148. OEA and MB also sought comment on alternative versions of the
simultaneous stopping rule for Auction 112:
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 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 invoke this special
stopping rule, they 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.
149. OEA and MB proposed to exercise these options only in certain
circumstances, for example, where the

[[Page 9266]]

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 proposed to retain the
discretion to exercise any of these options with or without prior
announcement during the auction. OEA and MB received no comments on
these proposals and adopt them for Auction 112.

B. Bidding Procedures

1. Minimum Opening Bids and Acceptable Bid Amounts
150. The provision at 47 U.S.C. 309(j) 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.
151. In the Auction 112 Comment Public Notice, OEA and MB proposed
not to establish reserve prices for specific construction permits
listed in Attachment A that are different from minimum opening bid
amounts. This is consistent with previous broadcast spectrum auctions.
OEA and MB received no comments on this proposal and adopt it.
152. In the Auction 112 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 112
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, and recent broadcast transaction data, to
the extent such information is available.
153. Two commenters request that OEA and MB reduce or eliminate the
minimum opening bids that were proposed in the Auction 112 Comment
Public Notice, in order to reduce costs for prospective stations in
remote areas. Brian Lane recommends that OEA and MB cut all proposed
opening bids in half, arguing that there are considerable equipment and
engineering costs that could be prohibitive to smaller and diverse
bidders. Edge Networks, Inc d/b/a Evoca (Evoca) supports Mr. Lane's
proposal but suggests that it may not go far enough in order to bring
new, improved, and innovative TV and internet services to small,
remote, and rural communities. Evoca claims that the markets involved
in Auction 112 are so small that layering on any costs in addition to
construction and operation of a TV may all but assure that these
communities do not get any new service at all, and therefore suggests
that OEA and MB consider eliminating the minimums altogether for at
least the smaller communities.
154. OEA and MB are not persuaded by arguments that reducing the
minimum opening bids by 50% will significantly affect the viability of
prospective stations in remote areas. However, in furtherance of their
goals of promoting competition and encouraging greater participation by
an array of entities, OEA and MB adopt a more modest reduction in
minimum opening bids of 25%, which they believe balances these goals
with the goal of conducting the auction in an efficient manner that
avoids burdening bidders. Those minimum opening bids are laid out in
Attachment A to the Auction 112 Procedures Public Notice.
155. In the Auction 112 Comment Public Notice, OEA and MB proposed
that, in each round, a qualified bidder will be able to place a bid on
a given construction permit in any of up to nine different amounts.
Under the proposal, the FCC auction bidding system interface will list
the nine acceptable bid amounts for each construction permit. OEA and
MB received no comments on this proposal, and adopt it as proposed.
156. In the Auction 112 Comment Public Notice, to calculate the
first of the acceptable bid amounts, OEA and MB proposed to use a
minimum acceptable bid increment percentage of 10%. This means that the
minimum acceptable bid amount for a construction permit will be
approximately 10% greater than the provisionally winning bid amount for
the construction permit. To calculate the eight additional acceptable
bid amounts, OEA and MB proposed in the Auction 112 Comment Public
Notice to use an additional bid increment percentage of 5% of the
minimum acceptable bid. OEA and MB did not receive any comments on
these proposals to use 10% and 5% respectively in our calculation of
nine acceptable bid amounts for each construction permit. Experience in
previous broadcast auctions suggests that a minimum acceptable bid
increment percentage of 10% and an additional bid increment percentage
of 5% are sufficient to ensure active bidding. Therefore, OEA and MB
will begin the auction with a minimum acceptable bid increment
percentage of 10% and an additional bid increment percentage of 5%.
157. In Auction 112, 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. The
result of this calculation is subject to a minimum of $100. 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.
158. 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) +

[[Page 9267]]

(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.
159. OEA and MB proposed to 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 they determine that circumstances so dictate,
consistent with past practice. OEA and MB also proposed to retain the
discretion to do so on a construction permit-by-construction permit
basis. OEA and MB also proposed to retain the discretion to limit (a)
the amount by which a minimum acceptable bid for a construction permit
may increase compared with the corresponding provisionally winning bid,
and (b) the amount by which an additional bid amount may increase
compared with the immediately preceding acceptable bid amount. For
example, 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.
160. OEA and MB received no comments on these proposals concerning
changes of bid amounts, and adopt the discretion to utilize them. OEA
and MB typically exercise this discretion based on their monitoring of
ongoing bidding and reserve such discretion here. If OEA and MB
exercise this discretion, they will alert bidders by announcement in
the FCC auction bidding system during the auction.
2. Provisionally Winning Bids
161. 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.
162. In the Auction 112 Comment Public Notice, OEA and MB proposed
to 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). No
comments were received on this proposal, and OEA and MB adopt it as
proposed.
163. Accordingly, 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.
164. As a reminder, provisionally winning bids count toward
activity for purposes of the activity rule.
3. Bid Removal and Bid Withdrawal
165. In the Auction 112 Comment Public Notice, OEA and MB explained
that 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.
166. In the Auction 112 Comment Public Notice, OEA and MB proposed
to prohibit bidders from withdrawing any bid after close of the round
in which that bid was placed. This proposal was made in recognition of
the site-specific nature and wide geographic dispersion of the permits
available in this auction, as well as OEA and MB's experience with past
auctions of broadcast construction permits. OEA and MB received no
comments on this issue. Accordingly, OEA and MB will prohibit bid
withdrawals in Auction 112. 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
167. After Auction 112 closes, OEA and MB will provide a means for
the public to view and download reports of all bids placed during each
round of the auction and all bid results, including bidder identities.
5. Auction Announcements
168. 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

