Auction of AM and FM Broadcast Construction Permits Scheduled for July 27, 2021; Notice of Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 109
| Published date | 19 April 2021 |
| Citation | 86 FR 20294 |
| Record Number | 2021-08000 |
| Section | Rules and Regulations |
| Court | Federal Communications Commission |
Federal Register, Volume 86 Issue 73 (Monday, April 19, 2021)
[Federal Register Volume 86, Number 73 (Monday, April 19, 2021)]
[Rules and Regulations]
[Pages 20294-20311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08000]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 73
[AU Docket No. 21-39; DA 21-361; FR ID 21109]
Auction of AM and FM Broadcast Construction Permits Scheduled for
July 27, 2021; Notice of Filing Requirements, Minimum Opening Bids,
Upfront Payments, and Other Procedures for Auction 109
AGENCY: Federal Communications Commission.
ACTION: Final action; requirements and procedures.
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SUMMARY: This document summarizes the procedures, deadlines, and
upfront payment and minimum opening bid amounts for the upcoming
auction of certain AM and FM broadcast construction permits. The
Auction 109 Procedures Public Notice summarized here is intended to
familiarize potential applicants with details of the procedures, terms,
and conditions governing participation in Auction 109.
DATES: Applications to participate in Auction 109 must be submitted
before 6:00 p.m. Eastern Time (ET) on May 11, 2021. Upfront payments
for Auction 109 must be received by 6:00 p.m. ET on June 16, 2021.
Bidding in Auction 109 is scheduled to start on July 27, 2021.
FOR FURTHER INFORMATION CONTACT:
General Auction 109 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
Auction 109 Legal Information: Lynne Milne or Lyndsey Grunewald at
202-418-0660.
Licensing Information: Lisa Scanlan or Tom Nessinger or James
Bradshaw at (202) 418-2700.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction 109
Procedures Public Notice, released on April 1, 2021. The complete text
of the Auction 109 Procedures Public Notice, including attachments and
any related document, are available on the Commission's website at
www.fcc.gov/auction/109 or by using the search function for AU Docket
No. 21-39, DA 21-361, on the Commission's Electronic Comment Filing
System (ECFS) web page at www.fcc.gov/ecfs. Alternative formats are
available to persons with disabilities by sending an email to
[email protected] or by calling the Consumer & Governmental Affairs Bureau
at (202) 418-0530 (voice), (202) 418-0432 (TTY).
I. General Information
1. Introduction. By the Auction 109 Procedures Public Notice, the
Office of Economics and Analytics (OEA), in conjunction with the Media
Bureau (MB), establishes the procedures and minimum opening bid amounts
for the upcoming auction of certain AM and FM broadcast construction
permits.
2. On February 8, 2021, OEA, in conjunction with MB, released a
public notice seeking comment on competitive bidding procedures and
minimum opening bid amounts to be used in Auction 109. Three parties
submitted comments in response to the Auction 109 Comment Public
Notice, 86 FR 12556, March 4, 2021.
3. Construction Permits Offered in Auction 109. Auction 109 will
offer four AM construction permits and 136 FM construction permits. The
construction permits to be auctioned are listed in Attachment A to the
Auction 109 Procedures Public Notice.
4. AM Construction Permits. Auction 109 will offer four
construction permits in the AM broadcast service. Attachment A to the
Auction 109 Procedures Public Notice lists the community of license,
channel, class, and coordinates for each AM permit being offered.
5. The construction permits to be auctioned are for four previously
licensed AM stations: KFTK(AM), East St. Louis, IL, former Facility ID
No. 72815; WQQW(AM), Highland, IL, former Facility ID No. 90598;
KZQZ(AM), St. Louis, MO, former Facility ID No. 72391; and KQQZ(AM),
Fairview Heights, IL, former Facility ID No. 5281. The license renewals
of each of these former AM stations were dismissed with prejudice in a
hearing before the Commission's Administrative Law Judge and the call
signs deleted.
6. To facilitate the auction of the four AM permits, the four AM
facilities will
[[Page 20295]]
be treated as existing allotments, using the coordinates, AM station
frequency and class, and community of license of the respective AM
facility as listed in Attachment A to the Auction 109 Procedures Public
Notice. The Media Bureau has protected these four AM stations by
freezing the filing of any minor modification applications that would
be mutually exclusive with the facilities of the four AM stations.
Pursuant to that freeze, any AM minor change application that conflicts
with the most recently licensed facilities of these four AM stations
may not be filed during a period that started on March 20, 2020, and
ends the day after the filing deadline for long-form applications by
Auction 109 winning bidders. Because protections only extend to the
previously licensed facility parameters, any winning bidder or
permittee will be limited in its opportunities to modify these AM
permits. Due to the existence of these technical limitations, preferred
site coordinates cannot be specified for any of these AM construction
permits.
7. FM Construction Permits. Auction 109 will also offer 136
construction permits in the FM broadcast service. The construction
permits to be auctioned include all of the 130 FM permits that had
previously been listed in the inventory for Auction 106, as well as six
additional permits. The FM construction permits offered in Auction 109
include 34 construction permits that were offered but not sold or were
defaulted upon in prior auctions.
8. Attachment A to the Auction 109 Procedures Public Notice lists
the specific vacant FM allotments for which the Commission will offer
construction permits in this auction, along with the reference
coordinates for each vacant FM allotment. These construction permits
are for vacant FM allotments reflecting FM channels added to the Table
of FM Allotments, 47 CFR 73.202(b), pursuant to the Commission's
established rulemaking procedures, and assigned at the indicated
communities.
9. Each applicant in the FM service may submit a set of preferred
site coordinates on its short-form application (FCC Form 175) as an
alternative to the reference coordinates for the vacant FM allotment
upon which the applicant intends to bid. In order to avoid potential
conflicts between, on the one hand, FM commercial and noncommercial
educational (NCE) minor change applications, which can typically be
filed on a first-come first-served basis, and, on the other hand, any
alternative reference coordinates submitted on an applicant's short
form application, MB will not accept any FM commercial or NCE minor
change application during the Auction 109 short-form application filing
window from April 28, 2021, to May 11, 2021. FM commercial and NCE
minor change applications filed during the Auction 109 short-form
application filing window will be dismissed. In addition, MB has
announced that, in order to promote a more certain and speedy auction
process, during a period that started on February 8, 2021 and ending
the day after the filing deadline for post-Auction 109, long-form
applications, it will not accept any application proposing to modify
any FM allotments that will be offered in Auction 109; any petition or
counterproposal that proposes a change in channel, class, community, or
reference coordinates for any FM allotments that will be offered in
Auction 109; nor any application, petition, or counterproposal that
fails to fully protect any FM allotment that will be offered in Auction
109. Any such application filed between February 8, 2021 and the day
after the filing deadline for post-auction 109, long-form applications
will be dismissed.
10. OEA and MB declined to adopt commenters' suggestions to add
certain AM facilities and FM allotments to the Auction 109 inventory.
11. An applicant may apply for any AM or FM construction permit
listed in Attachment A to the Auction 109 Procedures Public Notice.
Consistent with our approach in previous broadcast service auctions,
when two or more short-form applications (FCC Form 175) are submitted
specifying the same permit, mutual exclusivity exists for auction
purposes, and that construction permit must be awarded by competitive
bidding procedures. As explained in the Auction 109 Comment Public
Notice, once mutual exclusivity exists for auction purposes, even if
only one applicant is qualified to bid for a particular construction
permit, that applicant is required to submit a bid in order to obtain
the construction permit.
II. Applying To Participate in Auction 109
12. Relevant Authority. Auction 109 applicants must familiarize
themselves thoroughly with the Commission's general competitive bidding
rules, including Commission decisions in proceedings regarding
competitive bidding procedures, application requirements, and
obligations of Commission licensees. Broadcasters should also
familiarize themselves with the Commission's AM and FM broadcast
service and competitive bidding requirements contained in part 73 of
the Commission's rules, as well as Commission orders concerning
competitive bidding for broadcast construction permits. Applicants must
also be thoroughly familiar with the procedures, terms, and conditions
contained in the Auction 109 Procedures Public Notice and any future
public notices that may be released in this proceeding or that relate
to the construction permits being offered in Auction 109 or the AM and
FM broadcast services.
13. The terms contained in the Commission's rules, relevant orders,
and public notices are not negotiable. The Commission may amend or
supplement the information contained in its public notices at any time,
and will issue public notices to convey any new or supplemental
information to applicants. It is the responsibility of all applicants
to remain current with all Commission rules and with all public notices
pertaining to this auction. Copies of most auctions-related Commission
documents, including public notices, can be retrieved from the FCC
Auctions internet site at www.fcc.gov/auctions.
14. An applicant should consult the Commission's rules to ensure
that, in addition to the materials described below, all required
information is included in its short-form application. To the extent
the information in the Auction 109 Procedures Public Notice does not
address a potential applicant's specific operating structure, or if the
applicant needs additional information or guidance concerning the
following disclosure requirements, the applicant should review the
educational materials for Auction 109 and/or use the contact
information provided in the Auction 109 Procedures Public Notice to
consult with Commission staff to better understand the information it
must submit in its short-form application.
15. General Information Regarding Short-Form Applications. An
application to participate in Auction 109, referred to as a short-form
application or FCC Form 175, provides information that the Commission
uses to determine whether the applicant is legally, technically, and
financially qualified to participate in Commission auctions for
licenses or permits. The short-form application is the first part of
the Commission's two-phased auction application process. In the first
phase, parties desiring to participate in the auction must file a
streamlined, short-form application in which they certify under penalty
of perjury as to their qualifications. Eligibility to participate in
bidding is based on the applicant's short-form application and
[[Page 20296]]
certifications, and on its upfront payment, as explained below.
16. A party seeking to participate in Auction 109 must file a
short-form application electronically via the FCC's Auction Application
System prior to 6:00 p.m. ET on May 11, 2021, following the FCC Form
175 Filing Instructions for this auction in Attachment B to the Auction
109 Procedures Public Notice. All those wishing to participate in
Auction 109, regardless of whether they may have previously filed a
short-form application for Auction 106, will be required to file a new
application to participate in Auction 109.
17. An applicant bears full responsibility for submitting an
accurate, complete, and timely short-form application. An applicant
must certify on its short-form application under penalty of perjury
that it is legally, technically, financially, and otherwise qualified
to hold a license. Each applicant should read carefully the
instructions set forth in Attachment B to the Auction 109 Procedures
Public Notice and should consult the Commission's rules to ensure that,
in addition to the materials described below, all the information
required is included within its short-form application.
18. Submission of a short-form application (and any amendments
thereto) constitutes a representation by the certifying official that
he or she is an authorized representative of 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. Submission of a false certification to the
Commission may result in penalties, including monetary forfeitures,
license forfeitures, ineligibility to participate in future auctions,
and/or criminal prosecution.
19. 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 be the basis for that party to
become qualified to bid in that auction.
