PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 1919 M STREET, N.W. WASHINGTON, D.C. 20554 News media information (202) 418-0500. DA 96-1958 December 4, 1996 AUCTION OF INTERACTIVE VIDEO AND DATA SERVICE (IVDS) Auction Notice and Filing Requirements for 983 IVDS Licenses Scheduled for February 18, 1997 Report No. AUC 96 13 A (Auction No. 13) 1. INTRODUCTION Licenses to Be Auctioned: 983 licenses to provide Interactive Video and Data Service ("IVDS"). The auction will consist of two licenses (Frequency Blocks "A" and "B") in each of the 428 Rural Service Areas ("RSA") in the United States, plus 127 Metropolitan Statistical Area ("MSA") licenses where winning bidders from a previous auction have been found to be in default. Each license authorizes service on 500 kilohertz of spectrum (218.0-218.5 or 218.5-219.0 MHz) in each service area: Frequency Block A: 218.0 - 218.5 MHz Frequency Block B: 218.5 - 219.0 MHz A list of licenses subject to auction is provided in Attachment A. Auction Date: The auction will commence on Tuesday, February 18, 1997. The precise schedule for bidding will be announced by public notice at least one week before the start of the auction. Unless otherwise announced, bidding will be conducted on each business day until bidding has stopped on all licenses. Auction Number: This is the thirteenth spectrum auction the FCC has conducted, and will be referred to as Auction No. 13. Bidding Methodology: Simultaneous multiple round bidding. Bidding will be permitted only from remote locations, either electronically (by computer) or telephonically. Pre-Auction Deadlines:  Short-Form Application (FCC Form 175). . Tuesday, January 21, 1997, 5:30 p.m. EST  Upfront Payments:  Wire Transfer . . . . . . . . . . . Monday, February 3, 1997, 6:00 p.m. EST  Cashier's Check . . . . . . . . . . Monday, February 3, 1997, 11:59 p.m. EST  Orders for Remote Bidding Software . . . Tuesday, February 4, 1997, 5:30 p.m. EST  Mock Auction . . . . . . . . . . . . . . Wednesday and Thursday, February 12-13, 1997 Telephone Contacts:  FCC Wireless Consumer Assistance Branch . . . . . . . . 800-322-1117 (Bidder Information Packages and General Auction Information)  FCC Technical Support Hotline . . . . . . . . . . . . . 202-414-1250 List of Attachments:  Attachment A: List of Licenses Offered  Attachment B: Electronic Filing of FCC Form 175  Attachment C: Guidelines for Completing FCC Form 175 and Exhibits  Attachment D: Summary Listing of Documents from the Commission and the Wireless Telecommunications Bureau Addressing Application of the Anti-Collusion Rules Bidder Information Package: More complete details about this auction will be contained in a Bidder Information Package. The FCC will provide one copy free of charge. Additional copies may be ordered at a cost of $16.00 each, including postage, payable by Visa or Master Card, or by check payable to "Federal Communications Commission" or "FCC." To place an order, please contact the FCC Wireless Consumer Assistance Branch at 800-322-1117. Bidders who do not receive their Packages within two weeks of ordering should contact the Branch. Participation: Those wishing to participate in the auction must submit a short-form application on the FCC Form 175. The FCC Form 175 must be completed and filed in accordance with the Commission's rules and the instructions provided in the Bidder Information Package, and must be received at the Commission's Gettysburg office no later than 5:30 p.m. EST on Tuesday, January 21, 1997. Applicants are strongly encouraged to file their FCC Form 175 electronically, although manual filing (via hard copy) will be permitted. Electronic filing enables applicants to receive interactive feedback while completing the application, and immediate acknowledgment that the FCC Form 175 has been submitted for filing. In addition, only those applicants who file applications electronically will have the option of bidding either electronically or telephonically; applicants who file their applications manually will be permitted to bid only telephonically. Applicants whose FCC Form 175s are accepted will be required to submit an upfront payment and an FCC Remittance Advice (FCC Form 159). The upfront payment must be made in U.S. dollars by wire transfer or cashier's check. Payments submitted by wire transfer must be received at Mellon Bank in Pittsburgh, Pennsylvania, no later than Monday, February 3, 1997 at 6:00 p.m. EST. Payments made by cashier's check must be received at Mellon Bank in Pittsburgh no later than Monday, February 3, 1997, at 11:59 p.m. EST. NOTE: No other form of payment will be accepted. Prohibition of Collusion: To ensure competitiveness of the auction process, the FCC's rules prohibit applicants for the same MSA and RSA areas from communicating with each other during the auction about bids, bidding strategies or settlements. This prohibition begins with the filing of short-form applications, and ends when winning bidders submit down payments. The prohibition does not apply where applicants enter into a bidding agreement before filing their short-form applications, and disclose the existence of the agreement in the short-form application. See 47 C.F.R.  1.2105(c). See also the summary of documents from the Commission and the Wireless Telecommunications Bureau addressing application of the anti-collusion rules in Attachment D to this