169. The public notice announcing the close of the bidding and
auction results will be released shortly after bidding has ended in
Auction 112. This public notice will also establish the deadlines for
submitting down payments, final payments, and the long-form
applications.

A. Down Payments

170. 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, each winning bidder must submit
sufficient funds (in addition to the upfront payment) to bring its
total amount of money on deposit with the Commission for Auction 112 to
20% of the net amount of its winning bid(s) (gross bid(s) less any
applicable new entrant bidding credit).

B. Final Payments

171. Each winning bidder will be required to submit the balance of
the net amount for each of its winning bid(s) within 10 business days
after the applicable deadline for submitting down payments.

C. Long-Form Application (FCC Form 2100--Schedule A)

172. The Commission's rules currently provide that within thirty
days following the close of bidding and notification to the winning
bidders, unless a longer period is specified by public notice, each
winning bidder must electronically submit a separate, properly
completed long-form application for each permit won, and required
exhibits, along with the applicable applicant filing fee. Winning
bidders for TV construction permits will electronically file FCC Form
2100, Schedule A, in the Media Bureau's Licensing and Management System
(LMS). Winning bidders claiming new entrant status must include an
exhibit demonstrating their eligibility for the

[[Page 9268]]

bidding credit. Further instructions on these and other filing
requirements will be provided to winning bidders in the auction closing
public notice.

D. Default and Disqualification

173. 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 Auction 112 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.
174. The percentage of the applicable bid to be assessed as an
additional payment for defaults in a particular auction is established
in advance of the auction. Accordingly, in the Auction 112 Comment
Public Notice, OEA and MB proposed to set the additional default
payment for this auction at 20% of the applicable bid. OEA and MB
received no comments on this proposal, and it is therefore adopted for
the reasons described in the Auction 112 Comment Public Notice.
175. 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 revoke any existing
authorizations held by the applicant.

E. Refund of Remaining Upfront Payment Balance

176. 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. Bidders are
encouraged to use the Refund Information icon found on the Auction
Application Manager page or the Refund Form link available on the
Auction Application Submit Confirmation page in the FCC Auction
Application System to access the form. After the required information
is completed on the blank form, the form must be printed, signed, and
submitted to the Commission by mail, fax, or email as instructed below.
177. If you have elected not to access the Refund Form through the
Auction Application Manager page, then OEA and MB request that all
information listed below be supplied in writing.

1. Name, address, contact and phone number of Bank
2. ABA Number (capable to accept ACH payments) (please verify this
number with your Bank)
3. Account Number to Credit
4. Name of Account Holder
5. FCC Registration Number (FRN)

178. 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#5002021f17073922351631283523103633337e373f26">[email&#160;protected]</a>.

Note: Refund processing generally takes up to two weeks to
complete. Bidders with questions about refunds should contact Scott
Radcliffe at (202) 418-7518 or Theresa Meeks at (202) 418-2945.

VI. Procedural Matters

A. Paperwork Reduction Act

179. 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 112 Procedures Public Notice does
not contain new or substantively 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. The Commission will be submitting a non-
substantive change request to OMB concerning OMB 3060-0600 related to
the certification requirement for Auction 112 applicants adopted
herein, and the Commission will not require Auction 112 applicants to
make this certification on FCC Form 175 until OMB has approved the non-
substantive change request.

B. Congressional Review Act

180. 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 112 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

181. 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 112 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 112 will be conducted. In this proceeding, a
Supplemental Initial Regulatory Flexibility Analysis (Supplemental
IRFA) was incorporated in the Auction 112 Comment Public Notice. The
Commission sought written public comment on the proposals in the
Auction 112 Comment Public Notice, including comments on the
Supplemental IRFA. This Supplemental Final Regulatory Flexibility
Analysis (Supplemental FRFA) supplements the FRFAs in the Competitive
Bidding Orders to reflect the actions taken in the Auction 112
Procedures Public Notice and conforms to the RFA.
182. Need for, and Objectives of, the Public Notice. The procedures
for the conduct of Auction 112 as described in the Auction 112
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 112
Procedures Public Notice provides an overview of the procedures, terms,
and conditions governing Auction 112, and the post-auction application
and payment processes, as well as setting the minimum opening bid
amount for each of the TV construction permits that are subject to
being assigned by competitive bidding.
183. To promote the efficient and fair administration of the
competitive bidding process for all Auction 112 participants, including
small businesses, in the Auction 112 Procedures Public Notice, OEA and
MB announce the following procedures:

