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

Citation87 FR 9250
Record Number2022-03348
Published date18 February 2022
SectionRules and Regulations
CourtFederal Communications Commission
Federal Register, Volume 87 Issue 34 (Friday, February 18, 2022)
[Federal Register Volume 87, Number 34 (Friday, February 18, 2022)]
                [Rules and Regulations]
                [Pages 9250-9270]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-03348]
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                FEDERAL COMMUNICATIONS COMMISSION
                47 CFR Parts 1 and 73
                [AU Docket No. 21-449; DA 22-125; FR ID 71977]
                Auction of Construction Permits for Full Power Television
                Stations; Notice and Filing Requirements, Minimum Opening Bids, Upfront
                Payments, and Other Procedures for Auction 112
                AGENCY: Federal Communications Commission.
                ACTION: Final action; requirements and procedures.
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                SUMMARY: This document summarizes the procedures, deadlines, and
                upfront payment and minimum opening bid amounts for the upcoming
                auction of construction permits for full power television (TV)
                stations. The Auction 112 Procedures Public Notice summarized here is
                intended to familiarize potential applicants with details of the
                procedures, terms, and conditions governing participation in Auction
                112, as well as an overview of the post-auction application and payment
                processes.
                DATES: Applications to participate in Auction 112 must be submitted
                before 6:00 p.m. Eastern Time (ET) on March 30, 2022. Upfront payments
                for Auction 112 must be received by 6:00 p.m. ET on May 6, 2022.
                Bidding in Auction 112 is scheduled to start on June 7, 2022.
                FOR FURTHER INFORMATION CONTACT:
                 General Auction 112 Information: FCC Auctions Hotline at 888-225-
                5322, option two; or 717-338-2868.
                 Auction 112 Legal Information: Mary Lovejoy or Andrew McArdell at
                (202) 418-0660.
                 Licensing Information: Shaun Maher at (202) 418-2324 or Kevin
                Harding at (202) 418-7077.
                SUPPLEMENTARY INFORMATION: This is a summary of the Federal
                Communication Commission's (Commission or FCC) document, Auction 112
                Procedures Public Notice, in AU Docket No. 21-449; DA 21-125, released
                on February 10, 2022. The complete text of this document, including
                attachments and any related documents, is available on the Commission's
                website at http://www.fcc.gov/auction/112 or by using the search
                function for 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
                A. Introduction
                 1. By the Auction 112 Procedures Public Notice, the Office of
                Economics and Analytics (OEA) and the Media Bureau (MB) establish the
                procedures and minimum opening bid amounts to be used for Auction 112,
                an auction of construction permits for full power television (TV)
                stations. Bidding in this auction is scheduled to start on June 7,
                2022. The Auction 112 Procedures Public Notice provides details
                regarding the procedures, terms, conditions, dates, and deadlines
                governing participation in Auction 112 bidding, as well as an overview
                of the post-auction application and payment processes.
                B. Background and Relevant Authority
                 2. On November 19, 2021, OEA and MB released a public notice
                seeking comment on competitive bidding procedures to be used in Auction
                112. One party filed comments in response to the Auction 112 Comment
                Public Notice, 86 FR 68203, December 1, 2021, and one party filed a
                reply. In the Auction 112 Procedures Public Notice, OEA and MB resolve
                all open issues raised in the Auction 112 Comment Public Notice.
                Auction 112 will proceed pursuant to the procedures described in the
                Auction 112 Procedures Public Notice, which have been adopted in
                accordance with 47 U.S.C. 309(j)(3).
                 3. Other Commission rules and decisions provide the underlying
                authority for the procedures OEA and MB adopt for Auction 112. Auction
                112 applicants must familiarize themselves thoroughly with the
                Commission's general competitive bidding rules, including Commission
                decisions in proceedings regarding competitive bidding procedures,
                application requirements, and obligations of Commission licensees.
                Prospective applicants should also familiarize themselves with the
                Commission's television broadcast service and
                [[Page 9251]]
                competitive bidding requirements contained in part 73 of the
                Commission's rules, as well as Commission orders concerning competitive
                bidding for broadcast construction permits. Applicants must also be
                thoroughly familiar with the procedures, terms and conditions contained
                in the Auction 112 Procedures Public Notice and any future public
                notices that may be released in this proceeding.
                 4. The terms contained in the Commission's rules, relevant orders,
                and public notices are not negotiable. The Commission may amend or
                supplement the information contained in its public notices at any time
                and will issue public notices to convey any new or supplemental
                information to applicants. Pursuant to the Commission's rules, OEA and
                MB also retain the authority to implement further procedures during the
                course of this auction. It is the responsibility of all applicants to
                remain current with all Commission rules and with all public notices
                pertaining to Auction 112.
                C. Construction Permits To Be Offered in Auction 112
                 5. Auction 112 will offer 27 construction permits for TV stations.
                The construction permits that will be available in Auction 112 are
                listed in Attachment A to the Auction 112 Procedures Public Notice.
                 6. The construction permits that will be available in Auction 112
                are for channel allotments contained in the Table of Television
                Allotments (TV Table) and assigned at the indicated communities for
                which there currently is not a licensee. Each construction permit
                awarded will be for one of the allotted-but-unlicensed channels
                currently contained in the TV Table.
                D. Auction Specifics
                1. Auction Title and Start Date
                 7. This auction of construction permits for TV stations will be
                referred to as ``Auction 112.'' Bidding in Auction 112 is scheduled to
                begin on Tuesday, June 7, 2022. Pre-auction dates and deadlines are
                listed below.
                 8. The initial schedule for bidding rounds will be announced by
                public notice at least one week before the bidding starts in Auction
                112. Unless otherwise announced, bidding on all construction permits
                will be conducted on each business day until bidding has stopped on all
                construction permits.
                2. Auction Dates and Deadlines
                 9. The following dates and deadlines apply to Auction 112:
                Auction Tutorial Available (via internet)......... No later than February 25, 2022.
                Short-Form Application (FCC Form 175) Filing March 17, 2022, 12:00 p.m. ET.
                 Window Opens.
                Short-Form Application (FCC Form 175) Filing March 30, 2022, 6:00 p.m. ET.
                 Window Deadline.
                Upfront Payments (via wire transfer).............. May 6, 2022, 6:00 p.m. ET.
                Mock Auction...................................... June 3, 2022.
                Bidding Begins in Auction 112..................... June 7, 2022.
                
                3. Requirements for Participation
                 10. Those wishing to participate in Auction 112 must:
                 Submit a short-form application (FCC Form 175)
                electronically prior to 6:00 p.m. ET on March 30, 2022, following the
                electronic filing procedures set forth in the FCC Form 175
                Instructions.
                 Submit a sufficient upfront payment and an FCC Remittance
                Advice Form (FCC Form 159) by 6:00 p.m. ET on May 6, 2022, following
                the procedures and instructions set forth in Attachment B to the
                Auction 112 Procedures Public Notice.
                 Comply with all provisions outlined in the Auction 112
                Procedures Public Notice and applicable Commission rules.
                II. Applying To Participate in Auction 112
                A. General Information Regarding Short-Form Applications
                 11. A short-form application, or FCC Form 175, provides information
                that the Commission uses to determine whether the applicant has the
                legal, technical, and/or financial qualifications to participate in a
                Commission auction for licenses or permits. The short-form application
                is the first part of the Commission's two-phased auction application
                process. In the first phase, a party seeking to participate in Auction
                112 must file a short-form application in which it certifies, under
                penalty of perjury, that it is qualified to participate. Eligibility to
                participate in Auction 112 is determined based on an applicant's short-
                form application and certifications and on the applicant's upfront
                payment. After bidding closes, in the second phase of the process, each
                winning bidder in Auction 112 must file a more comprehensive post-
                auction, long-form application FCC Form 2100, Schedule A, in the Media
                Bureau's Licensing and Management System (LMS) for the construction
                permits it wins in the auction.
                 12. A party seeking to participate in Auction 112 must file an FCC
                Form 175 electronically via the Auction Application System prior to
                6:00 p.m. ET on March 30, 2022, following the procedures prescribed in
                the FCC Form 175 Instructions. If an applicant claims eligibility for a
                bidding credit, then the information provided in its FCC Form 175 will
                be used to determine whether the applicant is eligible for the claimed
                bidding credit. Below OEA and MB describe more fully the information
                disclosures and certifications required in the short-form application.
                Each Auction 112 applicant will be subject to the Commission's rule
                prohibiting certain communications. An applicant is subject to the
                prohibition beginning at the deadline for filing short-form
                applications--6:00 p.m. ET on March 30, 2022.
                 13. An Auction 112 applicant bears full responsibility for
                submitting an accurate, complete, and timely short-form application.
                Pursuant to the Commission's competitive bidding rules, an applicant
                must make a series of certifications under penalty of perjury on its
                FCC Form 175 related to the information provided in its application and
                its participation in the auction, and an applicant must confirm that it
                is legally, technically, financially, and otherwise qualified to hold a
                permit. Additionally, each participant in Auction 112 must certify that
                it has read the Auction 112 Procedures Public Notice and familiarized
                itself both with the auction procedures and with the requirements for
                obtaining a construction permit for a television broadcast station. If
                an Auction 112 applicant fails to make the required certifications in
                its FCC Form 175 by the filing deadline, then its application will be
                deemed unacceptable for filing and cannot be corrected after the filing
                deadline.
                 14. An applicant should note that submitting an FCC Form 175 (and
                any amendments thereto) constitutes a representation by the certifying
                official that he or she is an authorized representative of the
                applicant with authority to bind the applicant, that he or she has read
                the form's instructions
                [[Page 9252]]
                and certifications, and that the contents of the application, its
                certifications, and any attachments are true and correct. Submitting a
                false certification to the Commission may result in penalties,
                including monetary forfeitures, license forfeitures, ineligibility to
                participate in future auctions, and/or criminal prosecution.
                 15. Applicants are cautioned that, because the required information
                submitted in FCC Form 175 bears on each applicant's qualifications,
                requests for confidential treatment will not be routinely granted. The
                Commission generally has held that it may publicly release confidential
                business information where the party has put that information at issue
                in a Commission proceeding or where the Commission has identified a
                compelling public interest in disclosing the information. In this
                regard, the Commission specifically has held that information submitted
                in support of receiving bidding credits in auction proceedings should
                be made available to the public.
                 16. No individual or entity may file more than one short-form
                application. If a party submits multiple short-form applications for an
                auction, then only one application may form the basis for that party to
                become qualified to bid in that auction.
                 17. Similarly, and consistent with the Commission's general
                prohibition on joint bidding agreements, a party generally is permitted
                to participate in a Commission auction only through a single bidding
                entity. Accordingly, the filing of applications in Auction 112 by
                multiple entities controlled by the same individual or set of
                individuals generally will not be permitted. Consistent with this
                requirement, a broadcaster interested in bidding on more than one
                construction permit cannot use two or more subsidiary entities to bid
                separately on construction permits in separate markets, regardless of
                whether each subsidiary were to select different construction permits
                on its short-form application. Likewise, if an entity, individual, or
                set of individuals hold controlling interests in multiple entities that
                are interested in participating in Auction 112, regardless of whether
                those entities have other, non-shared controlling or non-controlling
                interests, those entities must participate in the auction through a
                single bidding entity and only that bidding entity may file an auction
                application. In that regard, the bidding entity must disclose in its
                short-form application any joint ventures or other agreements or
                arrangements with any commonly controlled, non-applicant entities
                related to bidding in Auction 112. As noted by the Commission in
                adopting the prohibition on applications by commonly controlled
                entities, this rule, in conjunction with the prohibition against joint
                bidding agreements, protects the competitiveness of the Commission's
                auctions.
                 18. OEA and MB discuss below additional details regarding certain
                information required to be submitted in the FCC Form 175. An applicant
                should consult the Commission's rules to ensure that, in addition to
                the materials described below, all required information is included in
                its short-form application. To the extent the information in the
                Auction 112 Procedures Public Notice does not address an applicant's
                specific operating structure, or if the applicant needs additional
                information or guidance concerning the described disclosure
                requirements, the applicant should review the educational materials for
                Auction 112 (see the Education section of the Auction 112 website at
                www.fcc.gov/auction/112) and use the contact information provided in
                the Auction 112 Procedures Public Notice to consult with Commission
                staff to better understand the information that it must submit in its
                short-form application.
                B. Certification That Applicant Has Read the Procedures Public Notice
                and Familiarized Itself With Requirements
                 19. In the Auction 112 Comment Public Notice, OEA and MB sought
                comment on a proposal to require each participant in Auction 112 to
                certify in its short-form application, under penalty of perjury, that
                it has read the public notice adopting procedures for the auction and
                that it has familiarized itself both with the auction procedures and
                with the requirements for obtaining a construction permit for a TV
                station. As with other certifications required to be made in an auction
                application, a failure to make the certification would render the
                application unacceptable for filing, and the applicant will not be
                found qualified to bid. OEA and MB proposed this requirement to help
                ensure that each applicant has reviewed the procedures to become a
                qualified bidder and participate in the auction process and that it has
                investigated and assessed technical and business factors that may be
                relevant to its use of the licenses being offered. OEA and MB expressed
                the belief that this requirement would promote an applicant's
                successful participation and minimize its risk of defaulting on its
                auction obligations. No parties filed comments addressing this
                proposal, and OEA and MB adopt it in the Auction 112 Procedures Public
                Notice.
                 20. This certification is designed to bolster applicants' efforts
                to educate themselves about the procedures for auction participation
                and to ensure that, prior to submitting their short-form applications,
                applicants understand their obligation to stay abreast of relevant,
                forthcoming information. Familiarity with the Commission's rules and
                procedures governing Auction 112 may also help bidders avoid the
                consequences to them associated with defaults, which also cause harm to
                other applicants and the public by reducing the efficiency of the
                auction process and reducing the likelihood that the license will be
                assigned to the bidder that values it the most. This certification,
                along with the other certifications required pursuant to 47 CFR
                1.2105(a), will promote submission of applications that meet the
                Commission's requirements, thereby leading to a more efficient
                application process.
                 21. A substantively similar requirement was recently instituted for
                Auction 110, a Commission auction of flexible-use licenses in the 3.45-
                3.55 GHz band. That requirement furthered a long-standing policy under
                which the Commission expressly places a burden upon each applicant to
                be thoroughly familiar with the procedures, terms, and conditions
                contained in the relevant Procedures Public Notice and any future
                public notices that may be released in the auction proceeding. While
                the certification OEA and MB add refers to information regarding
                auction procedures and licensing that is available at the time of
                certification, potential auction applicants are on notice that their
                educational efforts must continue even after their short-form
                applications are filed. Commission staff routinely makes available
                detailed educational materials, such as interactive, online tutorials
                and technical guides, to enhance interested parties' comprehension of
                the pre-bidding and bidding processes and to help minimize the need for
                applicants to engage outside engineers, legal counsel, or other auction
                experts.
                 22. For these reasons, OEA and MB will require each Auction 112
                applicant to certify as follows in its short-form application: That the
                applicant has read the public notice adopting procedures for the
                auction and that it has familiarized itself both with the auction
                procedures and with the requirements for obtaining a construction
                permit for a television broadcast station.
                 23. An applicant must provide this certification under penalty of
                perjury, consistent with 47 CFR 1.2105(a).