Public Notice. Relevant Authority: Prospective bidders should familiarize themselves thoroughly with the FCC's rules relating to the Interactive Video and Data Service, contained in Title 47, Part 95, Subpart F of the Code of Federal Regulations ("C.F.R."), and relating to application and auction procedures, contained in Title 47, Part 1, Subpart Q. Prospective bidders should also be thoroughly familiar with the procedures, terms and conditions (collectively, "Terms") contained in the Second Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348 (1994), 59 Fed. Reg. 22980 (May 4, 1994), and associated Erratum (released May 12, 1994); he Second Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 7245 (1994), 59 Fed. Reg. 44272 (Aug. 26, 1994), and associated Erratum (released Oct. 19, 1994); the Fourth Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2330 (1994), 59 Fed. Reg. 24947 (May 18, 1994); the Sixth Memorandum Opinion and Order and Further Notice of Proposed Rule Making in PP Docket No. 93-253, FCC 96-330 (released Sept. 10, 1996), 61 Fed. Reg. 49066 (Sept. 18, 1996) and 61 Fed. Reg. 49103 (Sept. 18, 1996); and the Tenth Report and Order in PP Docket No. 93-253, FCC 96-447 (released Nov. 21, 1996), 61 Fed. Reg. 60198 (Nov. 27, 1996) (collectively referred to as "the Relevant Orders"). The Terms contained in the FCC's rules, the Relevant Orders, this Public Notice, and in the Bidder Information Package are not negotiable. Prospective bidders should review these auction documents thoroughly prior to the auction to make certain that they understand all of the provisions and are willing to be bound by all of the Terms before participating in the auction. Potential bidders should also be aware that petitions for reconsideration of the FCC's actions in the Tenth Report and Order may be filed, and that those of the Terms adopted therein are therefore subject to change upon reconsideration or appeal. Furthermore, potential bidders should be aware that petitions for reconsideration and petitions for rulemaking are currently on file with the Commission with regard to issues such as the provision of mobile service by IVDS licensees and the length of IVDS license terms. Accordingly, bidders are advised to keep current on any developments that may affect the FCC's rules or Terms. The Commission may amend or supplement the information contained in this Public Notice and in the Bidder Information Package at any time. The FCC will issue public notices to convey new or supplemental information to bidders. It is the responsibility of all prospective bidders to remain current with all FCC rules and with all public notices pertaining to this auction. Copies of FCC documents, including public notices, may be obtained for a fee by calling the Commission's copy contractor, International Transcription Service, Inc., at 202-857-3800. Additionally, many documents can be retrieved from the FCC Internet node via anonymous ftp@ftp.fcc.gov or the FCC World Wide Web site at http://www.fcc.gov. Bidders should also note that a separate IVDS Web page is available at the FCC Internet node. Bidder Alerts: All applicants must certify under penalty of perjury on their FCC Form 175 applications that they are legally, technically, financially and otherwise qualified to hold a license. Prospective bidders are reminded that submission of a false certification to the Commission is a serious matter that may result in severe penalties, including monetary forfeitures, license revocations, exclusion from participation in future auctions, and/or criminal prosecution. As is the case with many business investment opportunities, some unscrupulous entrepreneurs may attempt to use the IVDS auction to deceive and defraud unsuspecting investors. Common warning signals of fraud include the following: The first contact is a "cold call" from a telemarketer, or is made in response to an inquiry prompted by a radio or television infomercial. The offering materials used to invest in the venture appear to be targeted at IRA funds, for example by including all documents and papers needed for the transfer of funds maintained in IRA accounts. The amount of the minimum investment is less than $25,000. The sales representative makes verbal representations that: (a) the IRS, FTC, SEC, FCC, or other government agency has approved the investment; (b) the investment is not subject to state or federal securities laws; or (c) the investment will yield unrealistically high short-term profits. In addition, the offering materials often include copies of actual FCC releases, or quotes from FCC personnel, giving the appearance of FCC knowledge or approval of the solicitation. The Commission does not approve any individual investment proposal, nor does it provide a warranty with respect to any license being auctioned. Potential applicants and investors are reminded that winning an IVDS license in this auction is not a guarantee of success in the marketplace. Information about deceptive telemarketing investment schemes is available from the Federal Trade Commission (FTC) at 202-326-2222 and from the Securities and Exchange Commission (SEC) at 202-942-7040. Complaints about specific deceptive telemarketing investment schemes should be directed to the FTC, the SEC, or the National Fraud Information Center at 800-876-7060. Consumers who have concerns about specific IVDS investment proposals may also call the FCC Wireless Consumer Assistance Branch at 800-322-1117. 