20. Consistent with the Commission's general prohibition of joint
bidding agreements, a party is generally permitted to participate in a
Commission auction only through a single bidding entity. Accordingly,
the filing of applications in Auction 109 by multiple entities
controlled by the same individual or set of individuals is not
permitted. This restriction applies across all applications, without
regard to the construction permits selected. Consistent with this
requirement, a broadcaster interested in bidding on more than one
construction permit cannot use two or more subsidiary entities to bid
separately on construction permits in separate markets, regardless of
whether each subsidiary were to select different construction permits
on its short-form application. Likewise, if an entity, individual, or
set of individuals hold controlling interests in multiple entities that
are interested in participating in Auction 109, regardless of whether
those entities have other, non-shared controlling or non-controlling
interests, those entities must participate in the auction through a
single bidding entity and only that bidding entity may file an auction
application. In that regard, the bidding entity must disclose in its
short-form application any joint ventures or other agreements or
arrangements with any commonly controlled, non-applicant entities
related to bidding in Auction 109. As noted by the Commission in
adopting the prohibition of applications by commonly controlled
entities, this rule, in conjunction with the prohibition against joint
bidding agreements, protects the competitiveness of our auctions.
21. Authorized Bidders. An applicant must designate at least one
authorized bidder, and no more than three, in its FCC Form 175. The
Commission's rules prohibit an individual from serving as an authorized
bidder for more than one auction applicant or being listed as an
authorized bidder in more than one FCC Form 175 application.
22. Permit Selection. An applicant must select on its FCC Form 175
the construction permit or permits, from the list of available permits,
on which it wants to bid. An applicant must carefully review and verify
its construction permit selections before the deadline for submitting
the FCC Form 175, because those selections cannot be changed after the
initial auction application filing deadline. The FCC auction bidding
system will not accept bids on construction permits that were not
selected on the applicant's FCC Form 175.
23. 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 partnership, joint venture, consortium, or
agreement, arrangement, or understanding of any kind relating to the AM
and FM construction permits being auctioned, including any agreement
that addresses or communicates directly or indirectly bids (including
specific prices), bidding strategies (including the specific
construction permit(s) or license(s) 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 requirements, the applicant
must certify under penalty of perjury in its FCC Form 175 that it has
described, and identified each party to, any such agreement,
arrangement, or understanding into which it has entered. An auction
applicant that enters into any agreement during an auction that relates
to the permits or licenses being auctioned is subject to the same
disclosure obligations it would have for agreements existing at the FCC
Form 175 filing deadline, and it must maintain the accuracy and
completeness of the information in its pending auction application.
24. 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
this prohibition, joint bidding arrangements include arrangements
relating to the permits being auctioned that address or communicate,
directly or indirectly, bidding at the auction, bidding strategies,
including arrangements regarding price or the specific permits on which
to bid, and any such arrangements relating to the post-auction market
structure.
25. To implement the prohibition on joint bidding arrangements, the
Commission's rules require each auction applicant to certify in its
short-form application that it has disclosed any arrangements or
understandings of any kind relating to the permits or licenses being
auctioned to which it (or any party that controls or is controlled by
it) is a party. The applicant must also certify that it (or any party
that controls or is controlled by it) has not entered and will not
enter into any arrangement or understanding of any kind relating
directly or indirectly to bidding at auction with, among others, any
other applicant.
26. Although the Commission's rules do not prohibit auction
applicants from communicating about matters that are within the scope
of an excepted agreement that has been disclosed in an FCC Form 175,
the Commission reminds applicants that certain discussions or exchanges
could nonetheless touch upon impermissible subject matters, and that
compliance with the Commission's rules will not insulate a party from
enforcement of the antitrust laws.
27. Applicants should bear in mind that a winning bidder will be
required
[[Page 20297]]
to disclose in its long-form application following the close of the
auction the specific terms, conditions, and parties involved in any
agreement relating to the permits or licenses being auctioned into
which it had entered prior to the time bidding closed. This applies to
any joint venture, partnership, or other agreement, arrangement, or
understanding of any kind entered into relating to the competitive
bidding process, including any agreements relating to the permits being
auctioned that address or communicate directly or indirectly bids
(including specific prices), bidding strategies (including the specific
permits on which to bid or not to bid), or the post-auction market
structure, to which the applicant, or any party that controls or is
controlled by the applicant, is a party.
28. Ownership Disclosure Requirements. Each applicant must comply
with the ownership disclosure requirements and provide information
required by Sec. Sec. 1.2105 and 1.2112 and, where applicable, 1.2110
of the Commission's rules. Specifically, in completing the FCC Form
175, an applicant will be required to fully disclose information on the
real party(ies)-in-interest and the ownership structure of the
applicant, including both direct and indirect ownership interests of
10% or more, as prescribed in Sec. Sec. 1.2105 and 1.2112 and, where
applicable, 1.2110 of the Commission's rules. Each applicant is
responsible for ensuring that information submitted in its short-form
application is complete and accurate.
29. Foreign Ownership Disclosure Requirements. Section 310 of the
Communications Act of 1934, as amended (the Act), 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. In its FCC Form 175, an applicant must report
citizenship or jurisdiction of formation for the applicant and for each
disclosable interest holder (DIH). In completing the FCC Form 175, an
applicant also will be required to certify that it is in compliance
with the foreign ownership provisions contained in section 310 of the
Act. Section 1.2105(a)(2)(vi) specifies that the Commission will accept
an auction application certifying that a request for waiver or
declaratory ruling from the requirements of section 310 is pending. If
an applicant has foreign ownership interests in excess of the
applicable limit or benchmark specified in section 310(b), it may seek
to participate in Auction 109 if it has filed with the Media Bureau
prior to the FCC Form 175 filing deadline a petition for declaratory
ruling requesting Commission approval to exceed the applicable foreign
ownership limit or benchmark in section 310(b) that is pending before,
or has been granted by, the Commission.
30. Prohibited Communication and Compliance with Antitrust Laws.
The rules prohibiting certain communications set forth in Sec. Sec.
1.2105(c) and 73.5002(d) and (e) of the rules apply to each applicant
that files an FCC Form 175 in Auction 109. Section 1.2105(c)(1) of the
Commission's rules provides that, subject to specified exceptions,
after the deadline for filing a short-form application all applicants
are prohibited from cooperating or collaborating with respect to,
communicating with or disclosing, to each other in any manner the
substance of their own, or each other's, or any other applicant's bids
or bidding strategies (including post-auction market structure), or
discussing or negotiating settlement agreements, until after the down
payment deadline.
31. Entities Subject to Sec. 1.2105(c). An applicant for purposes
of this rule includes the officers and directors of the applicant, all
controlling interests in the entity submitting the FCC Form 175, as
well as all holders of interests amounting to 10% or more of that
entity. A party that submits an application becomes an applicant under
the rule at the application filing deadline, and that status does not
change based on later developments, including failure to become a
qualified bidder.
32. Scope of Prohibition on Communications; Prohibition on Joint
Bidding Agreements. Section 1.2105 of the Commission's rules prohibits
certain communications between applicants for an auction, regardless of
whether the applicants seek permits in the same geographic area or
market. The Commission's rules also prohibit any joint bidding
arrangement, including arrangements relating to the permits being
auctioned, that address or communicate, directly or indirectly, bidding
at the auction, bidding strategies, including arrangements regarding
price or the specific permits on which to bid, and any such
arrangements relating to the post-auction market structure. The rule
provides limited exceptions for a communication within the scope of any
arrangement consistent with the exclusion from the Commission's rule
prohibiting joint bidding, provided such arrangement is disclosed on
the applicant's auction application. An applicant may continue to
communicate pursuant to any pre-existing agreements, arrangements, or
understandings that are solely operational or that provide for transfer
or assignment of licenses, provided that such agreements, arrangements,
or understandings are disclosed on its application and do not both
relate to the permits at auction and address or communicate bids
(including amounts), bidding strategies, or the particular permits or
licenses on which to bid or the post-auction market structure.
33. 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.
34. Parties subject to Sec. 1.2105(c) should take special care in
circumstances where their officers, directors, and employees may
receive information directly or indirectly relating to any applicant's
bids or bidding strategies. Such information may be deemed to have been
received by the applicant under certain circumstances. For example,
Commission staff have determined that, where an individual serves as an
officer or director for two or more applicants, the bids and bidding
strategies of one applicant are presumed conveyed to the other
applicant through the shared officer or director, which creates an
apparent violation of the rule.
35. Subject to the exception described above, Sec. 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. Moreover, a communication
conveying bids or bidding strategies (including post-auction market
structure) must also relate to the licenses being auctioned in order to
be covered by the prohibition. Thus, the prohibition is limited in
scope and does not apply to all communications between or among the
specified parties. The Commission consistently has made clear that
application of the rule prohibiting communications has never required
total suspension of essential ongoing business. Entities subject to the
prohibition may negotiate agreements during the prohibition period,
provided that the communications involved do not relate both (1) to the
licenses or permits being auctioned and (2) to bids or bidding
strategies or post-auction market structure.
[[Page 20298]]
36. Accordingly, business discussions and negotiations that are
unrelated to bidding in Auction 109 and that do not convey information
about the bids or bidding strategies of an applicant, including the
post-auction market structure, are not prohibited by the rule. While
Sec. 1.2105(c) does not prohibit business discussions and negotiations
among auction applicants that are not auction related, each applicant
must remain vigilant not to communicate, directly or indirectly,
information that affects, or could affect, bids or bidding strategies.
Certain discussions might touch upon subject matters that could convey
price or geographic information related to bidding strategies. Such
subject areas include, but are not limited to, management, sales, local
marketing agreements, and other transactional agreements.
37. Communicating with Third Parties. Section 1.2105(c) does not
prohibit an applicant from communicating bids or bidding strategies to
a third-party, such as a consultant or consulting firm, counsel, or
lender. The applicant should take appropriate steps, however, to ensure
that any third party it employs for advice pertaining to its bids or
bidding 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, so 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.
38. Applicants may discuss the short-form application or bids for
specific permits with their counsel, consultant, or expert of their
choice before the short-form application deadline. Furthermore, the
same third-party individual could continue to give advice to multiple
applicants regarding their applications after the short-form
application deadline, provided that no information pertaining to bids
or bidding strategies is conveyed to that individual from any of the
applicants the individual advises. No person may serve as an authorized
bidder for more than one applicant in Auction 109.
39. Applicants also should use caution in their dealings with other
parties, such as members of the press, financial analysts, or others
who might become conduits for the communication of prohibited bidding
information. For example, even though communicating that it has applied
to participate in this auction will not violate the rule, an
applicant's statement to the press that it intends to stop bidding in
an auction could give rise to a finding of a Sec. 1.2105 violation.
Similarly, an FCC Form 175 applicant's public statement of intent not
to place bids during bidding in Auction 109 could also violate the
rule.
40. Section 1.2105(c) Certification. By electronically submitting
its FCC Form 175, each applicant in Auction 109 certifies its
compliance with Sec. Sec. 1.2105(c) and 73.5002(d) of the rules.
However, the mere filing of a certifying statement as part of an
application will not outweigh specific evidence that a prohibited
communication has occurred, nor will it preclude the initiation of an
investigation when warranted. Any applicant found to have violated
these communication prohibitions may be subject to sanctions.
41. Duty to Report Prohibited Communications. Section 1.2105(c)(4)
requires that any applicant that makes or receives a communication that
appears to violate Sec. 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.
42. Procedures for Reporting Prohibited Communications. Section
1.2105(c) requires parties to file only a single report concerning a
prohibited communication and to file that report with 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
Sec. 1.2105(c) must be filed consistent with the instructions set
forth in the Auction 109 Procedures Public Notice. For Auction 109,
such reports must be filed with the Chief of the Auctions Division,
OEA, by the most expeditious means available. Any such report should be
submitted by email to the Auctions Division Chief at the following
email address: [email protected]. If you choose instead to submit a
report in hard copy, contact Auctions Division staff for guidance at
[email protected] or (202) 418-0660.
