Home/Federal/Federal Register/2025-23785

Rule2025-23785

Auction of Advanced Wireless Services (AWS-3) Licenses; Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 113

Primary source

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

Published

December 23, 2025

Issuing agencies

Federal Communications Commission

Abstract

In this document, the Federal Communications Commission (Commission) summarizes the procedures, deadlines, and upfront payment and minimum opening bid amounts for the upcoming auction of 200 Advanced Wireless Services licenses for spectrum in the Federal Communications Commission's inventory in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands (AWS-3 bands). This document provides details regarding the procedures, terms, conditions, dates, and deadlines governing participation in Auction 113 bidding, as well as overview of the post-auction application and payment processes.

Full Text

<html>
<head>
<title>Federal Register, Volume 90 Issue 244 (Tuesday, December 23, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 244 (Tuesday, December 23, 2025)]
[Rules and Regulations]
[Pages 59979-60012]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23785]

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

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 27

[AU Docket No. 25-117; DA 25-1075; FR ID 323537]

Auction of Advanced Wireless Services (AWS-3) Licenses; Filing
Requirements, Minimum Opening Bids, Upfront Payments, and Other
Procedures for Auction 113

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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

SUMMARY: In this document, the Federal Communications Commission
(Commission) summarizes the procedures, deadlines, and upfront payment
and minimum opening bid amounts for the upcoming auction of 200
Advanced Wireless Services licenses for spectrum in the Federal
Communications Commission's inventory in the 1695-1710 MHz, 1755-1780
MHz, and 2155-2180 MHz bands (AWS-3 bands). This document provides
details regarding the procedures, terms, conditions, dates, and
deadlines governing participation in Auction 113 bidding, as well as
overview of the post-auction application and payment processes.

[[Page 59980]]

DATES: Applications to participate in Auction 113 must be submitted
before 6:00 p.m. Eastern Time (ET) on February 11, 2026. Upfront
payments for Auction 113 must be received by 6:00 p.m. ET on April 8,
2026. Bidding in Auction 113 is scheduled to start on June 2, 2026.

FOR FURTHER INFORMATION CONTACT: General Auction 113 Information: FCC
Auctions Hotline at (888) 225-5322, option two; or (717) 338-2868.
Auction 113 Legal Information: Valerie Barrish or Yasiman Montgomery at
(202) 418-0660. AWS-3 Bands Licensing Information: Madelaine Maior at
(202) 418-1466 or Jeffery Tignor at (202) 418-0774.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
document (Auction 113 Procedures Public Notice) in AU Docket No. 25-
117; DA 25-1075; adopted and released on December 18, 2025. The
complete text of this document, including attachments and any related
documents, are available on the Commission's website at <a href="https://docs.fcc.gov/public/attachments/DA-25-1075A1.pdf">https://docs.fcc.gov/public/attachments/DA-25-1075A1.pdf</a> or by using the search
function for AU Docket No. 25-117, on the Commission's Electronic
Comment Filing System (ECFS) web page at <a href="http://www.fcc.gov/ecfs">www.fcc.gov/ecfs</a>. To request
materials in accessible formats for people with disabilities, send an
email to <a href="/cdn-cgi/l/email-protection#0a4c49493f3a3e4a6c6969246d657c">[email&#160;protected]</a> or by call the Consumer & Governmental Affairs
Bureau at (202) 418-0530.

I. General Information

A. Introduction

In the Auction 113 Procedures Public Notice, the Office of
Economics and Analytics (OEA), jointly with the Wireless
Telecommunications Bureau (WTB), establishes the procedures to be used
for Auction 113, the auction of 200 Advanced Wireless Services licenses
for spectrum in the Commission's inventory in the 1695-1710 MHz, 1755-
1780 MHz, and 2155-2180 MHz bands (collectively, the ``AWS-3'' bands).
Auction 113, which marks the Federal Communications Commission's
(Commission) first auction since its authority to use competitive
bidding lapsed in 2023, will bring unused, valuable 5G-ready spectrum
to market, and proceeds will fund the Commission's ongoing efforts to
protect American networks from untrustworthy and insecure foreign
equipment.
Bidding in Auction 113 is scheduled to commence on June 2, 2026.
Auction 113 will be conducted using an ascending clock auction with a
supply of one in each category of frequency-specific channel blocks,
referred to as the ``clock-1'' auction format. The Auction 113
Procedures Public Notice provides details regarding the procedures,
terms, conditions, dates, and deadlines governing participation in
Auction 113 bidding, as well as an overview of the post-auction
application and payment processes.

B. Background and Relevant Authority

The Commission is offering licenses in Auction 113 pursuant to the
Spectrum and Secure Technology and Innovation Act of 2024 (Spectrum and
Secure Technology and Innovation Act). The Spectrum and Secure
Technology and Innovation Act directs the Commission to initiate a
system of competitive bidding under 47 U.S.C. 309(j) to grant licenses
for spectrum in its inventory in the AWS-3 bands as of December 23,
2024. See Servicemember Quality of Life Improvement and National
Defense Authorization Act for Fiscal Year 2025, Public Law 118-159,
Div. E, Title LIV, Sec. Sec. 5401-5405, Sec. 5403. Auction proceeds
will support the Commission's Supply Chain Reimbursement Program, which
implements the Secure and Trusted Communications Networks Act of 2019
by reimbursing eligible advanced communications service providers for
their costs to remove, replace, and dispose of Huawei Technologies
Company or ZTE Corporation equipment and services obtained on or before
June 30, 2020.
On March 11, 2025, in accordance with 47 U.S.C. 309(j)(3), OEA and
WTB released the Auction 113 Comment Public Notice, 90 FR 13117 (March
20, 2025), seeking comment on certain competitive bidding and other
various procedures to be used in Auction 113. Ten parties filed
comments in response to the Auction 113 Comment Public Notice, and six
parties filed reply comments.
One commenter recommends that funds from spectrum auctions and
licenses be strategically and primarily directed towards expanding
rural Tribal cellular services and communications infrastructure
support on Tribal lands rather than for incumbent reimbursement. No
parties commented on this recommendation. Even if this recommendation
did not conflict with Congress's express direction for the Auction 113
proceeds, the use of auction proceeds is outside the scope of this
proceeding on auction procedures as well as outside the scope of OEA's
and WTB's delegated authority.
The Commission's rules and decisions provide the underlying
authority for the procedures OEA and WTB adopt for Auction 113. As
specified in 47 CFR 27.1105, any auction of licenses for spectrum in
the AWS-3 band is to be governed by the bidding procedures set forth in
47 CFR part 1, subpart Q. The Commission has also adopted rules
regarding the AWS-3 bands, as well as the licensing and operating rules
that are applicable to all 47 CFR part 27 services. See 2014 AWS-3
Report and Order, 79 FR 32366 (June 4, 2014). On July 24, 2025, the
Commission adopted the 2025 AWS-3 Report and Order, 90 FR 36385 (August
4, 2025), in which it updated the designated entity provisions of the
47 CFR part 27 rules that had applied to the Commission's first auction
of AWS-3 spectrum in 2014. One commenter requests that OEA and WTB
adopt an accelerated two-year buildout deadline for Auction 113 winning
bidders because it claims that doing so will favor bidders with the
financial capacity, operational readiness, and technical sophistication
to promptly deploy service as well as discourage ``speculative
bidding.'' Four commenters oppose this request. The Commission adopted
buildout rules for the AWS-3 bands in the 2014 AWS-3 Report and Order,
and any amendments to those rules require a rulemaking proceeding and
cannot be made in the context of establishing the procedures for
Auction 113 because such action is outside the scope of OEA's and WTB's
delegated authority.
Prospective applicants should familiarize themselves with the 47
CFR part 1, subpart Q rules, including amendments and clarifications
thereto, as well as Commission decisions regarding competitive bidding
procedures, application requirements, and obligations of Commission
licensees. In addition, applicants must be thoroughly familiar with the
procedures, terms, and conditions contained in the Auction 113
Procedures Public Notice and any future public notices that may be
released in this proceeding.
The terms contained in the Commission's rules, relevant orders, and
public notices are not negotiable. OEA and WTB may amend or supplement
the information contained in their public notices at any time, and may
issue public notices to convey any new or supplemental information that
may generally apply to applicants. Pursuant to the Commission's rules,
OEA and WTB also retain the authority to implement further procedures
during the course of this auction. It is the responsibility of all
applicants to remain current with all Commission rules and with all
public notices pertaining to Auction 113.

[[Page 59981]]

C. Description of Licenses To Be Offered in Auction 113

The AWS-3 spectrum available in Auction 113 will be licensed on a
geographic area basis. Of the 200 licenses offered in Auction 113, the
48 licenses located in the A1 block (1695-1700 MHz), B1 block (1700-
1710 MHz), H block (1760-1765/2160-2165), I block (1765-1770/2165-
2170), and J block (1770-1780 MHz/2170-2180 MHz) are based on Economic
Areas (EAs) and the 152 located in the G block (1755-1760/2155-2160)
are based on Cellular Market Areas (CMAs). The AWS-3 frequencies will
be licensed in five and ten megahertz blocks, with each license having
a total bandwidth of five, ten, or twenty megahertz. The list of
licenses to be offered in Auction 113 is available in the Attachment A
file on the Auction 113 website at <a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>.
One commenter requests that Block G be redefined using county level
geographic areas for Auction 113, rather than on a CMA basis, as
specified in 47 CFR part 27. However, implementing such a change would
require an amendment to the Commission's part 27 rules that must be
adopted in a rulemaking proceeding. A Commission rule cannot be amended
in the context of this proceeding establishing the procedures for
Auction 113 because such action is outside the scope of OEA's and WTB's
delegated authority.
OEA and WTB did not seek comment on establishing a Tribal licensing
window for AWS-3 spectrum inventory in the Auction 113 Comment Public
Notice, however five parties commented on this topic. The Commission
declined in the 2025 AWS-3 Report and Order to implement a Tribal
licensing window for Auction 113, and has therefore resolved this
issue.
The 1695-1710 MHz band will be licensed in an unpaired
configuration for low-power mobile transmit (i.e., uplink) operations.
The 1755-1780 MHz band will be licensed paired with the 2155-2180 MHz
band, with the 1755-1780 MHz band authorized for low-power mobile
transmit (i.e., uplink) operations and the 2155-2180 MHz band
authorized for base station and fixed (i.e., downlink) operations.
Figure 1 in the Auction 113 Comment Public Notice shows the band
plan for the 1695-1710 MHz band. Figure 2 in the Auction 113 Comment
Public Notice shows the band plans for the 1755-1780 MHz and 2155-2180
MHz bands. Table 1 contains summary information regarding the AWS-3
licenses available in Auction 113:

Table 1--AWS-3 License Summary
[Auction 113]
----------------------------------------------------------------------------------------------------------------
Total
Block Frequencies (MHz) bandwidth Pairing Geographic area type Number of
(MHz) licenses
----------------------------------------------------------------------------------------------------------------
A1............. 1695-1700 MHz.... 5 unpaired............. EA 1
B1............. 1700-1710 MHz.... 10 unpaired............. EA 1
G.............. 1755-1760/2155- 10 2 x 5 MHz............ CMA 152
2160 MHz.
H.............. 1760-1765/2160- 10 2 x 5 MHz............ EA 14
2165 MHz.
I.............. 1765-1770/2165- 10 2 x 5 MHz............ EA 29
2170 MHz.
J.............. 1770-1780/2170- 20 2 x 10 MHz........... EA 3
2180 MHz.
----------------------------------------------------------------------------------------------------------------

Each potential bidder is solely responsible for investigating and
evaluating all technical and marketplace factors that may have a
bearing on the potential uses of a license that it may seek in Auction
113. In addition to the typical due diligence considerations that the
Commission encourages of bidders in all auctions, OEA and WTB call
particular attention in Auction 113 to the incumbency issues in the
1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands and protection of
Federal and non-Federal incumbent operations described herein. Each
applicant should closely follow releases from the Commission concerning
these issues and consider carefully the technical and economic
implications for commercial use of the AWS-3 band. The Commission makes
no representations or warranties about the use of this spectrum for
particular services, or about the information in Commission databases
that is furnished by outside parties.

D. Incumbency Issues

The AWS-3 bands are currently being used for a variety of
government and non-government services. In the 2014 AWS-3 Report and
Order, the Commission allocated the 1695-1710 MHz band for non-Federal
fixed and mobile (except aeronautical mobile) commercial use and the
1755-1780 MHz band for non-Federal fixed and mobile commercial use.
Licenses in the 1695-1710 MHz band are being made available on a shared
basis with incumbent Federal meteorological-satellite (MetSat) data
users. The Commission adopted twenty-seven Protection Zones for the
1695-1710 MHz band in the 2014 AWS-3 Report and Order, and the forty-
seven Federal earth stations located in these Protection Zones will
operate on a co-equal, primary basis with commercial AWS-3 licensees.
All other Federal earth stations operate on a secondary basis. In order
to facilitate coordination, uplink/mobile transmit devices in the 1695-
1710 MHz band must be under the control of, or associated with, a base
station as a means to facilitate shared use of the band and prevent
interference to Federal operations.
Licenses in the 1755-1780 MHz band are being made available on a
shared basis with a limited number of Federal incumbents indefinitely,
and some Federal systems that have or will over time relocate out of
the band. The Federal systems located in the Protection Zones adopted
by the Commission for the 1755-1780 MHz band in the 2014 AWS-3 Report
and Order will operate on a co-equal, primary basis with commercial AWS
licensees. The Federal systems that will relocate from the band
pursuant to an approved transition plan will operate on a primary basis
until they are reaccommodated. In order to facilitate coordination,
uplink/mobile transmit devices in the 1755-1780 MHz band must be under
the control of, or associated with, a base station as a means to
facilitate shared use of the band and prevent interference to Federal
operations. NTIA issues annual reports on the status of the transitions
of spectrum in the 1695-1710 MHz and 1755-1780 MHz bands. See, e.g.,
<a href="https://www.ntia.doc.gov/report/2024/2023-commercial-spectrum-enhancement-act-csea-report">https://www.ntia.doc.gov/report/2024/2023-commercial-spectrum-enhancement-act-csea-report</a>. See also <a href="https://www.ntia.doc.gov/category/aws-3-transition">https://www.ntia.doc.gov/category/aws-3-transition</a>.

[[Page 59982]]

Licenses to operate in the 1695-1710 MHz and 1755-1780 MHz bands
are subject to the condition that the licensee must not cause harmful
interference to an incumbent Federal entity relocating from these bands
under an approved Transition Plan. This condition remains in effect
until the National Telecommunications and Information Administration
(NTIA) terminates the applicable authorization of the incumbent Federal
entity. Although this license condition does not apply to the permanent
sharing scenario, the Commission's rules require successful
coordination to avoid causing harmful interference to these Federal
incumbents. In addition, AWS-3 licensees in the 1755-1780 MHz band must
agree to accept interference from incumbent Federal users while they
remain authorized to operate in the band. The 2155-2180 MHz band is
already allocated for exclusive non-Federal, commercial use. Although
no Federal users are currently licensed or operating in the 2155-2180
MHz band, AWS-3 licensees may have to protect or relocate and/or share
in the cost of relocating non-Federal incumbent Fixed Microwave and
Broadband Radio Service licensees in the band.
AWS-3 licensees in the 1695-1710 MHz and 1755-1780 MHz bands are
required to successfully coordinate with Federal incumbent users in
these bands prior to operating in designated protection zones. The 2014
AWS-3 Report and Order established that 1695-1710 MHz licensees
operating at certain power levels are required to coordinate with
Federal incumbents in those protection zones, and higher-powered
operations would generally require nationwide coordination. Similarly,
operations in the 1755-1780 MHz band are subject to successful
coordination with Federal incumbents in the protection zones adopted
for that band, with the default coordination zone being nationwide.
Prior to commencing operations in the 1755-1780 MHz band, an AWS-3
licensee must reach a coordination arrangement on an operator-to-
operator basis with each Federal agency that has an assignment with
United States and Possessions authority. The FCC/NTIA Coordination
Procedures Public Notice, 79 FR 54710 (September 12, 2014), contains
various refinements to the previously-defined protection zones for each
of these bands. The FCC/NTIA Coordination Procedures Public Notice also
provides information and guidance on the overall coordination process
for these bands, as contemplated by the 2014 AWS-3 Report and Order,
including informal pre-coordination discussion and the formal process
of submitting coordination requests to, and receiving responses from,
relevant Federal agencies. OEA and WTB encourage each potential
applicant to carefully review these coordination requirements and the
policies and procedures adopted by the Commission to implement them,
and to consider the impact of those requirements and policies on the
potential applicant's business plans.
One commenter expresses opposition to Federal spectrum sharing and
coordination requirements for the AWS-3 bands because he contends that
they create challenges for bidders and could deter participation or
lead to underutilized spectrum. These arguments are outside the scope
of this proceeding, and as such, OEA and WTB do not address them. The
Commission adopted rules for the spectrum sharing and coordination
requirements for the AWS-3 bands in the 2014 AWS-3 Report and Order.
Amendments to those rules require a rulemaking proceeding and cannot be
adopted in the context of establishing the procedures for Auction 113
because such action is outside the scope of OEA's and WTB's delegated
authority.