2. BIDDER ELIGIBILITY AND SMALL BUSINESS PROVISIONS A. General Eligibility Criteria As described in Part 1 above, this auction offers a total of 983 IVDS licenses, with two licenses available in each of the 428 RSAs (Frequency Blocks "A" or "B"), and 127 defaulted MSA licenses available for reauction. Each license authorizes service on 500 kilohertz of spectrum (218.0-218.5 MHz (Frequency Block "A") or 218.5-219.0 MHz (Frequency Block "B")) in each service area. Section 95.813 of the Commission's Rules sets out eligibility requirements for IVDS licensees. Under Section 95.813(b)(1), no entity is eligible to hold an IVDS system license if it already holds, or has an interest in, an IVDS system license for the same service area. Prospective bidders should be aware that the Commission has recently concluded that, in the limited instance where IVDS licensees wish to participate in a subsequent auction in order to "switch" licenses in a service area, the prospective bidder may file, as an attachment to its pre- auction short-form application, a request for waiver of the common ownership rule for this limited purpose. If the prospective bidder is granted the waiver and ultimately wins the second license, it must divest itself of the first license within ninety (90) days of the grant of the second license. See Sixth Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, FCC 96- 330,  52 (released September 10, 1996). B. Special Financial Provisions for Qualifying Small Businesses Qualifying small business applicants are eligible for two special financial provisions: bidding credits and installment payments. (1) Definitions of Small Businesses The Commission revised the small business definitions for the IVDS auctions in the Tenth Report and Order and added a second tier of small businesses, referred to as "very small businesses." o A "small business" is defined as an entity with average gross revenues that are not more than $15 million for the preceding three years. o A "very small business" is defined as an entity with average gross revenues that are not more than $3 million for the preceding three years. Gross revenues includes all income received by an entity, whether earned or passive, before any deductions are made for costs of doing business (e.g., cost of goods sold), as evidenced by audited financial statements for the relevant number of most recently completed calendar years, or, if audited financial statements were not prepared on a calendar-year basis, for the most recently completed fiscal years preceding the filing of the applicant's short-form application (FCC Form 175). If an entity was not in existence for all or part of the relevant period, gross revenues shall be evidenced by the audited financial statements of the entity's predecessor-in-interest or, if there is no identifiable predecessor-in-interest, unaudited financial statements certified by the applicant as accurate. When an applicant does not otherwise use audited financial statements, its gross revenues may be certified by its chief financial officer or its equivalent. In determining whether an entity qualifies as a small business at either threshold, gross revenues of all "controlling" principals will be attributed to the prospective small business applicant, as well as the gross revenues of affiliates of the applicant. However, personal net worth is not included in the determination of eligibility for bidding as a small business. The term "control" includes both de jure and de facto control of the applicant. Typically, de jure control is evidenced by ownership of 50.1 percent of an entity's voting stock. De facto control is determined on a case-by-case basis. An entity must demonstrate at least the following indicia of control to establish that it retains de facto control of the applicant: (1) the entity constitutes or appoints more than 50 percent of the board of directors or partnership management committee; (2) the entity has authority to appoint, promote, demote and fire senior executives that control the day-to-day activities of the licensees; and (3) the entity plays an integral role in all major management decisions. The definition of "affiliate" is set forth at Section 1.2110(b)(4) of the Commission's Rules. (2) Bidding Credits The size of an IVDS bidding credit depends on the annual gross revenues of the bidder and its affiliates, as averaged over the preceding three years:  A bidder with average gross annual revenues of not more than $15 million (a "small business") receives a 10-percent discount on its winning bid for IVDS licenses.  