43. A party reporting any communication pursuant to Sec. 1.65 or
Sec. 1.2105(a)(2) or (c)(4) must take care to ensure that any report
of a prohibited communication does not itself give rise to a violation
of Sec. 1.2105(c). For example, a party's report of a prohibited
communication could violate the rule by communicating prohibited
information to other applicants through the use of Commission filing
procedures that would allow such materials to be made available for
public inspection. 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. Such
parties also are encouraged to coordinate with the Auctions Division
staff about the procedures for submitting such reports.
44. Winning Bidders Must Disclose Terms of Agreements. Each
applicant that is a winning bidder will be required to disclose in its
long-form application the specific terms, conditions, and parties
involved in any agreement relating to the competitive bidding process
it has entered into. Such agreements must have been entered into prior
to the filing deadline for short-form applications. This disclosure
requirement applies to any bidding consortia, joint venture,
partnership, or agreement, understanding, or other arrangement entered
into relating to the competitive bidding process, including any
agreement relating to the post-auction market structure. Failure to
comply with the Commission's rules can result in enforcement action.
45. 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 Sec. 1.2105(c) will not
insulate a party from enforcement of the antitrust laws. To the extent
the Commission becomes aware of specific allegations that suggest that
violations of the Federal antitrust laws may have occurred, the
Commission may refer such allegations to the United States Department
of Justice for investigation. If an applicant is found to have violated
the antitrust laws or the Commission's rules in connection with its
participation in the competitive bidding process, it may be subject to
forfeiture of its upfront payment, down
[[Page 20299]]
payment, or full bid amount, and may be prohibited from participating
in future auctions, among other sanctions.
46. New Entrant Bidding Credits. To promote the objectives of
section 309(j) of the Act and further its long-standing commitment to
the diversification of broadcast facility ownership, the Commission
provides a tiered new entrant bidding credit for broadcast auction
applicants with no, or very few, other media interests.
47. The Auction 109 Procedures Public Notice explains why OEA and
MB are unable to establish for Auction 109 a bidding credit for a party
that had successfully petitioned for a vacant FM channel to be added to
the FM Table of Allotments, as suggested by a commenter.
48. Applicants that qualify for the new entrant bidding credit are
eligible for a bidding credit in this auction that represents the
amount by which a bidder's winning bid is discounted. The size of a new
entrant bidding credit depends on the number of ownership interests in
other media of mass communications that are attributable to the bidder-
entity and its attributable interest-holders. A 35% bidding credit will
be given to a winning bidder if it, and/or any individual or entity
with an attributable interest in the winning bidder, has no
attributable interest in any other media of mass communications, as
defined in 47 CFR 73.5008. A 25% bidding credit will be given to a
winning bidder if it, and/or any individual or entity with an
attributable interest in the winning bidder, has an attributable
interest in no more than three mass media facilities, as defined in 47
CFR 73.5008. No bidding credit will be given if any of the commonly
owned mass media facilities serve the same area as the broadcast permit
proposed in the auction, as defined in 47 CFR 73.5007(b), or if the
winning bidder, and/or any individual or entity with an attributable
interest in the winning bidder, has attributable interests in more than
three mass media facilities. For purposes of determining whether a
broadcast permit offered in this auction is in the same area as an
applicant's existing mass media facilities, the coverage area of the
to-be-auctioned facility is calculated using maximum class facilities
at the AM construction permit coordinates or the FM allotment reference
coordinates specified in Attachment A to the Auction 109 Procedures
Public Notice, not, based on any applicant-specified preferred site
coordinates for FM allotments.
49. Bidding credits are not cumulative; qualifying applicants
receive either the 25% or the 35% bidding credit, but not both.
50. The interests of the applicant, and of any individuals or
entities with an attributable interest in the applicant, in other media
of mass communications are considered when determining an applicant's
eligibility for the New Entrant Bidding Credit. Attributable interests
are defined in 47 CFR 73.3555 and note 2 of that section. In Auction
109, the bidder's attributable interests, and thus, its maximum new
entrant bidding credit eligibility, are determined as of the short-form
application filing deadline. An applicant intending to divest a media
interest or make any other ownership change, such as resignation of
positional interests (officer or director) in order to avoid
attribution for purposes of qualifying for the New Entrant Bidding
Credit, must have consummated such divestment transactions or have
completed such ownership changes by no later than the FCC Form 175
filing deadline. However, events occurring after the short-form
application filing deadline, such as the acquisition of attributable
interests in media of mass communications, may cause diminishment or
loss of the bidding credit and, must be reported immediately.
51. Under broadcast attribution rules, those entities or
individuals with an attributable interest in a bidder include: (1) All
officers and directors of a corporate bidder; (2) any owner of 5% or
more of the voting stock of a corporate bidder; (3) all general
partners and limited partners of a partnership bidder, unless the
limited partners are sufficiently insulated; and (4) all members of a
limited liability company, unless sufficiently insulated.
52. In cases where an applicant's spouse or close family member
holds other media interests, such interests are not automatically
attributable to the bidder. The Commission decides attribution issues
in this context based on certain factors traditionally considered
relevant.
53. The eligibility standards for the New Entrant Bidding Credit
include attribution of the media interests held by very substantial
investors in, or creditors of, an applicant claiming new entrant
status. Specifically, the attributable mass media interests held by an
individual or entity with an equity and/or debt interest in an
applicant shall be attributed to that bidder for purposes of
determining its eligibility for the New Entrant Bidding Credit, if the
equity and debt interests, in the aggregate, exceed 33% of the total
asset value of the applicant, even if such an interest is non-voting.
54. Generally, media interests will be attributable for purposes of
the New Entrant Bidding Credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules. However, attributable interests held by a
winning bidder in existing low power television, television translator
or FM translator facilities will not be counted among the applicant's
other mass media interests in determining its eligibility for a New
Entrant Bidding Credit. A medium of mass communications is defined in
47 CFR 73.5008(b). Full service noncommercial educational stations, on
both reserved and non-reserved channels, are included among media of
mass communications as defined in Sec. 73.5008(b).
55. Application Requirements. If an applicant claims eligibility
for a bidding credit, the information provided in its FCC Form 175 will
be used to determine whether the applicant is eligible for the claimed
bidding credit. In addition to the ownership information required
pursuant to Sec. Sec. 1.2105 and 1.2112, applicants seeking a New
Entrant Bidding Credit are required to establish on their short-form
applications that they satisfy the eligibility requirements to qualify
for the bidding credit. In those cases, a certification under penalty
of perjury must be provided in completing the short-form application.
An applicant claiming that it qualifies for a 35% New Entrant Bidding
Credit must certify that neither it nor any of its attributable
interest holders has any attributable interests in any other media of
mass communications. An applicant claiming that it qualifies for a 25%
New Entrant Bidding Credit must certify that neither it nor any of its
attributable interest holders has any attributable interests in more
than three media of mass communications, and must identify and describe
such media of mass communications.
56. Unjust Enrichment. Unjust enrichment provisions apply to a
winning bidder that utilizes a bidding credit and subsequently seeks to
assign or transfer control of its license or construction permit to an
entity not qualifying for the same level of bidding credit.
57. 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 109.
Accordingly,
[[Page 20300]]
each applicant must certify under penalty of perjury on its FCC Form
175 that, as of the filing deadline, the applicant, any of its
affiliates, any of its controlling interests, and any of 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.
58. An applicant is considered a former defaulter or a former
delinquent when it or any of its controlling interests has defaulted on
any Commission construction permit or license or has been delinquent on
any non-tax debt owed to any Federal agency, but has since remedied all
such defaults and cured all of the outstanding non-tax delinquencies,
as of the FCC Form 175 filing deadline. A former defaulter or
delinquent who has remedied all such defaults and cured all of the
outstanding non-tax delinquencies prior to the FCC Form 175 filing
deadline in this auction may participate so long as it is otherwise
qualified, if the applicant makes an upfront payment that is 50% more
than would otherwise be required. For this reason, an applicant must
certify under penalty of perjury whether it (along with any of its
controlling interests) has ever been in default on any payment for a
Commission construction permit or license (including a down payment) or
has ever been delinquent on any non-tax debt owed to any Federal
agency, subject to the exclusions described in 47 CFR
1.2105(a)(2)(xii).
59. Applicants should review previous guidance provided on default
and delinquency disclosure requirements in the context of the auction
short-form application process. Applicants also may consult with
Auctions Division staff if they have questions about delinquency or
default disclosure requirements.
60. The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission adopted rules, including a provision referred to as the red
light rule, that implement its obligations under the Debt Collection
Improvement Act of 1996, which governs the collection of debts owed to
the United States. Under the red light rule, applications and other
requests for benefits filed by parties that have outstanding debts owed
to the Commission will not be processed. When adopting that rule, the
Commission explicitly declared, however, that its competitive bidding
rules are not affected by the red light rule. As a consequence, the
Commission's adoption of the red light rule does not alter the
applicability of any of its competitive bidding rules, including the
provisions and certifications of Sec. Sec. 1.2105 and 1.2106, with
regard to current and former defaults or delinquencies.
61. 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 Sec. 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, 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.
Each applicant should carefully review all records and other available
Federal agency databases and information sources to determine whether
the applicant, or any of its affiliates, or any of its controlling
interests, or any of the affiliates of its controlling interests,
currently owes or was ever delinquent in the payment of non-tax debt
owed to any Federal agency.
62. Optional Applicant Status Identification. An applicant owned by
members of minority groups and/or women, as defined in Sec.
1.2110(c)(3), or that is a rural telephone company, as defined in Sec.
1.2110(c)(4), may identify itself as such in filling out its FCC Form
175. This applicant status information is optional and collected for
statistical purposes only because it assists the Commission in
monitoring the participation of various groups in its auctions.
63. Noncommercial Educational Status Election. If an FCC Form 175
filed during the Auction 109 filing window identifying the
application's proposed station as noncommercial educational (NCE) is
mutually exclusive with any application filed during that window for a
commercial station, the NCE application will be returned as
unacceptable for filing and the applicant will not be provided with any
further opportunity to become eligible to bid in this auction. Short-
form applications that do not identify the facilities proposed in the
FCC Form 175 as NCE will be considered, as a matter of law,
applications for commercial broadcast stations. For this reason, each
prospective applicant in this auction should consider carefully whether
it wishes to propose NCE operation for any AM or FM station acquired in
this auction. This NCE election cannot be reversed after the initial
application filing deadline.
64. Only Minor Modifications to FCC Form 175 Allowed. After the
initial application filing deadline, an applicant will be permitted to
make only minor modifications to its short-form application. Examples
of minor changes include 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, or change
in the applicant's selected bidding option (electronic or telephonic).
A major modification to an FCC Form 175 (e.g., change of construction
permit selection, change in the required certifications, change in
control of the applicant such as any change in ownership or control
that would constitute an assignment or transfer of control of the
applicant) will not be permitted after the initial FCC Form 175 filing
deadline. If an applicant makes a major amendment, as defined by Sec.
1.2105(b)(2), the major amendment may result in the disqualification of
the applicant from participating in bidding. Questions about FCC Form
175 amendments should be directed to the Auctions Division at (202)
418-0660.