E. Auction Specifics

1. Auction Title and Start Date
The auction of licenses for spectrum in the Commission's inventory
in the AWS-3 bands will be referred to as ``Auction 113.'' Bidding in
Auction 113 will begin on June 2, 2026. The initial schedule for
bidding rounds in Auction 113 will be announced by public notice at
least one week before bidding begins. Unless otherwise announced,
bidding on all licenses will be conducted on each business day until
bidding has stopped on all licenses.
2. Auction Dates and Deadlines
The following pre-bidding dates and deadlines apply to Auction 113:

Auction Application System Publicly Available: Expected January 7, 2026
Auction Application Tutorial Available (via internet): No later than
January 12, 2026
Short-Form Application (FCC Form 175)
Filing Window Opens: January 26, 2026, 12:00 p.m. Eastern Time (ET)
Short-Form Application (FCC Form 175)
Filing Window Deadline: February 11, 2026, 6:00 p.m. ET
Upfront Payments (via wire transfer): April 8, 2026, 6:00 p.m. ET
Bidding Tutorial Available (via internet): No later than May 1, 2026
Mock Auction: May 29, 2026
Bidding Begins in Auction 113: June 2, 2026

3. Auction Delay, Suspension, or Cancellation
OEA and WTB adopt their proposal that at any time before or during
the bidding process, OEA, in conjunction with WTB, may delay, suspend,
or cancel bidding in Auction 113 in the event of a natural disaster,
technical obstacle, network interruption, administrative or weather
necessity, evidence of an auction security breach or unlawful bidding
activity, or for any other reason that affects the fair and efficient
conduct of competitive bidding. This approach has proven effective in
resolving exigent circumstances in previous auctions, and OEA and WTB
find no reason to depart from it here. OEA will notify participants of
any such delay, suspension, or cancellation by public notice and/or
through the FCC Auction Bidding System's (bidding system) announcement
function. If the bidding is delayed or suspended, then OEA may, in its
sole discretion, elect to resume the auction starting from the
beginning of the current round or from some previous round, or cancel
the auction in its entirety. OEA and WTB emphasize that they will
exercise the authority to delay, suspend, or cancel bidding in Auction
113 solely at their discretion.
4. Requirements for Participation
Those wishing to participate in Auction 113 must:
<bullet> Submit a short-form application (FCC Form 175)
electronically prior to 6:00 p.m. ET on February 11, 2026, following
the electronic filing procedures and other instructions set forth in
the Auction 113 Procedures Public Notice and 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 April 8, 2026, following
the procedures and instructions set forth in the Auction 113 Procedures
Public Notice.
<bullet> Comply with all provisions outlined in the Auction 113
Procedures Public Notice and applicable Commission rules.

F. Educational Materials

Before the opening of the short-form filing window for Auction 113,
detailed educational information will be provided in various formats to
potential participants on the Auction 113 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-

[[Page 59983]]

step instructions for completing the FCC Form 175 in the FCC's Auction
Application System (AAS), which is the Commission's newly developed
system that will be used for the first time in Auction 113. These
materials will be available in the Education section on the Auction 113
website at <a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>. In addition, OEA will provide an
online application procedures tutorial for the auction, covering
information on pre-bidding preparation, completing short-form
applications, and the application review process. Applicants should
carefully review both the Auction 113 application tutorial and the FCC
Form 175 filing instructions, paying close attention to any departures
from previous application processes as a result of the use of the new
AAS for Auction 113.
In advance of the start of the mock auction, OEA will provide
educational materials on the bidding procedures for Auction 113,
including a user guide for the bidding system, bidding system file
formats, and an online bidding procedures tutorial. These materials
will provide detailed information on bidding features specific to the
ascending clock auction format, including intra-round bidding and proxy
bids. OEA and WTB recognize the importance of these materials to
applicants' and bidders' comprehension of the bidding procedures OEA
and WTB adopt herein. Accordingly, the educational materials will be
released as soon as reasonably possible to provide potential applicants
and bidders with time to understand them and ask questions of
Commission staff before bidding begins.
OEA and WTB believe that parties interested in participating in
Auction 113 will find the interactive, online tutorials an efficient
and effective way to further their understanding of the application and
bidding processes. The online tutorials will allow viewers to navigate
the presentation outline, review written notes, and listen to audio of
the notes. Additional features of these web-based tools include links
to auction-specific Commission releases, email links for contacting
Commission staff, and screen shots of the online application and
bidding systems. The online tutorials will be accessible in the
Education section on the Auction 113 website at <a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>. Once posted, the tutorials will remain continuously accessible.
One commenter advocates for additional educational support in the
form of personalized and interactive tools for less experienced
participants, claiming that the educational resources the Commission
makes available to participants are often too generalized for bidders
to apply to their particular circumstances. The Commission currently
offers a wide variety of educational materials, demonstrations,
educational opportunities, and other information and resources to
assist prospective applicants and bidders with understanding the FCC's
auction application system and the bidding system. Moreover, individual
prospective applicants and bidders can address specific questions to
Commission staff well in advance of all auction deadlines. As a result,
OEA and WTB conclude that the added benefit, if any, of developing
personalized and interactive educational tools in time for Auction 113
is outweighed by the time and expense that Commission would incur to
customize such resources.

II. Pre-Bidding Activities and Considerations

A. Due Diligence

OEA and WTB remind each potential bidder that it is solely
responsible for investigating and evaluating all technical and
marketplace factors that may have a bearing on the value of the
licenses that it is seeking in Auction 113 and that it is required to
certify, under penalty of perjury, that it has read the Auction 113
Procedures Public Notice and has familiarized itself with the auction
procedures and the service rules for the AWS-3 bands. The Commission
makes no representations or warranties about the use of this spectrum
or these licenses for particular services. Each applicant should be
aware that a Commission auction represents an opportunity to become a
Commission licensee, subject to certain conditions and regulations.
This includes the established authority of the Commission to alter the
terms of existing licenses by rulemaking, which is equally applicable
to licenses awarded by auction. A Commission auction does not
constitute an endorsement by the Commission of any particular service,
technology, or product, nor does a Commission license constitute a
guarantee of business success.
An applicant should perform its due diligence research and analysis
before proceeding, as it would with any new business venture. In
particular, OEA and WTB encourage each potential bidder to perform
technical analyses and/or refresh its previous analyses to assure
itself that, should it become a winning bidder for any Auction 113
license, it will be able to build and operate facilities that will
fully comply with all applicable technical and legal requirements. OEA
and WTB urge each applicant to inspect any prospective sites for
communications facilities located in, or near, the geographic area for
which it plans to bid, confirm the availability of such sites, and to
familiarize itself with the Commission's rules regarding the National
Environmental Policy Act (NEPA), the National Historic Preservation Act
(NHPA), and any other environmental statutes that may apply.
In August 2025, the Commission released the Modernizing the
Commission's National Environmental Policy Act Rules NPRM, 90 FR 40295
(August 19, 2025), to consider updates to its rules implementing NEPA.
Potential bidders in Auction 113 should be mindful that if the
Commission amends its NEPA rules, AWS-3 licensees will be subject to
the amended rules.
OEA and WTB also encourage each applicant in Auction 113 to
continue to conduct its own research throughout the auction in order to
determine the existence of pending or future administrative or judicial
proceedings that might affect its decision on continued participation
in the auction. Each applicant is responsible for assessing the
likelihood of the various possible outcomes and for considering the
potential impact on licenses available in an auction. The due diligence
considerations mentioned in the Auction 113 Procedures Public Notice do
not constitute an exhaustive list of steps that should be undertaken
prior to participating in Auction 113. As always, the burden is on the
potential bidder to determine how much research to undertake, depending
upon the specific facts and circumstances related to its interests. For
example, applicants should pay particular attention to the requirements
presented by the temporary and indefinite sharing of portions of the
AWS-3 bands by incumbent Federal users and AWS-3 licensees, which may
vary by geography and frequency. The FCC/NTIA Coordination Procedures
Public Notice contains additional information regarding the extent of
sharing in the AWS-3 bands, refinements to the protection zones adopted
in the 2014 AWS-3 Report and Order, and information and guidance on the
overall coordination process between commercial and Federal users. OEA
and WTB expect that the information in both the FCC/NTIA Coordination
Procedures Public Notice and federal agencies' approved transition
plans will be material to an applicant's potential participation in
Auction 113. Therefore, OEA and WTB strongly encourage each applicant
to closely review these materials, as well as future releases from

[[Page 59984]]

the Commission and NTIA concerning these issues, and to carefully
consider the technical and economic implications for commercial use of
the AWS-3 bands.
Applicants are solely responsible for identifying associated risks
and for investigating and evaluating the degree to which such matters
may affect their ability to bid on, otherwise acquire, or make use of
the licenses available in Auction 113. Each potential bidder is
responsible for undertaking research to ensure that any licenses won in
the auction will be suitable for its business plans and needs. Each
potential bidder must undertake its own assessment of the relevance and
importance of information gathered as part of its due diligence
efforts.
The Commission makes no representations or guarantees regarding the
accuracy or completeness of information in its databases or any third-
party databases, including, for example, court docketing systems. To
the extent the Commission's databases may not include all information
deemed necessary or desirable by an applicant, it must obtain or verify
such information from independent sources or assume the risk of any
incompleteness or inaccuracy in said databases. Furthermore, the
Commission makes no representations or guarantees regarding the
accuracy or completeness of information that has been provided by
incumbent licensees and incorporated into its databases.

B. Licensing Considerations

In addition to the incumbency issues discussed in the Auction 113
Procedures Public Notice, potential bidders should be aware of the
following licensing considerations concerning the use of the AWS-3
frequencies they acquire in Auction 113.
1. International Coordination
Potential bidders seeking licenses for geographic areas adjacent to
the Canadian and Mexican borders should be aware that the use of the
AWS-3 frequencies they acquire in Auction 113 are subject to current
and future agreements with the governments of Canada and Mexico.
The Commission routinely works with the United States Department of
State and Canadian and Mexican government officials to ensure the
efficient use of the spectrum as well as interference-free operations
in the border areas near Canada and Mexico. Until such time as any
adjusted agreements, as needed, between the United States, Mexico, and/
or Canada can be agreed to, operations in the AWS-3 bands must not
cause harmful interference across the border, consistent with the terms
of the agreements currently in force.
2. Environmental Review Requirements
Licensees must comply with the Commission's rules for environmental
review under the NEPA, the NHPA, and any other environmental statutes
that may apply. Licensees and other applicants that propose to build
certain types of communications facilities for licensed service must
follow Commission procedures implementing obligations under NEPA and
NHPA prior to constructing the facilities. Under NEPA, a licensee or
applicant must assess if certain environmentally sensitive conditions
specified in the Commission's rules are relevant to the proposed
facilities, and prepare an environmental assessment when applicable. If
an environmental assessment is required, then facilities may not be
constructed until environmental processing is completed. Under NHPA, a
licensee or applicant must follow the procedures in 47 CFR 1.1320, as
well as the Nationwide Programmatic Agreement for Collocation of
Wireless Antennas and the Nationwide Programmatic Agreement Regarding
the Section 106 National Historic Preservation Act Review Process (see
47 CFR pt. 1, Appendices B and C). Compliance with section 106 of the
NHPA requires Tribal consultation, and if construction of the
communications facilities would have adverse effects on historic or
Tribally significant properties, an environmental assessment must be
prepared.
3. Mobile Spectrum Holdings
OEA and WTB remind bidders of the Commission's mobile spectrum
holdings policies applicable to the AWS-3 band. Specifically, the
Commission did not impose a pre-auction bright-line limit on
acquisitions of the AWS-3 band. The Commission also determined that it
would perform case-by-case review of proposed secondary market
transactions once AWS-3 was found suitable and available for the
provision of mobile telephony/broadband services. All 65 megahertz of
AWS-3 spectrum have been found suitable and available and are currently
included in the spectrum screen.
4. Quiet Zones
AWS-3 licensees must individually apply for and receive a separate
license for each transmitter if the proposed operation will affect the
radio quiet zones set forth in the Commission's rules.

C. Short-Form Applications: Due Before 6:00 p.m. ET on February 11,
2026

In order to be eligible to bid in Auction 113, an applicant must
first follow the procedures to submit a short-form application (FCC
Form 175) electronically via the FCC's Auction Application Portal,
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 February 11, 2026. Late applications will not be accepted. No
application fee is required for short-form applications. However, in
Amendment of the Schedule of Application Fees, 86 FR 15026 (March 19,
2021), the Commission adopted a long-form application filing fee that
includes an amount to recover costs for processing the short-form
application, and each Auction 113 winning bidder must submit the filing
fee prescribed in 47 CFR 1.1102 with each separate long-form
application.
Applications may be filed at any time beginning at 12:00 p.m. ET on
January 26, 2026, until the filing window closes at 6:00 p.m. ET on
February 11, 2026. 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 February 11, 2026.
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 using the contact information provided in the Auction 113
Procedures Public Notice. In order to provide better service to the
public, all calls to Technical Support are recorded.

[[Page 59985]]

D. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and
Opportunity for Minor Modifications
After the deadline for filing auction applications, the Commission
will process all timely submitted applications to determine whether
each applicant has complied with the application requirements and
provided all information concerning its qualifications for bidding. OEA
will issue a public notice with applicants' initial application status,
identifying: (1) those that are complete; and (2) those that are
incomplete or deficient because of defects that may be corrected. The
public notice will include the deadline for resubmitting corrected
applications and an electronic copy will be sent by email to the
contact address listed in the FCC Form 175 for each applicant. In
addition, each applicant with an incomplete application will be sent
information on the nature of the deficiencies in its application, along
with the name and contact information of a Commission staff member who
can answer questions specific to the application.
After the initial application filing deadline on February 11, 2026,
applicants can make only minor modifications to their applications.
Minor amendments include any changes that are not major, such as: the
deletion or addition of authorized bidders (to a maximum of three);
revision of addresses and telephone numbers of the applicant, its
responsible party, and its contact person; correcting typographical
errors; and supplying or correcting information as requested to support
the certifications made in the application. Major modifications (e.g.,
change of license selection, change 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. 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. 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 113 and whether the applicant may be eligible
to pursue any bidding credit claim.
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#52332731263b3d3c636361123431317c353d24">[email&#160;protected]</a>.
2. Public Notice of Applicants' Final Application Status After Upfront
Payment Deadline
After Commission staff reviews resubmitted applications and upfront
payments, OEA will release a Qualified Bidders Public Notice
identifying applicants that have become qualified bidders for the
auction. The Qualified Bidders Public Notice will be issued before
bidding in the auction begins. Qualified bidders are those applicants
with submitted FCC Form 175 applications that are deemed timely filed
and complete and that have made a timely and sufficient upfront
payment.

E. Upfront Payments

In order to be eligible to bid in Auction 113, a sufficient upfront
payment and a complete and accurate FCC Remittance Advice Form (FCC
Form 159, Revised 2/03) must be submitted before 6:00 p.m. ET on April
8, 2026. After completing its short-form application, an applicant will
have access to an electronic blank version of the FCC Form 159. An
accurate and complete FCC Form 159 must accompany each payment. Proper
completion of this form is critical to ensuring correct crediting of
upfront payments. Payers are responsible for ensuring that all
information entered on the FCC Form 159, including payment amounts, is
accurate. Instructions for completing FCC Form 159 for Auction 113 are
provided below.
1. Making Upfront Payments by Wire Transfer for Auction 113
All upfront payments for Auction 113 must be transmitted by
electronic wire transfer directly from a bank or other financial
institution to the proper account at the U.S. Treasury. Wire transfer
payments for Auction 113 must be received before 6:00 p.m. ET on April
8, 2026. 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
ACCOUNT NUMBER: 827000001001

Originating Bank Information (OBI Field): (Skip one space between each
information item)

``AUCTIONPAY''
APPLICANT FCC REGISTRATION NUMBER (FRN): (use the same FRN as used on
the applicant's FCC Form 159, block 21)
PAYMENT TYPE CODE: (same as FCC Form 159, block 24A: ``U113'')

Note: The beneficiary account number (BNF Account Number) is
specific to the upfront payments for Auction 113. Do not use a BNF
Account Number from a previous auction.