A bidder with average gross annual revenues of not more than $3 million (a "very small business") receives a 15-percent discount on its winning bid for IVDS licenses. These bidding credits are not cumulative. (3) Installment Payments Upon issuance of the IVDS licenses, a qualifying small or very small business may elect to pay the balance of its net winning bids (actual bids less the applicable bidding credits) in quarterly installments over the five-year term of the license, with interest charges to be fixed at the time of licensing at a rate equal to the rate for five-year U.S. Treasury obligations. While the Commission will endeavor to issue all licenses at the same time, bidders should note that license issue dates and corresponding interest rates may vary between the licenses. Payments shall include interest only for the first two years and payments of interest and principal amortized over the remaining three years of the license term. A license issued to an eligible small business that elects installment payments shall be conditioned on the full and timely performance of the license holder's quarterly payments. (4) Application Showing Applicants should note that they will be required to file supporting documentation to establish that they satisfy the eligibility requirements to bid as a small business or very small business in this auction, and are subject to audits to confirm their eligibility. See 47 C.F.R.  95.816(d)(3). (5) Unjust Enrichment IVDS winning bidders should note that unjust enrichment provisions apply to winning bidders who use bidding credits or installment financing and subsequently assign or transfer control of their IVDS licenses to an entity that does not qualify for the special financial provisions. See 47 C.F.R.  1.2111(c) (d). 3. PRE-AUCTION PROCEDURES A. Short-Form Application (FCC Form 175) Due Tuesday, January 21, 1997 In order to be eligible to bid in this auction, applicants must first submit an FCC Form 175 application to the Commission. This application must be received at the Commission's Gettysburg office by 5:30 p.m. EST on Tuesday, January 21, 1997. Late applications will not be accepted. There is no application fee required when filing a FCC Form 175. However, to be eligible to bid, an applicant will have to submit an upfront payment. See Part 3.C below. (1) Filing Options Applicants are encouraged to file their applications electronically in order to take advantage of the greater efficiencies and convenience of electronic filing. For example, electronic filing enables the applicant to: (a) receive interactive feedback while completing the application, and (b) receive immediate acknowledgment that the FCC Form 175 has been submitted for filing. In addition, only those applicants that file electronically will have the option of bidding electronically. However, manual filing (via hard copy) is also permitted. Please note that manual filers will not be permitted to bid electronically and must bid telephonically, unless the FCC Form 175 is amended electronically. The following is a brief description of each filing method. (a) Electronic filing Applicants wishing to file electronically may generally do so on a 24-hour basis beginning at about the same time as release of the Bidder Information Package. All the information required to file the FCC Form 175 electronically (i.e., software, help files and configuration samples) will be available over both the Internet and the FCC's Bulletin Board System ( BBS ). Information about downloading, installing, and running the FCC Form 175 application software is included in Attachment B to this Public Notice. (b) Manual filing Auction applicants will be permitted to file their FCC Form 175 applications in hard copy, with microfiche or 3.5-inch diskette attachments where any manually filed FCC Form 175 and 175-S exceeds five pages in length. Manual filers must verify that they are using the FCC Form 175 marked "October 1995" in the lower right corner. Earlier versions of the form will not be accepted for filing. Copies of FCC Forms 175 and 175-S will be included in the Bidder Information Package, or can be obtained by calling 202-418-FORM. Manual applications may be submitted by hand delivery (including private "overnight" courier), or by U.S. mail (certified mail with return receipt recommended). They must be addressed to: FCC Form 175 Filing, Auction No. 13 Federal Communications Commission Office of Operations 1270 Fairfield Road Gettysburg, PA 17325-7245 NOTE: Manual applications delivered to any other location will not be accepted. (2) Completion of the FCC Form 175 Applicants should carefully review 47 C.F.R.  1.2105 and 95.816, and must complete all items on the FCC Form 175 (and 175-S, if applicable). Instructions for completing the FCC Form 175 will be contained in the Bidder Information Package and are in Attachment C to this Public Notice. Failure to sign a manually filed FCC Form 175 or failure to submit the required ownership information (for both electronic and manual filers) will result in dismissal of the application and loss of the ability to participate in the auction. Only original signatures will be accepted for manually filed applications. B. Application Processing and Minor Corrections After the deadline for filing the FCC Form 175 applications has passed, the FCC will process all timely applications to determine which are acceptable for filing. Then it will issue a public notice identifying: (1) those applications accepted for filing (including FCC account numbers and the licenses for which they applied); (2) those applications rejected; and (3) those applications which have minor defects that may be corrected, and the deadline for filing such corrected applications. As described more fully in our rules, after the January 21, 1997 short-form filing deadline, applicants may make only minor corrections to their FCC Form 175 applications. Applicants will not be permitted to make major modifications to their applications (e.g., change their license selections, change the certifying official, change control of the