65. Duty to Maintain Accuracy and Completeness of FCC Form 175.
Each applicant has a continuing obligation to maintain the accuracy and
completeness of information furnished in its pending application in a
competitive bidding proceeding. An auction applicant must furnish
additional or corrected information to the Commission within five days
after a significant occurrence, or amend its FCC Form 175 no more than
five days after the applicant becomes aware of the need for the
amendment. In accordance with the Commission's rules, an applicant's
obligation to make modifications to a pending auction application in
order to provide additional or corrected information continues beyond
the five-day period, even if the report is not made within the five-day
period. An applicant is obligated to amend its pending application even
if a reported change is considered to be a major modification that may
result in the dismissal of its application.
66. Modifying an FCC Form 175. During the initial filing window, an
applicant will be able to make any necessary modifications to its FCC
Form 175 in the Auction Application System.
[[Page 20301]]
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.
Additional information on the procedures for modifying an FCC Form 175
appear in Attachment B to the Auction 109 Procedures Public Notice.
67. As with filing the FCC Form 175, any amendment(s) to the
application and related statements of fact must be certified by an
authorized representative of the applicant with authority to bind the
applicant. Submission of any such amendment or related statement of
fact constitutes a representation by the person certifying that he or
she is an authorized representative with such authority and that the
contents of the amendment or statement of fact are true and correct.
III. Preparing for Bidding in Auction 109
68. Due Diligence. Each potential bidder is solely responsible for
investigating and evaluating all technical and marketplace factors that
may have a bearing on the value of the construction permit(s) it is
seeking in this auction. The FCC makes no representations or warranties
about the use of this spectrum or these construction permits for
particular services. Applicants should be aware that an FCC auction
represents an opportunity to become an FCC permittee in a broadcast
service, subject to certain conditions and regulations. This includes
the established authority of the Commission to alter the terms of
existing licenses by rulemaking, which is equally applicable to
licenses awarded by auction. An FCC auction does not constitute an
endorsement by the FCC of any particular service, technology, or
product, nor does an FCC construction permit or license constitute a
guarantee of business success.
69. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, each potential bidder should perform technical analyses
and/or refresh its previous analyses to assure itself that, should it
become a winning bidder for any Auction 109 construction permit, it
will be able to build and operate facilities that will fully comply
with all applicable technical and legal requirements. For example,
potential applicants should note the short-spacing restrictions for FM
allotment MM-FM1192-B, Channel 300B, at Sacramento, California. Each
applicant should inspect any prospective transmitter sites located in,
or near, the service area for which it plans to bid, to confirm the
availability of such sites, and to familiarize itself with the
Commission's rules regarding any applicable Federal, state, and local
requirements.
70. The Media Bureau has protected the parameters of the four
previously-licensed AM stations that were on the relevant frequencies
in the St. Louis area. Because protections only extend to those
previously licensed station parameters, the winning bidders will be
limited in their opportunities to modify these AM construction permits.
For example, to the extent that any of these four previously licensed
stations had contour overlap with nearby stations in violation of Sec.
73.37 or Sec. 73.187 of the rules, the winning bidder for that AM
construction permit will be limited to the parameters of the previously
licensed station on that frequency, and will not be permitted to make
such overlap worse. Furthermore, to the extent that any of the four
previously licensed AM stations exceeded the root-sum-square (RSS)
contribution limits in Sec. 73.182 of the rules, a winning bidder will
be limited to the nighttime RSS contributions of the previously-
licensed St. Louis area AM station. Generally, a winning bidder may
avail itself of any grandfathered situation involving the relevant
previously licensed St. Louis area AM station.
71. Each applicant should continue to conduct its own research
throughout Auction 109 in order to determine the existence of pending
or future administrative or judicial proceedings that might affect its
decision to continue participating in the auction. Each Auction 109
applicant is responsible for assessing the likelihood of the various
possible outcomes and for considering the potential impact on
construction permits available in this auction. The due diligence
considerations mentioned in the Auction 109 Procedures Public Notice do
not comprise an exhaustive list of steps that should be undertaken
prior to participating in this auction. As always, the burden is on the
potential bidder to determine how much research to undertake, depending
upon specific facts and circumstances related to its interests.
72. Applicants are solely responsible for identifying associated
risks and for investigating and evaluating the degree to which such
matters may affect their ability to bid on, otherwise acquire, or make
use of the construction permits available in Auction 109. Each
potential bidder is responsible for undertaking research to ensure that
any permits won in this auction will be suitable for its business plans
and needs. Each potential bidder must undertake its own assessment of
the relevance and importance of information gathered as part of its due
diligence efforts.
73. 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.
74. Bidder Education--Online Tutorial on Auction Process. An
educational auction tutorial is available on the Auction 109 web page.
This online tutorial provides information about pre-auction procedures,
the FCC auction application system, completing short-form applications,
auction conduct, the FCC auction bidding system, auction rules, and
broadcast services rules. The online auction tutorial is accessible on
the Education tab of the Auction 109 website at www.fcc.gov/auction/109. This tutorial will remain available and accessible anytime for
reference in connection with the procedures outlined in the Auction 109
Procedures Public Notice.
75. Short-Form Application Filing Deadline. In order to be eligible
to bid in Auction 109, in addition to other requirements, an applicant
must first follow the procedures to submit a short-form application
(FCC Form 175) for the relevant auction electronically via the FCC
Auction Application System, following the instructions set forth in
Attachment B to the Auction 109 Procedures Public Notice. 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 May 11,
2021. Late applications will not be accepted. No filing fee is required
to be paid at the time of filing a short-form application.
76. Applications may be filed at any time beginning at noon ET on
April 28,
[[Page 20302]]
2021, until the filing window closes at 6:00 p.m. ET on May 11, 2021.
Applicants are strongly encouraged to file early and are responsible
for allowing adequate time to file 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 May 11, 2021.
77. 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 included in Attachment B to the Auction 109 Procedures
Public Notice. Applicants requiring technical assistance should contact
FCC Auctions Technical Support at (877) 480-3201, option nine; (202)
4141250; or (202) 414-1255 (text telephony (TTY)). Hours of service are
Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to
provide better service to the public, all calls to Technical Support
are recorded.
78. Correction of Application Deficiencies by Minor Modifications.
After the deadline for filing auction applications, Commission staff
will review all timely submitted applications for Auction 109 to
determine whether each applicant has complied with the application
requirements and whether it has provided all required information
concerning its qualifications for bidding. After this review is
completed, OEA and MB will issue a public notice announcing applicants'
initial application status by identifying (1) those that are complete;
(2) those that are rejected; and (3) those that are incomplete or
deficient because of minor defects that may be corrected. This public
notice also will establish an application resubmission filing window,
during which an applicant may make permissible minor modifications to
its application to address identified deficiencies. The public notice
will include the deadline for resubmitting corrected applications, and
a paper copy will be sent by overnight delivery 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 phone number of a Commission staff member who can answer questions
specific to the application. To become a qualified bidder, an applicant
must have a complete application (i.e., have timely corrected any
identified deficiencies) and make a timely and sufficient upfront
payment. Qualified bidders will be identified by public notice at least
10 days prior to the mock auction.
79. After the application filing deadline on May 11, 2021,
applicants can make only minor corrections or updates to their
applications. They will not be permitted to make major modifications.
80. Commission staff will communicate only with an applicant's
contact person or certifying official, as designated on the short-form
application, unless the applicant's certifying official or contact
representative notifies the Commission in writing that applicant's
counsel or other representative is authorized to speak on behalf of the
applicant. Authorizations may be sent by email to [email protected].
81. Public Notice of Final Application Status After Upfront Payment
Deadline. After Commission staff review resubmitted applications for
Auction 109 and evaluate upfront payment submissions, Commission staff
will release a public notice identifying applicants that have become
qualified bidders. A public notice announcing qualified bidders will be
issued before bidding in the auction begins. Qualified bidders are
those applicants with submitted FCC Forms 175 that are deemed timely
filed and complete, and which have made a timely and sufficient upfront
payment (as described below).
82. Upfront Payments. In order to be eligible to bid in this
auction, a sufficient upfront payment and a complete and accurate FCC
Remittance Advice Form (FCC Form 159, February 2003 edition) must be
submitted before 6:00 p.m. ET on June 16, 2021, following the
procedures outlined below and the instructions in Attachment C to the
Auction 109 Procedures Public Notice. After completing its short-form
application, an applicant will have access to an electronic version of
the FCC Form 159. This FCC Form 159 can be printed and the completed
form must be sent by fax to the FCC at (202) 418-2843, or by email to
[email protected].
83. Making Upfront Payments by Wire Transfer. All upfront payments
must be made by wire transfer. No other payment method is acceptable.
All payments must be made in U.S. dollars. Upfront payments for Auction
109 go to a U.S. Treasury account number specific to Auction 109 and
different from the accounts used in previous FCC auctions. Do not use a
beneficiary account number from a previous auction. Wire transfer
information is specified in the Making Upfront Payments by Wire
Transfer section of the Auction 109 Procedures Public Notice.
84. Each applicant is responsible for ensuring timely submission of
its upfront payment and for timely filing of an accurate and complete
Form 159. To avoid untimely payments, an applicant should discuss
arrangements and deadlines with its financial institution (including
that financial institution's specific wire transfer requirements)
several days before they plan to make the wire transfer, and well ahead
of the due date, as well as allowing sufficient time for the wire
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 is
responsible for obtaining confirmation from its financial institution
that its wire transfer to the U.S. Treasury was successful and from
Commission staff that its upfront payment was timely received and that
it was deposited into the proper account. As a regulatory requirement,
the U.S. Treasury screens all payments from all financial institutions
before deposits are made available to specified accounts. If wires are
suspended, the U.S. Treasury may direct questions regarding any
transfer to the financial institution initiating the wire. Each
applicant must take care to assure that any questions directed to its
financial institution(s) are addressed promptly. To receive
confirmation from Commission staff requesting receipt and deposit of
wire transfers, 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.
85. Failure to deliver a sufficient upfront payment as instructed
in the Auction 109 Procedures Public Notice by the 6:00 p.m. deadline
on June 16, 2021, will result in dismissal of the short-form
application and disqualification from participation in the auction.
86. Completing and Submitting FCC Form 159. An accurate and
complete FCC Form 159 (February 2003 edition) must be sent to the FCC
to accompany each upfront payment. At least one hour before placing the
order for the wire transfer (but on the same business day), applicants
must fax a completed Form 159 to the FCC at (202) 418-2843.
Alternatively, the completed form can be scanned and sent as an
attachment to an email to [email protected].
[[Page 20303]]
On the fax cover sheet, write: Wire Transfer--Auction Payment for
Auction 109.
87. Upfront Payments and Bidding Eligibility. OEA and MB adopted
the upfront payment amount proposed for each construction permit in
Attachment A of the Auction 109 Comment Public Notice, except that the
upfront payment amount for Allotment MM-FM1237-C1, Big Lake, Texas is
reduced because the minimum opening bid for that permit should be lower
than the amount initially proposed, as discussed below. The specific
upfront payment amounts and bidding units for each construction permit
in Auction 109 are specified in Attachment A to the Auction 109
Procedures Public Notice.