                [[Page 9253]]
                C. Authorized Bidders
                 24. An applicant must designate at least one authorized bidder, and
                no more than three, in its FCC Form 175. The Commission's rules
                prohibit an individual from serving as an authorized bidder for more
                than one auction applicant or being listed as an authorized bidder in
                more than one FCC Form 175 application.
                D. Permit Selection
                 25. An applicant must select on its FCC Form 175 all of the
                construction permits on which it may want to bid. An applicant must
                carefully review and verify its construction permit selections before
                the FCC Form 175 filing deadline because permit selections cannot be
                changed after the initial auction application filing deadline. The FCC
                Auction Bidding System (bidding system) will not accept bids on
                construction permits that were not selected on the bidder's FCC Form
                175.
                E. Disclosure of Agreements and Bidding Arrangements
                 26. An applicant must provide in its FCC Form 175 a brief
                description of, and identify each party to, any partnerships, joint
                ventures, consortia or agreements, arrangements, or understandings of
                any kind relating to the TV construction permits being auctioned,
                including any agreements that address or communicate directly or
                indirectly bids (including specific prices), bidding strategies
                (including the specific licenses on which to bid or not to bid), or the
                post-auction market structure, to which the applicant, or any party
                that controls or is controlled by the applicant, is a party. In
                connection with the agreement disclosure requirement, the applicant
                must certify under penalty of perjury in its FCC Form 175 that it has
                described, and identified each party to, any such agreements,
                arrangements, or understandings to which it (or any party that controls
                it or that it controls) is a party. If, after the FCC Form 175 filing
                deadline, an auction applicant enters into any agreement relating to
                the licenses being auctioned, then it is subject to these same
                disclosure obligations. Each applicant must maintain the accuracy and
                completeness of the information in its pending auction application.
                 27. For purposes of making the required agreement disclosures on
                the FCC Form 175, if parties agree in principle on all material terms
                prior to the application filing deadline, then each party to the
                agreement that is submitting an auction application must provide a
                brief description of, and identify the other party or parties to, the
                agreement on its respective FCC Form 175, even if the agreement has not
                been reduced to writing. Parties that have not agreed in principle by
                the FCC Form 175 filing deadline should not describe, or include the
                names of parties to, the discussions on their applications.
                 28. The Commission's rules generally prohibit joint bidding and
                other arrangements involving auction applicants (including any party
                that controls or is controlled by such applicants). For purposes of the
                prohibition, a joint bidding arrangement includes any arrangement
                relating to the construction permits being auctioned that addresses or
                communicates, directly or indirectly, bidding at the auction, bidding
                strategies, including arrangements regarding price or the specific
                construction permits on which to bid, and any such arrangement relating
                to the post-auction market structure.
                 29. To implement the prohibition on joint bidding arrangements, the
                Commission's rules require each applicant to certify in its short-form
                application that it has disclosed any arrangements or understandings of
                any kind relating to the permits or licenses being auctioned to which
                it (or any party that controls or is controlled by it) is a party. The
                applicant must also certify that it (or any party that controls or is
                controlled by it) has not entered and will not enter into any
                arrangement or understanding of any kind relating directly or
                indirectly to bidding at auction with, among others, any other
                applicant.
                 30. Although the Commission's rules do not prohibit auction
                applicants from communicating about matters that are within the scope
                of an excepted agreement that has been disclosed in an FCC Form 175,
                the Commission reminds applicants that certain discussions or exchanges
                could nonetheless touch upon impermissible subject matters, and that
                compliance with the Commission's rules will not insulate a party from
                enforcement of the antitrust laws.
                 31. Applicants should bear in mind that a winning bidder will be
                required to disclose in its FCC Form 2100 post-auction application the
                specific terms, conditions, and parties involved in any agreement
                relating to the construction permits being auctioned into which it had
                entered prior to the time bidding was completed. This applies to any
                settlement agreement, joint venture, partnership, or other agreement,
                arrangement, or understanding of any kind entered into relating to the
                competitive bidding process, including any agreements relating to the
                construction permits being auctioned that address or communicate
                directly or indirectly bids (including specific prices), bidding
                strategies (including the specific construction permits on which to bid
                or not to bid), or the post-auction market structure, to which the
                applicant, or any party that controls or is controlled by the
                applicant, is a party.
                F. Ownership Disclosure Requirements
                 32. Each applicant must comply with the ownership disclosure
                requirements and provide information required by 47 CFR 1.2105 and
                1.2112. Specifically, in completing FCC Form 175, an applicant must
                fully disclose information regarding the real party or parties-in-
                interest in the applicant or application and the ownership structure of
                the applicant, including both direct and indirect ownership interests
                of 10% or more, as prescribed in 47 CFR 1.2105 and 1.2112. These
                interest holders may differ from the types of attributable interest
                holders that are required to be reported by broadcast applicants under
                part 73 of the rules in conjunction with licensing and assignment and
                transfer of facilities or reporting of ownership information, such as
                insulated interest holders and holders of non-voting stock/equity in
                the applicant. Each applicant is responsible for ensuring that
                information submitted in its short-form application is complete and
                accurate.
                 33. In certain circumstances, an applicant may have previously
                filed an FCC Form 602 ownership disclosure information report or filed
                an auction application for a previous auction in which ownership
                information was disclosed. The most current ownership information
                contained in any FCC Form 602 or previous auction application on file
                with the Commission that used the same FCC Registration Number (FRN)
                the applicant is using to submit its FCC Form 175 will automatically be
                pre-filled into certain ownership sections on the applicant's FCC Form
                175, if such information is in an electronic format compatible with FCC
                Form 175. Each applicant must carefully review any ownership
                information automatically entered into its FCC Form 175, including any
                ownership attachments, to confirm that all information supplied on FCC
                Form 175 is complete and accurate as of the application filing
                deadline. Any information that needs to be corrected or updated must be
                changed directly in FCC Form 175.
                G. Foreign Ownership Disclosure Requirements
                 34. The provisions in 47 U.S.C. 310 require the Commission to
                review
                [[Page 9254]]
                foreign investment in radio station licenses and imposes specific
                restrictions on who may hold certain types of radio licenses. In
                completing FCC Form 175, an applicant is required to disclose
                information concerning foreign ownership of the applicant. If an
                applicant has foreign ownership interests in excess of the applicable
                limit or benchmark set forth in 47 U.S.C. 310(b), then it may seek to
                participate in Auction 112 only if it has filed a petition for
                declaratory ruling with the Media Bureau prior to the FCC Form 175
                filing deadline. An applicant must certify in its FCC Form 175 that, as
                of the deadline for filing its application to participate in the
                auction, the applicant either is in compliance with the foreign
                ownership provisions of 47 U.S.C. 310 or has filed a petition for
                declaratory ruling requesting Commission approval to exceed the
                applicable foreign ownership limit or benchmark in 47 U.S.C. 310(b)
                that is pending before, or has been granted by, the Commission.
                H. Information Procedures During the Auction Process
                 35. Consistent with past practice in most recent Commission
                spectrum auctions, OEA and MB adopt the proposal to limit information
                available in Auction 112 in order to discourage unproductive and
                anticompetitive strategic behavior. Accordingly, OEA and MB will not
                identify bidders placing particular bids until after the bidding has
                closed. While OEA and MB generally make available to the public
                information provided in each applicant's FCC Form 175 following an
                initial review by Commission staff, they will not make public until
                after bidding has closed: (1) The construction permits that an
                applicant selects for bidding in its short-form application, (2) the
                amount of any upfront payment made by or on behalf of an applicant, (3)
                any applicant's bidding eligibility, and (4) any other bidding-related
                information that might reveal the identity of the bidder placing a bid.
                 36. The limited information procedures used in past auctions have
                helped safeguard against potential anticompetitive behavior such as
                retaliatory bidding and collusion. No commenters objected to this
                proposal, and OEA and MB find nothing in the record to suggest that
                they should not use those procedures for Auction 112. The competitive
                benefits associated with limiting information disclosure support
                adoption of such procedures and outweigh the potential benefits of full
                disclosure.
                 37. After the close of each round of bidding in Auction 112, under
                the limited information procedures (sometimes also referred to as
                anonymous bidding), for each permit OEA and MB will make public its
                current provisionally winning bid amount, the minimum acceptable bid
                amount for the following round, and the amounts of all bids placed on
                the permit during the round. These reports will be publicly accessible.
                 38. Throughout the auction, OEA and MB will provide bidders with
                secure access to certain non-public bidding information while bidding
                is ongoing. For example, bidders will be able to view their own level
                of eligibility, both before and during the auction.
                 39. After the close of bidding, bidders' permit selections, upfront
                payment amounts, bidding eligibility, bids, and other bidding-related
                information will be made publicly available.
                 40. OEA and MB warn applicants that direct or indirect
                communication to other applicants or the public disclosure of non-
                public information (e.g., reductions in eligibility, identities of
                bidders) could violate the Commission's rule prohibiting certain
                communications. Therefore, to the extent an applicant believes that
                such a disclosure is required by law or regulation, including
                regulations issued by the U.S. Securities and Exchange Commission
                (SEC), OEA and MB strongly urge that the applicant consult with
                Commission staff in the Auctions Division before making such
                disclosure.
                I. Prohibited Communications and Compliance With Antitrust Laws
                 41. The rules prohibiting certain communications set forth in 47
                CFR 1.2105(c) and 73.5002(d) and (e) apply to each ``applicant'' in
                Auction 112. The provisions in 47 CFR 1.2105(c)(1) provide that,
                subject to specified exceptions, after the deadline for filing a short-
                form application, all applicants are prohibited from cooperating or
                collaborating with respect to, communicating with or disclosing, to
                each other in any manner the substance of their own, or each other's,
                or any other applicant's bids or bidding strategies (including post-
                auction market structure), or discussing or negotiating settlement
                agreements, until after the down payment deadline.
                1. Entities Subject to Section 1.2105(c)
                 42. An ``applicant'' for purposes of this rule includes the
                officers and directors of the applicant, all ``controlling interests''
                in the entity submitting the FCC Form 175, as well as all holders of
                interests amounting to 10% or more of that entity. A party that submits
                an application becomes an ``applicant'' under the rule at the short-
                form application filing deadline, and that status does not change based
                on later developments, including failure to become a qualified bidder.
                Thus, an auction applicant that does not correct deficiencies in its
                application, fails to submit a timely and sufficient upfront payment,
                or does not otherwise become qualified, remains an ``applicant'' for
                purposes of the rule and remains subject to the prohibition on certain
                communications until the applicable down payment deadline.
                2. Prohibition Applies Until Down Payment Deadline
                 43. The prohibition in 47 CFR 1.2105(c) on certain communications
                begins at an auction's short-form application filing deadline and ends
                at the auction's down payment deadline after the auction closes, which
                will be announced in a future public notice.
                3. Scope of Prohibition on Certain Communications; Prohibition on Joint
                Bidding Agreements
                 44. The provisions in 47 CFR 1.2105(c) prohibit certain
                communications between auction applicants, regardless of whether the
                applicants seek permits in the same geographic area or market. The rule
                also prohibits any ``joint bidding arrangement,'' including
                arrangements relating to the permits being auctioned that address or
                communicate, directly or indirectly, bidding at the auction, bidding
                strategies, including arrangements regarding price or the specific
                permits on which to bid, and any such arrangements relating to the
                post-auction market structure. The rule allows for limited exceptions
                for communications within the scope of any arrangement consistent with
                the exclusion from the Commission's rule prohibiting joint bidding,
                provided such arrangement is disclosed on the applicant's short-form
                application. An applicant may communicate pursuant to any pre-existing
                agreements, arrangements, or understandings relating to the licenses
                being auctioned that are solely operational or that provide for the
                transfer or assignment of licenses, provided that such agreements,
                arrangements, or understandings are disclosed on its application and do
                not both relate to the permits at auction and address or communicate
                bids (including amounts), bidding strategies, or the particular permits
                or licenses on which to bid or the post-auction market structure.
                 45. In addition to express statements of bids and bidding
                strategies, the prohibition against communicating ``in
                [[Page 9255]]
                any manner'' includes public disclosures as well as private
                communications and indirect or implicit communications. Consequently,
                an applicant must take care to determine whether its auction-related
                communications may reach another applicant. Applicants are reminded
                that the prohibition on communications between applicants begins at the
                deadline for submitting short-form applications and before the public
                notice identifying applicants is released. Special care should be taken
                with regard to any public disclosures or private communications
                regarding bids or bidding strategies during the period following the
                short-form application deadline when the identity of other applicants
                is not known.
                 46. Parties subject to 47 CFR 1.2105(c) should take special care in
                circumstances where their officers, directors, and employees may
                receive information directly or indirectly relating to any applicant's
                bids or bidding strategies. Such information may be deemed to have been
                received by the applicant under certain circumstances. For example,
                Commission staff have determined that, where an individual serves as an
                officer or director for two or more applicants, the bids and bidding
                strategies of one applicant are presumed to be conveyed to the other
                applicant through the shared officer or director, which creates an
                apparent violation of the rule
                 47. Subject to the limited exceptions for communications within the
                scope of any arrangement consistent with the exclusion from the
                Commission's rule prohibiting joint bidding, 47 CFR 1.2105(c)(1)
                prohibits applicants from communicating with specified other parties
                only with respect to ``their own, or each other's, or any other
                applicant's bids or bidding strategies . . . .'' The Prohibited
                Communications Guidance Public Notice, 80 FR 63215, October 19, 2015,
                released in advance of the broadcast incentive auction (Auction 1000)
                reviewed the scope of the prohibition generally, as well as specific
                variations on the prohibition that were unique to Auction 1000. As the
                Commission explained therein, a communication conveying ``bids or
                bidding strategies (including post-auction market structure)'' must
                also relate to the ``licenses being auctioned'' in order to be covered
                by the prohibition. Thus, the prohibition is limited in scope and does
                not apply to all communications between or among the specified parties.
                The Commission consistently has made clear that application of the rule
                prohibiting communications has never required total suspension of
                essential ongoing business. Entities subject to the prohibition may
                negotiate agreements during the prohibition period, provided that the
                communications involved do not relate to both: (1) The licenses or
                permits being auctioned and (2) bids or bidding strategies or post-
                auction market structure.
                 48. Accordingly, business discussions and negotiations that are
                unrelated to bidding in Auction 112 and that do not convey information
                about the bids or bidding strategies of an applicant, including the
                post-auction market structure, are not prohibited by the rule.
                Moreover, not all auction-related information is covered by the
                prohibition. For example, communicating merely whether a party has or
                has not applied to participate in Auction 112 will not violate the
                rule. In contrast, communicating, among other things, how a party will
                participate, including whether or not a party plans to submit an
                upfront payment and the upfront payment amount, specific bid amounts,
                and/or whether or not the party is placing or intends to place bids,
                would convey bids or bidding strategies and would be prohibited.
                 49. While 47 CFR 1.2105(c) does not prohibit business discussions
                and negotiations among auction applicants that are unrelated to the
                auction, each applicant must remain vigilant not to communicate,
                directly or indirectly, information that affects, or could affect, bids
                or bidding strategies. Certain discussions might touch upon subject
                matters that could convey price or geographic information related to
                bidding strategies. Such subject areas include, but are not limited to,
                management, sales, local marketing agreements, and other transactional
                agreements.