applicant, or sign the application). See 47 C.F.R.  95.816(c)(2)(i). C. Upfront Payments Due Monday, February 3, 1997 In order to be eligible to bid in the auction, applicants must submit an upfront payment accompanied by an FCC Remittance Advice (FCC Form 159). All upfront payments must be received at Mellon Bank in Pittsburgh, Pennsylvania, by Monday, February 3, 1997, at the time specified below (which varies based on method of payment). Please note that: þ All payments must be made in U.S. dollars. þ All payments must be made by wire transfer (preferred method) or cashier's check, and payable to the "Federal Communications Commission" or "FCC." No personal checks, credit card payments, or other form of payment will be accepted. þ Upfront payments for Auction 13 go to a different lockbox number from the one used in previous FCC auctions, and different from the lockbox number to be used for post-auction payments. þ Failure to deliver the upfront payment by the deadline specified below will result in dismissal of the application and disqualification from participation in the auction. (1) Wire Transfers The FCC strongly encourages applicants to make their upfront payments by wire transfer, which experience has shown provides the greatest reliability and efficiency. Wire transfer payments must be received by 6:00 p.m. EST on Monday, February 3, 1997. To avoid untimely payments, applicants should discuss arrangements (including bank closing schedules) with their banker several days before they plan to make the wire transfer, and allow sufficient time for the transfer to be initiated and completed before the deadline. Applicants will need the following information: ABA Routing Number: 043000261 Receiving Bank: Mellon Pittsburgh BNF: FCC/AC--910-0171 OBI Field: (Skip one space between each information item) "AUCTIONPAY" FCC ACCOUNT NO. (same as FCC Form 159, Block 1) PAYMENT TYPE CODE (same as FCC Form 159, Block 14A: "AWIU") FCC CODE (same as FCC Form 159, Block 17A: "13") PAYOR NAME (same as FCC Form 159, Block 3) LOCKBOX NO. 358430 NOTE: The BNF and Lockbox No. are specific to the upfront payments for IVDS; do not use BNF or Lockbox numbers from previous auctions. Applicants making upfront payments by wire transfer must fax a completed FCC Form 159 to Mellon Bank at 412-236-5702 at least one hour before placing the order for the wire transfer (but on the same business day). On the cover sheet of the fax, write "Wire Transfer - Auction Payment for Auction Event #13". (2) Cashier's Checks Cashier's checks must be drawn on financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation, and must be received by 11:59 p.m. EST on Monday, February 3, 1997. Each bidder should submit a single check and FCC Form 159 covering its entire upfront payment. But if payments for more than one bidder are sent together, each bidder's check and the associated FCC Form 159 must be in a separate inside envelope. For delivery by U.S. Postal Service, send cashier's check(s) and accompanying FCC Form 159(s) to: Mellon Bank Attn: Upfront Payments Auction # 13 P.O. Box 358430 Pittsburgh, PA 15251-5430 For delivery in person or by courier or messenger service, send cashier's check(s) and accompanying FCC Form 159(s) to: Mellon Bank Attn: Wholesale Lockbox Shift Supervisor 27th Floor (153-2713) 3 Mellon Bank Center 525 William Penn Way Pittsburgh, PA 15259-0001 (NOTE: Please indicate on the inside envelope "Lockbox No. 358430") (3) FCC Form 159 Each upfront payment must be accompanied by a completed FCC Remittance Advice (FCC Form 159). Proper completion of FCC Form 159 is critical to ensuring correct credit of upfront payments. Instructions for completing FCC Form 159 will be contained in the Bidder Information Package. (4) Amount of Upfront Payment The amount of the upfront payment required to participate in Auction No. 13 is $9,000 per MSA license and $2,500 per RSA license. The upfront payment associated with each license offered is listed in Attachment A to this Public Notice. A bidder should calculate its total upfront payment on the basis of the largest combination of bidding units on which the bidder anticipates being active in any single round of bidding. The number of bidding units associated with any particular license equals the amount of the upfront payment for that license, as set forth in Attachment A. The combination of bidding units on which a bidder is active in a round equals the sum of the bidding units associated with the licenses on which the bidder has submitted a bid, or on which the bidder is the standing high bidder. The upfront payment submitted by each applicant is not attributed to specific licenses but instead will define the largest combination of bidding units on which the applicant will be permitted to bid in any round of bidding. Thus, if an applicant submits a $16,500 total upfront payment, the applicant could be active in any single round on three RSAs and one MSA, or on any combination of licenses for which the sum of associated bidding units does not exceed 16,500. NOTE: An applicant may, on its FCC Form 175, apply for every license being offered, but its actual bidding in any round will be limited by the bidding units reflected in its upfront payment. As explained in Parts 4.A(2) and 4.A(4) below, bidders will be required to remain active in each round of the auction on a specified percentage of bidding