[[Page 9269]]

<bullet> A requirement that any applicant seeking to participate in
Auction 112 certify in its short-form application, under penalty of
perjury, that it has read the public notice adopting procedures for
Auction 112, and that it has familiarized itself with those procedures
and the requirements for obtaining a construction permit for a TV
station;
<bullet> establishment of an additional default payment of 20%
under 47 CFR 1.2104(g)(2) in the event that a winning bidder defaults
or is disqualified after the auction;
<bullet> use of a simultaneous multiple-round auction format,
consisting of sequential bidding rounds with a simultaneous stopping
rule (with discretion to exercise alternative stopping rules under
certain circumstances);
<bullet> use of anonymous bidding/limited information procedures
which will not make public until after bidding has closed: (1) The
construction permits that an applicant selects for bidding in its
short-form application, (2) the amount of any upfront payment made by
or on behalf of an applicant, (3) any applicant's bidding eligibility,
and (4) any other bidding-related information that might reveal the
identity of the bidder placing a bid;
<bullet> retention by OEA, in conjunction with MB, of its
discretion to delay, suspend, or cancel bidding in Auction 112 for any
reason that affects the fair and efficient conduct of the competitive
bidding process;
<bullet> retention by OEA of its discretion to adjust the bidding
schedule in order to manage the pace of Auction 112;
<bullet> a specific minimum opening bid amount for each
construction permit available in Auction 112;
<bullet> a specific number of bidding units for each construction
permit;
<bullet> a specific upfront payment amount for each construction
permit;
<bullet> establishment of a bidder's initial bidding eligibility in
bidding units based on that bidder's upfront payment through assignment
of a specific number of bidding units for each construction permit;
<bullet> use of an activity requirement so that bidders must bid
actively during the auction rather than waiting until late in the
auction before participating;
<bullet> a single stage auction in which a bidder is required to be
active on 100% of its bidding eligibility in each round of the auction;
<bullet> provision of three activity waivers for each qualified
bidder to allow it to preserve eligibility during the course of the
auction;
<bullet> use of minimum acceptable bid amounts and additional bid
increments, along with a proposed methodology for calculating such
amounts, while retaining discretion to change their methodology if
circumstances dictate;
<bullet> bid removal procedures; and
<bullet> a prohibition on bid withdrawals.
184. 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.
185. 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 112 Comment Public
Notice.
186. 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; and (3) satisfies any additional criteria established by the
SBA.
187. The specific competitive bidding procedures and minimum
opening bid amounts described in the Auction 112 Procedures Public
Notice will affect all applicants participating in Auction 112. OEA and
MB expect that the pool of applicants who seek to bid in Auction 112
will include firms of all sizes.
188. 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 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.
189. Additionally, the Commission has estimated the number of
licensed commercial television stations to be 1,373. Of this total,
1,269 stations (or about 92.4%) had revenues of $41.5 million or less,
according to Commission staff review of the BIA Kelsey Inc. Media
Access Pro Television Database (BIA), and therefore these stations
qualify as small entities under the SBA definition.
190. In addition, the Commission has estimated the number of
licensed noncommercial educational (NCE) television stations to be 385.
These stations are non-profit, and therefore considered to be small
entities.
191. 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 112.
192. 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 112 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 television station is dominant in its field of operation.
193. OEA and MB also note that they are unable to accurately
develop an estimate of how many of the potential Auction 112 applicants
might prove to

[[Page 9270]]

be 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 certain
auctions of licenses for wireless services). OEA and MB conclude,
however, that the majority of Auction 112 eligible bidders will likely
meet the SBA's definition of a small business concern.
194. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities. For Auction 112, 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.
195. Auction 112 applicants, including small entities, will become
qualified to bid in Auction 112 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 112 applicant must
maintain the accuracy of its previously filed short-form application
electronically using the FCC Auction Application System.
196. 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 112 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 a long-form application and
required exhibits for each construction permit won through Auction 112.
197. Further, as required by 47 CFR 1.2105(c), reports concerning
prohibited communications must be filed with the Chief of the Auctions
Division, as detailed in the Auction 112 Procedures Public Notice.
198. 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.
199. OEA and MB intend that the procedures adopted in the Auction
112 Procedures Public Notice to facilitate participation in Auction 112
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 112 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 112. 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 112, should ensure
that the auction will be administered predictably, efficiently and
fairly, thus providing certainty for small entities as well as other
auction participants. In addition, in consideration of comments
submitted in this proceeding, the minimum opening bid amounts were
reduced to amounts 25% lower than those that had been proposed in the
Auction 112 Comment Public Notice; this change is intended to encourage
participation in Auction 112 by a greater number of interested parties,
which may include some small entities.
200. Notice to SBA. The Commission will send a copy of the Auction
112 Procedures Public Notice, including this 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. 2022-03348 Filed 2-17-22; 8:45 am]
BILLING CODE 6712-01-P

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