                 50. OEA and MB caution applicants that bids or bidding strategies
                may be communicated outside of situations that involve one party
                subject to the prohibition communicating privately and directly with
                another such party. For example, the Commission has warned that
                prohibited communications concerning bids and bidding strategies may
                include communications regarding capital calls or requests for
                additional funds in support of bids or bidding strategies to the extent
                such communications convey information concerning the bids and bidding
                strategies directly or indirectly. Moreover, the Commission found a
                violation of the rule against prohibited communications when an
                applicant used the Commission's bidding system to disclose its bidding
                strategy in a manner that explicitly invited other auction participants
                to cooperate and collaborate . . . in specific markets, and it has
                placed auction participants on notice that the use of its bidding
                system to disclose market information to competitors will not be
                tolerated and will subject bidders to sanctions.
                 51. Likewise, when completing a short-form application, each
                applicant should avoid any statements or disclosures that may violate
                47 CFR 1.2105(c), particularly in light of the limited information
                procedures in effect for Auction 112. Specifically, an applicant should
                avoid including any information in its short-form application that
                might convey information regarding its permit selections, such as
                referring to certain markets in describing agreements, including any
                information in application attachments that will be publicly available
                that may otherwise disclose the applicant's permit selections, or using
                applicant names that refer to permits being offered.
                 52. Applicants also should be mindful that communicating non-public
                application or bidding information publicly or privately to another
                applicant may violate 47 CFR 1.2105(c) even though that information
                subsequently may be made public during later periods of the application
                or bidding processes.
                4. Communicating With Third Parties
                 53. The provisions in 47 CFR 1.2105(c) do not prohibit an applicant
                from communicating bids or bidding strategies to a third party, such as
                a consultant or consulting firm, counsel, or lender. The applicant
                should take appropriate steps, however, to ensure that any third party
                it employs for advice pertaining to its bids or bidding strategies does
                not become a conduit for prohibited communications to other specified
                parties, as that would violate the rule. For example, an applicant
                might require a third party, such as a lender, to sign a non-disclosure
                agreement before the applicant communicates any information regarding
                bids or bidding strategy to the third party. Within third-party firms,
                separate individual employees, such as attorneys or auction
                consultants, may advise individual applicants on bids or bidding
                strategies, as long as such firms implement firewalls and other
                compliance procedures that prevent such individuals from communicating
                the bids or bidding strategies of one applicant to other individuals
                representing separate applicants. Although firewalls and/or other
                procedures should be used, their existence is not an absolute defense
                to
                [[Page 9256]]
                liability if a violation of the rule has occurred.
                 54. As the Commission has noted in other broadcast auctions, in the
                case of an individual, the objective precautionary measure of a
                firewall is not available. As a result, an individual that is privy to
                bids or bidding information of more than one applicant presents a
                greater risk of becoming a conduit for a prohibited communication. OEA
                and MB emphasize that whether a prohibited communication has taken
                place in a given case will depend on all the facts pertaining to the
                case, including who possessed what information, what information was
                conveyed to whom, and the course of bidding in the auction.
                 55. OEA and MB remind potential applicants that they may discuss
                the short-form application or bids for specific permits with the
                counsel, consultant, or expert of their choice before the short-form
                application deadline. Furthermore, the same third-party individual
                could continue to give advice to multiple applicants regarding their
                applications after the short-form application deadline, provided that
                no information pertaining to bids or bidding strategies is conveyed to
                that individual from any of the applicants the individual advises. OEA
                and MB remind potential applicants, however, that no person may serve
                as an authorized bidder for more than one applicant in Auction 112.
                 56. Applicants also should use caution in their dealings with other
                parties, such as members of the press, financial analysts, or others
                who might become conduits for the communication of prohibited bidding
                information. For example, even though communicating that it has applied
                to participate in this auction will not violate the rule, an
                applicant's statement to the press or a statement on social media that
                it intends to stop bidding or does not intend to bid at all in an
                auction could give rise to a finding of a 47 CFR 1.2105 violation.
                Similarly, an FCC Form 175 applicant's public statement of intent not
                to place bids during bidding in Auction 112 could also violate the
                rule.
                5. Section 1.2105(c) Certifications
                 57. By electronically submitting its FCC Form 175, each applicant
                in Auction 112 certifies its compliance with 47 CFR 1.2105(c) and
                73.5002(d) of the rules. If an applicant has a non-controlling interest
                with respect to more than one application, then the applicant must
                certify that it has established internal control procedures to preclude
                any person acting on behalf of the applicant from possessing
                information about the bids or bidding strategies of more than one
                applicant or communicating such information with respect to either
                applicant to another person acting on behalf of and possessing such
                information regarding another applicant. The mere filing of a
                certifying statement as part of an application, however, will not
                outweigh specific evidence that a prohibited communication has
                occurred, nor will it preclude the initiation of an investigation when
                warranted. Any applicant found to have violated these communication
                prohibitions may be subject to sanctions.
                6. Duty To Report Prohibited Communications
                 58. The provision in 47 CFR 1.2105(c)(4) requires that any
                applicant that makes or receives a communication that appears to
                violate 47 CFR 1.2105(c) must report such communication in writing to
                the Commission immediately, and in no case later than five business
                days after the communication occurs. Each applicant's obligation to
                report any such communication continues beyond the five-day period
                after the communication is made, even if the report is not made within
                the five-day period.
                7. Procedures for Reporting Prohibited Communications
                 59. A party reporting any information or communication pursuant to
                47 CFR 1.65 or 1.2105(a)(2) or (c)(4) must take care to ensure that any
                report of a prohibited communication does not itself give rise to a
                violation of 47 CFR 1.2105(c). For example, reporting a prohibited
                communication through ECFS or another Commission filing system that
                allows public access to filed materials could violate the rule by
                communicating prohibited information to other parties covered by the
                rule.
                 60. An applicant must file only a single report concerning a
                prohibited communication and must file that report with the Commission
                personnel expressly charged with administering the Commission's
                auctions. This rule is designed to minimize the risk of inadvertent
                dissemination of information in such reports. Any reports required by
                47 CFR 1.2105(c) must be filed consistent with the instructions set
                forth in the Auction 112 Procedures Public Notice. For Auction 112,
                such reports must be filed with the Chief of the Auctions Division,
                OEA, by the most expeditious means available. Any such report should be
                submitted by email to the Auctions Division Chief at the following
                email address: [email protected]. If you choose instead to submit a
                report in hard copy, contact Auctions Division staff at
                [email protected] or (202) 418-0660 for guidance prior to making any
                filing.
                 61. Given the potential competitive sensitivity of information in
                such a report, a party seeking to report a prohibited communication
                should consider submitting its report with a request that the report or
                portions of the submission be withheld from public inspection by
                following the procedures specified in 47 CFR 0.459. OEA and MB
                encourage such parties to coordinate with the Auctions Division staff
                about the procedures for submitting reports of prohibited
                communications.
                8. Winning Bidders Must Disclose Terms of Agreements
                 62. Each applicant that is a winning bidder will be required to
                provide, as part of its long-form application, any agreement or
                arrangement relating to the competitive bidding process that it has
                entered into and a summary of the specific terms, conditions, and
                parties involved in that agreement. This applies to any settlement
                agreement, bidding consortia, joint venture, partnership, or agreement,
                understanding, or other arrangement entered into relating to the
                competitive bidding process, including any agreement relating to the
                post-auction market structure. Failure to comply with the Commission's
                rules can result in enforcement action.
                9. Additional Information Concerning Rule Prohibiting Certain
                Communications in Commission Auctions
                 63. A summary listing of documents issued by the Commission and OEA
                addressing the application of 47 CFR 1.2105(c) is available on the
                Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications.
                10. Antitrust Laws
                 64. Regardless of compliance with the Commission's rules,
                applicants remain subject to the antitrust laws, which are designed to
                prevent anticompetitive behavior in the marketplace. Compliance with
                the disclosure requirements of 47 CFR 1.2105(c)(4) will not insulate a
                party from enforcement of the antitrust laws. For instance, a violation
                of the antitrust laws could arise out of actions taking place well
                before any party submits a short-form application. The Commission has
                cited a number of examples of potentially anticompetitive actions that
                would be prohibited under antitrust laws: for example, actual or
                potential competitors
                [[Page 9257]]
                may not agree to divide territories in order to minimize competition,
                regardless of whether they split a market in which they both do
                business, or whether they merely reserve one market for one and another
                market for the other.
                 65. To the extent the Commission becomes aware of specific
                allegations that suggest that violations of the federal antitrust laws
                may have occurred, the Commission may refer such allegations to the
                United States Department of Justice for investigation. If an applicant
                is found to have violated the antitrust laws or the Commission's rules
                in connection with its participation in the competitive bidding
                process, then it may be subject to a forfeiture and may be prohibited
                from participating further in Auction 112 and in future auctions, among
                other sanctions.
                J. New Entrant Bidding Credit
                 66. To promote the objectives of 47 U.S.C. 309(j) and further its
                long-standing commitment to the diversification of broadcast facility
                ownership, the Commission provides a tiered new entrant bidding credit
                for broadcast auction applicants with no, or very few, other media
                interests.
                 67. Applicants that qualify for the new entrant bidding credit are
                eligible for a bidding credit in this auction that represents the
                amount by which a bidder's winning bid is discounted. Eligibility for
                the new entrant bidding credit must be specified in an applicant's
                short-form application, which establishes that applicant's maximum
                bidding credit eligibility for Auction 112. The size of a new entrant
                bidding credit depends on the number of ownership interests in other
                media of mass communications that are attributable to the bidder-entity
                and its attributable interest-holders:
                 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.
                 68. Bidding credits are not cumulative; qualifying applicants
                receive either the 25% or the 35% bidding credit, but not both.
                 69. The interests of the applicant, and of any individuals or
                entities with an attributable interest in the applicant, in other media
                of mass communications are considered when determining an applicant's
                eligibility for the new entrant bidding credit. Attributable interests
                are defined in 47 CFR 73.3555 and note 2 of that section. In Auction
                112, the bidder's attributable interests, and thus, its maximum new
                entrant bidding credit eligibility, are determined as of the short-form
                application filing deadline. An applicant intending to divest a media
                interest or make any other ownership change, such as resignation of
                positional interests (officer or director) in order to avoid
                attribution for purposes of qualifying for the new entrant bidding
                credit, must have consummated such divestment transactions, or have
                completed such ownership changes, by no later than the FCC Form 175
                filing deadline. Each prospective bidder is reminded, however, that
                events occurring after the short-form application filing deadline, such
                as the acquisition of attributable interests in media of mass
                communications, may cause diminishment or loss of the bidding credit
                and, must be reported immediately. OEA and MB remind each applicant of
                its duty to continuously maintain the accuracy of information submitted
                in its auction application.
                 70. Under broadcast attribution rules, those entities or
                individuals with an attributable interest in a bidder include:
                 All officers and directors of a corporate bidder;
                 any owner of 5% or more of the voting stock of a corporate
                bidder;
                 all general partners and limited partners of a partnership
                bidder, unless the limited partners are sufficiently insulated; and
                 all members of a limited liability company, unless
                sufficiently insulated.
                 71. In cases where an applicant's spouse or close family member
                holds other media interests, such interests are not automatically
                attributable to the bidder. The Commission decides attribution issues
                in this context based on certain factors traditionally considered
                relevant.
                 72. In the New Entrant Bidding Credit Reconsideration Order, 64 FR
                44856, August 18, 1999, the Commission further refined the eligibility
                standards for the new entrant bidding credit, judging it appropriate to
                attribute the media interests held by very substantial investors in, or
                creditors of, an applicant claiming new entrant status. Specifically,
                the attributable mass media interests held by an individual or entity
                with an equity and/or debt interest in an applicant shall be attributed
                to that bidder for purposes of determining its eligibility for the new
                entrant bidding credit, if the equity and debt interests, in the
                aggregate, exceed 33% of the total asset value of the applicant, even
                if such an interest is non-voting.
                 73. In the Diversity Order, 76 FR 7719, February 11, 2011, the
                Commission relaxed the equity/debt plus attribution standard, to allow
                for higher investment opportunities in entities meeting the definition
                of ``eligible entities.'' An ``eligible entity'' is defined in Note
                2(i) of 47 CFR 73.3555. Pursuant to the Diversity Order, the Commission
                will allow the holder of an equity or debt interest in the applicant to
                exceed the above-noted 33% threshold without triggering attribution
                provided (1) the combined equity and debt in the ``eligible entity'' is
                less than 50%; or (2) the total debt in the ``eligible entity'' does
                not exceed 80% of the asset value, and the interest holder does not
                hold any equity interest, option, or promise to acquire an equity
                interest in the ``eligible entity'' or any related entity.
                 74. Generally, media interests will be attributable for purposes of
                the new entrant bidding credit to the same extent that such other media
                interests are considered attributable for purposes of the broadcast
                multiple ownership rules. Attributable interests held by a winning
                bidder in existing low power television, television translator, or FM
                translator facilities, however, will not be counted among the
                applicant's other mass media interests in determining its eligibility
                for a new entrant bidding credit. A medium of mass communications is
                defined in 47 CFR 73.5008(b). Full service noncommercial educational
                stations, on both reserved and non-reserved channels, are included
                among ``media of mass communications'' as defined in 47 CFR 73.5008(b).
                1. Application Requirements
                 75. In addition to the ownership information required pursuant to
                47 CFR 1.2105 and 1.2112, applicants seeking a new entrant bidding
                credit are required to establish on their short-form applications that
                they satisfy the eligibility requirements to qualify for the bidding
                credit. In those cases, a certification under penalty of perjury must
                be provided in completing the short-form application. An applicant
                claiming that it qualifies for a 35% new entrant bidding credit must
                certify that
                [[Page 9258]]
                neither it nor any of its attributable interest holders has any
                attributable interests in any other media of mass communications. An
                applicant claiming that it qualifies for a 25% new entrant bidding
                credit must certify that neither it nor any of its attributable
                interest holders has any attributable interests in more than three
                media of mass communications, and must identify and describe such media
                of mass communications.
                2. Unjust Enrichment
                 76. Applicants should note that unjust enrichment provisions apply
                to a winning bidder that utilizes a bidding credit and subsequently
                seeks to assign or transfer control of its license or construction
                permit to an entity not qualifying for the same level of bidding
                credit.
                K. Provisions Regarding Former and Current Defaulters
                 77. Pursuant to the rules governing competitive bidding, each
                applicant must make certifications regarding whether it is a current or
                former defaulter or delinquent. A current defaulter or delinquent is
                not eligible to participate in Auction 112, but a former defaulter or
                delinquent may participate so long as it is otherwise qualified and
                makes an upfront payment that is 50% more than would otherwise be
                necessary. Accordingly, each applicant must certify under penalty of
                perjury on its FCC Form 175 that it, its affiliates, its controlling
                interests, and the affiliates of its controlling interests are not in
                default on any payment for a Commission construction permit or license
                (including down payments) and that it is not delinquent on any non-tax
                debt owed to any Federal agency. Additionally, an applicant must
                certify under penalty of perjury whether it (along with its controlling
                interests) has ever been in default on any payment for a Commission
                construction permit or license (including down payments) or has ever
                been delinquent on any non-tax debt owed to any Federal agency, subject
                to the exclusions described below. For purposes of making these
                certifications, the term ``controlling interest'' is defined in 47 CFR
                1.2105(a)(4)(i).