At least one hour before placing the order for the wire transfer
(but on the same business day), applicants must print and fax a
completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843.
Alternatively, the completed form can be scanned and sent as an
attachment to an email to <a href="/cdn-cgi/l/email-protection#396b6b767e6e504b5c7f58415c4a795f5a5a175e564f">[email&#160;protected]</a>. On the fax cover sheet
or in the email subject header, write ``Wire Transfer--Auction Payment
for Auction 113.'' To meet the upfront payment deadline, an applicant's
payment must be credited to the Commission's account for Auction 113
before the deadline.
Each applicant is responsible for ensuring the timely submission of
its upfront payment and for timely filing 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

[[Page 59986]]

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.
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 113 go to an account number
different from the accounts used in previous FCC auctions.
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
The following information supplements the standard instructions for
FCC Form 159 (Revised 2/03) and is provided to help ensure the correct
completion of FCC Form 159 for upfront payments for Auction 113.
Applicants need to complete FCC Form 159 carefully because:
<bullet> Mistakes may affect bidding eligibility; and
<bullet> Lack of consistency between information provided in FCC
Form 159 (Revised 2/03), FCC Form 175, long-form application (FCC Form
601), and correspondence about an application may cause processing
delays.
Therefore, appropriate cross-references between the FCC Form 159
Remittance Advice and the short-form application (FCC Form 175) are
described in the following chart:

------------------------------------------------------------------------
Block No. Required information
------------------------------------------------------------------------
1............................ LOCKBOX #--Leave Blank.
2............................ Payer Name--Enter the name of the person
or company making the payment. If the
applicant itself is the payer, this
entry would be the same name as in FCC
Form 175.
3............................ Total Amount Paid--Enter the amount of
the upfront payment associated with the
FCC Form 159 (Revised 2/03).
4-8.......................... Street Address, City, State, ZIP Code--
Enter the street mailing address (not
post office box number) where mail
should be sent to the payer. If the
applicant is the payer, these entries
would be the same as FCC Form 175 from
the Applicant Information section.
9............................ Daytime Telephone Number--Enter the
telephone number of a person
knowledgeable about this upfront
payment.
10........................... Country Code--For addresses outside the
United States, enter the appropriate
postal country code (available from the
Mailing Requirements Department of the
U.S. Postal Service).
11........................... Payer FRN--Enter the payer's 10-digit FCC
Registration Number (FRN) registered in
the Commission Registration System
(CORES).
21........................... Applicant FRN (Complete only if applicant
is different than payer)--Enter the
applicant's 10-digit FRN registered in
CORES.
24A.......................... Payment Type Code--Enter ``U113''.
25A.......................... Quantity--Enter the number ``1''.
26A.......................... Fee Due--Amount of Upfront Payment.
27A.......................... Total Fee--Will be the same amount as
26A.
28A.......................... FCC Code 1--Enter the number ``113''
(indicating Auction 113).
------------------------------------------------------------------------

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

3. Upfront Payments and Bidding Eligibility
An upfront payment is a refundable deposit made by each applicant
seeking to participate in bidding to establish its eligibility to bid
on licenses. Upfront payments that are related to the inventory of
licenses being auctioned protect against frivolous or insincere bidding
and provide the Commission with a source of funds from which to collect
payments owed at the close of bidding.
Applicants that are former defaulters must pay upfront payments 50%
greater than non-former defaulters. For purposes of classification as a
former defaulter or a former delinquent, defaults and delinquencies of
the applicant itself and its controlling interests are included.
An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the licenses on which it will bid. OEA and WTB
adopt the proposals in the Auction 113 Comment Public Notice to set
upfront payments based on the MHz-pops of each license offered in the
auction and to determine an applicant's initial bidding eligibility,
the maximum number of bidding units on which a bidder may place bids in
any single round, based on the amount of the upfront payment. In order
to bid for a license, qualified bidders must have a current eligibility
level that meets or exceeds the number of bidding units assigned to
that license. At a minimum, therefore, an applicant's total upfront
payment must be enough to establish eligibility to bid on at least one
license in a market selected on its FCC Form 175 for Auction 113, or
else the applicant will not become qualified to participate in the
auction. The total upfront payment does not affect the total dollar
amount the bidder may bid.
The Commission has authority to determine appropriate upfront
payments for each license being auctioned, taking into account such
factors as the efficiency of the auction process and the potential
value of similar licenses. In the Auction 113 Comment Public Notice,
OEA and WTB proposed to base upfront payments for the paired licenses
on dollars per MHz-pop in three population tiers: $0.005 per MHz-pop
for the paired licenses in areas with a population of less than
300,000, $0.01 per MHz-pop for the paired licenses in areas with a
population of at least 300,000 and less than 1,000,000, $0.025 per MHz-
pop for the paired licenses in areas with a population of at least
1,000,000, and $0.005 per MHz-pop for the unpaired licenses and sought
comment on this proposal. OEA and WTB received no comment on this
proposal. OEA and WTB believe that this methodology is appropriate here
and therefore adopt it. For all licenses, upfront payments will be
subject to a

[[Page 59987]]

minimum of $500 per license. The upfront payment amount per license is
set forth in the Attachment A file on the Auction 113 website at
<a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>.
Additionally, for the reasons set forth in the Auction 113 Comment
Public Notice, OEA and WTB adopt the proposal to assign each license a
specific number of bidding units, equal to one bidding unit per $100 of
the upfront payment, which is necessary for implementing the activity
requirement described in the Auction 113 Procedures Public Notice, and
facilitates the efficient conduct of the auction. The number of bidding
units for a given license is fixed and does not change during the
auction as prices change. Thus, in calculating its upfront payment
amount, an applicant should determine the maximum number of bidding
units on which it may wish to bid in any single round, and submit an
upfront payment amount covering that number of bidding units. In order
to make this calculation, an applicant should add together the bidding
units for the licenses on which it seeks to be active in any given
round. Applicants should check their calculations carefully, as there
is no provision for increasing a bidder's eligibility after the upfront
payment deadline.

Example--Upfront Payments and Bidding Eligibility
----------------------------------------------------------------------------------------------------------------
License Description Bidding units Upfront payment
----------------------------------------------------------------------------------------------------------------
CMA117-G.................................... Colorado Springs, CO........... 760 $76,000
CMA118-G.................................... Reading, PA.................... 430 43,000
----------------------------------------------------------------------------------------------------------------
Under the clock-1 format, if a bidder wishes to bid on both of the above licenses in a round, it must have
selected both of the markets in which each of these licenses are located on its FCC Form 175 and have
purchased at least 1,190 bidding units (760 + 430) of bidding eligibility. If a bidder only wishes to bid on
one license, but not both, purchasing 760 bidding units would allow the bidder to bid on either license, but
not both at the same time. If the bidder purchased only 430 bidding units, the bidder would have enough
eligibility to bid for the license in Reading but not for the one in Colorado Springs.

If an applicant is a former defaulter, it must calculate its
upfront payment for the maximum number of licenses on which it plans to
bid by multiplying the number of bidding units on which it wishes to be
active by 1.5. In order to calculate the number of bidding units to
assign to former defaulters, the Commission will calculate the number
of bidding units a non-former defaulter would get for the upfront
payment received, divide that number by 1.5, and round the result up to
the nearest bidding unit. If a former defaulter fails to submit a
sufficient upfront payment to establish eligibility to bid on at least
one license, the applicant will not be eligible to bid in Auction 113.

F. Auction Registration

All qualified bidders for Auction 113 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.
Qualified bidders that do not receive this registration mailing
will not be able to submit bids. Therefore, any qualified bidder for
Auction 113 that has not received this mailing by noon on May 15, 2026,
should call the Auctions Hotline at (717) 338-2868. Receipt of this
registration mailing is critical to participating in the auction, and
each applicant is responsible for ensuring it has received all the
registration materials.
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 Bidding System

Bidders will be able to participate in Auction 113 over the
internet using the bidding system. In addition, bidders will have the
option of placing bids by telephone through a dedicated auction bidder
line. Please note that telephonic bid assistants are required to use a
script when entering bids placed by telephone. Telephonic bidders are
therefore reminded to allow sufficient time to bid by placing their
calls well in advance of the close of a round. The length of a call to
place a telephonic bid may vary; please allow a minimum of 10 minutes.
The toll-free telephone number for the auction bidder line will be
provided to qualified bidders prior to the start of bidding in the
auction.
Only qualified bidders are permitted to bid. Each authorized bidder
must have his or her own SecurID[supreg] token, which the Commission
will provide at no charge. Each applicant will be issued three
SecurID[supreg] tokens. A bidder cannot bid without his or her
SecurID[supreg] token. In order to access the bidding function of the
bidding system, bidders must be logged in during the bidding round
using the passcode generated by the SecurID[supreg] token and a
personal identification number (PIN) created by the bidder. For
security purposes, the SecurID[supreg] tokens and a telephone number
for bidding questions are only mailed to the contact person at the
contact address listed on the FCC Form 175. Each SecurID[supreg] token
is tailored to a specific auction. SecurID[supreg] tokens issued for
other auctions or obtained from a source other than the FCC will not
work for Auction 113. 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.
The Commission makes no warranties whatsoever and shall not be
deemed to have made any warranties, with respect to the bidding system,
including any implied warranties of merchantability or fitness for a
particular purpose. In no event shall the Commission, or any of its
officers, employees, or agents, be liable for any damages whatsoever
(including, but not limited to, loss of business profits, business
interruption, loss of use, revenue, or business information, or any
other direct, indirect, or consequential damages) arising out of or
relating to the existence, furnishing, functioning, or use of the
bidding system. Moreover, no obligation or liability will arise out of
the Commission's technical, programming, or other advice or service
provided in connection with the bidding system.
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

[[Page 59988]]

not limited to, a bidder's hardware, software, or internet access
problem that prevents the bidder from submitting a bid prior to the end
of a round, the Commission shall have no obligation to resolve or
remediate such an issue on behalf of the bidder. Similarly, if an issue
arises due to bidder error using the bidding system, the Commission
shall have no obligation to resolve or remediate such an issue on
behalf of the bidder. Accordingly, after the close of a bidding round,
the results of bid processing will not be altered absent evidence of
any failure in the bidding system.

H. Mock Auction

All qualified bidders will be eligible to participate in a mock
auction. The mock auction, which will begin on May 29, 2026, will
enable qualified bidders to become familiar with the bidding system and
to practice submitting bids prior to the auction. OEA and WTB recommend
that all qualified bidders, including all their authorized bidders,
participate to assure that they can log in to the bidding system and
gain experience with the bidding procedures. Participating in the mock
auction may reduce the likelihood of a bidder making a mistake during
the auction. Details regarding the mock auction will be announced in
the Qualified Bidders Public Notice for Auction 113.

I. Fraud Alert

As is the case with many business investment opportunities, some
unscrupulous parties may attempt to use Auction 113 to deceive and
defraud unsuspecting investors. Common warning signals of fraud include
the following:
<bullet> The first contact is a ``cold call'' from a telemarketer
or is made in response to an inquiry prompted by a radio or television
infomercial.
<bullet> The offering materials used to invest in the venture
appear to be targeted at IRA funds, for example, by including all
documents and papers needed for the transfer of funds maintained in IRA
accounts.
<bullet> The amount of investment is less than $25,000.
<bullet> The sales representative makes verbal representations
that: (a) the Internal Revenue Service, Federal Trade Commission (FTC),
Securities and Exchange Commission (SEC), FCC, or other government
agency has approved the investment; (b) the investment is not subject
to state or federal securities laws; or (c) the investment will yield
unrealistically high short-term profits. In addition, the offering
materials often include copies of actual FCC releases, or quotes from
FCC personnel, giving the appearance of FCC knowledge or approval of
the solicitation.
Information about deceptive telemarketing investment schemes is
available from the FCC, as well as the FTC and SEC. Additional sources
of information for potential bidders and investors may be obtained from
the following sources:
<bullet> the FCC's Consumer Call Center at (888) 225-5322 or by
visiting <a href="http://www.fcc.gov/general/frauds-scams-and-alerts-guides">www.fcc.gov/general/frauds-scams-and-alerts-guides</a>.
<bullet> the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting
<a href="https://consumer.ftc.gov/">https://consumer.ftc.gov/</a>.
<bullet> the SEC at (800) 732-0330 or by visiting <a href="https://www.investor.gov/">https://www.investor.gov/</a>.
Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National
Consumer League's Fraud Center at <a href="https://fraud.org/">https://fraud.org/</a> or (202) 835-3323,
Ext. 815.

III. Short-Form Application Contents and Certifications

A. General Information Regarding Short-Form Applications

An application to participate in Auction 113, referred to as a
short-form application or FCC Form 175, provides information concerning
the applicant's legal, technical, and/or financial qualifications to
participate in a Commission auction for spectrum 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 113 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 113 is determined
based on an applicant's short-form application and certifications and
on the applicant's upfront payment. Pursuant to 47 CFR 1.2105, each
applicant must make a series of certifications under penalty of perjury
on its FCC Form 175 related to the information provided in its
application and its participation in the auction, and it must confirm
that it is legally, technically, financially, and otherwise qualified
to hold a Commission license. An auction applicant's failure to make
the required certifications in its short-form application by the
applicable filing deadline would render its application unacceptable
for filing, its application would be dismissed with prejudice, and it
would be ineligible to participate further in the auction. One
commenter requests that the Commission ``develop and mandate a
Certification of Tribal Spectrum Access for all licensees.'' No parties
commented on this request, and the request is outside the scope of
OEA's and WTB's delegated authority.
After bidding closes, in the second phase of the process, each
winning bidder in Auction 113 must file a more comprehensive post-
auction long-form application (FCC Form 601) for the licenses it wins
in the auction, and it must have a complete and accurate ownership
disclosure information report (FCC Form 602) on file with the
Commission. OEA and WTB remind applicants that being deemed qualified
to bid in Auction 113 does not constitute a determination that a party
is qualified to hold a Commission license or is eligible for a
designated entity bidding credit.
A party seeking to participate in Auction 113 must file an FCC Form
175 electronically via the Auction Application Portal (AAP) in the AAS
prior to 6:00 p.m. ET on February 11, 2026, following the procedures
prescribed in the FCC Form 175 Instructions. In order to access the AAP
within the AAS to create a new auction application for an applicant, or
save, edit, view, and/or withdraw an existing application for the
applicant, an individual must: (1) have a unique email address
associated with an FCC Username account that is associated with the
applicant's FCC Registration Number (FRN) in the Commission
Registration System (CORES), (2) be granted the appropriate permissions
in CORES by an Administrator of that FRN, and (3) be assigned the
appropriate Auctions Permissions in the AAP by the Administrator of
that FRN. The AAS includes security features that are being implemented
for the first time in Auction 113, including the use of multifactor
authentication. The Commission expects to make the AAS available to the
public for the Administrator(s) for an FRN to assign the appropriate
Auctions Permissions in the AAP to each unique FCC Username associated
with that FRN on January 7, 2026.
An Auction 113 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
license. If an applicant claims eligibility for a

[[Page 59989]]

bidding credit, then the information provided in its FCC Form 175 will
be used to determine whether the applicant appears to be eligible for
the claimed bidding credit, with the final determination of bidding
credit eligibility to occur based on a winning bidder's post-auction
long-form application. Each participant in Auction 113 must also
certify that it has read the Auction 113 Procedures Public Notice and
familiarized itself both with the auction procedures and with the
requirements for obtaining a license and operating facilities in the
AWS-3 bands. If an Auction 113 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.
An applicant should note that submitting an FCC Form 175 (and any
amendments thereto) constitutes a representation by the certifying
official that he or she is an authorized representative of the
applicant with authority to bind the applicant, that he or she has read
the form's instructions and certifications, and that the contents of
the application, its certifications, and any attachments are true and
correct. Submitting a false certification to the Commission may result
in penalties, including monetary forfeitures, license forfeitures,
ineligibility to participate in future auctions, and/or criminal
prosecution.
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, OEA and WTB have previously concluded that information
submitted in support of receiving bidding credits in auction
proceedings should be made available to the public.
An applicant must designate between one and three individuals as
authorized bidders in its FCC Form 175. The Commission's rules prohibit
an individual from serving as an authorized bidder for more than one
auction applicant.
To access the bidding system, each authorized bidder will be
required to have a unique email address associated with an FCC Username
account that is associated with the applicant's FRN in CORES. The email
address associated with an FCC Username account is also the FCC
Username for that account. If an authorized bidder does not provide an
FCC Username that is associated with the applicant's FRN in the
applicant's FCC Form 175, that bidder will be unable to place or submit
bids. For further details, applicants should refer to the FCC Form 175
Instructions for Auction 113.
No individual or entity may file more than one short-form
application or have a controlling interest in more than one short-form
application. If a party submits multiple short-form applications for an
auction, then only one application may form the basis for that party to
become qualified to bid in that auction.
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 113 by
multiple entities controlled by the same individual or set of
individuals generally will not be permitted. 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.
After the initial short-form application filing deadline,
Commission staff will review each timely submitted application to
determine whether it complies with the application requirements.
Following this review, a public notice will be released announcing the
status of the submitted applications and establishing an application
resubmission filing window, during which an applicant may make minor
modifications to its application to address identified deficiencies. To
become a qualified bidder, an applicant must have a complete
application (i.e., have timely filed an application that is deemed
complete after the deadline for correcting any identified deficiencies)
and make a timely and sufficient upfront payment. Qualified bidders
will be identified by public notice at least 10 days prior to the mock
auction.
The Auction 113 Procedures Public Notice provides details regarding
certain information required to be submitted in the FCC Form 175,
however, an applicant should consult the Commission's rules to ensure
that, in addition to the materials described in the Auction 113
Procedures Public Notice, all required information is included in its
short-form application. To the extent the information in the Auction
113 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 113 (see
the Education section on the Auction 113 website at <a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>) and use the contact information provided in the Auction
113 Procedures Public Notice to consult with Commission staff to better
understand the information that it must submit in its short-form
application.