units reflected in their upfront payments in order to retain their current eligibility. (5) Refunds Because experience with prior auctions has shown that, in most cases, wire transfers provide quicker and more efficient refunds than paper checks, the FCC currently intends to use wire transfers for all Auction 13 refunds. To avoid delays in processing refunds, applicants should include wire transfer instructions with any refund request they file; they may also provide this information in advance by faxing it to the FCC Billings and Collections Branch, ATTN: William Koch, at 202-418-2843. (Applicants should also note that implementation of the Debt Collection Improvement Act of 1996 requires the FCC to obtain a Taxpayer Identification Number before it can disburse refunds.) Eligibility for refunds is discussed later in Part 5.D. D. Auction Registration No later than five business days before the auction, the FCC will issue a public notice announcing all qualified bidders for the auction. Qualified bidders are those applicants whose FCC Form 175 applications have been accepted for filing and who have timely submitted upfront payments sufficient to make them eligible to bid on at least one of the licenses for which they applied. All qualified bidders are automatically registered for the auction. Registration materials will be distributed prior to the auction by two separate overnight mailings, each containing part of the confidential identification codes required to place bids, sent only to the contact person and applicant address listed in the FCC Form 175. Applicants who do not receive both registration mailings will not be able to submit bids. Therefore, any qualified applicant who has not received both mailings within three business days after the release of the qualified bidders public notice should contact the FCC Wireless Consumer Assistance Branch at 800-322-1117. Receipt of both registration mailings is critical to participating in the auction and each applicant is responsible for ensuring it has received all of the registration material. Qualified bidders must be aware that lost login codes, passwords or bidder identification numbers can only be replaced by appearing in person at the FCC Auction Headquarters located at 2 Massachusetts Avenue, NE, Washington, DC 20002. Only an authorized representative or certifying official, as designated on an applicant's FCC Form 175, may appear in person with two forms of identification (one of which must be a photo identification) in order to receive replacement codes. E. Remote Electronic Bidding Software Qualified bidders who file or amend the FCC Form 175 electronically may purchase remote electronic bidding software for $175.00, including shipping and handling. (Auction software is tailored to a specific auction, so software from prior auctions will not work for Auction 13.) Information about this software and an order form will be included in the Bidder Information Package. Bidders who order remote bidding software by the February 4, 1997 deadline will receive it with the registration mailings. F. Mock Auction All applicants whose FCC Form 175s have been accepted for filing will be eligible to participate in a mock auction on February 12-13, 1997. The mock auction will enable applicants to become familiar with the electronic software prior to the auction. Free demonstration software will be available for use in the mock auction. Participation is strongly recommended. Details will be announced by public notice. 4. AUCTION EVENT A. Auction Structure (1) Simultaneous Multiple Round Auction The two licenses (Frequency Blocks "A" and "B") in each of the 428 RSAs, and the 127 defaulted MSA licenses will be awarded through a single, simultaneous multiple round auction. Unless otherwise announced, bids will be accepted on all licenses in each round of the auction. (2) Activity Rule As explained in Part 3.C(4) above, an applicant's upfront payment determines its maximum bidding eligibility in any single round of bidding. In order to ensure that the auction closes within a reasonable period of time, an activity rule requires bidders to bid actively throughout the auction, rather than waiting until the end before participating. A bidder that does not satisfy the activity rule either loses bidding eligibility or uses an activity rule waiver, as explained in Part 4.A(3) below. A bidder is considered "active" on a license in the current round if it either is the high bidder at the end of the previous round's bid withdrawal period, or submits an acceptable bid (see Part 4.B(2) below) in the current round. A bidder's activity level in a round is the sum of the bidding units associated with licenses on which the bidder is active. The minimum required activity level is expressed as a percentage of the bidder's maximum bidding eligibility and increases as the auction progresses, as described in Part 4.A(4) below. (3) Activity Rule Waivers Each bidder will be provided five activity rule waivers that may be used in any round during the course of the auction. Use of an activity rule waiver preserves the bidder's current bidding eligibility despite the bidder's activity in the current round being below the required minimum level. An activity rule waiver applies to an entire round of bidding and not to a particular license. The FCC auction system assumes that bidders with insufficient