                 78. Under the Commission's rule regarding applications by former
                defaulters, an applicant is considered a ``former defaulter'' or a
                ``former delinquent'' when, as of the FCC Form 175 deadline, the
                applicant or any of its controlling interests has defaulted on any
                Commission construction permit or license or has been delinquent on any
                non-tax debt owed to any Federal agency, but has since remedied all
                such defaults and cured all of the outstanding non-tax delinquencies.
                For purposes of the certification under 47 CFR 1.2105(a)(2)(xii), the
                applicant may exclude from consideration any cured default on a
                Commission construction permit or license or cured delinquency on a
                non-tax debt owed to a Federal agency for which any of the following
                criteria are met: (1) The notice of the final payment deadline or
                delinquency was received more than seven years before the FCC Form 175
                filing deadline, (2) the default or delinquency amounted to less than
                $100,000, (3) the default or delinquency was paid within two quarters
                (i.e., six months) after receiving the notice of the final payment
                deadline or delinquency, or (4) the default or delinquency was the
                subject of a legal or arbitration proceeding and was cured upon
                resolution of the proceeding. With respect to the first exclusion,
                notice to a debtor may include notice of a final payment deadline or
                notice of delinquency and may be express or implied depending on the
                origin of any Federal non-tax debt giving rise to a default or
                delinquency. Additionally, for the third exclusion, the date of receipt
                of the notice of a final default deadline or delinquency by the
                intended party or debtor will be used for purposes of verifying receipt
                of notice.
                 79. In addition to the Auction 112 Procedures Public Notice, OEA
                and MB encourage applicants to review previous guidance on default and
                delinquency disclosure requirements in the context of the auction
                short-form application process. Parties are also encouraged to consult
                with Auctions Division staff if they have any questions about default
                and delinquency disclosure requirements.
                 80. The Commission considers outstanding debts owed to the United
                States Government, in any amount, to be a serious matter. The
                Commission adopted rules, including a provision referred to as the
                ``red light rule,'' that implement its obligations under the Debt
                Collection Improvement Act of 1996, which governs the collection of
                debts owed to the United States. Under the red-light rule, applications
                and other requests for benefits filed by parties that have outstanding
                debts owed to the Commission will not be processed. When adopting that
                rule, the Commission explicitly declared, however, that its competitive
                bidding rules ``are not affected'' by the red-light rule. As a
                consequence, the Commission's adoption of the red-light rule does not
                alter the applicability of any of its competitive bidding rules,
                including the provisions and certifications of 47 CFR 1.2105 and
                1.2106, with regard to current and former defaults or delinquencies.
                 81. OEA and MB remind each applicant, however, that the
                Commission's Red Light Display System, which provides information
                regarding debts currently owed to the Commission, may not be
                determinative of an auction applicant's ability to comply with the
                default and delinquency disclosure requirements of 47 CFR 1.2105. Thus,
                while the red-light rule ultimately may prevent the processing of long-
                form applications by auction winners, an auction applicant's lack of
                current ``red light'' status is not necessarily determinative of its
                eligibility to participate in an auction (or whether it may be subject
                to an increased upfront payment obligation). Moreover, a prospective
                applicant in Auction 112 should note that any long-form applications
                filed after the close of bidding will be reviewed for compliance with
                the Commission's red-light rule, and such review may result in the
                dismissal of a winning bidder's long-form application. OEA and MB
                encourage each applicant to carefully review all records and other
                available Federal agency databases and information sources to determine
                whether the applicant, or any of its affiliates, or any of its
                controlling interests, or any of the affiliates of its controlling
                interests, currently owes or was ever delinquent in the payment of non-
                tax debt owed to any Federal agency.
                L. Optional Applicant Status Identification
                 82. An applicant owned by members of minority groups and/or women,
                as defined in 47 CFR 1.2110(c)(3), or that is a rural telephone
                company, as defined in 47 CFR 1.2110(c)(4), may identify itself as such
                in filling out its FCC Form 175. This applicant status information is
                collected for statistical purposes only and assists the Commission in
                monitoring the participation of various groups in its auctions.
                M. Noncommercial Educational Status Election
                 83. In the NCE Second Report and Order, 68 FR 26220, May 15, 2003,
                the Commission held that applications for noncommercial educational
                (NCE) broadcast stations on non-reserved spectrum, filed during an
                auction filing window, will be returned as unacceptable for filing if
                mutually exclusive with any application for a commercial station.
                Accordingly, if an FCC Form 175 filed during the Auction
                [[Page 9259]]
                112 filing window identifying the application's proposed station as
                noncommercial educational is mutually exclusive with any application
                filed during that window for a commercial station, the NCE application
                will be returned as unacceptable for filing and the applicant will not
                be provided with any further opportunity to become eligible to bid in
                this auction. For this reason, each prospective applicant in this
                auction should consider carefully whether it wishes to propose NCE
                operation for any television broadcast station acquired in this
                auction. This NCE election cannot be reversed after the initial
                application filing deadline.
                N. Modifications to FCC Form 175
                1. Only Minor Modifications Allowed
                 84. After the initial short-form application filing deadline, an
                Auction 112 applicant will be permitted to make only minor changes to
                its FCC Form 175. Examples of minor changes include the deletion or
                addition of authorized bidders (to a maximum of three) and the revision
                of addresses and telephone numbers of the applicant, its responsible
                party, and its contact person. Major modifications to an FCC Form 175
                (e.g., change of construction permit selection, certain changes in
                ownership that would constitute an assignment or transfer of control of
                the applicant, change in the required certifications, change in
                applicant's legal classification that results in a change in control,
                or change in claimed eligibility for a higher percentage of bidding
                credit) will not be permitted after the FCC Form 175 filing deadline.
                If an amendment reporting changes is a ``major amendment,'' as
                described in 47 CFR 1.2105(b)(2), the major amendment will not be
                accepted and may result in the dismissal of the application. Questions
                about FCC Form 175 amendments should be directed to the Auctions
                Division at (202) 418-0660.
                2. Duty to Maintain Accuracy and Completeness of FCC Form 175
                 85. Pursuant to 47 CFR 1.65, each applicant has a continuing
                obligation to maintain the accuracy and completeness of information
                furnished in a pending application, including a pending application to
                participate in Auction 112. Consistent with the requirements for
                spectrum auctions, an applicant for Auction 112 must furnish additional
                or corrected information to the Commission within five business days
                after a significant occurrence, or amend its FCC Form 175 no more than
                five business days after the applicant becomes aware of the need for
                the amendment. In accordance with the Commission's rules, an
                applicant's obligation to make modifications to a pending auction
                application in order to provide additional or corrected information
                continues beyond the five-day period, even if the report is not made
                within the five-day period. An applicant is obligated to amend its
                pending application even if a reported change may result in the
                dismissal of the application because it is subsequently determined to
                be a major modification.
                3. Modifying an FCC Form 175
                 86. As noted above, a party seeking to participate in Auction 112
                must file an FCC Form 175 electronically via the FCC's Auction
                Application System. During the short-form application filing window, an
                applicant will be able to make any necessary modifications to its FCC
                Form 175 in the Auction Application System. An applicant that has
                certified and submitted its FCC Form 175 before the short-form
                application filing deadline may continue to make modifications as often
                as necessary until the filing deadline; however, the applicant must re-
                certify and re-submit its FCC Form 175 before the filing deadline in
                order to confirm and effect any application changes. After each
                submission, a confirmation page will be displayed stating the
                submission time and submission date.
                 87. An applicant will also be allowed to modify its FCC Form 175 in
                the Auction Application System, except for certain fields, during the
                resubmission filing window and after the release of the public notice
                announcing the qualified bidders for an auction. During these times, if
                an applicant needs to make permissible minor changes to its FCC Form
                175 or must make changes in order to maintain the accuracy and
                completeness of its application pursuant to 47 CFR 1.65 and
                1.2105(b)(4), then it must make the change(s) in the Auction
                Application System and re-certify and re-submit its application to
                confirm and effect the change(s).
                 88. An applicant's ability to modify its FCC Form 175 in the
                Auction Application System will be limited between the closing of the
                initial filing window and the opening of the application resubmission
                filing window, and between the closing of the resubmission filing
                window and the release of the public notice announcing the qualified
                bidders for an auction. During these periods, an applicant will be able
                to view its submitted application, but will be permitted to modify only
                the applicant's address, responsible party address, and contact
                information (e.g., name, address, telephone number, etc.) in the
                Auction Application System. An applicant will not be able to modify any
                other pages of the FCC Form 175 in the Auction Application System
                during these periods. If, during these periods, an applicant needs to
                make other permissible minor changes to its FCC Form 175, or changes to
                maintain the accuracy and completeness of its application pursuant to
                47 CFR 1.65 and 1.2105(b)(4), then the applicant must submit a letter
                briefly summarizing the changes to its FCC Form 175 via email to
                [email protected]. The email summarizing the changes must include a
                subject line referring to Auction 112 and the name of the applicant,
                for example, ``Re: Changes to Auction 112 Auction Application of XYZ
                Corp.'' Any attachments to the email must be formatted as Adobe[supreg]
                Acrobat[supreg] (PDF) or Microsoft[supreg] Word documents. An applicant
                that submits its changes in this manner must subsequently modify,
                certify, and submit its FCC Form 175 application(s) electronically in
                the Auction Application System once it is again open and available to
                applicants.
                 89. Applicants should also note that even at times when the Auction
                Application System is open and available to applicants, the system will
                not allow an applicant to make certain other permissible changes itself
                (e.g., correcting a misstatement of the applicant's legal
                classification, name, or certifying official). If an applicant needs to
                make a permissible minor change of this nature, then it must submit a
                written request by email to the Auctions Division Chief, via
                [email protected] requesting that the Commission manually make the
                change on the applicant's behalf. Once Commission staff has informed
                the applicant that the change has been made in the Auction Application
                System, the applicant must then re-certify and re-submit its FCC Form
                175 in the Auction Application System to confirm and effect the
                change(s).
                 90. As with filing the FCC Form 175, any amendment(s) to the
                application and related statements of fact must be certified by an
                authorized representative of the applicant with authority to bind the
                applicant. Applicants should note that submission of any such amendment
                or related statement of fact constitutes a representation by the person
                certifying that he or she is an authorized representative with such
                authority and that the contents of the amendment or statement of fact
                are true and correct.
                 91. Applicants must not submit application-specific material
                through the Commission's Electronic Comment
                [[Page 9260]]
                Filing System. Further, as discussed above, parties submitting
                information related to their applications should use caution to ensure
                that their submissions do not contain confidential information or
                communicate information that would violate 47 CFR 1.2105(c) or the
                limited information procedures adopted for Auction 112. An applicant
                seeking to submit, outside of the Auction Application System,
                information that might reflect non-public information, such as an
                applicant's upfront payment amount, or bidding eligibility, should
                consider including in its email a request that the filing or portions
                of the filing be withheld from public inspection until the end of the
                prohibition on certain communications pursuant to 47 CFR 1.2105(c).
                 92. Questions about FCC Form 175 amendments should be directed to
                the Auctions Division at (202) 418-0660.
                III. Preparing for Bidding in Auction 112
                A. Due Diligence
                 93. OEA and MB remind each potential bidder that it is solely
                responsible for investigating and evaluating all technical and
                marketplace factors that may have a bearing on the value of the
                construction permit(s) it is seeking in Auction 112 and that it is
                required to certify, under penalty of perjury, that it has read the
                Auction 112 Procedures Public Notice and has familiarized itself both
                with the auction procedures and with the requirements for obtaining a
                construction permit for a TV station. The Commission makes no
                representations or warranties about the use of this spectrum or these
                construction permits for particular services. Each applicant should be
                aware that a Commission auction represents an opportunity to become an
                FCC permittee in a broadcast service, subject to certain conditions and
                regulations. This includes the established authority of the Commission
                to alter the terms of existing licenses by rulemaking, which is equally
                applicable to permits or licenses awarded by auction. A Commission
                auction does not constitute an endorsement by the Commission of any
                particular service, technology, or product, nor does a Commission
                construction permit or license constitute a guarantee of business
                success.
                 94. An applicant should perform its due diligence research and
                analysis before proceeding, as it would with any new business venture.
                In particular, OEA and MB encourage each potential bidder to perform
                technical analyses and/or refresh its previous analyses to assure
                itself that, should it become a winning bidder for any Auction 112
                construction permit, it will be able to build and operate facilities
                that will fully comply with all applicable technical and legal
                requirements. OEA and MB also urge each applicant to inspect any
                prospective transmitter sites located in, or near, the service area for
                which it plans to bid, to confirm the availability of such sites, and
                to familiarize itself with the Commission's rules regarding any
                applicable federal, state, and local requirements, including the
                National Environmental Policy Act (NEPA), the National Historic
                Preservation Act (NHPA), and other environmental statutes.
                 95. OEA and MB also encourage each applicant in Auction 112 to
                continue to conduct its own research throughout the auction in order to
                determine the existence of pending or future administrative or judicial
                proceedings that might affect its decision to continue participating in
                the auction. Each applicant is responsible for assessing the likelihood
                of the various possible outcomes and for considering the potential
                impact on construction permits available in this auction. The due
                diligence considerations mentioned in the Auction 112 Procedures Public
                Notice do not comprise an exhaustive list of steps that should be
                undertaken prior to participating in Auction 112. As always, the burden
                is on the potential bidder to determine how much research to undertake,
                depending upon specific facts and circumstances related to its
                interests.
                 96. Applicants are solely responsible for identifying associated
                risks and for investigating and evaluating the degree to which such
                matters may affect their ability to bid on, otherwise acquire, or make
                use of the construction permits available in Auction 112. Each
                potential bidder is responsible for undertaking research to ensure that
                any permits won in this auction will be suitable for its business plans
                and needs. Each potential bidder must undertake its own assessment of
                the relevance and importance of information gathered as part of its due
                diligence efforts.
                 97. The Commission makes no representations or guarantees regarding
                the accuracy or completeness of information in its databases or any
                third-party databases, including, for example, court docketing systems.
                To the extent the Commission's databases may not include all
                information deemed necessary or desirable by an applicant, it must
                obtain or verify such information from independent sources or assume
                the risk of any incompleteness or inaccuracy in said databases.
                Furthermore, the Commission makes no representations or guarantees
                regarding the accuracy or completeness of information that has been
                provided by incumbent licensees and incorporated into its databases.
                B. Bidder Education
                 98. Before the opening of the short-form application filing window
                for Auction 112, detailed educational information will be provided in
                various formats to would-be participants on the Auction 112 web page.
                Specifically, OEA will provide various materials on the pre-bidding
                processes in advance of the opening of the short-form application
                window, beginning with the release of step-by-step instructions for
                completing the FCC Form 175, which OEA will make available in the
                Education section of the Auction 112 website at www.fcc.gov/auction/112. In addition, OEA will provide an online tutorial for the auction,
                covering pre-auction procedures including completing a short-form
                application in the FCC Auction Application System, and bidding
                procedures including how to use the FCC auction bidding system. In
                advance of the start of the mock auction, OEA will release a user guide
                for the bidding system.