B. Certification of Notice of Auction 113 Requirements and Procedures

For the reasons set forth in the Auction 113 Comment Public Notice,
OEA and WTB adopt the proposal to require any applicant seeking to
participate in Auction 113 to certify in its short-form application,
under penalty of perjury, that it has read the Auction 113 Procedures
Public Notice adopting procedures for Auction 113 and that it has
familiarized itself with these procedures and with the requirements for
obtaining a license and operating facilities in the AWS-3 bands.
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
information. Familiarity with the Commission's rules and procedures
governing Auction 113 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 the submission of applications that meet the Commission's
requirements, thereby leading to a more efficient application process.
A substantively similar requirement was instituted for Auctions
110, 108, and 112. This requirement furthers 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 WTB add refers to information regarding
auction procedures and licensing that is

[[Page 59990]]

available at the time of certification, potential auction applicants
are on notice from the Auction 113 Procedures Public 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 applicants minimize
their need to engage outside engineers, legal counsel, or other auction
experts.
For these reasons, OEA and WTB will require each Auction 113
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 license
and operating facilities in the AWS-3 bands.

An applicant must provide this certification under penalty of
perjury, consistent with 47 CFR 1.2105(a). This certification must be
provided in addition to the certifications already required under 47
CFR 1.2105. As with the other certifications required in the short-form
application, an applicant's failure to make this certification in its
FCC Form 175 by the February 11, 2026 short-form filing deadline will
render its application unacceptable for filing, and its application
will be dismissed with prejudice.

C. Acknowledgement Statement for Auction 113 Applicants

OEA and WTB adopt their proposal to require each applicant that
selects on its short-form application any market in which there is a
license in the 1755-1780 MHz band available for bidding to submit as an
attachment to its short-form application a signed statement
acknowledging that the applicant's operations in the 1755-1780 MHz band
may be subject to interference from Federal systems, that the applicant
must accept interference from incumbent Federal operations, and that
the applicant has considered these risks before submitting any bids for
applicable licenses in Auction 113. The specific text that must be
included in the required acknowledgement statement is contained in
Attachment B to the Auction 113 Procedures Public Notice. The
acknowledgement statement must be signed by the same individual that
signs the application on behalf of the applicant.

D. License Selection

Auction 113 will offer 200 licenses in 199 markets. An applicant
must select all of the markets in which it may want to bid from the
list of available markets on its FCC Form 175. One market, EA173, has
two licenses available (one in frequency block H and one in frequency
block I). An applicant that wishes to bid on either license in that
market must select the market (and will be therefore eligible to bid on
both licenses, assuming that it otherwise has sufficient bidding
eligibility), even if it intends to bid on only one license and not the
other. An applicant must carefully review and verify its selections
before the FCC Form 175 filing deadline because those selections cannot
be changed after the auction application filing deadline. An applicant
is not required to place bids on any of the licenses in the markets it
selects, but the bidding system will not accept bids for license(s) in
a market that the applicant did not select in its FCC Form 175.
When two or more short-form applications are submitted selecting
the same market in Auction 113, mutual exclusivity exists for auction
purposes as to the license(s) in that market, and those license(s) must
be awarded by competitive bidding procedures. Once mutual exclusivity
exists for auction purposes, even if only one applicant is qualified to
bid for a particular license, that applicant is required to submit a
bid in order to obtain the license.

E. Disclosure of Agreements and Bidding Arrangements

An applicant must provide in its FCC Form 175 a brief description
of, and identify each party to, any partnerships, joint ventures,
consortia or other agreements, arrangements, or understandings of any
kind relating to the licenses being auctioned, including any agreements
that address or communicate directly or indirectly bids (including
specific prices), bidding strategies (including the specific licenses
on which to bid or not to bid), or the post-auction market structure,
to which the applicant, or any party that controls or is controlled by
the applicant, is a party. In connection with the agreement disclosure
requirement, the applicant must certify under penalty of perjury in its
FCC Form 175 that it has described, and identified each party to any
such agreements, arrangements, or understandings to which it (or any
party that controls it or that it controls) is a party. Moreover, since
each applicant must maintain the accuracy and completeness of the
information in its pending auction application, if it enters into any
agreement relating to the licenses being auctioned after the FCC Form
175 filing deadline, then that agreement is subject to these same
disclosure requirements.
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.
The Commission's rules generally prohibit joint bidding and other
arrangements involving auction applicants (including any party that
controls or is controlled by such applicants). For purposes of the
prohibition, a joint bidding arrangement includes any arrangement
relating to the licenses being auctioned that addresses or
communicates, directly or indirectly, bidding in the auction, bidding
strategies, including arrangements regarding price or the specific
licenses on which to bid, and any such arrangement relating to the
post-auction market structure.
This prohibition applies to joint bidding arrangements involving
two or more nationwide providers, as well as joint bidding arrangements
involving a nationwide provider and one or more non-nationwide
providers, where at least one party to the arrangement is an applicant
for the auction. In the Updating Part 1 Report and Order, 80 FR 56764
(September 18, 2015), the Commission stated that entities that qualify
as nationwide providers generally would be identified in procedures
public notices released before each auction. To that end, in the
Auction 113 Comment Public Notice, OEA and WTB proposed to identify
AT&T, T-Mobile, and Verizon as ``nationwide providers'' for the purpose
of implementing the competitive bidding rules in Auction 113, including
47 CFR 1.2105(c), the rule prohibiting certain communications, which is
consistent with the Commission's decisions in recent spectrum auctions
and the 2024 Communications Marketplace Report, FCC 24-136 (released
December 31, 2024).
One commenter requests that OEA and WTB also identify EchoStar
Corporation (EchoStar), or any bidders ``with whom EchoStar has
agreements,''

[[Page 59991]]

as a ``nationwide provider'' for purposes of Auction 113, citing the
public statements made by DISH Network (DISH) and EchoStar that have
referred to DISH's ``nationwide 5G network'' and because EchoStar's
Boost Mobile Network touts 99% coverage. OEA and WTB decline to adopt
this suggestion for Auction 113. The Commission has historically
relied, in part, on the Communications Marketplace Report among its
justifications for a determination of which entities are considered to
be ``nationwide providers'' for competitive bidding purposes, and the
Commission's most recent report, released in December 2024, did not
identify EchoStar as a nationwide provider. In addition, EchoStar's
geographic coverage as reflected on the Commission's National Broadband
Map, is substantially less than that of AT&T, T-Mobile, and Verizon.
Moreover, EchoStar's Boost Mobile is partially a Mobile Virtual Network
Operator (MVNO), and its purported ``99%'' coverage that this commenter
refers to is based in part on the nationwide networks of its wholesale
providers (e.g., AT&T and T-Mobile). OEA and WTB therefore adopt their
proposal to identify only AT&T, T-Mobile, and Verizon as ``nationwide
providers'' for purposes of implementing the competitive bidding rules
in Auction 113.
Under certain circumstances, a non-nationwide provider may enter
into an agreement to form a consortium or a joint venture (as
applicable) that results in a single party applying to participate in
an auction. Specifically, a designated entity can participate in one
consortium or joint venture in an auction, and non-nationwide providers
that are not designated entities may participate in an auction through
only one joint venture. A non-nationwide provider may enter into only
one agreement to form a consortium or joint venture (as applicable),
and such consortium or joint venture shall be the exclusive bidding
vehicle for its members in the auction. The general prohibition on
joint bidding arrangements excludes certain agreements, including those
that are solely operational in nature, as defined in 47 CFR
1.2105(a)(2)(ix)(A)-(C).
To implement the prohibition on joint bidding arrangements, the
Commission's rules require each applicant to certify in its short-form
application that it has disclosed any arrangements or understandings of
any kind relating to the licenses being auctioned to which it (or any
party that controls or is controlled by it) is a party. The applicant
must also certify that it (or any party that controls or is controlled
by it) has not entered and will not enter into any arrangement or
understanding of any kind relating directly or indirectly to bidding at
auction with, among others, any other applicant or a nationwide
provider.
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, OEA and
WTB remind 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.
Applicants should bear in mind that a winning bidder will be
required to disclose in its post-auction long-form application, the
specific terms, conditions, and parties involved in any agreement
relating to the licenses being auctioned into which it had entered
prior to the time bidding was completed. This applies to any bidding
consortium, joint venture, partnership, or other agreement,
arrangement, or understanding of any kind entered into relating to the
competitive bidding process, including any agreements relating to the
licenses being auctioned that address or communicate directly or
indirectly bids (including specific prices), bidding strategies
(including the specific licenses on which to bid or not to bid), or the
post-auction market structure, to which the applicant, or any party
that controls or is controlled by the applicant, is a party.

F. Ownership Disclosure Requirements

Each applicant must comply with the applicable part 1 ownership
disclosure requirements and provide information required by 47 CFR
1.2105 and 1.2112, and, when applicable, 47 CFR 1.2110. 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 and, where applicable, 47 CFR
1.2110. Each applicant is responsible for ensuring that information
submitted in its short-form application is complete and accurate.
In certain circumstances, an applicant may have previously filed an
FCC Form 602 ownership disclosure information report or filed an
application to participate in a previous auction in which ownership
information was disclosed. If in that previous filing, the applicant
used the same FRN the applicant is using to create its FCC Form 175 for
Auction 113, the applicant will have the option to pre-fill the most
current ownership information contained in any such filing into certain
ownership sections on the applicant's FCC Form 175, if such information
is in an electronic format compatible with FCC Form 175. Applicants who
want to take advantage of the pre-fill option are encouraged to submit
an FCC Form 602 ownership report or update any ownership information on
file with the Commission in an FCC Form 602 ownership report prior to
starting a short-form application for Auction 113 to ensure that their
most recent ownership information is pre-filled into their short-form
application. Each applicant must carefully review any ownership
information that has been pre-filled 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

47 U.S.C. 310 requires the Commission to review foreign investment
in radio station licenses and imposes specific restrictions on who may
hold certain types of radio licenses. 47 U.S.C. 310 applies to
applications for initial radio licenses, applications for assignments
and transfers of control of radio licenses, and spectrum leasing
arrangements under the Commission's secondary market rules. In
completing FCC Form 175, an applicant is required to disclose
information concerning foreign ownership of the applicant. If an
applicant has foreign ownership interests in excess of the applicable
limit or benchmark set forth in 47 U.S.C. 310(b), then it may seek to
participate in Auction 113 as long as it has filed a petition for
declaratory ruling with the Commission prior to the FCC Form 175 filing
deadline. An applicant must certify in its FCC Form 175 that, as of the
deadline for filing its application to participate in the auction, the
applicant either is in compliance with the foreign ownership provisions
of 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.

[[Page 59992]]

H. Additional Disclosures for Small Businesses and Rural Service
Providers Seeking Bidding Credits

In Auction 113, designated entity bidding credits will be available
to applicants that demonstrate eligibility for a small business or a
rural service provider bidding credit and are subsequently winning
bidders in the auction. A bidding credit represents an amount by which
an eligible small business or rural service provider bidder's overall
payment across the licenses won may be discounted, subject to the
specified caps on the total bidding credit discount they may receive
adopted in the Auction 113 Procedures Public Notice. These bidding
credits will not be cumulative--an applicant is permitted to request
either a small business bidding credit or a rural service provider
bidding credit, but not both.
The Commission's rules regarding designated entity bidding credits
provide for, among other things: (1) a two-pronged standard for
evaluating eligibility for small business benefits, (2) updated gross
revenue requirements for determining whether a small business is
eligible for a 15% or 25% bidding credit, (3) a bidding credit for
eligible rural service providers, and (4) an attribution rule for
certain disclosable interest holders of applicants claiming eligibility
for bidding credits. An applicant seeking a designated entity bidding
credit must disclose in its short-form application additional
information demonstrating its eligibility for that bidding credit, and
must also certify that it is eligible for the bidding credit it
requests in its FCC Form 175.
In addition to the information provided in the Auction 113
Procedures Public Notice, each applicant should review carefully the
Commission's decisions regarding eligibility for designated entity
benefits as well as the part 1 rules. In particular, OEA and WTB remind
applicants requesting bidding credits that they should take due account
of the requirements of the Commission's rules and implementing orders
regarding de jure and de facto control of such applicants. Nearly all
of the spectrum associated with the licenses to be offered in Auction
113 is in the Commission's inventory in connection with two Auction 97
winning bidders having claimed small business bidding credits for which
the Commission later determined they were ineligible. Applicants should
be mindful that the Commission will closely examine qualifications of
all applicant claims of bidding credit eligibility and strictly enforce
its designated entity eligibility requirements.
Moreover, the Commission's rules include a prohibition, which
applies to all applicants (whether they seek bidding credits or not),
against changes in ownership of the applicant that would constitute an
assignment or transfer of control after the initial filing deadline for
FCC Form 175. Applicants should not expect to receive any opportunities
to revise their ownership structure after the filing of their short-
and long-form applications, including making revisions to their
agreements or other arrangements with interest holders, lenders, or
others in order to address potential concerns relating to compliance
with the designated entity bidding credit requirements.
This policy will help to ensure compliance with the Commission's
rules applicable to the award of bidding credits prior to the conduct
of the auction, which will involve competing bids from those that do
and do not seek bidding credits, and thus preserves the integrity of
the auction process. OEA and WTB also believe that this will meet the
Commission's statutory objectives in awarding licenses through the
competitive bidding process.
OEA and WTB did not make any proposals or seek comment in the
Auction 113 Comment Public Notice on eligibility for bidding credits or
the small business bidding credit levels for Auction 113, however, two
parties offered comments on this topic, seeking to roll back to the
small business definitions and bidding credits and other designated
entity rules that had been used in Auction 97 held in 2014. These
comments are not addressed in this proceeding because the Commission
has already addressed those contentions and determined bidding credit
eligibility and the levels of small business bidding credits available
in Auction 113 in the 2025 AWS-3 Report and Order.
1. Small Business Bidding Credit
For Auction 113, bidding credits will be available to eligible
small businesses and consortia thereof, subject to the bidding credit
caps adopted in the Auction 113 Procedures Public Notice. Under the
service rules applicable to AWS-3 band licenses to be offered in
Auction 113, the two-tiers of bidding credits available are determined
as follows:
<bullet> A bidder that qualifies as a ``small business''--i.e., one
with attributed average annual gross revenues that do not exceed $55
million for the preceding five years--is eligible to receive a 15%
discount on its overall payment.
<bullet> A bidder that qualifies as a ``very small business''--
i.e., one with attributed average annual gross revenues that do not
exceed $20 million for the preceding five years--is eligible to receive
a 25% discount on its overall payment.
Small business bidding credits are not cumulative; an eligible
applicant may receive either the 15% or the 25% bidding credit on its
overall payment, but not both. The Commission's unjust enrichment
provisions also apply to a winning bidder that uses a bidding credit
and subsequently seeks to assign or transfer control of its license
within a certain period to an entity not qualifying for at least the
same level of small business bidding credit.
Each applicant seeking a small business bidding credit must
disclose the gross revenues for the preceding five years for each of
the following: (1) the applicant, (2) its affiliates, (3) its
controlling interests, and (4) the affiliates of its controlling
interests. The applicant must also submit an attachment that lists all
parties with which the applicant has entered into any spectrum use
agreements or arrangements for any licenses that may be won by the
applicant in Auction 113. In addition, to the extent that an applicant
has an agreement with any disclosable interest holder for the use of
more than 25% of the spectrum capacity of any license that may be won
in Auction 113, the applicant must disclose the identity and the
attributable gross revenues of any such disclosable interest holder.
This attribution rule will be applied on a license-by-license basis. As
a result, an applicant may be eligible for a bidding credit on some,
but not all, of the licenses for which it is bidding in Auction 113. If
an applicant is applying as a consortium of small businesses, then the
disclosures described in this paragraph must be provided for each
consortium member.
2. Rural Service Provider Bidding Credit
An eligible applicant may request a 15% discount on its overall
payment using a rural service provider bidding credit, subject to the
cap discussed below. To be eligible for a rural service provider
bidding credit, an applicant must: (1) be a service provider that is in
the business of providing commercial communications services and,
together with its controlling interests, affiliates, and the affiliates
of its controlling interests, has fewer than 250,000 combined wireless,
wireline, broadband, and cable subscribers; and (2) serve predominantly
rural areas. Rural areas are defined as counties with a population
density of 100 or fewer