activity would prefer to use an activity rule waiver (if available) rather than lose bidding eligibility. Therefore, the system will automatically apply a waiver in any round where a bidder's activity level is below the minimum required unless: (1) there are no activity rule waivers available; or (2) the bidder overrides the automatic election as discussed below and more fully explained in the Bidder Information Package. A bidder with insufficient activity who wants to reduce its bidding eligibility rather than use an activity rule waiver must affirmatively override the automatic waiver mechanism during the bid submission period. In this case, the bidder's eligibility is permanently reduced as described in Part 4.A(4) below, and it will not be permitted to later regain its lost bidding eligibility. Finally, a bidder may proactively use an activity rule waiver in a way that is not necessarily related to the bidder's activity level. If a bidder submits a proactive waiver during a bid submission period in which no bids are submitted, the auction will remain open. (Note that an automatic waiver invoked in a round in which there are no new valid bids will not keep the auction open.) Thus in the later rounds of the auction, if a bidder does not intend to bid but wants to ensure that the auction does not close, it should enter a proactive waiver in place of a bid. (4) Auction Stages The auction is composed of three stages, which are each defined by an increasing activity rule: Stage One: In each round of the first stage of the auction, a bidder desiring to maintain its current eligibility is required to be active on licenses encompassing at least 50 percent of its current bidding eligibility. Failure to maintain the requisite activity level will result in a reduction in the bidder's bidding eligibility in the next round of bidding (unless an activity rule waiver is used). During Stage One, reduced eligibility for the next round will be calculated by multiplying the current round activity by two (2). Stage Two: In each round of the second stage, a bidder desiring to maintain its current eligibility is required to be active on 80 percent of its current bidding eligibility. During Stage Two, reduced eligibility for the next round will be calculated by multiplying the current round activity by five-fourths (5/4). Stage Three: In each round of the third stage, a bidder desiring to maintain its current eligibility is required to be active on 98 percent of its current bidding eligibility. In this final stage, reduced eligibility for the next round will be calculated by multiplying the current round activity by fifty-fortyninths (50/49). CAUTION: Since activity requirements increase in each auction stage, bidders must carefully check their current activity during the bid submission period of the first round following a stage transition. This is especially critical for bidders who have standing high bids and do not plan to submit new bids. In past auctions, some bidders have inadvertently lost bidding eligibility or used an activity rule waiver because they did not reverify their activity status at stage transitions. Bidders may check their activity against the required minimum activity level either by using the remote bidding software's bid submission module or by calling a telephone bid assistant. (5) Stage Transitions The auction will start in Stage One. Under our general guidelines it will advance to the next stage (i.e., from Stage One to Stage Two, then from Stage Two to Stage Three) when, in each of three consecutive rounds of bidding, the high bid has increased on ten percent or less of the spectrum being auctioned (as measured in bidding units). However, the FCC retains the discretion to accelerate the auction by announcing that the next stage will begin in the next bidding round. (6) Auction Stopping Rules Barring extraordinary circumstances, bidding will remain open on all licenses until bidding stops on every license. Thus, the auction will close for all licenses when one round passes during which no bidder submits a new acceptable bid on any license or applies a proactive waiver. The FCC retains the discretion, however, to keep an auction open even if no new acceptable bids and no proactive waivers are submitted. In this event, the effect will be the same as if a bidder had submitted a proactive waiver. Thus, the activity rule will apply as usual, and a bidder with insufficient activity will either lose bidding eligibility or use an activity rule waiver (if it has any left). Further, in its discretion, the FCC reserves the right to declare that the auction will end after a specified number of additional rounds ("special stopping rule"). If the FCC invokes this special stopping rule, it will accept bids in the final round(s) only for licenses on which the high bid increased in at least one of the preceding three rounds. The FCC intends to exercise this option only in extreme circumstances, such as where the auction is proceeding very slowly, where there is minimal overall bidding activity, or where it appears likely that the auction will not close within a reasonable period of time. Before exercising this option, the FCC will probably first attempt to increase the pace of the auction by, for example, moving the auction into the next stage (where bidders would be required to maintain a higher level of bidding