                 99. OEA and MB believe that parties interested in participating in
                Auction 112 will find the interactive, online tutorial an efficient and
                effective way to further their understanding of the application and
                bidding processes. The online tutorial will allow viewers to navigate
                the presentation outline, review written notes, and listen to audio of
                the notes. Additional features of this web-based tool include links to
                auction-specific Commission releases, email links for contacting
                Commission staff, and screen shots of the online application and
                bidding systems. The online tutorial will be accessible in the
                Education section of the Auction 112 website at www.fcc.gov/auction/112. Once posted, the tutorial will remain continuously accessible.
                C. Short-Form Applications: Due Before 6:00 p.m. ET on March 30, 2022
                 100. In order to be eligible to bid in Auction 112, an applicant
                must first submit a short-form application (FCC Form 175)
                electronically via the Auction Application System following the
                instructions set forth in the FCC Form 175 Instructions. The short-form
                application will become available with the opening of the initial
                filing window and must be submitted prior to 6:00 p.m. ET on March 30,
                2022. Late applications will not be accepted. No
                [[Page 9261]]
                filing fee is required to be paid at the time of filing a short-form
                application.
                 101. Applications may be filed at any time beginning at noon ET on
                March 17, 2022, until the filing window closes at 6:00 p.m. ET on March
                30, 2022. Applicants are strongly encouraged to file early and are
                responsible for allowing adequate time for filing their applications.
                There are no limits or restrictions on the number of times an
                application can be updated or amended until the initial filing deadline
                on March 30, 2022]
                 102. An applicant must always click on the CERTIFY & SUBMIT button
                on the ``Certify & Submit'' screen to successfully submit its FCC Form
                175 and any modifications; otherwise the application or changes to the
                application will not be received or reviewed by Commission staff.
                Additional information about accessing, completing, and viewing the FCC
                Form 175 is provided in the FCC Form 175 Instructions. Applicants
                requiring technical assistance should contact FCC Auctions Technical
                Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-
                1255 (text telephony (TTY)). Hours of service are Monday through
                Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to provide better
                service to the public, all calls to Technical Support are recorded.
                D. Application Processing and Minor Modifications
                1. Public Notice of Applicants' Initial Application Status and
                Opportunity for Minor Modifications
                 103. Commission staff will review all timely submitted applications
                for Auction 112 to determine whether each applicant has complied with
                the application requirements and whether it has provided all required
                information concerning its qualifications for bidding. After this
                review is completed, OEA and MB will issue a public notice announcing
                applicants' initial application status by identifying: (1) Those that
                are complete; (2) those that are rejected; and (3) those that are
                incomplete or deficient because of defects that may be corrected. This
                public notice also will establish an application resubmission filing
                window, during which an applicant may make permissible minor
                modifications to its application to address identified deficiencies.
                The public notice will include the deadline for resubmitting corrected
                applications and a copy of the public notice will be sent by overnight
                delivery to the contact address listed in the FCC Form 175 for each
                applicant. OEA and MB ask each applicant to make sure that the contact
                address provided in its short-form application is accurate and is a
                location capable of accepting packages that require a signature. In
                addition, each applicant with an incomplete application will be sent
                information on the nature of the deficiencies in its application, along
                with the name and contact information of a Commission staff member who
                can answer questions specific to the application. To become a qualified
                bidder, an applicant must have a complete application (i.e., have
                timely corrected any identified deficiencies) and make a timely and
                sufficient upfront payment. Qualified bidders will be identified by
                public notice at least 10 days prior to the mock auction.
                 104. After the initial application filing deadline on March 30,
                2022, applicants can make only minor modifications to their
                applications. Major modifications will not be permitted. After the
                deadline for resubmitting corrected applications, an applicant will
                have no further opportunity to cure any deficiencies in its application
                or provide any additional information that may affect Commission
                staff's ultimate determination of whether and to what extent the
                applicant is qualified to participate in Auction 112.
                 105. Commission staff will communicate only with an applicant's
                contact person or certifying official, as designated on the applicant's
                FCC Form 175, unless the applicant's certifying official or contact
                person notifies Commission staff in writing that another representative
                is authorized to speak on the applicant's behalf. Authorizations may be
                sent by email to [email protected].
                2. Public Notice of Applicants' Final Application Status After Upfront
                Payment Deadline
                 106. After Commission staff review resubmitted applications for
                Auction 112 and evaluate upfront payments, OEA and MB will release a
                public notice identifying applicants that have become qualified
                bidders. A Qualified Bidders Public Notice will be issued before
                bidding in the auction begins. Qualified bidders are those applicants
                with submitted FCC Forms 175 that are deemed timely filed and complete
                and that have made a sufficient upfront payment.
                E. Upfront Payments
                 107. In order to be eligible to bid in Auction 112, a sufficient
                upfront payment and a complete and accurate FCC Remittance Advice Form
                (FCC Form 159) must be submitted before 6:00 p.m. ET on May 6, 2022.
                After completing its short-form application, an applicant will have
                access to an electronic pre-filled version of the FCC Form 159. An
                accurate and complete FCC Form 159 (February 2003 edition) must
                accompany each payment. Proper completion of this form is critical to
                ensuring correct crediting of upfront payments. Payers using the pre-
                filled FCC Form 159 are responsible for ensuring that all the
                information on the form, including payment amounts, is accurate.
                Instructions for completing FCC Form 159 for Auction 112 are provided
                in Attachment B to the Auction 112 Procedures Public Notice.
                1. Making Upfront Payments by Wire Transfer for Auction 112
                 108. Upfront payments for Auction 112 must be wired to, and will be
                deposited in, the U.S. Treasury.
                 109. Wire transfer payments for Auction 112 must be received before
                6:00 p.m. ET on May 6, 2022. No other payment method is acceptable. To
                avoid untimely payments, applicants should discuss arrangements
                (including bank closing schedules and other specific bank wire transfer
                requirements, such as an in-person written request before a specified
                time of day) with their bankers several days before they plan to make
                the wire transfer, and must allow sufficient time for the transfer to
                be initiated and completed before the deadline. The following
                information will be needed:
                 ABA Routing Number: 021030004.
                 Receiving Bank: TREAS NYC, 33 Liberty Street, New York, NY 10045.
                 Beneficiary: FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.
                 Beneficiary Account Number: 827000001002.
                 Originating Bank Information (OBI Field): (Skip one space between
                each information item).
                 ``Auctionpay''.
                 Applicant FCC Registration Number (FRN): (use the same FRN as used
                on the applicant's FCC Form 159, block 21).
                 Payment Type Code: (same as FCC Form 159, block 24A: ``U112'').
                 Note: The beneficiary account number (BNF Account Number) is
                specific to the upfront payments for Auction 112. Do not use a BNF
                Account Number from a previous auction.
                 110. At least one hour before placing the order for the wire
                transfer (but on the same business day), applicants must print and fax
                a completed FCC Form 159 to the FCC at (202) 418-2843. Alternatively,
                the completed form can
                [[Page 9262]]
                be scanned and sent as an attachment to an email to
                [email protected]. On the fax cover sheet or in the email subject
                header, write ``Wire Transfer--Auction Payment for Auction 112.'' To
                meet the upfront payment deadline, an applicant's payment must be
                credited to the Commission's account for Auction 112 before the
                deadline.
                 111. Each applicant is responsible for ensuring timely submission
                of its upfront payment and for timely filing of an accurate and
                complete FCC Form 159. An applicant should coordinate with its
                financial institution well ahead of the due date regarding its wire
                transfer and allow sufficient time for the transfer to be initiated and
                completed prior to the deadline. The Commission repeatedly has
                cautioned auction participants about the importance of planning ahead
                to prepare for unforeseen last-minute difficulties in making payments
                by wire transfer. Each applicant also is responsible for obtaining
                confirmation from its financial institution that its wire transfer to
                the U.S. Treasury was successful and from Commission staff that its
                upfront payment was timely received and that it was deposited into the
                proper account. As a regulatory requirement, the U.S. Treasury screens
                all payments from all financial institutions before deposits are made
                available to specified accounts. If wires are suspended, the U.S.
                Treasury may direct questions regarding any transfer to the financial
                institution initiating the wire. Each applicant must take care to
                assure that any questions directed to its financial institution(s) are
                addressed promptly. To receive confirmation from Commission staff,
                contact Scott Radcliffe of the Office of Managing Director's Revenue &
                Receivables Operations Group/Auctions at (202) 418-7518 or Theresa
                Meeks at (202) 418-2945.
                 112. Please note the following information regarding upfront
                payments:
                 All payments must be made in U.S. dollars.
                 All payments must be made by wire transfer.
                 Upfront payments for Auction 112 go to an account number
                different from the accounts used in previous FCC auctions.
                 113. Failure to deliver a sufficient upfront payment as instructed
                herein by the upfront payment deadline will result in dismissal of the
                short-form application and disqualification from participation in the
                auction.
                2. Completing and Submitting FCC Form 159
                 114. An accurate and complete FCC Form 159 must be sent to the FCC
                to accompany each upfront payment. At least one hour before placing the
                order for the wire transfer (but on the same business day), applicants
                must fax a completed Form 159 to the FCC at (202) 418-2843.
                Alternatively, the completed form can be scanned and sent as an
                attachment to an email to [email protected]. On the fax cover sheet
                or in the email subject header, write ``Wire Transfer--Auction Payment
                for Auction 112.''
                3. Upfront Payments and Bidding Eligibility
                 115. The Commission has delegated authority to OEA and MB to
                determine appropriate upfront payments for each construction permit
                being auctioned, taking into account such factors as the efficiency of
                the auction process and the potential value of similar licenses. An
                upfront payment is a refundable deposit made by each applicant seeking
                to participate in bidding to establish its eligibility to bid on
                construction permits. Upfront payments that are related to the specific
                construction permits being auctioned protect against frivolous or
                insincere bidding and provide the Commission with a source of funds
                from which to collect payments owed at the close of bidding. In the
                Auction 112 Comment Public Notice, OEA and MB proposed an upfront
                payment amount for each construction permit and sought comment on the
                upfront payment amounts. Although OEA and MB received no comments
                regarding the upfront payment amounts for Auction 112, they adopt
                upfront payment amounts that are 25% lower than those proposed in
                Attachment A of the Auction 112 Comment Public Notice so as to align
                the upfront payment amounts with the reduced minimum opening bids that
                are adopted below.
                 116. An applicant must make an upfront payment sufficient to obtain
                bidding eligibility on the construction permits on which it will bid.
                OEA and MB proposed in the Auction 112 Comment Public Notice that the
                amount of the upfront payment submitted by an applicant will determine
                its initial bidding eligibility, the maximum number of bidding units on
                which a bidder may place bids in any single round. Under that proposal,
                in order to bid on a particular construction permit, a qualified bidder
                must have a current eligibility level that meets or exceeds the number
                of bidding units assigned to that construction permit. At a minimum,
                therefore, an applicant's total upfront payment must be enough to
                establish eligibility to bid on at least one of the construction
                permits selected on its FCC Form 175 for Auction 112, or else the
                applicant will not become qualified to participate in the auction. An
                applicant does not have to make an upfront payment to cover all
                construction permits the applicant selected on its FCC Form 175, rather
                only enough to cover the maximum number of bidding units that are
                associated with construction permits on which the applicant wishes to
                place bids and hold provisionally winning bids in any given round. The
                total upfront payment does not affect the total dollar amount the
                bidder may bid on any given construction permit.
                 117. OEA and MB received no comments on the proposals that the
                upfront payment amount would determine a bidder's initial eligibility
                and to assign each construction permit a specific number of bidding
                units, equal to one bidding unit per one thousand dollars of the
                upfront payment. Therefore, OEA and MB adopt these proposals. Each
                applicant's upfront payment amount will determine that bidder's initial
                bidding eligibility.
                 118. In calculating its upfront payment amount, an applicant must
                determine the maximum number of bidding units on which it may wish to
                bid in any single round and submit an upfront payment amount for the
                auction covering that number of bidding units. In order to make this
                calculation, an applicant should add together the bidding units for all
                construction permits on which it seeks to be active in any given round.
                A qualified bidder's maximum eligibility will not exceed the sum of the
                bidding units associated with the total number of construction permits
                selected on its FCC Form 175. In some cases, a qualified bidder's
                maximum eligibility may be less than the amount of its upfront payment
                because the qualified bidder has either previously been in default on a
                Commission construction permit or license or delinquent on non-tax debt
                owed to a Federal agency, or has submitted an upfront payment that
                exceeds the total amount of bidding units associated with the
                construction permits it selected on its FCC Form 175. Applicants should
                check their calculations carefully, as there is no provision for
                increasing a bidder's eligibility after the upfront payment deadline.
                 119. An applicant that is a former defaulter, as described above,
                must pay an upfront payment 50% greater than that required of an
                applicant that is not a former defaulter. For purposes of this
                [[Page 9263]]
                rule, defaults and delinquencies of the applicant itself and its
                controlling interests are included. If an applicant is a former
                defaulter, it must calculate its upfront payment for all of its
                selected construction permits by multiplying the number of bidding
                units on which it wishes to be active (bid on or hold provisionally
                winning bids on) during a given round by 1.5. In order to calculate the
                number of bidding units to assign to former defaulters, the Commission
                will divide the upfront payment received by 1.5 and round the result up
                to the nearest bidding unit.
                F. Auction Registration
                 120. All qualified bidders for Auction 112 are automatically
                registered for the auction. Registration materials will be distributed
                prior to the auction by overnight delivery. The mailing will be sent
                only to the contact person at the contact address listed in the FCC
                Form 175 and will include the SecurID[supreg] tokens that will be
                required to place bids, the web address and instructions for accessing
                and logging in to the auction bidding system, FCC assigned username
                (User ID) for each authorized bidder, and the Auction Bidder Line phone
                number.
                 121. Qualified bidders that do not receive this registration
                mailing will not be able to submit bids. Therefore, if this mailing is
                not received by the contact person for a qualified bidder by noon on
                May 31, 2022, call the Auctions Hotline at (717) 338-2868. Receipt of
                this registration mailing is critical to participating in the auction,
                and each qualified bidder is responsible for ensuring it has received
                all registration materials.
                 122. In the event that a SecurID[supreg] token is lost or damaged,
                only a person who has been designated as an authorized bidder, the
                contact person, or the certifying official on the applicant's short-
                form application may request a replacement. To request a replacement,
                call the Auction Bidder Line at the telephone number provided in the
                registration materials or the Auction Hotline at (717) 338-2868.
                G. Remote Electronic Bidding via the FCC Auction Bidding System
                 123. Bidders will be able to participate in Auction 112 over the
                internet using the FCC Auction Bidding System (bidding system) or by
                telephonic bidding. Each applicant should indicate its bidding
                preference--electronic or telephonic--on its FCC Form 175. Please note
                that telephonic bid assistants are required to use a script when
                entering bids placed by telephone. Telephonic bidders are therefore
                reminded to allow sufficient time to bid by placing their calls well in
                advance of the close of a round. The length of a call to place a
                telephonic bid may vary; please allow a minimum of 10 minutes. The
                toll-free telephone number for the auction bidder line will be provided
                to qualified bidders prior to the start of bidding in the auction.