88. An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the construction permits on which it will bid.
OEA and MB proposed in the Auction 109 Comment Public Notice that the
amount of the upfront payment would determine a bidder's initial
bidding eligibility, the maximum number of bidding units on which a
bidder may place bids in any single round. Under that proposal, in
order to bid on a particular construction permit, a qualified bidder
must have selected the construction permit on its FCC Form 175 and must
have a current eligibility level that meets or exceeds the number of
bidding units assigned to that construction permit. At a minimum,
therefore, an applicant's total upfront payment must be enough to
establish eligibility to bid on at least one of the construction
permits selected on its FCC Form 175, or else the applicant will not be
qualified to participate in the auction. An applicant does not have to
make an upfront payment to cover all construction permits the applicant
selected on its FCC Form 175, but only enough to cover the maximum
number of bidding units that are associated with construction permits
on which they wish to place bids and hold provisionally winning bids in
any given round. The total upfront payment does not affect the total
dollar amount the bidder may bid on any given construction permit.
89. OEA and MB received no comments on the proposal that the
upfront payment amount would determine a bidder's initial eligibility.
Therefore, OEA and MB adopted this proposal. Each applicant's upfront
payment amount will determine that bidder's initial bidding
eligibility.
90. In calculating its upfront payment amount, an applicant should
determine the maximum number of bidding units on which it may wish to
be active (bid on or hold provisionally winning bids on) 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 all construction permits on which it
seeks to be active in any given round. Applicants should check their
calculations carefully, as there is no provision for increasing a
bidder's eligibility after the upfront payment deadline.
91. An applicant that is a former defaulter, as described above,
must pay an upfront payment 50% greater than that required of an
applicant that is not a former defaulter. For purposes of this rule,
defaults and delinquencies of the applicant itself and its controlling
interests are included. If an applicant is a former defaulter, it must
calculate its upfront payment for all of its selected construction
permits by multiplying the number of bidding units on which it wishes
to be active (bid on or hold provisionally winning bids on) during a
given round by 1.5. In order to calculate the number of bidding units
to assign to former defaulters, the Commission will divide the upfront
payment received by 1.5 and round the result up to the nearest bidding
unit. If an applicant fails to submit a sufficient upfront payment to
establish eligibility to bid on at least one of the construction
permits selected on its FCC Form 175, the applicant will not be
eligible to participate in bidding in the auction. This applicant will
retain its status as an applicant in Auction 109 and will remain
subject to 47 CFR 1.2105(c), 73.5002(d).
92. Auction Registration. All qualified bidders for Auction 109 are
automatically registered for the auction. Registration materials will
be distributed prior to the auction by overnight mail. The mailing will
be sent only to the contact person at the contact address listed in the
FCC Form 175 and will include the SecurID[supreg] tokens that will be
required to place bids, the web address and instructions for accessing
and logging in to the auction bidding system, FCC assigned username
(User ID) for each authorized bidder, and the Auction Bidder Line phone
number.
93. Qualified bidders that do not receive this registration mailing
will not be able to submit bids. Therefore, if this mailing is not
received by the contact representative for a qualified bidder by noon
on Tuesday, July 20, 2021, call the Auctions Hotline at (717) 338-2868.
In no event, however, will the FCC send auction registration materials
to anyone other than the contact person listed on the applicant's FCC
Form 175 or respond to a request for replacement registration materials
from anyone other than the authorized bidder, contact person, or
certifying official listed on the applicant's FCC Form 175. Receipt of
this registration mailing is critical to participating in the auction,
and each qualified bidder is responsible for ensuring it has received
all of the registration materials.
94. In the event that SecurID[supreg] tokens are 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 replacements. To request replacement of
these items, call the Auction Bidder Line at the telephone number
provided in the registration materials or the Auctions Hotline at (717)
338-2868.
95. The SecurID[supreg] tokens can be recycled, and bidders should
return the tokens to the FCC. Pre-addressed envelopes will be provided
to return the tokens once bidding in the auction has ended.
96. Remote Electronic Bidding via the FCC Auction Bidding System.
The Commission will conduct this auction over the internet, and
telephonic bidding will be available as well. Only qualified bidders
are permitted to bid. Each applicant should indicate its bidding
preference--electronic or telephonic--on its FCC Form 175. In either
case, each authorized bidder must have its own SecurID[supreg] token,
which the Commission will provide at no charge. Each qualified bidder
will be issued three SecurID[supreg] tokens. For security purposes, the
SecurID[supreg] tokens, bidding system web address, FCC assigned
username, and the telephonic bidding telephone number are only mailed
to the contact person at the contact address listed on the FCC Form
175. Each SecurID[supreg] token is tailored to a specific auction.
SecurID[supreg] tokens issued for other auctions or obtained from a
source other than the FCC will not work for Auction 109.
97. The Commission makes no warranties whatsoever, and shall not be
deemed to have made any warranties, with respect to the FCC Auction
Application System and the auction bidding system, including any
implied warranties of merchantability or fitness for a particular
purpose. In no event shall the Commission, or any of its officers,
employees, or agents, be liable for any damages whatsoever (including,
but not limited to, loss of business profits, business interruption,
loss of use, loss of revenue, loss of business information, or any
other loss) arising out of or relating to the existence, furnishing,
functioning, or use of the
[[Page 20304]]
FCC Auction Application System or the FCC auction bidding systems that
are accessible to qualified bidders in connection with this auction.
Moreover, no obligation or liability will arise out of the Commission's
technical, programming, or other advice or service provided in
connection with the FCC auction systems.
98. To the extent an issue arises with the auction 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 auction bidding system or attributable to a bidder,
including, but not limited to, a bidder's hardware, software, or
internet access problem that prevents the bidder from submitting a bid
prior to the end of a round, the Commission shall have no obligation to
resolve or remedy such an issue on behalf of the bidder. Similarly, if
an issue arises due to bidder error using the auction bidding system,
the Commission shall have no obligation to resolve or remedy such an
issue on behalf of the bidder. Accordingly, after the close of a
bidding round, the results of bid processing will not be altered absent
evidence of any failure in the auction bidding system.
99. Mock Auction. All qualified bidders will be eligible to
participate in a mock auction on Friday, July 23, 2021. The mock
auction will enable bidders to become familiar with the FCC auction
bidding system prior to the auction. All bidders should participate in
the mock auction. Details will be announced by public notice.
100. Fraud Alert. As is the case with many business investment
opportunities, some unscrupulous entrepreneurs may attempt to use
Auction 109 to deceive and defraud unsuspecting investors. Information
about deceptive telemarketing investment schemes is available from the
FCC as well as the Federal Trade Commission (FTC), Securities and
Exchange Commission (SEC) and the National Fraud Information Center.
Additional sources of information for potential bidders and investors
are described in the Auction 109 Procedures Public Notice.
101. Environmental Review Requirements. Permittees or licensees
must comply with the Commission's rules for environmental review under
the National Environmental Policy Act, the National Historic
Preservation Act, and other Federal environmental statutes. The
construction of a broadcast facility is a Federal action, and the
permittee or licensee must comply with the Commission's environmental
rules for each such facility. These environmental rules require, among
other things, that the permittee or licensee consult with expert
agencies having environmental responsibilities, including the U.S. Fish
and Wildlife Service, the State Historic Preservation Office, the U.S.
Army Corps of Engineers, and the Federal Emergency Management Agency
(through the local authority with jurisdiction over floodplains). In
assessing the effect of facility construction on historic properties,
the permittee or licensee must follow the provisions of the FCC's
Nationwide Programmatic Agreement Regarding the Section 106 National
Historic Preservation Act Review Process. The permittee or licensee
must prepare environmental assessments for any facility that may have a
significant impact in or on wilderness areas, wildlife preserves,
threatened or endangered species, or designated critical habitats,
historical or archaeological sites, Indian religious sites,
floodplains, and surface features. In addition, the permittee or
licensee must prepare environmental assessments for facilities that
include high intensity white lights in residential neighborhoods or
excessive radio frequency emission.
IV. Bidding
102. The first round of bidding for Auction 109 will begin on
Tuesday, July 27, 2021. Unless otherwise announced, bidding on all
construction permits will be conducted on each business day until
bidding has stopped on all construction permits. The initial bidding
schedule will be announced in a public notice listing the qualified
bidders, which is released at least one week before the start of
bidding in the auction.
A. Auction Structure
103. Simultaneous Multiple Round Auction. In the Auction 109
Comment Public Notice, OEA and MB proposed to auction all construction
permits listed in Attachment A of this Auction 109 Procedures Public
Notice in a single auction using the Commission's standard simultaneous
multiple-round auction format. This type of auction offers every
construction permit for bid at the same time and consists of successive
bidding rounds in which qualified bidders may place bids on individual
construction permits. OEA and MB received no comment on this proposal,
and this proposal was adopted. Unless otherwise announced, bids will be
accepted on all construction permits in each round of the auction until
bidding stops on every construction permit.
104. FCC Auction Bidding System. All bidding will take place
remotely either over the internet through the FCC auction bidding
system or by telephone using the telephonic bidding option. Please note
that telephonic bid assistants are required to use a script when
entering bids placed by telephone. Telephonic bidders are therefore
reminded to allow sufficient time to bid by placing their calls well in
advance of the close of a round. The length of a call to place a
telephonic bid may vary; please allow a minimum of ten minutes. All
telephone calls are recorded.
105. An Auction 109 bidder's ability to bid on specific
construction permits is determined by two factors: (1) The construction
permits selected by that applicant in its FCC Form 175 and (2) the
bidder's bidding eligibility measured in bidding units. The FCC auction
bidding system will allow bidders to submit bids on only those
construction permits the bidder selected on its FCC Form 175.
106. In order to access the bidding function of the FCC auction
bidding system, bidders must be logged in during a bidding round using
the passcode generated by the SecurID[supreg] token and a personal
identification number (PIN) created by the bidder. Bidders are strongly
encouraged to print a round summary for each round after they have
completed all of their activity for that round.
107. Round Structure. The initial schedule of bidding rounds will
be announced in the public notice listing the qualified bidders in the
auction. Each bidding round is followed by the release of round
results. Multiple bidding rounds may be conducted each day.
108. In the Auction 109 Comment Public Notice, OEA and MB proposed
to 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. OEA
and MB received no comment on these proposals and adopted them for
Auction 109. OEA and MB may change the amount of time for the bidding
rounds, the amount of time between rounds, or the number of rounds per
day, depending upon bidding activity and other factors, by prior
announcement.
109. Eligibility and Activity Rules. In Auction 109, upfront
payments will be used to determine initial (maximum) bidding
eligibility (as measured in bidding units) for Auction 109. The amount
of the upfront payment submitted by a bidder determines initial bidding
eligibility, the maximum
[[Page 20305]]
number of bidding units on which a bidder may be active (bid or hold
provisionally winning bids) in a given round. Each construction permit
is assigned a specific number of bidding units as listed in Attachment
A to the Auction 109 Procedures Public Notice. Bidding units assigned
to each construction permit do not change as prices rise during the
auction. Upfront payments are not attributed to specific construction
permits. Rather, a bidder may place bids on any of the construction
permits selected on its FCC Form 175 as long as the total number of
bidding units associated with those construction permits does not
exceed the bidder's current eligibility. Eligibility cannot be
increased during the auction; it can only remain the same or decrease.
Thus, in calculating its upfront payment amount, an applicant must
determine the maximum number of bidding units on which it may wish to
bid or hold provisionally winning bids in any single round, and submit
an upfront payment amount covering that total number of bidding units.
At a minimum, an applicant's upfront payment must cover the bidding
units for at least one of the construction permits it selected on its
short-form application. The total upfront payment does not affect the
total dollar amount a bidder may bid on any given construction permit.
OEA and MB received no comments on the bidding eligibility proposals,
and these proposals are adopted.