[[Page 59993]]

persons per square mile. An applicant seeking a rural service provider
bidding credit must provide the number of subscribers served as of the
short-form application deadline. An applicant may count any subscriber
as a single subscriber even if that subscriber receives more than one
service.
Each applicant seeking a rural service provider bidding credit must
disclose the number of its subscribers, along with the number of
subscribers of its affiliates, controlling interests, and the
affiliates of its controlling interests. The applicant must also submit
an attachment that lists all parties with which the applicant has
entered into any spectrum use agreements or arrangements for any
licenses that may be won by the applicant in Auction 113. In addition,
to the extent that an applicant has an agreement with any disclosable
interest holder for the use of more than 25% of the spectrum capacity
of any license that may be won in Auction 113, the identity and the
attributable subscribers of any such disclosable interest holder must
be disclosed. Like applicants seeking eligibility for small business
bidding credits, eligible rural service providers may also form a
consortium. If an applicant is applying as a consortium of rural
service providers, then the disclosures described in this paragraph,
including the certification, must be provided for each consortium
member.
3. Attributable Interests
Controlling Interests and Affiliates. Pursuant to 47 CFR 1.2110, an
applicant's eligibility for bidding credits is determined by
attributing the gross revenues (for those seeking small business
benefits) or subscribers (for those seeking rural service provider
benefits) of the applicant, its affiliates, its controlling interests,
and the affiliates of its controlling interests. This information must
therefore be disclosed in the short-form application of any auction
participant seeking a small business or rural service provider bidding
credit. Controlling interests of an applicant include individuals and
entities with either de facto or de jure control of the applicant.
Typically, ownership of greater than 50% of an entity's voting stock
evidences de jure control. De facto control is determined on a case-by-
case basis based on the totality of the circumstances. The following
are some common indicia of de facto control:
<bullet> the entity constitutes or appoints more than 50% of the
board of directors or management committee;
<bullet> the entity has authority to appoint, promote, demote, and
fire senior executives that control the day-to-day activities of the
licensee; and
<bullet> the entity plays an integral role in management decisions.
Additionally, for attribution purposes, officers and directors of
an applicant seeking a bidding credit are considered to have a
controlling interest in the applicant. Applicants should refer to 47
CFR 1.2110(c)(2) and the FCC Form 175 Instructions to understand how
certain interests are calculated in determining control for purposes of
attributing gross revenues.
Affiliates of an applicant or controlling interest include an
individual or entity that: (1) directly or indirectly controls or has
the power to control the applicant, (2) is directly or indirectly
controlled by the applicant, (3) is directly or indirectly controlled
by a third party that also controls or has the power to control the
applicant, or (4) has an ``identity of interest'' with the applicant.
The Commission's definition of an affiliate of the applicant
encompasses both controlling interests of the applicant and affiliates
of controlling interests of the applicant. For more information on how
to disclose information regarding controlling interests and affiliates,
applicants should refer to 47 CFR 1.2110(c)(2) and (c)(5) respectively,
as well as the FCC Form 175 Instructions.
An applicant seeking a small business bidding credit must
demonstrate, through its disclosures, its eligibility for the bidding
credit by: (1) meeting the applicable small business size standard,
based on the Commission's controlling interest and affiliation rules;
and (2) retaining control, on a license-by-license basis, over the
spectrum associated with the licenses for which it seeks small business
benefits. For purposes of the first prong of the standard, applicants
should note that control and affiliation may arise through, among other
things, ownership interests, voting interests, management and other
operating agreements, or the terms of any other types of agreements--
including spectrum lease agreements--that independently or together
create a controlling, or potentially controlling, interest in the
applicant's or licensee's business as a whole. In addition, once an
applicant demonstrates eligibility as a small business under the first
prong, it must also be eligible for benefits on a license-by-license
basis under the second prong. As part of making the FCC Form 175
certification that it is qualified as a designated entity under 47 CFR
1.2110, an applicant is certifying that it does not have any spectrum
use or other agreements that would confer either de jure or de facto
control of any license it seeks to acquire with bidding credits.
With respect to the retention of control over the spectrum
associated with the licenses at issue, applicants should note that,
under this standard for evaluating eligibility for small business
bidding credits, if an applicant executes a spectrum use agreement that
does not comply with the Commission's relevant standard of de facto
control, then it will be subject to unjust enrichment obligations for
the benefits associated with that particular license. If that spectrum
use agreement (either alone or in combination with the Commission's
designated entity controlling interest and attribution rules) goes so
far as to confer control of the applicant's overall business, then the
gross revenues of the additional interest holders will be attributed to
the applicant, which could render the applicant ineligible for all
current and future small business benefits on all licenses.
Limitation on Spectrum Use. Under 47 CFR 1.2110(c)(2)(ii)(J), the
gross revenues (or the subscribers, in the case of a rural service
provider) of an applicant's disclosable interest holder are
attributable to the applicant, on a license-by-license basis, if the
disclosable interest holder has an agreement with the applicant to use,
in any manner, more than 25% of the spectrum capacity of any license
won by the applicant and acquired with a bidding credit during the
five-year unjust enrichment period for the applicable license. For
purposes of this requirement, a disclosable interest holder of an
applicant seeking designated entity benefits is defined as any
individual or entity holding a 10% or greater interest of any kind in
the applicant, including but not limited to, a 10% or greater interest
in any class of stock, warrants, options, or debt securities in the
applicant or licensee. Any applicant seeking a bidding credit for
licenses won in Auction 113 will be subject to this attribution rule
and must make the requisite disclosures.
Certain disclosable interest holders may be excluded from this
attribution rule. Specifically, an applicant claiming the rural service
provider bidding credit may have a spectrum license use agreement with
a disclosable interest holder, without having to attribute the
disclosable interest holder's subscribers, so long as the disclosable
interest holder is independently eligible for a rural service provider
credit and the disclosable interest holder's spectrum use and any
spectrum use agreement is otherwise permissible under the Commission's
existing rules. If applicable, the applicant must attach to

[[Page 59994]]

its FCC Form 175 any additional information as may be required to
indicate any license that may be subject to this attribution rule or to
demonstrate its eligibility for the exception from this attribution
rule. Consistent with the Commission's limited information procedures,
OEA and WTB intend to withhold from public disclosure all information
contained in any such attachments until after the close of Auction 113.
Exceptions from Attribution Rules for Small Businesses and Rural
Service Providers. Applicants claiming designated entity benefits may
be eligible for certain exceptions from the Commission's attribution
rules. For example, in calculating an applicant's gross revenues under
the controlling interest standard, the Commission will not attribute to
the applicant the personal net worth, including personal income, of its
officers and directors. However, to the extent that the officers and
directors of the applicant are controlling interest holders of other
entities, the gross revenues of those entities will be attributed to
the applicant. Moreover, if an officer or director operates a separate
business, then the gross revenues derived from that business would be
attributed to the applicant.
The Commission has also exempted from attribution to the applicant
the gross revenues of the affiliates of a rural telephone cooperative's
officers and directors, if certain conditions specified in 47 CFR
1.2110(b)(4)(iii) are met. An applicant claiming this exemption must
provide, in an attachment, an affirmative statement that the applicant,
affiliate, and/or controlling interest is an eligible rural telephone
cooperative within the meaning of 47 CFR1.2110(b)(4)(iii), and the
applicant must supply any additional information as may be required to
demonstrate eligibility for the exemption from the attribution rule.
An applicant claiming a rural service provider bidding credit may
be eligible for an exception from the Commission's attribution rules as
an existing rural partnership. To qualify for this exception, an
applicant must be a rural partnership providing service as of July 16,
2015, and each member of the rural partnership must individually have
fewer than 250,000 combined wireless, wireline, broadband, and cable
subscribers. Because each member of the rural partnership must
individually qualify for the bidding credit, by definition, a
partnership that includes a nationwide provider as a member will not be
eligible for the benefit.
Finally, a consortium of small businesses or rural service
providers may seek an exception from the Commission's attribution
rules. Under the Commission's rules, a consortium of small businesses
or rural service providers is a conglomerate organization composed of
two or more entities, each of which individually satisfies the
definition of small business or rural service provider. A consortium
must provide additional information for each member demonstrating each
member's eligibility for the claimed bidding credit in order to show
that the applicant satisfies the eligibility criteria for the bidding
credit. The gross revenue or subscriber information of each consortium
member will not be aggregated for purposes of determining the
consortium's eligibility for the claimed bidding credit. This
information must be provided, however, to ensure that each consortium
member qualifies for the bidding credit sought by the consortium.

I. Provisions Regarding Former and Current Defaulters

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 113, 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 they are 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 specific exclusions provided in the Commission's rules. For
purposes of making these certifications, the term ``controlling
interest'' is defined in 47 CFR 1.2105(a)(4)(i).
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 filing 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 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.
In addition to the Auction 113 Procedures Public Notice, applicants
are encouraged to review previous guidance on default and delinquency
disclosure requirements in the context of the auction short-form
application process. Parties are also encouraged to consult with
Auctions Division staff if they have any questions about default and
delinquency disclosure requirements.
The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission has previously adopted rules, including a provision referred
to as the ``red light rule,'' that implement its obligations under the
Debt Collection Improvement Act of 1996, which governs the collection
of debts owed to the United States. Under the red light rule,
applications and other requests for benefits filed by parties that have
outstanding debts owed to the Commission will not be processed. When
adopting that rule, the Commission explicitly declared, however, that
its competitive bidding rules ``are not affected'' by the red light

[[Page 59995]]

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.
OEA and WTB remind each applicant, however, that any indication in
the Commission's Red Light Display System, which provides information
regarding debts currently owed to the Commission, may not be
determinative of an auction applicant's ability to comply with the
default and delinquency disclosure requirements of 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 113 should note that any long-form applications
filed after the close of bidding will be reviewed for compliance with
the Commission's red light rule, and such review may result in the
dismissal of a winning bidder's long-form application. OEA and WTB
encourage each applicant to carefully review all records and other
available Federal agency databases and information sources to determine
whether the applicant, or any of its affiliates, or any of its
controlling interests, or any of the affiliates of its controlling
interests, owes or was ever delinquent in the payment of non-tax debt
owed to any Federal agency.

J. Modifications to FCC Form 175

1. Duty To Maintain Accuracy and Completeness of FCC Form 175
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 113. Consistent with the requirements for prior spectrum
auctions, an applicant for Auction 113 must furnish additional or
corrected information to the Commission within five business days after
a significant occurrence, or amend its FCC Form 175 no more than five
business days after the applicant becomes aware of the need for the
amendment. An applicant is obligated to amend its pending application
even if a reported change may result in the dismissal of the
application because it is subsequently determined to be a major
modification.
2. Modifying an FCC Form 175
A party seeking to participate in Auction 113 must file an FCC Form
175 electronically via the AAP in the AAS. During the initial filing
window, an applicant will be able to make any necessary modifications
to its FCC Form 175 in the AAP. An applicant that has certified and
submitted its FCC Form 175 before the close of the initial filing
window may continue to make modifications as often as necessary until
the close of that window; however, the applicant must re-certify and
re-submit its FCC Form 175 before the close of the initial filing
window to confirm and effect its latest application changes. After each
submission, a confirmation page will be displayed stating the
submission time and submission date.
An applicant will also be allowed to modify its FCC Form 175 in the
AAP, 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 AAP and re-certify and re-submit its application to
confirm and effect the change(s).
An applicant's ability to modify its FCC Form 175 in the AAP 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) in the AAP. An applicant will not be able to
modify any other pages of the FCC Form 175 in the AAP 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#5130243225383e3f606062113732327f363e27">[email&#160;protected]</a>. The email summarizing the changes must include a
subject line referring to Auction 113 and the name of the applicant,
for example, ``Re: Changes to Auction 113 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 AAP once it is again open and available to applicants.
Applicants should also note that even at times when the AAP 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). 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#33524650475a5c5d020200735550501d545c45">[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
Portal, the applicant must then re-certify and re-submit its FCC Form
175 in the AAP to confirm and effect the change(s).
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.
Applicants must not submit application-specific material through
the Commission's Electronic Comment Filing System. Further, 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
113. An applicant seeking to submit, outside the AAP, information that
might reflect non-public information, such as an applicant's license
selection(s), upfront payment amount, or bidding eligibility, should
consider including in its email a request that the filing or portions
of the filing be withheld from public inspection until the end of the
prohibition on certain communications pursuant to 47 CFR1.2105(c).

[[Page 59996]]

Questions about FCC Form 175 amendments should be directed to the
Auctions Division at <a href="/cdn-cgi/l/email-protection#2b4a5e485f4244451a1a186b4d4848054c445d">[email&#160;protected]</a> or (202) 418-0660.

IV. Information Procedures and Prohibited Communications

A. Information Procedures During the Auction Process

Consistent with past practice in many prior spectrum license
auctions, OEA and WTB adopt the proposal to limit information available
during Auction 113 in order to prevent the identification of bidders
placing particular bids until after the bidding has closed.
Specifically, OEA and WTB will not make public until after bidding has
closed: (1) the licenses that an applicant selects for bidding in its
short-form application, (2) the amount of any upfront payment made by
or on behalf of an applicant for Auction 113, (3) any applicant's
bidding eligibility, and (4) any other bidding-related information that
might reveal the identity of the bidder placing a bid. Moreover, OEA
and WTB will not make public until after the close of the auction
whether an applicant has submitted with its short-form application a
signed acknowledgment statement regarding the acceptance of
interference from Federal incumbents for operations in the 1755-1780
MHz.
OEA and WTB also adopt their proposal to make public after each
bidding round, for each license, the aggregate demand, the posted price
of the last completed round, and the clock price for the next round.
The identities of bidders making specific bids will not be disclosed
until after the close of bidding in the auction. Bids placed according
to a bidder's proxy instructions will be made available, but a bidder's
proxy instructions will not be disclosed because they may contain price
information private to the bidder. The limited comment OEA and WTB
received on this proposal largely supports adopting it.
Each bidder will have access to additional information related to
its own bidding and bid eligibility. Specifically, after the bids of a
round have been processed, the bidding system will inform each bidder
of its processed demand for each license, its proxy instructions, and
its eligibility for the next round. The identities of bidders placing
specific bids will not be disclosed until after the close of bidding.
After the close of bidding, bidders' license selections, upfront
payment amounts, bidding eligibility, bids, and other bidding-related
actions will be made publicly available.
The limited information procedures (sometimes also referred to as
anonymous bidding) OEA and WTB adopt here have been effective in past
auctions to safeguard against potential anticompetitive behavior such
as retaliatory bidding and collusion. Commenters generally support
adopting the limited information procedures as proposed. One commenter
supports adopting limited information procedures generally to promote
fair competition and discourage anti-competitive conduct, but suggests
a more restrictive approach--i.e., implementing phased disclosures of
aggregate demand data, contending that in smaller markets with fewer
licenses available, bidding patterns and price movements revealed by
the proposed limited information procedures can indirectly reveal
biding strategies. Another commenter, however, asks OEA and WTB to
reject these suggested enhancements, arguing that such additional
procedures would complicate the development of Auction 113 bidding
software and strategies and that there is no reason for the Commission
``to stray from the tried-and-true bidding framework that has made its
auctions a success.''
Because the commenter suggesting this more restrictive approach
provides no evidence that the limited information procedures used in
the Commission's past auctions have facilitated anticompetitive bidding
behavior in any auction, OEA and WTB are not persuaded that they should
depart from the Commission's now-established practice of implementing
these procedures in wireless spectrum auctions, and they conclude that
the competitive benefits associated with limiting information
disclosure support adoption of such procedures and outweigh any
potential benefits of full disclosure. OEA and WTB also agree that
implementing the proposal for the phased disclosure of aggregate demand
data would unnecessarily complicate Auction 113 bidding procedures.
OEA and WTB warn applicants that direct or indirect communication
to other applicants or the public disclosure of non-public information
(e.g., reductions in eligibility, identities of bidders) could violate
the Commission's rule prohibiting certain communications. Therefore, to
the extent an applicant believes that such a disclosure is required by
law or regulation, including regulations issued by the U.S. Securities
and Exchange Commission (SEC), OEA and WTB strongly urge that the
applicant consult with Commission staff in the Auctions Division before
making such disclosure.