                 124. Only authorized bidders bidding on behalf of a qualified
                bidder will be permitted to bid. Each qualified bidder will be issued
                three SecurID[supreg] tokens, which the Commission will provide at no
                charge. Each authorized bidder for a qualified bidder must have an
                individually assigned SecurID[supreg] token in order to access the
                bidding system, either by telephone or over the internet. In order to
                access the bidding function of the bidding system, bidders must be
                logged in during the bidding round using the passcode generated by the
                SecurID[supreg] token and a personal identification number (PIN)
                created by the bidder. Bidders are strongly encouraged to print a bid
                summary for each round after they have completed all of their activity
                for that round. For security purposes, the SecurID[supreg] tokens,
                bidding system web address, FCC-assigned username, and the telephonic
                bidding telephone number are only mailed to the contact person at the
                contact address listed on the FCC Form 175. Each SecurID[supreg] token
                is tailored to a specific auction. SecurID[supreg] tokens issued for
                other auctions or obtained from a source other than the FCC will not
                work for Auction 112. Please note that the SecurID[supreg] tokens can
                be recycled, and the Commission requests that bidders return the tokens
                to the FCC. Pre-addressed envelopes will be provided to return the
                tokens once the auction has ended.
                 125. The Commission makes no warranties whatsoever, and shall not
                be deemed to have made any warranties, with respect to the FCC Auction
                Application System and the auction bidding system, including any
                implied warranties of merchantability or fitness for a particular
                purpose. In no event shall the Commission, or any of its officers,
                employees, or agents, be liable for any damages whatsoever (including,
                but not limited to, loss of business profits, business interruption,
                loss of use, loss of revenue, loss of business information, or any
                other direct, indirect, or consequential damages) arising out of or
                relating to the existence, furnishing, functioning, or use of the FCC
                Auction Application System or the FCC auction bidding system. Moreover,
                no obligation or liability will arise out of the Commission's
                technical, programming, or other advice or service provided in
                connection with the FCC auction systems.
                 126. To the extent an issue arises with the bidding system itself,
                the Commission will take all appropriate measures to resolve such
                issues quickly and equitably. Should an issue arise that is outside the
                bidding system or attributable to a bidder, including, but not limited
                to, a bidder's hardware, software, or internet access problem that
                prevents the bidder from submitting a bid prior to the end of a round,
                the Commission shall have no obligation to resolve or remedy such an
                issue on behalf of the bidder. Similarly, if an issue arises due to
                bidder error using the bidding system, the Commission shall have no
                obligation to resolve or remedy such an issue on behalf of the bidder.
                Accordingly, after the close of a bidding round, the results of bid
                processing will not be altered absent evidence of any failure in the
                bidding system.
                H. Mock Auction
                 127. All qualified bidders will be eligible to participate in a
                mock auction on June 3, 2022. The mock auction will enable qualified
                bidders to become familiar with the FCC auction bidding system and to
                practice submitting bids prior to the auction. OEA and MB recommend
                that all qualified bidders, including all their authorized bidders,
                participate to ensure that they can log in to the bidding system and
                gain experience with the bidding procedures. Participating in the mock
                auction may reduce the likelihood of a bidder making a mistake during
                the auction. Details regarding the mock auction will be announced in
                the Qualified Bidders Public Notice for Auction 112
                I. Auction Delay, Suspension, or Cancellation
                 128. In the Auction 112 Comment Public Notice, OEA and MB proposed
                that, at any time before or during the bidding process, OEA, in
                conjunction with MB, may delay, suspend, or cancel bidding in the
                auction in the event of natural disaster, technical obstacle, network
                interruption, administrative or weather necessity, evidence of an
                auction security breach or unlawful bidding activity, or for any other
                reason that affects the fair and efficient conduct of competitive
                bidding. OEA and MB received no comments on this proposal.
                 129. Because this approach has proven effective in resolving
                exigent circumstances in previous auctions, OEA and MB adopt these
                proposals regarding auction delay, suspension, or cancellation. By
                public notice or by announcement through the FCC auction
                [[Page 9264]]
                bidding system, OEA and MB may delay, suspend, or cancel bidding in the
                auction in the event of natural disaster, technical obstacle, network
                interruption, administrative or weather necessity, evidence of an
                auction security breach or unlawful bidding activity, or for any other
                reason that affects the fair and efficient conduct of competitive
                bidding. In such cases, OEA, in its sole discretion, may elect to
                resume the auction starting from the beginning of the current round or
                from some previous round, or cancel the auction in its entirety. OEA
                and MB emphasize that they will exercise this authority solely at their
                discretion, and not as a substitute for situations in which bidders may
                wish to apply their activity rule waivers.
                J. Environmental Review Requirements
                 130. Permittees or licensees must comply with the Commission's
                rules for environmental review under the National Environmental Policy
                Act, the National Historic Preservation Act, and other federal
                environmental statutes. The construction of a broadcast facility is a
                federal action, and the permittee or licensee must comply with the
                Commission's environmental rules for each such facility. These
                environmental rules require, among other things, that the permittee or
                licensee consult with expert agencies having environmental
                responsibilities, including the U.S. Fish and Wildlife Service, the
                State Historic Preservation Office, the U.S. Army Corps of Engineers,
                and the Federal Emergency Management Agency (through the local
                authority with jurisdiction over floodplains). In assessing the effect
                of facility construction on historic properties, the permittee or
                licensee must follow the provisions of the FCC's Nationwide
                Programmatic Agreement Regarding the Section 106 National Historic
                Preservation Act Review Process. The permittee or licensee must prepare
                environmental assessments for any facility that may have a significant
                impact in or on wilderness areas, wildlife preserves, threatened or
                endangered species, or designated critical habitats, historical or
                archaeological sites, Indian religious sites, floodplains, and surface
                features. In addition, the permittee or licensee must prepare
                environmental assessments for facilities that include high intensity
                white lights in residential neighborhoods or excessive radio frequency
                emission.
                IV. Bidding
                 131. The first round of bidding for Auction 112 will begin on June
                7, 2022. The initial bidding schedule will be announced in a public
                notice listing the qualified bidders, which will be released at least
                one week before the start of bidding in the auction.
                A. Auction Structure
                1. Simultaneous Multiple Round Auction
                 132. In the Auction 112 Comment Public Notice, OEA and MB proposed
                to auction all construction permits listed in Attachment A to the
                Auction 112 Procedures Public Notice in a single auction using a
                simultaneous multiple-round auction format. This type of auction offers
                every construction permit for bid at the same time and consists of
                successive bidding rounds in which qualified bidders may place bids on
                individual construction permits. OEA and MB received no comments on
                this proposal, and this proposal is adopted. Unless otherwise
                announced, bids will be accepted on all construction permits in each
                round of the auction until bidding stops on every construction permit.
                2. Round Structure
                 133. Limited information about the results of a round will be made
                public after the conclusion of the round. Specifically, after a round
                closes, OEA and MB will make available for each construction permit its
                current provisionally winning bid amount, the minimum acceptable bid
                amount for the following round, the amounts of all bids placed on the
                construction permit during the round, and whether the license is FCC-
                held. The reports will be publicly accessible. Moreover, after Auction
                112 closes, OEA and MB will make available complete reports of all bids
                placed during each round of the auction, including bidder identities.
                 134. As in past Commission spectrum auctions, bidders will have
                secure access to certain non-public bidding information while bidding
                is ongoing. Specifically, after each round ends, and before the next
                round begins, OEA and MB will make the following information available
                to individual bidders:
                 The bidder's activity, based on all bids in the previous
                round; and
                 Summary statistics of the bidder's bidding/bid-related
                actions in each round, including the construction permits on which it
                bid and the price it bid for each of those construction permits, the
                result of each of its bids, whether it has any provisionally winning
                bids, and remaining activity rule waivers.
                 135. Limiting the availability of bidding information during the
                auction balances the Commission's interest in providing bidders with
                sufficient information about the status of their own bids and bidding
                across all construction permits to allow them to bid confidently and
                effectively, while restricting the availability of information that may
                facilitate identification of bidders placing particular bids, which
                could potentially lead to undesirable strategic bidding.
                3. Round Structure
                 136. The initial schedule of bidding rounds will be announced in
                the public notice listing the qualified bidders in the auction. Each
                bidding round is followed by the release of round results. Multiple
                bidding rounds may be conducted each day.
                 137. In the Auction 112 Comment Public Notice, OEA and MB proposed
                to retain the discretion to adjust the bidding schedule in order to
                foster an auction pace that reasonably balances speed with the bidders'
                need to study round results and adjust their bidding strategies. OEA
                and MB received no comments on the proposal, and they adopt it for
                Auction 112. OEA and MB may change the amount of time for bidding
                rounds, the amount of time between rounds, or the number of rounds per
                day, depending upon bidding activity and other factors.
                4. Eligibility and Activity Rules
                 138. As discussed above, the amount of the upfront payment
                submitted by a bidder will determine its initial bidding eligibility in
                terms of bidding units. A bidder's bidding eligibility is the maximum
                number of bidding units on which a bidder may be active (bid or hold
                provisionally winning bids) in a given round. As noted earlier, each
                construction permit is assigned a specific number of bidding units, as
                listed in Attachment A to the Auction 112 Procedures Public Notice. The
                bidding unit amounts listed in Attachment A of the Auction 112
                Procedures Public Notice are 25% lower than the bidding unit amounts
                proposed in Attachment A of the Auction 112 Comment Public Notice. OEA
                and MB adopt these adjusted bidding unit amounts to correspond with the
                reduced upfront payments adopted above. Bidding units assigned to each
                construction permit do not change as prices rise during the auction.
                Upfront payments are not attributed to specific construction permits.
                Rather, a bidder may place bids on any of the construction permits
                selected on its FCC Form 175 as long as the total number of bidding
                units associated with those
                [[Page 9265]]
                construction permits does not exceed the bidder's current eligibility.
                 139. Eligibility cannot be increased during the auction; it can
                only remain the same or decrease. Thus, in calculating its upfront
                payment amount, an applicant must determine the maximum number of
                bidding units on which it may wish to bid or hold provisionally winning
                bids in any single round, and submit an upfront payment amount covering
                that total number of bidding units. At a minimum, an applicant's
                upfront payment must cover the bidding units for at least one of the
                construction permits it selected on its short-form application. The
                total upfront payment does not affect the total dollar amount a bidder
                may bid on any given construction permit. OEA and MB received no
                comments on the bidding eligibility proposals, and these proposals are
                adopted.
                 140. To ensure that an auction closes within a reasonable period of
                time, an activity rule requires bidders to bid actively throughout the
                auction, rather than wait until late in the auction before
                participating. Bidders are required to be active (bid or hold
                provisionally winning bids) on a specific percentage of their current
                bidding eligibility during each round of the auction. A bidder's
                activity level in a round is the sum of the bidding units associated
                with construction permits covered by the bidder's new bids in the
                current round and provisionally winning bids from the previous round.
                Bidding units associated with construction permits for which the bidder
                has removed bids do not count towards current activity. Provisionally
                winning bids are bids that would become final winning bids if the
                auction were to close after the given round.
                 141. OEA and MB received no comments on the eligibility and
                activity rules proposal. Therefore, in order to ensure that the auction
                closes within a reasonable period of time, OEA and MB adopt the
                following activity requirement as proposed: A bidder is required to be
                active on 100% of its current eligibility during each round of the
                auction. That is, a bidder must either place a bid or be a
                provisionally winning bidder during each round of the auction. Failure
                to maintain the requisite activity level will result in the use of an
                activity rule waiver, if any remain, or a reduction in the bidder's
                eligibility, possibly curtailing or eliminating the bidder's ability to
                place bids in subsequent rounds of the auction.
                5. Activity Rule Waivers
                 142. In the Auction 112 Comment Public Notice, OEA and MB proposed
                that each bidder in the auction be provided with three activity rule
                waivers, which are principally a mechanism for a bidder to avoid the
                loss of bidding eligibility in the event that exigent circumstances
                prevent it from bidding in a particular round. OEA and MB received no
                comments on this issue.
                 143. Therefore, OEA and MB adopt this proposal to provide bidders
                with three activity rule waivers. Use of an activity rule waiver
                preserves the bidder's eligibility despite its activity in the current
                round being below the required minimum activity level. An activity rule
                waiver applies to an entire round of bidding and not to a particular
                construction permit. A bidder may use an activity rule waiver in any
                round of the auction as long as the bidder has not used all of its
                waivers.
                 144. The FCC auction bidding system will assume that a bidder that
                does not meet the activity requirement would prefer to use an activity
                rule waiver (if available) rather than lose bidding eligibility.
                Therefore, the system will automatically apply a waiver at the end of
                any bidding round in which a bidder's activity level is below the
                minimum required unless (1) the bidder has no activity rule waiver
                remaining, or (2) the bidder overrides the automatic application of a
                waiver by reducing eligibility, therefore meeting the activity
                requirement. If the bidder has no waivers remaining and does not
                satisfy the required activity level, the bidder's current eligibility
                will be permanently reduced, possibly curtailing or eliminating the
                ability to place additional bids in the auction.
                 145. A bidder with insufficient activity may wish to reduce its
                bidding eligibility rather than use an activity rule waiver. If so, the
                bidder must affirmatively override the automatic waiver mechanism
                during the bidding round by using the reduce eligibility function in
                the FCC auction bidding system. In this case, the bidder's eligibility
                will be permanently reduced to bring it into compliance with the
                activity rule described above. Reducing eligibility is an irreversible
                action once the round has closed, and a bidder cannot regain its lost
                bidding eligibility.
                 146. Finally, a bidder may apply an activity rule waiver
                proactively as a means to keep the auction open without placing a bid.
                If a bidder proactively applies an activity rule waiver (using the
                proactive waiver function in the FCC auction bidding system) during a
                bidding round in which no bids are placed, the auction will remain open
                and the bidder's eligibility will be preserved. An automatic waiver
                applied by the FCC auction bidding system in a round in which there is
                no new bid or a proactive waiver will not keep the auction open.
                6. Stopping Rule
                 147. For Auction 112, OEA and MB proposed to employ a simultaneous
                stopping rule approach, which means all construction permits remain
                available for bidding until bidding stops on every construction permit.
                Specifically, bidding will close on all construction permits after the
                first round in which no bidder submits a new bid or applies a proactive
                activity rule waiver.
                 148. OEA and MB also sought comment on alternative versions of the
                simultaneous stopping rule for Auction 112:
                 Option 1. The auction would close for all construction permits
                after the first round in which no bidder applies a proactive waiver or
                places a new bid on any construction permit on which it is not the
                provisionally winning bidder. Thus, absent any other bidding activity,
                a bidder placing a new bid on a construction permit for which it is the
                provisionally winning bidder would not keep the auction open under this
                modified stopping rule.
                 Option 2. The auction would close for all construction permits
                after the first round in which no bidder applies a waiver or places any
                new bid on any construction permit that already has a provisionally
                winning bid. Thus, absent any other bidding activity, a bidder placing
                a new bid on an FCC-held construction permit (a construction permit
                that does not have a provisionally winning bid) would not keep the
                auction open under this modified stopping rule.
                 Option 3. The auction would close using a modified version of the
                simultaneous stopping rule that combines Option 1 and Option 2 above.
                 Option 4. The auction would close after a specified number of
                additional rounds (special stopping rule) to be announced in advance in
                the FCC auction bidding system. If OEA and MB invoke this special
                stopping rule, they will accept bids in the specified final round(s),
                after which the auction will close.