110. To ensure that an auction closes within a reasonable period of
time, an activity rule requires bidders to bid actively throughout the
auction, rather than wait until late in the auction before
participating. Bidders are required to be active (bid or hold
provisionally winning bids) on a specified percentage of their current
bidding eligibility during each round of the auction. A bidder's
activity level in a round is the sum of the bidding units associated
with construction permits covered by the bidder's new bids in the
current round and provisionally winning bids from the previous round.
111. The minimum required activity is expressed as a percentage of
the bidder's current eligibility, and it increases by stage as the
auction progresses. Failure to maintain the requisite activity level
will result in the use of an activity rule waiver, if any remain, or a
reduction in the bidder's eligibility, possibly curtailing or
eliminating the bidder's ability to place additional bids in the
auction.
112. In response to a commenter's suggestion that the auction
should begin with an activity requirement lower than that proposed in
the Auction 109 Comment Public Notice, OEA and MB adopted a more
flexible activity requirement in the Auction 109 Procedures Public
Notice. Accordingly, OEA and MB initially adopt two activity
requirements: An 80% requirement for the beginning of the auction and a
95% requirement that will be used later in the auction. These
requirements will be implemented using auction stages, as described
below.
113. Auction Stages. OEA and MB will conduct the auction in at
least two stages as described below. Under this approach, a bidder
desiring to maintain its current bidding eligibility will be required
to be active on construction permits representing at least 80% of its
current eligibility during each round of Stage One, and on at least 95%
of its current bidding eligibility in Stage Two.
114. Stage One: During the first stage of the auction, a bidder
desiring to maintain its current bidding eligibility will be required
to be active on construction permits representing at least 80% of its
current bidding eligibility in each bidding round. Failure to maintain
the required activity level will result in the use of an activity rule
waiver or, if the bidder has no activity rule waivers remaining, a
reduction in the bidder's bidding eligibility in the next round. During
Stage One, reduced eligibility for the next round will be calculated by
multiplying the bidder's current round activity (the sum of bidding
units of the bidder's provisionally winning bids and bids during the
current round) by five-fourths (\5/4\).
115. Stage Two: During the second stage of the auction, a bidder
desiring to maintain its current bidding eligibility is required to be
active on 95% of its current bidding eligibility. Failure to maintain
the required activity level will result in the use of an activity rule
waiver or, if the bidder has no activity rule waivers remaining, a
reduction in the bidder's bidding eligibility in the next round. During
Stage Two, reduced eligibility for the next round will be calculated by
multiplying the bidder's current round activity (the sum of bidding
units of the bidder's provisionally winning bids and bids during the
current round) by twenty-nineteenths (20/19).
116. Stage Transitions. OEA and MB intend to advance the auction
from Stage One to Stage Two after considering a variety of measures of
auction activity including, but not limited to, the percentages of
construction permits (as measured in bidding units) on which there are
new bids, the number of new bids, and the increase in revenue.
117. The auction will start in Stage One. Prior to moving from
Stage One to Stage Two or to any subsequent stages, OEA and MB will
alert bidders by announcement in the bidding system. Because activity
requirements increase in Stage Two, bidders must carefully check their
activity during the first round following a stage transition to ensure
that they are meeting the increased activity requirement. In past
auctions, some bidders have inadvertently lost bidding eligibility or
used an activity rule waiver because they did not re-verify their
activity at stage transitions.
118. OEA and MB have the discretion to further alter the activity
requirements before and/or during the auction as circumstances warrant.
In addition to transitioning to Stage Two, OEA and MB retain the
discretion to change the activity requirements during the auction by
other means, including adding an additional stage with a higher
activity requirement, not transitioning to Stage Two, and transitioning
to Stage Two with an activity requirement that is higher or lower than
95%. This determination will be based on a variety of measures of
auction activity, including, but not limited to, the number of new bids
and the percentages of construction permits (as measured in bidding
units) on which there are new bids.
119. Activity Rule Waivers. For Auction 109, OEA and MB adopted the
proposal to provide each bidder in the auction with three activity rule
waivers, which are principally a mechanism for a bidder to avoid the
loss of bidding eligibility in the event that exigent circumstances
prevent it from bidding in a particular round.
120. Use of an activity rule waiver preserves the bidder's
eligibility despite its activity in the current round being below the
required minimum activity level. An activity rule waiver applies to an
entire round of bidding and not to a particular construction permit. A
bidder may use an activity rule waiver in any round of the auction as
long as the bidder has not used all of its waivers.
121. The FCC auction bidding system will assume that a bidder that
does not meet the activity requirement would prefer to use an activity
rule waiver (if available) rather than lose bidding eligibility.
Therefore, the system will automatically apply a waiver at the end of
any bidding round in which a bidder's activity level is below the
minimum required unless (1) the bidder has no activity rule waiver
remaining, or (2) the bidder overrides the automatic
[[Page 20306]]
application of a waiver by reducing eligibility, therefore meeting the
activity requirement. If the bidder has no waivers remaining and does
not satisfy the required activity level, the bidder's current
eligibility will be permanently reduced, possibly curtailing or
eliminating the ability to place additional bids in the auction.
122. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the reduce eligibility function in
the FCC auction bidding system. In this case, the bidder's eligibility
would be permanently reduced to bring it into compliance with the
activity rule described above. Reducing eligibility is an irreversible
action once the round has closed, and a bidder cannot regain its lost
bidding eligibility.
123. Finally, a bidder may apply an activity rule waiver
proactively as a means to keep the auction open without placing a bid.
If a bidder proactively applies an activity rule waiver (using the
proactive waiver function in the FCC auction bidding system) during a
bidding round in which no bids are placed, the auction will remain open
and the bidder's eligibility will be preserved. An automatic waiver
applied by the FCC auction bidding system in a round in which there is
no new bid or a proactive waiver will not keep the auction open.
124. Auction Stopping Rule. For Auction 109, OEA and MB proposed to
employ a simultaneous stopping rule approach, which means all
construction permits remain available for bidding until bidding stops
on every construction permit. Specifically, bidding will close on all
construction permits after the first round in which no bidder submits
any new bid or applies a proactive waiver.
125. OEA and MB also sought comment on alternative versions of the
simultaneous stopping rule for Auction 109:
Option 1. The auction would close for all construction permits
after the first round in which no bidder applies a proactive waiver or
places any new bid on any construction permit on which it is not the
provisionally winning bidder. Thus, absent any other bidding activity,
a bidder placing a new bid on a construction permit for which it is the
provisionally winning bidder would not keep the auction open under this
modified stopping rule.
Option 2. The auction would close for all construction permits
after the first round in which no bidder applies a waiver or places any
new bid on any construction permit that already has a provisionally
winning bid. Thus, absent any other bidding activity, a bidder placing
a new bid on an FCC-held construction permit (a construction permit
that does not have a provisionally winning bid) would not keep the
auction open under this modified stopping rule.
Option 3. The auction would close using a modified version of the
simultaneous stopping rule that combines Option 1 and Option 2 above.
Option 4. The auction would close after a specified number of
additional rounds (special stopping rule) to be announced in advance in
the FCC auction bidding system. If OEA and MB invoke this special
stopping rule, bids will be accepted in the specified final round(s),
after which the auction will close.
Option 5. The auction would remain open even if no bidder places
any new bid or applies a waiver. In this event, the effect will be the
same as if a bidder had applied a waiver. Thus, the activity rule will
apply as usual, and a bidder with insufficient activity will either
lose bidding eligibility or use a waiver.
126. OEA and MB proposed to exercise these options only in certain
circumstances, for example, where the auction is proceeding unusually
slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable
period of time or will close prematurely. Before exercising these
options, OEA and MB are likely to attempt to change the pace of the
auction. For example, OEA and MB may adjust the pace of bidding by
changing the number of bidding rounds per day and/or the minimum
acceptable bids. OEA and MB proposed to retain the discretion to
exercise any of these options with or without prior announcement during
the auction. OEA and MB received one comment regarding stopping rule
Option 2. The commenter cautioned against the use of Option 2, but
indicated that this option should remain available. OEA and MB adopted
these approaches for Auction 109.
127. Auction Delay, Suspension, or Cancellation. By public notice
or by announcement through the FCC auction bidding system, OEA and MB
may delay, suspend, or cancel bidding in the auction in the event of
natural disaster, technical obstacle, network interruption,
administrative or weather necessity, evidence of an auction security
breach or unlawful bidding activity, or for any other reason that
affects the fair and efficient conduct of competitive bidding. In such
cases, OEA and MB, in their sole discretion, may elect to resume the
auction starting from the beginning of the current round or from some
previous round, or cancel the auction in its entirety. This authority
will be exercised solely at the discretion of OEA and MB, and not as a
substitute for situations in which bidders may wish to apply their
activity rule waivers.
B. Bidding Procedures
128. Minimum Opening Bids and Acceptable Bid Amounts. Consistent
with the mandate of section 309(j) of the Act, the Commission directed
OEA and MB to seek comment on the use of a minimum opening bid and/or
reserve price prior to the start of each auction.
129. In the Auction 109 Comment Public Notice, OEA and MB did not
propose to establish separate reserve prices for the construction
permits in Auction 109, and OEA and MB found no basis for establishing
any separate reserve price in the Auction 109 Procedures Public Notice.
This is consistent with policy applied in earlier broadcast spectrum
auctions. OEA and MB, however, proposed to establish minimum opening
bids for each construction permit in Auction 109, reasoning that a
minimum opening bid, which has been used in other auctions, is an
effective tool for accelerating the competitive bidding process. The
bidding system will not accept bids lower than the minimum opening bids
for each construction permit. Based on experience in past auctions,
setting minimum opening bid amounts judiciously is an effective tool
for accelerating the competitive bidding process.
130. OEA and MB adopted the minimum opening bid amounts proposed in
the Auction 109 Comment Public Notice., except that the minimum opening
bid for Allotment MM-FM1237-C1, Big Lake, Texas is lowered to $35,000
after further analysis in response to one commenter's filing. The
specific minimum opening bid and upfront payment amounts for each
construction permit are set forth in Attachment A to the Auction 109
Procedures Public Notice.
131. In each round of Auction 109 a qualified bidder will be able
to place a bid on a given construction permit in any of up to nine
different amounts. The FCC auction bidding system interface will list
the nine acceptable bid amounts for each construction permit.
132. In the Auction 109 Comment Public Notice, to calculate the
first of the acceptable bid amounts, OEA and MB proposed to use a
minimum
[[Page 20307]]
acceptable bid increment percentage of 10%. This means that the minimum
acceptable bid amount for a construction permit will be approximately
10% greater than the provisionally winning bid amount for the
construction permit. To calculate the eight additional acceptable bid
amounts, OEA and MB proposed in the Auction 109 Comment Public Notice
to use an additional bid increment percentage of 5%. The Commission did
not receive any comments on these proposals to use 10% and 5%
respectively in the calculation of nine acceptable bid amounts for each
construction permit. Based on OEA and MB experience in previous
broadcast auctions, a minimum acceptable bid increment percentage of
10% and an additional bid increment percentage of 5% are sufficient to
ensure active bidding. Therefore, OEA and MB will begin the auction
with a minimum acceptable bid increment percentage of 10% and an
additional bid increment percentage of 5%.
133. In Auction 109, the minimum acceptable bid amount for a
construction permit will be equal to its minimum opening bid amount
until there is a provisionally winning bid for the construction permit.