B. Prohibited Communications and Compliance With Antitrust Laws

The rules prohibiting certain communications set forth in 47 CFR
1.2105(c) apply to each ``applicant'' in Auction 113. 47 CFR
1.2105(c)(1) provides that, subject to specified exceptions, ``[a]fter
the short-form application filing deadline, all applicants are
prohibited from cooperating or collaborating with respect to,
communicating with or disclosing, to each other or any nationwide
provider [of communications services] that is not an applicant, or, if
the applicant is a nationwide provider, any non-nationwide provider
that is not an applicant, in any manner the substance of their own, or
each other's, or any other applicants' bids or bidding strategies
(including post-auction market structure), or discussing or negotiating
settlement agreements, until after the down payment deadline[.]'' Any
applicant found to have violated these communication prohibitions may
be subject to sanctions.
1. Entities Subject to 47 CFR 1.2105(c)
An ``applicant'' for purposes of this rule includes all
``controlling interests'' in the entity submitting the FCC Form 175
auction application, as well as all holders of interests amounting to
10% or more of the entity (including institutional investors and asset
management companies), and all officers and directors of that entity.
Under 47 CFR 1.2105(c), a party that submits an application becomes an
``applicant'' under the rule, which goes into effect at the application
deadline, and that status does not change based on later developments.
2. Prohibition Applies Until Down Payment Deadline
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. To be clear,
communications that occur even after bidding has ended and the auction
has closed, but before the down payment deadline, are still subject to
47 CFR 1.2105(c).
3. Scope of Prohibition on Certain Communications; Prohibition on Joint
Bidding Agreements
47 CFR 1.2105(c) prohibits certain communications between
applicants for an auction, regardless of whether the applicants seek
permits or licenses in the same geographic area or market. The

[[Page 59997]]

rule also applies to communications by applicants with non-applicant
nationwide providers of communications services and by nationwide
applicants with non-applicant, non-nationwide providers. For purposes
of the prohibited communications rule for Auction 113, OEA and WTB
consider AT&T, T-Mobile, and Verizon to be ``nationwide providers.''
The rule further prohibits ``joint bidding arrangements,'' including
arrangements relating to the permits or licenses being auctioned that
address or communicate, directly or indirectly, bidding at the auction,
bidding strategies, including arrangements regarding price or the
specific permits or licenses on which to bid, and any such arrangements
relating to the post-auction market structure. The rule allows for
limited exceptions for communications within the scope of any
arrangement consistent with the exclusion from the Commission's rule
prohibiting joint bidding, provided such arrangement is disclosed on
the applicant's auction application. Applicants may communicate
pursuant to any pre-existing agreements, arrangements, or
understandings relating to the licenses being auctioned that are solely
operational or that provide for the transfer or assignment of licenses,
provided that such agreements, arrangements, or understandings are
disclosed on their applications and do not address or communicate bids
(including amounts), bidding strategies, or the particular permits or
licenses on which to bid or the post-auction market structure.
In addition to express statements of bids and bidding strategies,
the prohibition against communicating ``in any manner'' includes public
disclosures as well as private communications and indirect or implicit
communications. Consequently, an applicant must take care to determine
whether its auction-related communications may reach another applicant.
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, even if the officers, directors, or
employees are not involved in their company's participation in the
auction or if the information received is wholly unsolicited. Such
information may be deemed to have been received by the applicant under
certain circumstances. For example, Commission staff have found that,
where an individual serves as an officer and director for two or more
applicants, the bids and bidding strategies of one applicant are
presumed to be conveyed to the other applicant through the shared
officer, which creates an apparent violation of the rule.
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 in that specific
auction's forward auction of spectrum licenses and reverse auction to
relinquish broadcast licenses. As the Commission explained therein, a
communication conveying ``bids or bidding strategies (including post-
auction market structure)'' must also relate to the ``licenses being
auctioned'' in order to be covered by the prohibition. Thus, the
prohibition is limited in scope and does not apply to all
communications between or among the specified parties. The Commission
consistently has made clear that application of the rule prohibiting
communications has never required total suspension of essential ongoing
business. Entities subject to the prohibition may negotiate agreements
during the prohibition period, provided that the communications
involved do not relate to both: (1) the licenses being auctioned and
(2) bids or bidding strategies or post-auction market structure.
Accordingly, business discussions and negotiations that do not
convey information about the bids or bidding strategies, including the
post-auction market structure, of an applicant are not prohibited by
the rule. Moreover, not all auction-related information is covered by
the prohibition. For example, communicating merely whether a party has
or has not applied to participate in Auction 113 will not violate the
rule. In contrast, communicating, among other things, how a party will
participate, including specific geographic areas selected, specific bid
amounts, and/or whether or not the party is placing bids, would convey
bids or bidding strategies and would be prohibited
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, even if they do not
directly address the licenses offered in Auction 113 or the AWS-1 and
AWS-3 bands still might touch upon subject areas that relate to bids
and bidding strategies or to post-auction market structure, which 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.
OEA and WTB caution applicants that bids or bidding strategies may
be communicated outside 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.''
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 113. Specifically, an applicant should avoid
including any information in its short-form application that might
convey information regarding its license selections, such as referring
to markets or other geographic areas in describing agreements,
including any information in application attachments that will be
publicly available that may otherwise disclose the applicant's license
selections, or using applicant names or attachment file names in the
application that refer to licenses being offered.
Applicants also should be mindful that communicating non-public
application or bidding information publicly or privately to another

[[Page 59998]]

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
47 CFR 1.2105(c) does not prohibit an applicant from communicating
bids or bidding strategies to a third party, such as a consultant or
consulting firm, counsel, or lender. An 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 liability if a violation
of the rule has occurred.
As the Commission has noted in other spectrum auctions, in the case
of an individual, the objective precautionary measure of a firewall is
not available. As a result, an individual that is privy to bids or
bidding information of more than one applicant presents a greater risk
of becoming a conduit for a prohibited communication. OEA and WTB will
take the same approach to interpreting the prohibited communications
rule in Auction 113. OEA and WTB emphasize that whether a prohibited
communication has taken place in a given case will depend on all the
facts pertaining to the case, including who possessed what information,
what information was conveyed to whom, and the course of bidding in the
auction.
OEA and WTB remind potential applicants that they may discuss the
short-form application or bids for specific licenses with the counsel,
consultant, or expert of their choice before the short-form application
deadline. Furthermore, the same third-party individual could continue
to give advice after the short-form deadline regarding the application,
provided that no information pertaining to bids or bidding strategies,
including licenses selected on the short-form application, is conveyed
to that individual.
Applicants also should use caution in their dealings with other
parties, such as members of the press, financial analysts, or others
who might become conduits for the communication of prohibited bidding
information. For example, even though communicating that it has applied
to participate in the auction will not violate the rule, an applicant's
statement to the press or a statement on social media that it intends
to stop bidding in an auction could give rise to a finding of a 47 CFR
1.2105 violation. Similarly, an applicant's public statement of intent
not to place bids during bidding in Auction 113 could also violate the
rule.
5. 47 CFR 1.2105(c) Certifications
By electronically submitting its FCC Form 175, each applicant for
Auction 113 certifies its compliance with 47 CFR 1.2105(c) of the
rules. The mere filing of a certifying statement as part of an
application, however, will not outweigh specific evidence that a
prohibited communication has occurred, nor will it preclude the
initiation of an investigation when warranted.
6. Duty To Report Prohibited Communications
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
A party reporting any information or communication pursuant to 47
CFR 1.65(a), 1.2105(a)(2), or 1.2105(c)(4) must take care to ensure
that any report of a prohibited communication does not itself give rise
to a violation of 47 CFR 1.2105(c). For example, a party's report of a
prohibited communication could violate the rule by communicating
prohibited information to other parties specified under the rule
through the use of Commission filing procedures that allow such
materials to be made available for public inspection.
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
113 Procedures Public Notice. For Auction 113, such reports must be
filed with the Chief of the Auctions Division, Office of Economics and
Analytics, by the most expeditious means available. Any such report
should be submitted by email to the Auctions Division Chief and sent to
<a href="/cdn-cgi/l/email-protection#7011051304191f1e414143301613135e171f06">[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#2a4b5f495e4345441b1b196a4c4949044d455c">[email&#160;protected]</a> or (202)
418-0660 for guidance.
Given the potential competitive sensitivity of public disclosure of
information in such a report, a party seeking to report such a
prohibited communication should consider submitting its report with a
request that the report or portions of the submission be withheld from
public inspection by following the procedures specified in 47 CFR
0.459. OEA and WTB encourage such parties to coordinate with the
Auctions Division staff about the procedures for submitting such
reports.
8. Additional Information Concerning Prohibition on Certain
Communications in Commission Auctions
A summary listing of documents issued by the Commission and OEA/WTB
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>.
9. Antitrust Laws
Regardless of compliance with the Commission's rules, applicants
remain subject to the antitrust laws, which are designed to prevent
anticompetitive behavior in the marketplace. Compliance with the
disclosure requirements of 47 CFR 1.2105(c)(4) will not insulate a
party from enforcement of the antitrust laws. For instance, a violation
of the antitrust laws could arise out of actions taking place well
before any party submits a short-form application. The Commission has
cited a number of examples of potentially anticompetitive actions that
would be prohibited under antitrust laws: for example, actual or
potential competitors may not agree to divide territories in

[[Page 59999]]

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.
To the extent OEA and WTB become aware of specific allegations that
suggest that violations of the federal antitrust laws may have
occurred, they may refer such allegations to the United States
Department of Justice for investigation. If an applicant is found to
have violated the antitrust laws or the Commission's rules in
connection with its participation in the competitive bidding process,
then it may be subject to a forfeiture and may be prohibited from
participating further in Auction 113 and in future auctions, among
other sanctions.

V. Bidding Procedures

OEA and WTB adopt their proposal to conduct Auction 113 using an
ascending clock-1 auction format. The clock-1 auction format was used
in Auction 108 and is similar to the clock phase of past Commission
ascending clock auctions, but rather than offering multiple generic
spectrum blocks in a category in a geographic area, each frequency-
specific license in an EA or CMA will constitute its own category with
a supply of 1. Therefore, in the clock-1 auction format adopted for
Auction 113, bidders will bid on frequency-specific licenses in a clock
phase. This proposal has ample support in the record.
While OEA and WTB set forth the key bidding procedures for the
clock-1 auction in the Auction 113 Procedures Public Notice, OEA, in
conjunction with WTB, released concurrently with the Auction 113
Procedures Public Notice an updated technical guide (Auction 113
Technical Guide) that provides further technical details about the
adopted bidding procedures. The information in the Auction 113
Technical Guide, which is available in the Education section on the
Auction 113 website (<a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>), supplements the
decisions made by OEA and WTB in the Auction 113 Procedures Public
Notice.

A. Clock-1 Auction Structure

Under the clock-1 format that OEA and WTB adopt, each bidder will
be able to bid for specific licenses in the clock bidding rounds, in
license-by-license bidding. The auction will proceed in a series of
rounds, with bidding conducted simultaneously for all licenses
available in the auction. Consistent with prior Commission clock
auctions, for each bidding round, the bidding system will announce a
clock price for each license, and a bidder will indicate its demand for
licenses at the prices associated with the current round. Under the
clock-1 auction format, a bidder's demand for a license can be zero or
one.
The clock price for a license will increase from round to round if
more than one bidder indicates demand for the license. The bidding
rounds will continue until the number of bidders demanding each license
does not exceed one. Once bidding rounds stop, the bidder with demand
for a license will become the winning bidder.

B. Individual Licenses in Two Geographic Area Types

Auction 113 will offer 200 geographic area-based licenses in 199
markets in the 1695-1710 MHz, 1755-1780 MHz, and the 2155-2180 MHz
bands. The Auction 113 inventory consists of licenses in EAs and CMAs.
The 48 EA licenses include frequency blocks designated A1, B1, H, I,
and/or J; the 152 CMA licenses are all for frequency block G. In
Auction 113, only one geographic area (EA173) has more than one
frequency block available, and it includes both the H and the I blocks.

C. Bidding Rounds

Auction 113 will consist of sequential bidding rounds, each
followed by the release of round results. OEA and WTB will conduct
bidding simultaneously for all licenses available in the auction. In
the first bidding round of Auction 113, a bidder will indicate whether
it demands the licenses at the minimum opening bid price. Before each
subsequent bidding round, the bidding system will announce a start-of-
round price and a clock price for each license, and during the round,
qualified bidders will indicate the licenses for which they wish to bid
at the prices associated with the current round. Bidding rounds will be
open for predetermined periods of time. Bidders will be subject to
activity and eligibility rules that govern the pace at which they
participate in the auction.
For each license, the clock price will increase from round to round
if more than one bidder indicates demand for that license. The bidding
rounds will continue until, for every license, demand does not exceed
one. At that point, the bidder still indicating demand for a license
will be the winning bidder.
The initial bidding schedule will be announced in a public notice
to be released at least one week before the start of bidding. Details
on viewing round results, including the location and format of
downloadable results files for each round, will be released concurrent
with or prior to that public notice.
A bidder will be able to submit bids via the internet through the
bidding system user interface, the bidding system's upload function, or
using the auction bidder line. The bidding system's upload function
accepts bid files in a comma-separated values (CSV) text format. The
bidding system will allow a bidder to submit bids only for licenses the
bidder selected on its FCC Form 175 and for which the bidder has
sufficient bidding eligibility.
During each open bidding round, a bidder will be able to modify its
bids in the current bidding round. Bids can be modified either through
the user interface, the bidding system's upload function, or through
the auction bidder line. If a bidder modifies its bids by uploading a
new file, then that file, including all of the file's bids and
modifications, will replace all of the bidder's bids previously
submitted in the round. The system will take the last bid file
submission as that bidder's bids for the round. OEA and WTB urge
bidders to verify their bids in each round. Information on how to do so
will be made available in educational materials that OEA will provide,
including a bidding system user guide and an online bidding procedures
tutorial.
OEA will retain the discretion to change the bidding schedule in
order to foster an auction pace that reasonably balances speed with the
bidders' need to study round results and adjust their bidding
strategies. Such adjustments may include changes to 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.

D. Stopping Rule

OEA and WTB adopt their proposal to employ a simultaneous stopping
rule for Auction 113, which means all licenses simultaneously remain
open for bidding until the first round in which, after bid processing,
no license has excess demand, at which point the auction will close.

E. Activity Rule

For the reasons set forth in the Auction 113 Comment Public Notice,
OEA and WTB adopt their proposal to employ an activity rule that
requires bidders to bid actively throughout the auction, rather than
wait until late in the auction before participating. For this clock
auction, a bidder's activity in a round for purposes of the activity
rule will be the sum of the bidding units associated with the bidder's
demands as

[[Page 60000]]

applied by the bidding system during bid processing. Bidders are
required to be active on a specific percentage (the activity
requirement percentage) of their current bidding eligibility during
each round of the auction. Failure to maintain the requisite activity
level will result in a reduction in the bidder's eligibility, possibly
curtailing or eliminating the bidder's ability to place bids in
subsequent rounds of the auction.
OEA and WTB adopt their proposal to require that bidders maintain a
fixed, high level of activity in each round of Auction 113 in order to
maintain bidding eligibility. In order for posted prices and aggregate
demand in the clock auction to reflect bidders' true demands reliably,
the bidding system requires a high activity requirement percentage to
incentivize bidders to start bidding early in the auction for the
licenses that they want to acquire. Consistent with past practice,
bidders will be required to be active on between 90% and 100% of their
bidding eligibility in all clock rounds, with the specific percentage
for each round to be set by OEA. OEA will set the activity requirement
percentage initially at 95%.
If the activity requirement is met, then the bidder's eligibility
will not change for the next round. If the activity requirement is not
met in a round, the bidder's eligibility will be reduced to an amount
that brings the bidder into compliance with the requirement. Bidding
activity will be based on the bids that are applied by the bidding
system. That is, if a bidder submits a bid to reduce its demand for a
license, but the bidding system cannot apply the request because demand
for that license will fall below one, then the bidder's activity will
reflect its unreduced demand (i.e., the license will still count toward
the bidder's activity).
OEA retains the discretion to change the activity requirement
percentage during the auction. The bidding system will announce any
such changes in advance of the round in which they would take effect,
giving bidders adequate notice to adjust their bidding strategies.
Most commenters did not object to the proposal to set the initial
activity requirement percentage at 95%, which the Commission has
successfully used in every clock auction since the format was
introduced for the Broadcast Incentive Auction. However, one commenter
proposes to reduce the activity requirement to 90% or to use a more
complicated tiered eligibility system to reduce the activity
requirement below 95%, arguing that ``strict'' activity requirements
create challenges for bidders, especially smaller entities, who are
``navigating complex auction rules.'' This commenter claims that
``unforeseen technical or financial constraints have limited bidder
activity, leading to a loss of eligibility,'' but provides no examples
of such instances. OEA and WTB are not persuaded by these unsupported
arguments, and see no convincing evidence of a need to deviate from the
proposed 95% initial activity requirement. Moreover, OEA and WTB agree
that they should not depart from the ``tried-and-true bidding
framework'' that has made Commission auctions successful, including
changing features that are in place to protect the integrity of the
auction or introducing features that would unnecessarily complicate
bidding system development or bidding strategies. The 95% initial
activity requirement has consistently demonstrated that it balances
providing bidders with the flexibility to substitute across markets in
response to learned price information with providing bidders incentives
to bid in each round of the auction for the markets that they are
sincerely interested in. Lowering the initial activity requirement
could extend the duration of the auction if bidders delay placing their
bids until the activity requirement is increased. OEA and WTB therefore
decline to reduce the initial activity requirement below 95% because
doing so could create more uncertainty regarding the exact level of
bidder demand, provide less helpful information to bidders about
aggregate demand, and likely prolong the auction as bidders could delay
their bidding until later in the auction.
In the Auction 113 Comment Public Notice, OEA and WTB sought
comment on procedures for a contingent bidding limit that would allow a
bidder's submitted bids to have bidding activity that is greater than
the bidder's eligibility. In particular, OEA and WTB sought comment on
whether the contingent bidding limit would be useful with the limited
inventory in Auction 113 or whether it would add unnecessary
complexity. The only two commenters that addressed this both object to
allowing contingent bidding in Auction 113, arguing that the contingent
bidding limit would introduce complexity and uncertainty into the
bidding without adding any appreciable benefits to the bidders or the
Commission, and that the contingent bidding limit was scarcely utilized
by bidders based on their analysis of bidding data from the
Commission's four most recent clock auctions. OEA and WTB agree that
including a contingent bidding limit in Auction 113 would introduce
added complexity. Given that Auction 113 has a more limited inventory
than recent auctions, OEA and WTB expect fewer bidders to attempt to
switch between licenses, lowering the likelihood that bidders see
submitted bids go unapplied during bid processing. As such, OEA and WTB
find a contingent bidding limit to be unnecessary, and will not include
it in Auction 113.
For Auction 113, OEA and WTB will not provide for activity rule
waivers to preserve a bidder's eligibility. This approach has been
followed in every ascending clock auction since the Commission
introduced the format. The clock auction relies on precisely
identifying the point at which demand decreases to equal supply to
determine winning bidders and final prices. Allowing waivers would
create uncertainty with respect to the exact level of bidder demand,
would reduce the incentives to bid sincerely, and would interfere with
the basic clock price-setting and winner determination mechanism.
Moreover, uncertainty about the level of demand would affect the way
bidders' requests to reduce demand are processed by the bidding system.
Submitting proxy instructions can address some of the circumstances
under which a bidder inadvertently risks losing bidding eligibility.