                 Option 5. The auction would remain open even if no bidder places a
                new bid or applies a waiver. In this event, the effect will be the same
                as if a bidder had applied a waiver. Thus, the activity rule will apply
                as usual, and a bidder with insufficient activity will either lose
                bidding eligibility or use a waiver.
                 149. OEA and MB proposed to exercise these options only in certain
                circumstances, for example, where the
                [[Page 9266]]
                auction is proceeding unusually slowly or quickly, there is minimal
                overall bidding activity, or it appears likely that the auction will
                not close within a reasonable period of time or will close prematurely.
                Before exercising these options, OEA and MB are likely to attempt to
                change the pace of the auction. For example, OEA and MB may adjust the
                pace of bidding by changing the number of bidding rounds per day and/or
                the minimum acceptable bids. OEA and MB proposed to retain the
                discretion to exercise any of these options with or without prior
                announcement during the auction. OEA and MB received no comments on
                these proposals and adopt them for Auction 112.
                B. Bidding Procedures
                1. Minimum Opening Bids and Acceptable Bid Amounts
                 150. The provision at 47 U.S.C. 309(j) calls upon the Commission to
                prescribe methods by which a reasonable reserve price will be required
                or a minimum opening bid established when applications for FCC licenses
                or construction permits are subject to auction (i.e., because they are
                mutually exclusive), unless the Commission determines that a reserve
                price or minimum opening bid is not in the public interest. Consistent
                with this mandate, the Commission directed the Bureaus to seek comment
                on the use of a minimum opening bid and/or reserve price prior to the
                start of each auction.
                 151. In the Auction 112 Comment Public Notice, OEA and MB proposed
                not to establish reserve prices for specific construction permits
                listed in Attachment A that are different from minimum opening bid
                amounts. This is consistent with previous broadcast spectrum auctions.
                OEA and MB received no comments on this proposal and adopt it.
                 152. In the Auction 112 Comment Public Notice, OEA and MB sought
                comment on specifically proposed minimum opening amounts for each
                construction permit listed in Attachment A to the Auction 112
                Procedures Public Notice, reasoning that a minimum opening bid, which
                has been used in other broadcast auctions, is an effective tool for
                accelerating the competitive bidding process. Specifically, a minimum
                opening bid was proposed for each construction permit by taking into
                account various factors relating to the efficiency of the auction and
                the potential value of the spectrum, including the type of service and
                class of facility offered, market size, population covered by the
                proposed broadcast facility, and recent broadcast transaction data, to
                the extent such information is available.
                 153. Two commenters request that OEA and MB reduce or eliminate the
                minimum opening bids that were proposed in the Auction 112 Comment
                Public Notice, in order to reduce costs for prospective stations in
                remote areas. Brian Lane recommends that OEA and MB cut all proposed
                opening bids in half, arguing that there are considerable equipment and
                engineering costs that could be prohibitive to smaller and diverse
                bidders. Edge Networks, Inc d/b/a Evoca (Evoca) supports Mr. Lane's
                proposal but suggests that it may not go far enough in order to bring
                new, improved, and innovative TV and internet services to small,
                remote, and rural communities. Evoca claims that the markets involved
                in Auction 112 are so small that layering on any costs in addition to
                construction and operation of a TV may all but assure that these
                communities do not get any new service at all, and therefore suggests
                that OEA and MB consider eliminating the minimums altogether for at
                least the smaller communities.
                 154. OEA and MB are not persuaded by arguments that reducing the
                minimum opening bids by 50% will significantly affect the viability of
                prospective stations in remote areas. However, in furtherance of their
                goals of promoting competition and encouraging greater participation by
                an array of entities, OEA and MB adopt a more modest reduction in
                minimum opening bids of 25%, which they believe balances these goals
                with the goal of conducting the auction in an efficient manner that
                avoids burdening bidders. Those minimum opening bids are laid out in
                Attachment A to the Auction 112 Procedures Public Notice.
                 155. In the Auction 112 Comment Public Notice, OEA and MB proposed
                that, in each round, a qualified bidder will be able to place a bid on
                a given construction permit in any of up to nine different amounts.
                Under the proposal, the FCC auction bidding system interface will list
                the nine acceptable bid amounts for each construction permit. OEA and
                MB received no comments on this proposal, and adopt it as proposed.
                 156. In the Auction 112 Comment Public Notice, to calculate the
                first of the acceptable bid amounts, OEA and MB proposed to use a
                minimum acceptable bid increment percentage of 10%. This means that the
                minimum acceptable bid amount for a construction permit will be
                approximately 10% greater than the provisionally winning bid amount for
                the construction permit. To calculate the eight additional acceptable
                bid amounts, OEA and MB proposed in the Auction 112 Comment Public
                Notice to use an additional bid increment percentage of 5% of the
                minimum acceptable bid. OEA and MB did not receive any comments on
                these proposals to use 10% and 5% respectively in our calculation of
                nine acceptable bid amounts for each construction permit. Experience in
                previous broadcast auctions suggests that a minimum acceptable bid
                increment percentage of 10% and an additional bid increment percentage
                of 5% are sufficient to ensure active bidding. Therefore, OEA and MB
                will begin the auction with a minimum acceptable bid increment
                percentage of 10% and an additional bid increment percentage of 5%.
                 157. In Auction 112, the minimum acceptable bid amount for a
                construction permit will be equal to its minimum opening bid amount
                until there is a provisionally winning bid for the construction permit.
                After there is a provisionally winning bid for a construction permit,
                the minimum acceptable bid amount will be calculated by multiplying the
                provisionally winning bid amount by one plus the minimum acceptable bid
                percentage--i.e., provisionally winning bid amount * 1.10, rounded. The
                result of this calculation is subject to a minimum of $100. Under the
                Commission's standard rounding procedure for auctions, results above
                $10,000 are rounded to the nearest $1,000; results below $10,000 but
                above $1,000 are rounded to the nearest $100; and results below $1000
                are rounded to the nearest $10.
                 158. The FCC auction bidding system will calculate the eight
                additional bid amounts by multiplying the minimum acceptable bid amount
                by the additional bid increment percentage of 5%, and that result
                (rounded) is the additional increment amount. The first additional
                acceptable bid amount equals the minimum acceptable bid amount plus the
                additional increment amount. The second additional acceptable bid
                amount equals the minimum acceptable bid amount plus two times the
                additional increment amount; the third additional acceptable bid amount
                is the minimum acceptable bid amount plus three times the additional
                increment amount; etc. Because the additional bid increment percentage
                is 5%, the calculation of the additional increment amount is (minimum
                acceptable bid amount) * (0.05), rounded. The first additional
                acceptable bid amount equals (minimum acceptable bid amount) +
                [[Page 9267]]
                (additional increment amount); the second additional acceptable bid
                amount equals (minimum acceptable bid amount) + (2*(additional
                increment amount)); the third additional acceptable bid amount equals
                (minimum acceptable bid amount) + (3*(additional increment amount));
                etc.
                 159. OEA and MB proposed to retain the discretion to change the
                minimum acceptable bid amounts, the minimum acceptable bid increment
                percentage, the additional bid increment percentage, and the number of
                acceptable bid amounts if they determine that circumstances so dictate,
                consistent with past practice. OEA and MB also proposed to retain the
                discretion to do so on a construction permit-by-construction permit
                basis. OEA and MB also proposed to retain the discretion to limit (a)
                the amount by which a minimum acceptable bid for a construction permit
                may increase compared with the corresponding provisionally winning bid,
                and (b) the amount by which an additional bid amount may increase
                compared with the immediately preceding acceptable bid amount. For
                example, OEA and MB could set a $1,000 limit on increases in minimum
                acceptable bid amounts over provisionally winning bids. Thus, if
                calculating a minimum acceptable bid using the minimum acceptable bid
                increment percentage results in a minimum acceptable bid amount that is
                $1,200 higher than the provisionally winning bid on a construction
                permit, the minimum acceptable bid amount would instead be capped at
                $1,000 above the provisionally winning bid.
                 160. OEA and MB received no comments on these proposals concerning
                changes of bid amounts, and adopt the discretion to utilize them. OEA
                and MB typically exercise this discretion based on their monitoring of
                ongoing bidding and reserve such discretion here. If OEA and MB
                exercise this discretion, they will alert bidders by announcement in
                the FCC auction bidding system during the auction.
                2. Provisionally Winning Bids
                 161. Consistent with practice in past auctions, the FCC auction
                bidding system at the end of each bidding round will determine a
                provisionally winning bid for each construction permit based on the
                highest bid amount received for that permit. A provisionally winning
                bid will remain the provisionally winning bid until there is a higher
                bid on the same construction permit at the close of a subsequent round.
                Provisionally winning bids at the end of the auction become the winning
                bids.
                 162. In the Auction 112 Comment Public Notice, OEA and MB proposed
                to use a pseudo-random number generator to select a single
                provisionally winning bid if identical high bid amounts are submitted
                on a construction permit in a given round (i.e., tied bids). No
                comments were received on this proposal, and OEA and MB adopt it as
                proposed.
                 163. Accordingly, the FCC auction bidding system will assign a
                pseudo-random number to each bid upon submission. The tied bid with the
                highest pseudo-random number wins the tiebreaker and becomes the
                provisionally winning bid. The remaining bidders, as well as the
                provisionally winning bidder, can submit higher bids in subsequent
                rounds. However, if the auction were to close with no other bids being
                placed, the winning bidder would be the one that placed the
                provisionally winning bid. If the construction permit receives any bids
                in a subsequent round, the provisionally winning bid again will be
                determined by the highest bid amount received for the construction
                permit.
                 164. As a reminder, provisionally winning bids count toward
                activity for purposes of the activity rule.
                3. Bid Removal and Bid Withdrawal
                 165. In the Auction 112 Comment Public Notice, OEA and MB explained
                that each qualified bidder has the option of removing any bids placed
                in a round provided that such bids are removed before the close of that
                bidding round. By removing a bid within a round, a bidder effectively
                ``unsubmits'' the bid. A bidder removing a bid placed in the same round
                is not subject to withdrawal payments. Removing a bid will affect a
                bidder's activity because a removed bid no longer counts toward bidding
                activity for the round. Once a round closes, a bidder may no longer
                remove a bid.
                 166. In the Auction 112 Comment Public Notice, OEA and MB proposed
                to prohibit bidders from withdrawing any bid after close of the round
                in which that bid was placed. This proposal was made in recognition of
                the site-specific nature and wide geographic dispersion of the permits
                available in this auction, as well as OEA and MB's experience with past
                auctions of broadcast construction permits. OEA and MB received no
                comments on this issue. Accordingly, OEA and MB will prohibit bid
                withdrawals in Auction 112. Bidders are cautioned to select bid amounts
                carefully because no bid withdrawals will be allowed, even if a bid was
                mistakenly or erroneously made.
                4. Bidding Results
                 167. After Auction 112 closes, OEA and MB will provide a means for
                the public to view and download reports of all bids placed during each
                round of the auction and all bid results, including bidder identities.
                5. Auction Announcements
                 168. Commission staff will use auction announcements to report
                necessary information, such as schedule changes, to bidders. All
                auction announcements will be available by clicking a link in the FCC
                auction bidding system.
                V. Post-Auction Procedures
                 169. The public notice announcing the close of the bidding and
                auction results will be released shortly after bidding has ended in
                Auction 112. This public notice will also establish the deadlines for
                submitting down payments, final payments, and the long-form
                applications.
                A. Down Payments
                 170. The Commission's rules provide that, unless otherwise
                specified by public notice, within ten business days after the release
                of the auction closing public notice, each winning bidder must submit
                sufficient funds (in addition to the upfront payment) to bring its
                total amount of money on deposit with the Commission for Auction 112 to
                20% of the net amount of its winning bid(s) (gross bid(s) less any
                applicable new entrant bidding credit).
                B. Final Payments
                 171. Each winning bidder will be required to submit the balance of
                the net amount for each of its winning bid(s) within 10 business days
                after the applicable deadline for submitting down payments.
                C. Long-Form Application (FCC Form 2100--Schedule A)
                 172. The Commission's rules currently provide that within thirty
                days following the close of bidding and notification to the winning
                bidders, unless a longer period is specified by public notice, each
                winning bidder must electronically submit a separate, properly
                completed long-form application for each permit won, and required
                exhibits, along with the applicable applicant filing fee. Winning
                bidders for TV construction permits will electronically file FCC Form
                2100, Schedule A, in the Media Bureau's Licensing and Management System
                (LMS). Winning bidders claiming new entrant status must include an
                exhibit demonstrating their eligibility for the
                [[Page 9268]]
                bidding credit. Further instructions on these and other filing
                requirements will be provided to winning bidders in the auction closing
                public notice.
                D. Default and Disqualification
                 173. Any winning bidder that defaults or is disqualified after the
                close of an auction (i.e., fails to remit the required down payment by
                the specified deadline, fails to submit a timely long-form application,
                fails to make a full and timely final payment, or is otherwise
                disqualified) is liable for default payments as described in 47 CFR
                1.2104(g)(2). A default payment consists of a deficiency payment, equal
                to the difference between the amount of the Auction 112 bidder's
                winning bid and the amount of the winning bid the next time a
                construction permit covering the same spectrum is won in an auction,
                plus an additional payment equal to a percentage of the defaulter's bid
                or of the subsequent winning bid, whichever is less.
                 174. The percentage of the applicable bid to be assessed as an
                additional payment for defaults in a particular auction is established
                in advance of the auction. Accordingly, in the Auction 112 Comment
                Public Notice, OEA and MB proposed to set the additional default
                payment for this auction at 20% of the applicable bid. OEA and MB
                received no comments on this proposal, and it is therefore adopted for
                the reasons described in the Auction 112 Comment Public Notice.
                 175. Finally, in the event of a default, the Commission has the
                discretion to re-auction the construction permit or offer it to the
                next highest bidder (in descending order) at its final bid amount. In
                addition, if a default or disqualification involves gross misconduct,
                misrepresentation, or bad faith by an applicant, then the Commission
                may declare the applicant and its principals ineligible to bid in
                future auctions and may take any other action that it deems necessary,
                including institution of proceedings to revoke any existing
                authorizations held by the applicant.
                E. Refund of Remaining Upfront Payment Balance
                 176. All refunds of upfront payment balances will be returned to
                the payer of record as identified on the FCC Form 159 unless the payer
                submits written authorization instructing otherwise. Bidders are
                encouraged to use the Refund Information icon found on the Auction
                Application Manager page or the Refund Form link available on the
                Auction Application Submit Confirmation page in the FCC Auction
                Application System to access the form. After the required information
                is completed on the blank form, the form must be printed, signed, and
                submitted to the Commission by mail, fax, or email as instructed below.
                 177. If you have elected not to access the Refund Form through the
                Auction Application Manager page, then OEA and MB request that all
                information listed below be supplied in writing.
                1. Name, address, contact and phone number of Bank
                2. ABA Number (capable to accept ACH payments) (please verify this
                number with your Bank)
                3. Account Number to Credit
                4. Name of Account Holder
                5. FCC Registration Number (FRN)
                 178. The refund request must be submitted by fax to the Revenue &
                Receivables Operations Group/Auctions at (202) 418-2843, or by email to
                [email protected].
                 Note: Refund processing generally takes up to two weeks to
                complete. Bidders with questions about refunds should contact Scott
                Radcliffe at (202) 418-7518 or Theresa Meeks at (202) 418-2945.