After there is a provisionally winning bid for a construction permit,
the minimum acceptable bid amount will be calculated by multiplying the
provisionally winning bid amount by one plus the minimum acceptable bid
percentage--i.e., provisionally winning bid amount * 1.10, rounded. In
accordance with the Commission's standard rounding procedure for
auctions, results of this calculation above $10,000 will be rounded to
the nearest $1,000; results below $10,000 but above $1,000 will be
rounded to the nearest $100; and results below $1000 will be rounded to
the nearest $10.
134. In Auction 109, the FCC auction bidding system will calculate
the eight additional bid amounts by multiplying the minimum acceptable
bid amount by the additional bid increment percentage of 5%, and that
result (rounded) is the additional increment amount. The first
additional acceptable bid amount equals the minimum acceptable bid
amount plus the additional increment amount. The second additional
acceptable bid amount equals the minimum acceptable bid amount plus two
times the additional increment amount; the third additional acceptable
bid amount is the minimum acceptable bid amount plus three times the
additional increment amount; etc. Because the additional bid increment
percentage is 5%, the calculation of the additional increment amount is
(minimum acceptable bid amount) * (0.05), rounded. The first additional
acceptable bid amount equals (minimum acceptable bid amount) +
(additional increment amount); the second additional acceptable bid
amount equals (minimum acceptable bid amount) + (2 * (additional
increment amount)); the third additional acceptable bid amount equals
(minimum acceptable bid amount) + (3 * (additional increment amount));
etc.
135. OEA and MB proposed to retain the discretion to change the
minimum acceptable bid amounts, the minimum acceptable bid increment
percentage, the additional bid increment percentage, and the number of
acceptable bid amounts if circumstances so dictate, consistent with
past practice. OEA and MB also proposed to retain the discretion to do
so on a construction permit-by-construction permit basis. OEA and MB
also proposed to retain the discretion to limit (a) the amount by which
a minimum acceptable bid for a construction permit may increase
compared with the corresponding provisionally winning bid, and (b) the
amount by which an additional bid amount may increase compared with the
immediately preceding acceptable bid amount. For example, OEA and MB
could set a $1,000 limit on increases in minimum acceptable bid amounts
over provisionally winning bids. Thus, if calculating a minimum
acceptable bid using the minimum acceptable bid increment percentage
results in a minimum acceptable bid amount that is $1,200 higher than
the provisionally winning bid on a construction permit, the minimum
acceptable bid amount would instead be capped at $1,000 above the
provisionally winning bid.
136. The sole commenter to address this issue expressed support for
the proposal to retain discretion to change the minimum acceptable bid
amounts, yet suggested that OEA and MB should not exercise this
discretion until several bidding rounds have concluded when more price
information is available. OEA and MB did not receive any other comments
on these proposals concerning changes of bid amounts. OEA and MB
typically exercise this discretion based on monitoring of ongoing
bidding and reserved such discretion in the Auction 109 Procedures
Public Notice. If OEA and MB exercise this discretion, bidders will be
alerted by announcement in the FCC auction bidding system during the
auction.
137. Provisionally Winning Bids. Consistent with practice in past
auctions, the FCC auction bidding system at the end of each bidding
round will determine a provisionally winning bid for each construction
permit based on the highest bid amount received for that permit. A
provisionally winning bid will remain the provisionally winning bid
until there is a higher bid on the same construction permit at the
close of a subsequent round. Provisionally winning bids at the end of
the auction become the winning bids.
138. OEA and MB will use a pseudo-random number generator to select
a single provisionally winning bid in the event of identical high bid
amounts being submitted on a construction permit in a given round
(i.e., tied bids). Accordingly, the FCC auction bidding system will
assign a pseudo-random number to each bid upon submission. The tied bid
with the highest pseudo-random number wins the tiebreaker and becomes
the provisionally winning bid. The remaining bidders, as well as the
provisionally winning bidder, can submit higher bids in subsequent
rounds. However, if the auction were to close with no other bids being
placed, the winning bidder would be the one that placed the
provisionally winning bid. If the construction permit receives any bids
in a subsequent round, the provisionally winning bid again will be
determined by the highest bid amount received for the construction
permit. As a reminder, provisionally winning bids count toward activity
for purposes of the activity rule.
139. Bid Removal and Bid Withdrawal. In the Auction 109 Comment
Public Notice, OEA and MB explained bid removal procedures in the FCC
auction bidding system. Each qualified bidder has the option of
removing any bids placed in a round provided that such bids are removed
before the close of that bidding round. By removing a bid within a
round, a bidder effectively unsubmits the bid. A bidder removing a bid
placed in the same round is not subject to withdrawal payments.
Removing a bid will affect a bidder's activity because a removed bid no
longer counts toward bidding activity for the round. Once a round
closes, a bidder may no longer remove a bid.
140. Bidders in Auction 109 are prohibited from withdrawing any bid
after close of the round in which that bid was placed. OEA and MB
adopted the prohibition in recognition of the site-specific nature and
wide geographic dispersion of the permits available in this auction, as
well as experience with past auctions of broadcast construction
permits. Bidders are cautioned to select bid amounts carefully because
no bid withdrawals will be allowed in Auction
[[Page 20308]]
109, even if a bid was mistakenly or erroneously made.
141. Bidding Results. Bids placed during a round will not be made
public until the conclusion of that round. After a round closes, OEA
and MB will compile reports of all bids placed, current provisionally
winning bids, new minimum acceptable bid amounts for the following
round, whether the construction permit is FCC-held, and bidder
eligibility status (bidding eligibility and activity rule waiver), and
post the reports for public access.
142. Auction Announcements. The Commission staff will use auction
announcements to report necessary information to bidders, such as
schedule changes. All auction announcements will be available by
clicking a link in the FCC auction bidding system.
V. Post-Auction Procedures
143. Shortly after bidding has closed, the Commission will issue a
public notice declaring the auction closed, identifying the winning
bidders, and establishing the deadlines for submitting down payments,
final payments, and the long-form applications.
144. Down Payments. Within ten business days after release of the
auction closing public notice, each winning bidder must submit
sufficient funds (in addition to its upfront payment) to bring its
total amount of money on deposit with the Commission for Auction 109 to
20% of the net amount of its winning bid(s) (gross bid(s) less any
applicable new entrant bidding credit(s)).
145. Final Payments. Each winning bidder will be required to submit
the balance of the net amount of its winning bid(s) within ten business
days after the applicable deadline for submitting down payments.
146. Long-Form Applications. The Commission's rules currently
provide that within thirty days following the close of bidding and
notification to the winning bidders, unless a longer period is
specified by public notice, each winning bidder must electronically
submit a separate, properly completed long-form application for each
permit won, and required exhibits, along with the applicable
application filing fee. Winning bidders for FM construction permits
will electronically file FCC Form 2100, Schedule 301-FM, in the Media
Bureau's Licensing and Management System (LMS). Winning bidders for AM
construction permits will electronically file FCC Form 301 in the Media
Bureau's Consolidated Data Base System (CDBS).
147. A winning bidder is required to submit an application filing
fee with each long-form application. 47 CFR 1.1104. The application
filing fee must be paid in addition to the winning bid amount. The
Commission recently adopted a new long-form application filing fee that
includes an amount to recover costs for processing the short-form
application. The amended Sec. 1.1104, which specifies filing fees for
AM and FM long-form applications, is not yet in effect. The long-form
application filing fee that is in effect when such form is filed will
be the applicable fee.
148. Winning bidders claiming new entrant status must include an
exhibit demonstrating their eligibility for the bidding credit. Further
instructions on these and other filing requirements will be provided to
winning bidders in the auction closing public notice.
149. Default and Disqualification. Any winning bidder that defaults
or is disqualified after the close of the auction (i.e., fails to remit
the required down payment within the prescribed period of time, fails
to submit a timely long-form application, fails to make full and timely
final payment, or is otherwise disqualified) is liable for a default
payment as described in 47 CFR 1.2104(g)(2). This default payment
consists of a deficiency payment, equal to the difference between the
amount of the Auction 109 bidder's winning bid and the amount of the
winning bid the next time a construction permit covering the same
spectrum is won in an auction, plus an additional payment equal to a
percentage of the defaulter's bid or of the subsequent winning bid,
whichever is less.
150. The percentage of the applicable bid to be assessed as an
additional payment for defaults in a particular auction is established
in advance of the auction. The additional default payment for Auction
109 is 20% of the applicable bid.
151. Finally, in the event of a default, the Commission has the
discretion to re-auction the construction permit or offer it to the
next highest bidder (in descending order) at its final bid amount. In
addition, if a default or disqualification involves gross misconduct,
misrepresentation, or bad faith by an applicant, the Commission may
declare the applicant and its principals ineligible to bid in future
auctions, and may take any other action that it deems necessary,
including institution of proceedings to revoke any existing
authorizations held by the applicant.
152. Refund of Remaining Upfront Payment Balance. All refunds of
upfront payment balances will be returned to the payer of record as
identified on the FCC Form 159 unless the payer submits written
authorization instructing otherwise. This written authorization must
comply with the refund instructions provided in the Auction 109
Procedures Public Notice.
VI. Procedural Matters
153. Paperwork Reduction Act. The Office of Management and Budget
(OMB) has approved the information collections in the Application to
Participate in an FCC Auction, FCC Form 175, OMB Control No. 3060-0600.
The Auction 109 Procedures Public Notice does not contain new or
modified information collection requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. Therefore, it does not
contain any new or modified information collection burden for small
business concerns with fewer than 25 employees pursuant to the Small
Business Paperwork Relief Act of 2002, Public Law 107-198.
154. Congressional Review Act. The Commission will submit the
Auction 109 Procedures Public Notice to the Administrator of the Office
of Management and Budget Office of Information and Regulatory Affairs
for concurrence as to whether these procedures are major or non-major
under the Congressional Review Act, 5 U.S.C. 804(2). The Commission
will send a copy of the Auction 109 Procedures Public Notice in a
report to Congress and the Government Accountability Office pursuant to
the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).
155. Supplemental Final Regulatory Flexibility Analysis. As
required by the Regulatory Flexibility Act of 1980, as amended (RFA),
the Commission prepared Initial Regulatory Flexibility Analyses (IRFAs)
in connection with the Broadcast Competitive Bidding Notice of Proposed
Rulemaking (NPRM), 62 FR 65392, December 12, 1997, and other Commission
NPRMs (collectively, Competitive Bidding NPRMs) pursuant to which
Auction 109 will be conducted. Final Regulatory Flexibility Analyses
(FRFAs) likewise were prepared in the Broadcast Competitive Bidding
Order, 63 FR 48615, September 11, 1998, and other Commission rulemaking
orders (collectively, Competitive Bidding Orders) pursuant to which
Auction 109 will be conducted. In this proceeding, a Supplemental
Initial Regulatory Flexibility Analysis (Supplemental IRFA) was
incorporated in the Auction 109 Comment Public Notice, 86 FR
[[Page 20309]]
12556, March 4, 2021. The Commission sought written public comment on
the proposals in the Auction 109 Comment Public Notice, including
comments on the Supplemental IRFA. This Supplemental Final Regulatory
Flexibility Analysis (Supplemental FRFA) supplements the FRFAs in the
Competitive Bidding Orders to reflect the actions taken in the Auction
109 Procedure Public Notice and conforms to the RFA.
156. Need for, and Objectives of, the Public Notice. The procedures
for the conduct of Auction 109 as described in the Auction 109
Procedures Public Notice implement the Commission's competitive bidding
rules, which have been adopted by the Commission in multiple notice-
and-comment rulemaking proceedings. More specifically, the Auction 109
Procedures Public Notice provides an overview of the procedures, terms,
and conditions governing Auction 109, and the post-auction application
and payment processes, as well as setting the minimum opening bid
amount for each of the AM and FM broadcast construction permits that
are subject to being assigned by competitive bidding.