F. Acceptable Bids

1. Reserve Prices
In the Auction 113 Comment Public Notice, OEA and WTB proposed not
to establish reserve prices other than minimum opening bid amounts for
the licenses being offered in Auction 113, reasoning that, unlike
Auction 97, the public interest did not provide any specific basis for
doing so in Auction 113. However, OEA and WTB invited commenters that
consider a reserve price to be in the public interest to describe what
specific factors lead them to that conclusion.
Three commenters argue that adopting an aggregate reserve price is
necessary to achieve Congress' goal of fully funding the Commission's
Supply Chain Reimbursement Program in a single auction, to ensure that
AWS-3 spectrum is not sold for less than it is worth, and to avoid
subjecting Auction 97 defaulting bidders to disproportionately large
liabilities--with one commenter specifically advocating for the
adoption of a $3.3 billion aggregate reserve. Two other commenters,
however, ask OEA and WTB to reject calls for an aggregate reserve price
in Auction 113, arguing

[[Page 60001]]

that it is not necessary where the Commission is already proposing
robust minimum opening bids that will prevent licenses from being
assigned at nominal amounts. Those commenters further observe that an
aggregate reserve price that is set too high could ultimately cause the
auction to fail, which would in turn deprive the Treasury of all
revenue and result in valuable spectrum remaining unlicensed and
unused.
OEA and WTB agree, and adopt their proposal not to establish
reserve prices for Auction 113 licenses, other than minimum opening bid
amounts. As the Commission has previously explained, while the primary
purpose of a minimum opening bid is to speed up the course of an
auction, a minimum opening bid also can serve a revenue-enhancing
function like a reserve price, because if bids are not accepted below a
certain level, they will also not be sold below that level. That is, a
minimum opening bid effectively functions as a reserve price. OEA and
WTB therefore conclude that adopting an aggregate reserve price is not
necessary for an auction in which they are adopting minimum opening
bids that are sufficiently high so as to prevent licenses from being
assigned at nominal amounts and in which OEA and WTB have no statutory
obligation to do so.
Contrary to one commenter's arguments, the Commission is not
required to adopt a reserve price to ensure that the maximum funding
earmarked by Congress for the Commission's Supply Chain Reimbursement
Program is fully funded from a single auction. OEA and WTB agree that
Congress's directive that proceeds raised in Auction 113 be used to
support the Commission's Supply Chain Reimbursement Program does not
require that the Commission risk a failed auction by setting a $3.3
billion reserve price. If a reserve was established but not met, the
auction would provide no funds at all. It is unreasonable to believe
that Congress intended such a result. Moreover, in the Part 1 Third
Report and Order, 63 FR 2315 (January 15, 1998), 63 FR 12658 (March 16,
1998), 63 FR 29958 (June 2, 1998), the Commission concluded that 47
U.S.C. 309(j)(4)(F) does not require it to use reserve prices or
minimum opening bids to maximize the revenue earned in all future
spectrum auctions because the other auction goals in 47 U.S.C.
309(j)(3)--such as ensuring the deployment and rapid deployment of new
technologies and services and promoting economic opportunity and
competition--have not been eliminated, and the Commission must continue
to balance and pursue all of its objectives.
OEA and WTB find unavailing commenters' arguments that the lack of
a reserve price would be detrimental to defaulting bidders from Auction
97 and that setting a reserve price would help these defaulting bidders
avoid facing disproportionately large liabilities in Auction 113. The
Commission is not obligated to establish an aggregate reserve price
equal to the sum of all bids on which bidders defaulted in Auction 97--
i.e., $3.3 billion--in order to shield past defaulting bidders from the
consequences of their own actions and to protect them from any risk
that they would be required to pay a deficiency payment following
Auction 113. Indeed, bidders in a Commission auction are on notice that
they bear any risk that may be associated with their winning bids,
because the Commission's default payment rules make clear that ``[a]
bidder assumes a binding obligation to pay its full bid amount upon
acceptance of the winning bid at the close of an auction.'' See 47 CFR
1.2104(g)(2). Those rules also make clear that if a bidder defaults on
its winning bid, it will be subject to a default payment consisting of
a deficiency payment equal to the difference between the amount of the
defaulted bid amount and the amount of the winning bid in a subsequent
auction, plus an additional default payment percentage amount. Setting
a reserve price that would render the deficiency payment provision of
the default payment meaningless would distort auction incentives and
likely encourage more defaults in the future.
The Commission has previously explained that the reserve price and
minimum opening bid provision in 47 U.S.C. 309(j)(4)(F) is intended to
prevent licenses from being assigned via auction at nominal amounts,
which could result, for example, from insufficient competition in the
auction that might in turn be due to the inability of potential bidders
to assess the market adequately or develop business plans. Moreover,
the Commission has discretion regarding whether to employ a minimum
opening bid and/or reserve price in an auction, after considering,
among other factors, the amount of spectrum being auctioned, levels of
incumbency, the availability of technology to provide service, the size
of the geographic service areas, issues of interference with other
spectrum bands, and any other relevant factors that could reasonably
have an impact on valuation of the spectrum being auctioned. Given the
circumstances in Auction 113--i.e., that it is an auction of licenses
in spectrum bands that are already in use for 5G services, that this is
the first auction the Commission will be conducting in almost four
years, and that the licenses being offered in Auction 113 have been
lying fallow for ten years during the pendency of litigation--OEA and
WTB conclude these factors should be sufficient to ensure that there
will be sufficient competition in the auction and that these licenses
will not be assigned at nominal amounts. This will in turn benefit the
public more than establishing a reserve price in the absence of a
statutory directive to do so.
2. Minimum Opening Bids
As is typical for spectrum license auctions, OEA and WTB sought
comment on the use of a minimum opening bid and/or reserve price, as
mandated by 47 U.S.C. 309(j) of the Communications Act. OEA and WTB
will establish minimum opening bids for every license in Auction 113.
The bidding system will not accept bids at prices less than the minimum
opening bid specified for each license. Based on the Commission's
experience in past auctions, setting appropriate minimum opening bids
is an effective tool to prevent an excessive number of bidding rounds
at very low prices.
OEA and WTB adopt their proposed minimum opening bid amounts. OEA
and WTB calculate minimum opening bids on a license-by-license basis
based on $0.01 per MHz-pop for the paired licenses in areas with a
population of less than 300,000, $0.02 per MHz-pop for the paired
licenses in areas with a population of at least 300,000 and less than
1,000,000, $0.05 per MHz-pop for the paired licenses in areas with a
population of at least 1,000,000, and $0.01 per MHz-pop for the
unpaired licenses. For all licenses, minimum opening bids will be
subject to a minimum of $1,000 per license.
Two commenters argue the proposed minimum opening bids are too low
and propose that the minimum opening bids for the licenses in Auction
113 not be lower than the minimum opening bids of the corresponding
licenses in Auction 97. They both argue that lower minimum opening bids
in Auction 113 on some licenses, relative to the corresponding minimum
opening bids in Auction 97, may result in lower winning bids on those
licenses and lower auction revenue.
OEA and WTB are unconvinced by these arguments. As the Commission
has recognized in past auctions, minimum opening bids are not intended
to be a reflection of final license prices, but instead a starting
point for bidding.

[[Page 60002]]

The minimum opening bid on a license has less bearing on the final
price of the license than it does on the number of rounds required to
reach the final price. OEA and WTB also disagree that lower minimum
opening bids on some licenses in Auction 113 (relative to Auction 97)
will reduce auction revenue, even though other minimum opening bids in
Auction 113 are higher (relative to Auction 97). In past auctions, the
Commission has recognized that a critical factor in setting minimum
opening bids is to not set them above the market clearing price, which
is unknown prior to the auction and, if set too high, could result in
lower participation and unsold licenses. Another commenter supports
this principle, agreeing that the minimum opening bids OEA and WTB
adopt will facilitate robust price discovery and participation. OEA and
WTB find that the amounts they adopt for Auction 113 balance the
competing objectives for minimum opening bids because (1) they are
sufficiently low so as not to deter participation or interfere with the
price-setting and winner determination mechanisms of the auction, and
(2) they are sufficiently high so as not to result in an excessive
number of rounds at prices very distant from the final prices and to
not permit the licenses to be sold for nominal amounts.
The minimum opening bids that OEA and WTB adopt for the midband
AWS-3 spectrum licenses available in Auction 113 are in line with the
minimum opening bids that have been set for every recent auction of
mid-band spectrum. In Auction 110 for licenses in the 3.45-3.55 GHz
band, the minimum opening bids were calculated based on $0.02 or $0.06
per MHz-pop, according to the population tiers of the geographic area.
In Auction 108 for licenses in the 2.5 GHz band, the minimum opening
bids were calculated based on $0.006 per MHz-pop for all licenses. In
Auction 107 for licenses in the 3.7-3.98 GHz band, the minimum opening
bids were calculated based on $0.003, $0.006 or $0.03 per MHz-pop,
according to the population tiers of the geographic area. In Auction
105 for licenses in the 3.55-3.65 GHz band, the minimum opening bids
were calculated based on $0.02 per MHz-pop for all licenses. Commenters
have not presented any evidence that there have been changes to the
market conditions for 5G-suitable spectrum that could justify
increasing the minimum opening bids for Auction 113 above the range of
minimum opening bids found in these four auctions of midband spectrum.
OEA and WTB find that this range of minimum opening bids better
reflects current market conditions than the minimum opening bids that
were used in Auction 97.
One commenter suggests implementing the use of ``adaptive pricing
mechanisms'' that would decrease minimum opening bids during the
auction for licenses that do not receive any bids at the current
minimum opening bids. OEA and WTB do not believe that this approach
would be helpful to bidders in Auction 113. No commenters submitted
evidence demonstrating that the specific minimum opening bids OEA and
WTB proposed for Auction 113 are too high. The minimum opening bids OEA
and WTB adopt in Auction 113 use a lower dollar-per-MHz-pop basis in
areas with lower populations than in areas with higher populations,
reducing the risk of licenses in rural areas going unsold. The number
of licenses unsold in recent auctions has been relatively small,
suggesting that minimum opening bids have not been set inappropriately
high. In Auction 110, 0.5% of licenses were not sold; in Auction 108,
1.8% of licenses were not sold; in Auction 107, there were no unsold
licenses; and in Auction 105, 8.9% of licenses were not sold.
Furthermore, OEA and WTB have concerns that introducing a feature into
the bidding system to reduce certain minimum opening bids ``for
licenses that receive no bids after a defined number of rounds'' could
introduce additional complexity into bidding strategies and could run
counter to the objective of not permitting licenses to be sold for
nominal amounts. Therefore, OEA and WTB decline to implement this
suggestion.
The minimum opening bids for all licenses offered in Auction 113
are set forth in the Attachment A file on the Auction 113 website at
<a href="http://www.fcc.gov/auction/113">www.fcc.gov/auction/113</a>.
3. Clock Price Increments
OEA and WTB adopt the procedures regarding clock price increments
as described in the Auction 113 Comment Public Notice. Therefore, after
bidding in the first round and before each subsequent round, for each
license, the bidding system will announce the start-of-round price and
the clock price for the upcoming round--that is, the lowest price and
the highest price at which bidders can submit bids during the round. As
long as aggregate demand for the license at the clock price exceeds
one, the start-of-round price for the upcoming round will be equal to
the clock price from the prior round. If aggregate demand equaled one
at a price in the previous round, then the start-of-round price for the
next round will be equal to the price at which demand equaled one. If
aggregate demand was zero in the previous round, then the start-of-
round price for the next round will remain the same.
OEA and WTB will set the clock price for a license for a round by
adding a percentage increment to the start-of-round price. OEA and WTB
will set the initial increment percentage at 10%, and OEA may adjust
this increment percentage within a range of 5% to 30%, inclusive, in
later rounds. To ensure that an increase in the percentage increment
does not result in an unduly large increase for a license, the total
dollar amount of the increment (the difference between the clock price
and the start-of-round price) will be capped at a certain amount. OEA
and WTB will set this cap on the increment initially at $50 million,
and OEA may adjust the cap in later rounds. The 5% to 30% increment
range and cap will allow us to manage the auction pace and take into
account bidders' needs to reevaluate their bidding strategies while
also moving the auction along quickly.
4. Bid Types
Under the clock-1 auction format adopted for Auction 113, a bidder
will indicate in each round the licenses it demands at the prices
associated with the round. A ``simple'' bid indicates a desired
quantity (in this auction, one or zero) at a price. In the first round,
a bidder indicates the licenses it demands at the minimum opening bids
by indicating a quantity of one for each of those licenses. After the
first round, a bidder that wants to maintain the same processed demand
for a license at the new clock price would submit a bid for the license
at the clock price, indicating that it is willing to pay up to that
price, if need be, for the license. A bid to maintain the same
processed demand cannot be at a price less than the clock price.
OEA and WTB will not permit a ``switch'' bid to reduce demand for
one license in a market and increase demand for another license in the
same market in Auction 113. OEA and WTB did not receive any comments on
this issue. The inventory of licenses for Auction 113 contains only one
market in which there are multiple licenses that may be considered
similar, thus the additional bidding and system complexity necessary to
permit switch bidding in this market is not worthwhile. A bidder that
wants to bid on both licenses within the market that has two licenses
could bid on these two licenses separately.