                VI. Procedural Matters
                A. Paperwork Reduction Act
                 179. The Office of Management and Budget (OMB) has approved the
                information collections in the Application to Participate in an FCC
                Auction, FCC Form 175. The Auction 112 Procedures Public Notice does
                not contain new or substantively modified information collection
                requirements subject to the Paperwork Reduction Act of 1995 (PRA),
                Public Law 104-13. Therefore, it does not contain any new or modified
                information collection burden for small business concerns with fewer
                than 25 employees pursuant to the Small Business Paperwork Relief Act
                of 2002, Public Law 107-198. The Commission will be submitting a non-
                substantive change request to OMB concerning OMB 3060-0600 related to
                the certification requirement for Auction 112 applicants adopted
                herein, and the Commission will not require Auction 112 applicants to
                make this certification on FCC Form 175 until OMB has approved the non-
                substantive change request.
                B. Congressional Review Act
                 180. The Commission has determined, and Administrator of the Office
                of Information and Regulatory Affairs, Office of Management and Budget,
                concurs, that these rules are ``non-major'' under the Congressional
                Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the
                Auction 112 Procedures Public Notice in a report to Congress and the
                Government Accountability Office pursuant to the Congressional Review
                Act, 5 U.S.C. 801(a)(1)(A).
                C. Supplemental Final Regulatory Flexibility Analysis
                 181. As required by the Regulatory Flexibility Act of 1980, as
                amended (RFA), the Commission prepared Initial Regulatory Flexibility
                Analyses (IRFAs) in connection with the Broadcast Competitive Bidding
                Notice of Proposed Rulemaking (NPRM), 62 FR 65392, December 12, 1997,
                and other Commission NPRMs (collectively, Competitive Bidding NPRMs)
                pursuant to which Auction 112 will be conducted. Final Regulatory
                Flexibility Analyses (FRFAs) likewise were prepared in the Broadcast
                Competitive Bidding Order, 63 FR 48615, September 11, 1998, and other
                Commission rulemaking orders (collectively, Competitive Bidding Orders)
                pursuant to which Auction 112 will be conducted. In this proceeding, a
                Supplemental Initial Regulatory Flexibility Analysis (Supplemental
                IRFA) was incorporated in the Auction 112 Comment Public Notice. The
                Commission sought written public comment on the proposals in the
                Auction 112 Comment Public Notice, including comments on the
                Supplemental IRFA. This Supplemental Final Regulatory Flexibility
                Analysis (Supplemental FRFA) supplements the FRFAs in the Competitive
                Bidding Orders to reflect the actions taken in the Auction 112
                Procedures Public Notice and conforms to the RFA.
                 182. Need for, and Objectives of, the Public Notice. The procedures
                for the conduct of Auction 112 as described in the Auction 112
                Procedures Public Notice implement the Commission's competitive bidding
                rules, which have been adopted by the Commission in multiple notice-
                and-comment rulemaking proceedings. More specifically, the Auction 112
                Procedures Public Notice provides an overview of the procedures, terms,
                and conditions governing Auction 112, and the post-auction application
                and payment processes, as well as setting the minimum opening bid
                amount for each of the TV construction permits that are subject to
                being assigned by competitive bidding.
                 183. To promote the efficient and fair administration of the
                competitive bidding process for all Auction 112 participants, including
                small businesses, in the Auction 112 Procedures Public Notice, OEA and
                MB announce the following procedures:
                [[Page 9269]]
                 A requirement that any applicant seeking to participate in
                Auction 112 certify in its short-form application, under penalty of
                perjury, that it has read the public notice adopting procedures for
                Auction 112, and that it has familiarized itself with those procedures
                and the requirements for obtaining a construction permit for a TV
                station;
                 establishment of an additional default payment of 20%
                under 47 CFR 1.2104(g)(2) in the event that a winning bidder defaults
                or is disqualified after the auction;
                 use of a simultaneous multiple-round auction format,
                consisting of sequential bidding rounds with a simultaneous stopping
                rule (with discretion to exercise alternative stopping rules under
                certain circumstances);
                 use of anonymous bidding/limited information procedures
                which will not make public until after bidding has closed: (1) The
                construction permits that an applicant selects for bidding in its
                short-form application, (2) the amount of any upfront payment made by
                or on behalf of an applicant, (3) any applicant's bidding eligibility,
                and (4) any other bidding-related information that might reveal the
                identity of the bidder placing a bid;
                 retention by OEA, in conjunction with MB, of its
                discretion to delay, suspend, or cancel bidding in Auction 112 for any
                reason that affects the fair and efficient conduct of the competitive
                bidding process;
                 retention by OEA of its discretion to adjust the bidding
                schedule in order to manage the pace of Auction 112;
                 a specific minimum opening bid amount for each
                construction permit available in Auction 112;
                 a specific number of bidding units for each construction
                permit;
                 a specific upfront payment amount for each construction
                permit;
                 establishment of a bidder's initial bidding eligibility in
                bidding units based on that bidder's upfront payment through assignment
                of a specific number of bidding units for each construction permit;
                 use of an activity requirement so that bidders must bid
                actively during the auction rather than waiting until late in the
                auction before participating;
                 a single stage auction in which a bidder is required to be
                active on 100% of its bidding eligibility in each round of the auction;
                 provision of three activity waivers for each qualified
                bidder to allow it to preserve eligibility during the course of the
                auction;
                 use of minimum acceptable bid amounts and additional bid
                increments, along with a proposed methodology for calculating such
                amounts, while retaining discretion to change their methodology if
                circumstances dictate;
                 bid removal procedures; and
                 a prohibition on bid withdrawals.
                 184. Summary of Significant Issues Raised by Public Comments in
                Response to the IRFA. There were no comments filed that specifically
                addressed the procedures and policies proposed in the Supplemental
                IRFA.
                 185. Response to Comments by the Chief Counsel for Advocacy of the
                Small Business Administration. Pursuant to the Small Business Jobs Act
                of 2010, which amended the RFA, the Commission is required to respond
                to any comment filed by the Chief Counsel for Advocacy of the Small
                Business Administration (SBA), and to provide a detailed statement of
                any change made to the proposed procedures as a result of those
                comments. The Chief Counsel did not file any comments in response to
                the procedures that were proposed in the Auction 112 Comment Public
                Notice.
                 186. Description and Estimate of the Number of Small Entities to
                Which the Procedures Will Apply. The RFA directs agencies to provide a
                description of and, where feasible, an estimate of the number of small
                entities that may be affected by the rules adopted herein. The RFA
                generally defines the term ``small entity'' as having the same meaning
                as the terms ``small business,'' ``small organization,'' and ``small
                governmental jurisdiction.'' In addition, the term ``small business''
                has the same meaning as the term ``small business concern'' under the
                Small Business Act. A ``small business concern'' is one which: (1) Is
                independently owned and operated; (2) is not dominant in its field of
                operation; and (3) satisfies any additional criteria established by the
                SBA.
                 187. The specific competitive bidding procedures and minimum
                opening bid amounts described in the Auction 112 Procedures Public
                Notice will affect all applicants participating in Auction 112. OEA and
                MB expect that the pool of applicants who seek to bid in Auction 112
                will include firms of all sizes.
                 188. Television Broadcasting. This Economic Census category
                ``comprises establishments primarily engaged in broadcasting images
                together with sound.'' These establishments operate television
                broadcast studios and facilities for the programming and transmission
                of programs to the public. These establishments also produce or
                transmit visual programming to affiliated broadcast television
                stations, which in turn broadcast the programs to the public on a
                predetermined schedule. Programming may originate in their own studio,
                from an affiliated network, or from external sources. The SBA has
                created the following small business size standard for such businesses:
                those having $41.5 million or less in annual receipts. The 2012
                Economic Census reports that 751 firms operated that entire year. Of
                that number, 656 had annual receipts of $25,000,000 or less, and 25 had
                annual receipts between $25,000,000 and $49,999,999. Based on this data
                OEA and MB therefore estimate that the majority of commercial
                television broadcasters are small entities under the applicable SBA
                size standard.
                 189. Additionally, the Commission has estimated the number of
                licensed commercial television stations to be 1,373. Of this total,
                1,269 stations (or about 92.4%) had revenues of $41.5 million or less,
                according to Commission staff review of the BIA Kelsey Inc. Media
                Access Pro Television Database (BIA), and therefore these stations
                qualify as small entities under the SBA definition.
                 190. In addition, the Commission has estimated the number of
                licensed noncommercial educational (NCE) television stations to be 385.
                These stations are non-profit, and therefore considered to be small
                entities.
                 191. OEA and MB note, however, that the SBA size standard data does
                not enable them to make a meaningful estimate of the number of small
                entities that may participate in Auction 112.
                 192. In assessing whether a business entity qualifies as small
                under the SBA definition, business control affiliations must be
                included. The estimate therefore likely overstates the number of small
                entities that might be affected by this auction because the revenue
                figures on which this estimate is based does not include or aggregate
                revenues from affiliated companies. Moreover, the definition of small
                business also requires that an entity not be dominant in its field of
                operation and that the entity be independently owned and operated. The
                estimate of small businesses to which Auction 112 competitive bidding
                rules may apply does not exclude any television station from the
                definition of a small business on these bases and is therefore over-
                inclusive to that extent. Furthermore, OEA and MB are unable at this
                time to define or quantify the criteria that would establish whether a
                specific television station is dominant in its field of operation.
                 193. OEA and MB also note that they are unable to accurately
                develop an estimate of how many of the potential Auction 112 applicants
                might prove to
                [[Page 9270]]
                be small businesses based on the number of small entities that applied
                to participate in prior broadcast auctions because that information is
                not collected from applicants for broadcast auctions in which bidding
                credits are not based on an applicant's size (as is the case in certain
                auctions of licenses for wireless services). OEA and MB conclude,
                however, that the majority of Auction 112 eligible bidders will likely
                meet the SBA's definition of a small business concern.
                 194. Description of Projected Reporting, Recordkeeping, and Other
                Compliance Requirements for Small Entities. For Auction 112, no new
                reporting, recordkeeping, or other compliance requirements for small
                entities or other auction applicants were proposed. The Commission
                designed the auction application process itself to minimize reporting
                and compliance requirements for applicants, including small business
                applicants. For all spectrum auctions, in the first part of the
                Commission's two-phased auction application process, parties desiring
                to participate in an auction file streamlined, short-form applications
                in which they certify under penalty of perjury as to their
                qualifications. Eligibility to participate in bidding is based on an
                applicant's short-form application and certifications, as well as its
                upfront payment. In the second phase of the auction application
                process, there are additional compliance requirements for winning
                bidders. Thus, a small business that fails to become a winning bidder
                does not need to provide the additional showings and more detailed
                demonstrations required of a winning bidder.
                 195. Auction 112 applicants, including small entities, will become
                qualified to bid in Auction 112 only if they comply with the following:
                (1) Submission of a short-form application that is timely and is found
                to be substantially complete, and (2) timely submission of a sufficient
                upfront payment for at least one of the construction permits that the
                applicant selected on its FCC Form 175. In accordance with the terms of
                47 CFR 1.2105(b)(2), an applicant whose application is found to contain
                deficiencies will have a limited opportunity to bring its application
                into compliance with the Commission's competitive bidding rules during
                a resubmission window. In addition, each Auction 112 applicant must
                maintain the accuracy of its previously filed short-form application
                electronically using the FCC Auction Application System.
                 196. In the second phase of the process, there are additional
                compliance requirements only applicable to winning bidders. As with
                other winning bidders, any small entity that is a winning bidder will
                be required to comply with the terms of the following rules, among
                others: (1) 47 CFR 1.2107(b), by submitting as a down payment within 10
                business days after release of the auction closing public notice
                sufficient funds (in addition to its upfront payment) to bring its
                total amount of money on deposit with the Commission for Auction 112 to
                20% of the amount of its winning bid or bids; (2) 47 CFR 1.2109(a), by
                submitting within 10 business days after the down payment deadline the
                balance of the amount for each of its winning bids; and (3) 47 CFR
                73.5005(a), by electronically filing a long-form application and
                required exhibits for each construction permit won through Auction 112.
                 197. Further, as required by 47 CFR 1.2105(c), reports concerning
                prohibited communications must be filed with the Chief of the Auctions
                Division, as detailed in the Auction 112 Procedures Public Notice.
                 198. Steps Taken to Minimize the Significant Economic Impact on
                Small Entities, and Significant Alternatives Considered. The RFA
                requires an agency to describe any significant, specifically small
                business, alternatives that it has considered in reaching its proposed
                approach, which may include the following four alternatives (among
                others): (1) The establishment of differing compliance or reporting
                requirements or timetables that take into account the resources
                available to small entities; (2) the clarification, consolidation, or
                simplification of compliance and reporting requirements under the rule
                for such small entities; (3) the use of performance rather than design
                standards; and (4) an exemption from coverage of the rule, or any part
                thereof, for such small entities.
                 199. OEA and MB intend that the procedures adopted in the Auction
                112 Procedures Public Notice to facilitate participation in Auction 112
                will result in both operational and administrative cost savings for
                small entities and other auction participants. In light of the numerous
                resources that will be available from the Commission to small entities
                and other auction participants at no cost, the processes and procedures
                announced in the Auction 112 Procedures Public Notice should minimize
                any economic impact of the auction processes and procedures on small
                entities and should result in both operational and administrative cost
                savings for small entities and other auction participants. For example,
                prior to the beginning of bidding in this auction, the Commission will
                hold a mock auction to allow qualified bidders the opportunity to
                familiarize themselves with both the processes and systems that will be
                used in Auction 112. During the auction, participants will be able to
                access and participate in bidding via the internet using a web-based
                system, or telephonically, providing two cost-effective methods of
                participation and avoiding the cost of travel for in-person
                participation. Further, small entities as well as other auction
                participants will be able to avail themselves of a telephone hotline
                for assistance with auction processes and procedures as well as a
                technical support telephone hotline to assist with issues such as
                access to or navigation within the electronic FCC Form 175 and use of
                the FCC's auction bidding system. In addition, all auction
                participants, including small business entities, will have access to
                various other sources of information and databases through the
                Commission that will aid in both their understanding and participation
                in the process. These mechanisms are made available to facilitate
                participation by all qualified bidders and may result in significant
                cost savings for small business entities that utilize these mechanisms.
                These resources, coupled with the description and communication of the
                bidding procedures before bidding begins in Auction 112, should ensure
                that the auction will be administered predictably, efficiently and
                fairly, thus providing certainty for small entities as well as other
                auction participants. In addition, in consideration of comments
                submitted in this proceeding, the minimum opening bid amounts were
                reduced to amounts 25% lower than those that had been proposed in the
                Auction 112 Comment Public Notice; this change is intended to encourage
                participation in Auction 112 by a greater number of interested parties,
                which may include some small entities.
                 200. Notice to SBA. The Commission will send a copy of the Auction
                112 Procedures Public Notice, including this Supplemental FRFA, to the
                Chief Counsel for Advocacy of the SBA.
                Federal Communications Commission.
                William Huber,
                Associate Chief, Auctions Division, Office of Economics and Analytics.
                [FR Doc. 2022-03348 Filed 2-17-22; 8:45 am]
                BILLING CODE 6712-01-P
                

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