157. To promote the efficient and fair administration of the
competitive bidding process for all Auction 109 participants, including
small businesses, in the Auction 109 Procedures Public Notice OEA and
MB announced the following procedures: (1) Use of a simultaneous
multiple-round auction format, consisting of sequential bidding rounds
with a simultaneous stopping procedure; (2) a specific upfront payment
amount for each construction permit; (3) a specific minimum opening bid
amount for each construction permit; (4) a specific number of bidding
units for each construction permit; (5) a bidder's initial bidding
eligibility will be based on the amount of that bidder's upfront
payment; (6) a two-stage auction with an activity requirement in which
a bidder is required to be active on 80% of its bidding eligibility in
stage one and 95% of its bidding eligibility in stage two; (7)
provision of three activity waivers for each qualified bidder to allow
it to preserve bidding eligibility during the course of the auction;
(8) use of minimum acceptable bid amounts and additional acceptable
increments, along with the methodology for calculating such amounts;
(9) a procedure for breaking ties if identical high bid amounts are
submitted on one permit in a given round; (10) a prohibition on bid
withdrawals; and (11) establishment of an additional default payment
percentage of 20% of the applicable bid in the event that a winning
bidder defaults or is disqualified after the auction.
158. Summary of Significant Issues Raised by Public Comments in
Response to the IRFA. There were no comments filed that specifically
addressed the Supplemental IRFA.
159. Response to Comments by the Chief Counsel for Advocacy of the
Small Business Administration. Pursuant to the Small Business Jobs Act
of 2010, which amended the RFA, the Commission is required to respond
to any comment filed by the Chief Counsel for Advocacy of the Small
Business Administration (SBA), and to provide a detailed statement of
any change made to the proposed procedures as a result of those
comments. The Chief Counsel did not file any comments in response to
the procedures that were proposed in the Auction 109 Comment Public
Notice.
160. Description and Estimate of the Number of Small Entities to
Which the Procedures Will Apply. The RFA directs agencies to provide a
description of and, where feasible, an estimate of the number of small
entities that may be affected by the rules adopted in the Auction 109
Procedures Public Notice. The RFA generally defines the term small
entity as having the same meaning as the terms small business, small
organization, and small governmental jurisdiction. In addition, the
term small business has the same meaning as the term small business
concern under the Small Business Act. A small business concern is one
which: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the SBA.
161. The specific competitive bidding procedures and minimum
opening bid amounts described in the Auction 109 Procedures Public
Notice will affect all applicants participating in Auction 109. The
number of entities that may apply to participate in Auction 109 is
unknown. Based on the number of applicants in prior FM auctions, OEA
and MB estimate that the number of applicants for Auction 109 may range
from approximately 130 to 260. This estimate is based on the number of
applicants who filed short-form applications to participate in previous
auctions of FM construction permits held to date, an average of 1.8
short-form applications were filed per construction permit offered,
with a median of 1.2 applications per permit. The actual number of
applicants for Auction 109 could vary significantly as any individual's
or entity's decision to participate may be affected by a number of
factors beyond the Commission's knowledge.
162. Radio Stations. This Economic Census category comprises
establishments primarily engaged in broadcasting aural programs by
radio to the public. Programming may originate in their own studio,
from an affiliated network, or from external sources. According to the
most recent rulemaking order to assess annual regulatory fees,
Commission staff identified from the Media Bureau's licensing databases
9,636 licensed radio facilities subject to annual regulatory fees as of
October 1, 2019, excluding from this count radio stations exempt from
required annual regulatory fees.
163. The SBA has established a small business size standard for
this category as firms having $41.5 million or less in annual receipts.
Economic Census data for 2012 shows that 2,849 radio station firms
operated during that year. Of that number, 2,806 firms operated with
annual receipts of less than $25 million per year, 17 with annual
receipts between $25 million and $49,999,999, and 26 with annual
receipts of $50 million or more. Therefore, based on the SBA's size
standard the majority of such entities are small entities.
164. According to Commission staff review of the BIA/Kelsey, LLC's
Media Access Pro Radio Database (BIA) as of January 26, 2021, nearly
all AM and FM full-service radio stations (approximately 15,478 of
15,483 total stations, or 99.97%) had revenues of $41.5 million or less
and thus qualify as small entities under the SBA definition. The SBA
size standard data, however, does not enable a meaningful estimate of
the number of small entities who may participate in Auction 109.
165. Also, in assessing whether a business entity qualifies as
small under the SBA definition, business control affiliations must be
included. This estimate therefore likely overstates the number of small
entities that might be affected by this auction because the revenue
figure on which it is based does not include or aggregate revenues from
affiliated companies. Moreover, the definition of small business also
requires that an entity not be dominant in its field of operation and
that the entity be independently owned and operated. The estimate of
small businesses to which Auction 109 competitive bidding procedures
may apply does not exclude any radio station from the definition of a
small business on these bases and is therefore over-inclusive to that
extent. Furthermore, OEA and MB are unable at this time to define or
quantify the criteria that would establish whether a specific radio
[[Page 20310]]
station is dominant in its field of operation. It is difficult to
assess these criteria in the context of media entities and therefore
estimates of small businesses to which they apply may be over-inclusive
to this extent.
166. OEA and MB are unable to accurately develop an estimate of how
many of the entities in this auction would be small businesses based on
the number of small entities that applied to participate in prior
broadcast auctions because that information is not collected from
applicants for broadcast auctions in which bidding credits are not
based on an applicant's size (as is the case in auctions of licenses
for wireless services).
167. In 2013, the Commission estimated that 97% of radio
broadcasters met the SBA's prior definition of small business concern,
based on annual revenues of $7 million. The SBA has since increased
that revenue threshold to $41.5 million, which suggests that an even
greater percentage of radio broadcasters would fall within the SBA's
definition. The Commission has estimated the number of licensed
commercial AM radio stations to be 4,347 and the number of commercial
FM radio stations to be 6,699, for a total number of 11,046 radio
stations. As of January 2021, 4,347 AM stations and 6,694 FM stations
had revenues of $41.5 million or less, according to Commission staff
review of the BIA Database. Accordingly, based on this data, OEA and MB
that the majority of Auction 109 applicants would likely meet the SBA's
definition of a small business concern.
168. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities. For Auction 109, no new
reporting, recordkeeping, or other compliance requirements for small
entities or other auction applicants were proposed. The Commission
designed the auction application process itself to minimize reporting
and compliance requirements for applicants, including small business
applicants. For all spectrum auctions, in the first part of the
Commission's two-phased auction application process, parties desiring
to participate in an auction file streamlined, short-form applications
in which they certify under penalty of perjury as to their
qualifications. Eligibility to participate in bidding is based on an
applicant's short-form application and certifications, as well as its
upfront payment. In the second phase of the auction application
process, there are additional compliance requirements for winning
bidders. Thus, a small business that fails to become a winning bidder
does not need to file a long-form application and provide the
additional showings and more detailed demonstrations required of a
winning bidder.
169. Auction 109 applicants, including small entities, will become
qualified to bid in Auction 109 only if they comply with the following:
(1) Submission of a short-form application that is timely and is found
to be substantially complete, and (2) timely submission of a sufficient
upfront payment for at least one of the construction permits that the
applicant selected on its FCC Form 175. In accordance with the terms of
47 CFR 1.2105(b)(2), an applicant whose application is found to contain
deficiencies will have a limited opportunity to bring its application
into compliance with the Commission's competitive bidding rules during
a resubmission window. In addition, each Auction 109 applicant must
maintain the accuracy of its previously filed short-form application
electronically using the FCC auction application system.
170. In the second phase of the process, there are additional
compliance requirements only applicable to winning bidders. As with
other winning bidders, any small entity that is a winning bidder will
be required to comply with the terms of the following rules, among
others: (1) 47 CFR 1.2107(b), by submitting as a down payment within 10
business days after release of the auction closing public notice
sufficient funds (in addition to its upfront payment) to bring its
total amount of money on deposit with the Commission for Auction 109 to
20% of the amount of its winning bid or bids; (2) 47 CFR 1.2109(a), by
submitting within 10 business days after the down payment deadline the
balance of the amount for each of its winning bids; and (3) 47 CFR
73.5005(a), by electronically filing a properly completed long-form
application and required exhibits for each construction permit won
through Auction 109.
171. Further, as required by 47 CFR 1.2105(c), reports concerning
prohibited communications must be filed with the Chief of the Auctions
Division, as detailed in the Auctions 109 Procedures Public Notice.
172. Steps Taken to Minimize the Significant Economic Impact on
Small Entities, and Significant Alternatives Considered. The RFA
requires an agency to describe any significant, specifically small
business, alternatives that it has considered in reaching its proposed
approach, which may include the following four alternatives (among
others): (1) The establishment of differing compliance or reporting
requirements or timetables that take into account the resources
available to small entities; (2) the clarification, consolidation, or
simplification of compliance and reporting requirements under the rule
for such small entities; (3) the use of performance rather than design
standards; and (4) an exemption from coverage of the rule, or any part
thereof, for such small entities. See 5 U.S.C. 603(c)(1)-(4).
173. OEA and MB intend that the procedures adopted in the Auctions
109 Procedures Public Notice to facilitate participation in Auction 109
will result in both operational and administrative cost savings for
small entities and other auction participants. In light of the numerous
resources that will be available from the Commission to small entities
and other auction participants at no cost, the processes and procedures
announced in the Auctions 109 Procedures Public Notice should minimize
any economic impact of the auction processes and procedures on small
entities and should result in both operational and administrative cost
savings for small entities and other auction participants. For example,
prior to the beginning of bidding in this auction, the Commission will
hold a mock auction to allow qualified bidders the opportunity to
familiarize themselves with both the processes and systems that will be
used in Auction 109. During the auction, participants will be able to
access and participate in bidding via the internet using a web-based
system, or telephonically, providing two cost-effective methods of
participation and avoiding the cost of travel for in-person
participation. Further, small entities as well as other auction
participants will be able to avail themselves of a telephone hotline
for assistance with auction processes and procedures as well as a
technical support telephone hotline to assist with issues such as
access to or navigation within the electronic FCC Form 175 and use of
the FCC's auction bidding system. In addition, all auction
participants, including small business entities, will have access to
various other sources of information and databases through the
Commission that will aid in both their understanding and participation
in the process. These mechanisms are made available to facilitate
participation by all qualified bidders and may result in significant
cost savings for small business entities that utilize these mechanisms.
These resources, coupled with the description and communication of the
bidding
[[Page 20311]]
procedures before bidding begins in Auction 109, should ensure that the
auction will be administered predictably, efficiently and fairly, thus
providing certainty for small entities as well as other auction
participants.
174. Notice to SBA. The Commission will send a copy of the Auctions
109 Procedures Public Notice, including the Supplemental FRFA, to the
Chief Counsel for Advocacy of the SBA.
Federal Communications Commission.
Erik Salovaara,
Assistant Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2021-08000 Filed 4-16-21; 8:45 am]
BILLING CODE 6712-01-P