[[Page 60003]]

5. Intra-Round Bids
After the first round, bids to change demand can be made at prices
between the start-of-round price and the clock price. These are known
as intra-round bids. A bidder will be permitted to make intra-round
bids by indicating the quantity it demands for the license (in this
auction, one or zero) and a price between the start-of-round price and
the clock price at which it wants to change its demand. For example, if
a bidder has processed demand for a license at the start-of-round price
of $200, but no longer wants the license if the price increases by more
than $10, the bidder would indicate a bid quantity of zero at a price
of $210. Similarly, if the bidder wishes to reduce its demand to zero
if the price increases at all above $200, the bidder would indicate a
bid quantity of zero at the start-of-round price of $200.
Permitting intra-round bids allows the bidding system to use
relatively large clock price increments, because bidders can submit
bids at prices lower than the clock prices. This may reduce the number
of rounds in the auction without increasing the risk that a large clock
price increment will prevent the auction from accurately determining
the market clearing price, at which only one bidder demands the
license.
Intra-round bid amounts will be limited to multiples of $10 for
prices below $10,000; to multiples of $100 for prices between $10,000
and $100,000, inclusive; and to multiples of $1,000 for prices above
$100,000. OEA and WTB limit intra-round bids to these multiples to
deter anti-competitive strategic bidding.
6. Proxy Bids
OEA and WTB adopt their proposal, which is supported by the record,
to make proxy bidding an option available to bidders in Auction 113. In
the first round, a bidder may submit a proxy instruction to the bidding
system for any license for which it submits a bid in the first round.
After the first round, a bidder may submit a proxy instruction to the
bidding system for any license for which it has processed demand. A
proxy instruction for a license must indicate a reduction in demand for
the license to zero at a price higher than the current round's clock
price. Proxy instructions to increase a bidder's demand for a license
at a given price will not be permitted.
Under the procedures OEA and WTB adopt here, if a proxy instruction
has been submitted, the bidding system will automatically submit a
proxy bid to maintain the bidder's demand for the license in every
subsequent round as long as the clock price for the round is less than
the proxy instruction price. In the first round in which the clock
price is greater than or equal to the proxy instruction price, the
bidding system will submit a proxy bid on behalf of the bidder to
reduce the bidder's demand for that license to zero at the proxy
instruction price. For example, if a bidder has processed demand for a
license with a clock price of $1,000, and the bidder is willing to
purchase the license for a price up to $1,800, the bidder could submit
a proxy instruction to reduce its demand for the license to 0 at
$1,800. In that case, the bidding system will submit proxy bids to
maintain the bidder's demand for the license in each subsequent round
as long as the clock price is less than $1,800. In a round in which the
clock price is above $1,800, the bidding system will submit a proxy bid
to reduce the bidder's demand for the license to zero at the price of
$1,800.
In the case that a bid to reduce demand, whether placed according
to proxy instructions or submitted by the bidder in the round, is not
applied during bid processing, the bidding system will automatically
generate a proxy instruction at the bid price and, in the following
rounds, submit proxy bids on behalf of the bidder according to that
proxy instruction. For example, suppose that the start-of-round price
for a license is $10,000, the clock price is $12,000, and a bidder with
processed demand for the license submits a bid to reduce its demand to
0 at price $11,500. If the bid is not applied during bid processing
(e.g., because there were no other bids for the license in the round),
in the following round the bidding system will submit a proxy bid on
behalf of the bidder to reduce demand for the license to 0 at price
$11,500. The proxy instruction preserves in the bidding system the
bidder's interest in retaining demand for the license only if the price
is no higher than $11,500, which may help avoid having the license sold
later in the auction to another bidder at a price less than what the
initial bidder would be willing to pay.
In any round, a bidder can remove or modify any existing proxy
instructions or proxy bids for the round by submitting new bids through
the user interface or file upload. The system will take the last bid
submission as that bidder's bids and proxy instructions. Bidders are
reminded that any bids submitted through an upload will replace all
bids and proxy instructions previously submitted.
As is the case for intra-round bid amounts, proxy instruction
prices will be limited to multiples of $10 for prices below $10,000; to
multiples of $100 for prices between $10,000 and $100,000, inclusive;
and to multiples of $1,000 for prices above $100,000. Proxy
instructions will not be publicly released either during or after the
auction.
Commenters agree that proxy bidding as proposed in the Auction 113
Comment Public Notice alleviates the burden and resources required to
monitor a multiple-round auction. One commenter states that proxy
bidding will also promote more efficient auction outcomes by reducing
the risk of erroneous bids and allowing for more efficient use of
bidder resources. Another commenter supports allowing proxy bidding,
but suggests that OEA and WTB consider introducing conditional proxy
bid increases in demand to allow a bidder to instruct the bidding
system to bid on an additional license if its price falls below a
certain level, claiming this approach would help bidders navigate the
complexities of managing multiple licenses.
OEA and WTB conclude that adopting this commenter's proposal is
unnecessary in an ascending clock auction because the posted prices and
start-of-round prices never decrease from one round to the next. In the
ascending clock auction managing substitutions between multiple
licenses is already possible, for instance, by placing a bid to
decrease demand on one license, and, if the bid to reduce demand is
processed, placing a bid to increase demand for another license that
has the same or fewer bidding units as the former license. This type of
substitution does not require a proxy bid to increase demand. Proxy
bids are not intended to relieve bidders of their responsibility to
manage their bidding eligibility or to actively follow round-to-round
changes in prices and aggregate demand. Furthermore, in the ascending
clock auction, once a bidder has processed demand for a license, the
bidder cannot ensure or guarantee that it will not win the license when
the auction closes. Similarly, a bidder cannot ensure or guarantee that
the price of a license will not continue to rise in future rounds, or
that the relative price of a license compared to another license will
not change in future rounds.
7. Missing Bids
Under the clock-1 auction format, if a bidder does not submit bids
in the current round for all of the licenses for which it had processed
demand in the previous round and does not have proxy instructions in
place, the bidding system will consider those licenses to

[[Page 60004]]

have missing bids. Missing bids are treated by the bidding system as
requests to reduce demand to zero at the start-of-round prices for the
licenses with missing bids. If these requests are applied, then a
bidder's bidding activity, and its bidding eligibility for the next
round, may be reduced. A bidder can avoid having missing bids by either
indicating its demand in every round or by entering appropriate proxy
instructions.

G. Bid Processing

OEA and WTB adopt bid processing procedures that the bidding system
will use after each round of bidding to process bids to change demand,
to determine the processed demand of each bidder for each license, and
to determine the posted price for each license that will serve as the
start-of-round price for the next round. Bids to maintain demand will
always be applied by the bidding system during bid processing.
1. No Excess Supply Rule for Bids To Reduce Demand
Under the clock-1 auction format, the bidding system will not allow
a bidder to reduce its demand for a license if the reduction would
cause aggregate demand to fall below one (the ``no excess supply''
rule). Therefore, if a bidder submits a bid to reduce its demand from
one to zero for a license if the price should increase above the price
in its bid, the bidding system will treat the bid as a request to
reduce demand that will be applied only if the no excess supply rule
would be satisfied.
OEA and WTB adopt the no excess supply rule for Auction 113. The no
excess supply rule has been integral to the success of the clock
auction since the clock auction was introduced at the Commission in the
Broadcast Incentive Auction. One commenter proposes to introduce
exceptions to the no excess supply rule, claiming it has created
barriers for bidders in past auctions, but provides no examples to
support this claim, which is counterintuitive on its face. The purpose
of not allowing the use of withdrawals and proactive waivers in a clock
auction is to reduce complexity and uncertainty about bidder demand for
spectrum. The clock auction relies on identifying the point at which
demand decreases to equal supply to determine prices. Allowing
withdrawals, proactive waivers, or exceptions to the no excess supply
rule would create uncertainty with respect to the exact level of bidder
demand and would interfere with the basic clock price-setting and
winner determination mechanism. The no excess supply rule ensures that
once there is demand for a license that the license will not then go
unsold. The no excess supply rule makes it risky or costly for a bidder
to engage in gamesmanship by increasing its demand for a license in one
round, potentially causing the price of the license to increase for
another bidder, and then reducing its demand for the license in a
subsequent round. OEA and WTB agree that they should not introduce
exceptions that are contrary to the underlying purpose of the rules,
which is to protect the integrity of the auction.
2. Eligibility Rule for Bids To Increase Demand
The bidding system will not allow a bidder to increase its demand
for a license if the total number of bidding units associated with all
of the bidder's license demands exceeds the bidder's eligibility for
the round. Therefore, if a bidder submits a bid to add a license for
which it did not have processed demand in the previous round, the
bidding system will treat the bid as a request to increase demand that
will be applied only if it would not cause the bidder's processed
activity to exceed its eligibility.
3. Processed Demand
OEA and WTB adopt the procedures described in the Auction 113
Comment Public Notice to determine the order in which the bidding
system will process bids after a round ends. After a round ends, the
bidding system will first consider and apply all bids to maintain
demand at the clock price, and then it will process bids to change
demand in order of price point, where the price point represents the
percentage of the distance between the bid price and the start-of-round
price, relative to the distance between the clock price and the start-
of-round price. The bidding system will process bids to change demand
in ascending order of price point across all licenses and all bidders,
first by considering intra-round bids in order of price point and then,
finally, bids at the clock price (i.e., bids with a price point equal
to 100%). As it considers each submitted bid during bid processing, the
bidding system will determine whether there is excess demand for a
license at that point in the processing in order to determine whether a
bidder's request to reduce demand for that license can be applied.
Likewise, the bidding system will evaluate the activity associated with
the bidder's most recently determined demands at that point in the
processing to determine whether a request to increase demand can be
applied.
If a bid can be applied, the licenses that the bidder holds at that
point in the processing would be adjusted, and aggregate demand for the
license would be recalculated accordingly. If the bid cannot be
applied, the unfulfilled bid will be held in a queue, to be considered
later during the current round's bid processing. The bidding system
will then consider the bid submitted at the next lowest price point,
and given the most recently determined demands of bidders, see if the
bid can be applied. Note that the price point at which a bid is
considered by the bidding system can affect whether the bid is applied,
because at any given price point some bidders may request to increase
demand for licenses while others may request reductions.
Every time a bid is applied, the unfulfilled bids held in the queue
will be reconsidered, in the order of their price points. Bids that
were not applied because demand would fall below one or because the
bidder's processed activity would exceed its eligibility will be
considered, again in price point order, if there should be excess
demand or if the bidder's processed activity is reduced sufficiently
later in the processing after other bids are processed.
This step of bid processing will conclude when all bids from the
round have been processed and no unfulfilled bids held in the queue can
be applied. The bidding system will then automatically generate a proxy
instruction for each bid to reduce demand that was not applied.
However, the bidding system will not carry over to the next round
unfulfilled bid requests to increase demand. The bidding system will
advise bidders about whether their bids were applied when round results
are released.
4. Price Determination
As described in the Auction 113 Comment Public Notice, the bidding
system further will determine, based on aggregate demand, the posted
price for each license for the round, with a license's posted price
serving as its start-of-round price for the next round. The price for a
license will increase from round to round as long as there is excess
demand for the license, but will not increase if either no bidder
demands the license or if only a single bidder demands the license.
If, at the end of a round, aggregate demand for a license exceeds
the supply of one, the posted price will equal the clock price for the
round. If a reduction in demand was applied during the

[[Page 60005]]

round and caused demand for a license to fall to one, the posted price
will be the highest price at which a reduction was applied for that
license. If aggregate demand is zero, or if aggregate demand is one and
no bid to reduce demand was applied for the license, then the posted
price will equal the start-of-round price for the round. The range of
acceptable bid amounts for the next round will be set by adding the
percentage increment to the posted price.
Under the clock-1 auction format, if a bid to reduce demand is not
applied, it is because there is no excess demand for the license and,
therefore, the posted price will not increase. Hence, the posted price
for a license will not be higher than the bid price of a bidder that
makes a bid to reduce demand that cannot be applied.
After the bids of the round have been processed, if the stopping
rule has not been met, the bidding system will announce clock prices to
indicate a range of acceptable bids for the next round. Each bidder
will be informed of the licenses for which it has processed demand and
of the aggregate demand for each license.
5. Caps on Bidding Credits
Eligible applicants claiming either a small business or rural
service provider bidding credit will be subject to specified caps on
the total bidding credit discount that they may receive. For Auction
113, OEA and WTB adopt the bidding credit caps at the amounts proposed
for the reasons discussed in the Auction 113 Comment Public Notice.
Specifically, OEA and WTB adopt a $25 million cap on the total bidding
credit discount that may be awarded to an eligible small business, and
a $10 million cap on the total bidding credit discount that may be
awarded to an eligible rural service provider in Auction 113.
Additionally, to create parity among eligible small businesses and
rural service providers competing against each other in smaller
markets, no winning designated entity bidder may receive more than $10
million in bidding credit discounts in total for licenses won in
markets with a population of 500,000 or fewer.
Two commenters argue against adopting bidding credit caps in
Auction 113. The Commission's part 1 rules, however, require a cap on a
winning bid discount that will be offered to small businesses and rural
service providers. See 47 CFR 1.2110(f)(2)(ii), (4)(ii). Amendments to
those rules require a rulemaking proceeding and cannot be done in the
context of establishing the procedures for Auction 113 because such
action is outside the scope of OEA's and WTB's delegated authority.
The record supports adopting the small business bidding credit cap
and rural service bidding credit cap for Auction 113 at the amounts
proposed, and OEA and WTB find this consistent with the Commission's
decisions in recent spectrum auctions. In the 2015 Updating Part 1
Report and Order, the Commission adopted small business and rural
service provider bidding credit caps and established the parameters for
implementing such bidding credit caps in a given auction based on an
evaluation of the expected capital requirements presented by the
specific service and the inventory of licenses to be auctioned. The
Commission's rules provide for a small business bidding credit cap of
not less than $25 million and a rural service provider bidding credit
of not less than $10 million, to be determined on an auction-by-auction
basis.
Under the parameters established in the 2015 Updating Part 1 Report
Order, OEA and WTB find that a $25 million small business bidding
credit cap for Auction 113 is appropriate because this is an auction of
a limited number of AWS-3 licenses and the expected capital
requirements associated with these AWS-3 licenses are not likely to be
any higher than those for bands where OEA and WTB adopted the same $25
million cap, given that many providers have already cleared,
standardized, deployed, and offer service using other licenses in the
same bands.
Some commenters disagree with this approach. One commenter, for
example, proposes that the Commission increase the bidding credit caps
to account for inflation, noting that a decade has passed since Auction
97 and, ``according to the Bureau of Labor Statistics, $25 million in
November 2014 dollars would be worth more than $33 million today.''
However, recent auction data demonstrate that a $25 million cap on
small business bidding credits has allowed a substantial majority of
eligible small businesses to take advantage of the bidding credit
program and be unaffected by the cap. Whatever the impact of inflation
generally, OEA and WTB see no persuasive evidence that a $25 million
cap would impair the meaningful opportunity that the bidding credit
provides for small businesses to participate in Auction 113.
One commenter argues that, in proposing to apply a $25 million
small business bidding credit cap, the ``lens through which [OEA and
WTB view] small business participation in Auction 113'' is ``out of
focus'' and OEA and WTB should instead draw on the results of Auction
97 to assess the capital requirements for Auction 113. This commenter
reasons that the Auction 97 results demonstrate that a $25 million
small business bidding credit cap is ``untenable,'' because Northstar
Wireless, LLC (Northstar) and SNR Wireless LicenseCo, LLC (SNR) placed
$3.4 billion in winning bids for 197 of the licenses available in
Auction 113, with the expectation that they would be eligible for $859
million in bidding credits. OEA and WTB find this argument meritless
inasmuch as the Commission's very purpose in requiring the
implementation of a minimum small business bidding credit cap in all
auctions that offer such a credit is to safeguard against the use of
bidding credits by entities that are not bona fide small businesses,
such as the applicants that were denied bidding credits in Auction 97.
The fact that a bidder claiming eligibility for bidding credits in
Auction 97 could have bid with an expectation of receiving close to $1
billion in bidding discounts, as Northstar and SNR did, illustrates why
the Commission established a cap on bidding credits that is reasonably
proportional to the capital expenditures for spectrum licenses likely
needed by bona fide small businesses, as well as the appropriateness of
the caps set in the Commission's most recent auctions. Moreover,
applying a reasonable bidding credit cap in Auction 97 such as the one
OEA and WTB adopt for Auction 113 would have substantially lessened the
financial impact of SNR's and Northstar's being found ineligible for
the bidding credits that they claimed, and perhaps they would not have
had the incentive to bid, in aggregate, so much more than they were
ultimately willing to pay. As the Commission concluded in the 2015
Updating Part 1 Report Order, a $25 million bidding credit cap provides
a significant benefit to the vast majority of bona fide small
businesses that may participate in Auction 113, particularly since
applying the cap would allow a bidder eligible for a 25% discount to
receive that discount on gross bids of up to $100 million.
Nor are OEA and WTB persuaded by a commenter's proposal to
introduce more complex bidding credit caps such as regional bidding
credit caps that are a function of regional spectrum values, population
density, median income, or broadband access disparities. Because the
$25 million bidding credit cap in recent auctions allowed the
substantial majority of small business to realize the

[[Page 60006]]

full value of their bidding credit based on their gross winning bid
amounts, OEA and WTB find it unnecessary to introduce other bidding
credit caps in some regions that would increase complexity, make it
more likely that a small business would be limited by some regional
cap, and could create issues for bidders and the bidding system as a
result of regional borders.
Based on the Commission's experience in its spectrum auctions, OEA
and WTB also find a $10 million rural service provider bidding credit
cap is appropriate because, as the Commission explained in the 2015
Updating Part 1 Report and Order, a rural service provider's approach
to bidding is generally more targeted and usually focuses on competing
for a few select license areas that align with its existing service
territory or adjacent areas.
Lastly, OEA and WTB find that a $10 million cap on the overall
bidding credit amount that any winning small business bidder may apply
to licenses won in small markets is appropriate based on the
Commission's conclusions in the 2015 Updating Part 1 Report and Order.
This is consistent with the approach adopted in all of the Commission's
spectrum actions beginning with the Broadcas

[…truncated; see source link]

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on December 23, 2025.

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