activity), increasing the number of bidding rounds per day, and/or increasing the amount of the minimum bid increments for the limited number of licenses where there is still a high level of bidding activity. (7) Auction Delay, Suspension or Cancellation By public notice or by announcement during the auction, the FCC may delay, suspend or cancel the auction in the event of natural disaster, technical obstacle, evidence of an auction security breach, unlawful bidding activity, administrative or weather necessity, or for any other reason that affects the fair and competitive conduct of competitive bidding. In such cases, the FCC, in its sole discretion, may elect to: resume the auction starting from the beginning of the current round; resume the auction starting from some previous round; or cancel the auction in its entirety. Network interruption may cause the FCC to delay or suspend the auction. B. Bidding Procedures (1) Round Structure Generally, there will be one bidding round per day during the early portion of the auction. Each bidding round contains the following performance and review periods: þ Bid submission period þ Bid submission round results þ Bid withdrawal period þ Bid withdrawal round results The initial bidding schedule will be announced by public notice at least one week before the start of the auction, and will be included in the registration mailings. The FCC has discretion to change the bidding schedule in order to foster an auction pace that reasonably balances speed with bidders' need to study round results and adjust their bidding strategies. The FCC may increase or decrease the amount of time for the performance and review periods, or the number of rounds per day, depending upon the bidding activity level and other factors. (2) Minimum Acceptable Bids There will be no minimum opening bid and no minimum bid increment for a license until the license has received an initial bid. Once there is a standing high bid on a license, the minimum bid increment for that license will be set initially at the greater of ten percent of the previous high bid or the amount of the upfront payment for the license. The Commission retains the discretion to vary the minimum bid increments in each round of the auction for individual licenses or groups of licenses by announcement prior to each round. (3) High Bids Each bid will be date-and time-stamped when it is entered into the computer system. In the event of tie bids, the Commission will identify the high bidder on the basis of the order in which bids are received by the Commission, starting with the earliest bid. (4) Bid Submission Each bidder may submit bids only once in each round for as many licenses as it is eligible. Eligibility in the first round of the auction is determined by: (a) the licenses applied for on FCC Form 175 and (b) the upfront payment amount deposited. The bid submission screens will be tailored for each bidder to include only those licenses for which the bidder applied on its FCC Form 175. Bidders who file the FCC Form 175 electronically (or amend electronically by the minor correction deadline) and purchase remote electronic bidding software may place their bids and withdrawals either electronically or telephonically, as they wish or circumstances warrant. Each electronic bidder will be required to login to the FCC auction system during the bid submission period using the FCC account number, bidder identification number, and confidential security codes provided in the registration materials. Bidders can download and print bid confirmations after they submit their bids electronically. To place a bid telephonically, a bidder must call the FCC Bidding Line during the bid submission period. This telephone number will be provided only to qualified bidders in the registration materials. The bid operator will request the bidder's FCC account number, bidder identification number, confidential security codes, and name of the authorized bidder. The FCC will fax a hard copy bid confirmation to those who bid by telephone. (5) Bid Withdrawal A high bidder that wants to withdraw one or more of its standing high bids during the course of the auction may do so during any bid withdrawal period, subject to the bid withdrawal payment specified in Section 1.2104(g) of the Commission's Rules. The procedure for withdrawing a high bid and receiving a withdrawal confirmation is essentially the same as the bid submission procedure described in Part 4.B(4) above. To prevent strategic delays to the close of the auction, the FCC retains the discretion to limit the number of times that a bidder may re-bid on a license from which it has withdrawn a high bid. If a high bid is withdrawn, the license will be offered in the next round at the second highest bid price, which may be less than, or equal to in the case of tie bids, the amount of the withdrawn bid, without any increment. The FCC will serve as a "place holder" on the license until a new acceptable bid is submitted on that license. (6) Round Results Upon the conclusion of each bid submission period, the FCC will compile reports of all bids placed, current high bids, and bidder eligibility status (bidding eligibility and activity rule waivers), and post the reports for public access. The process of compilation and verification is not instantaneous, but the reports will be available before the start of the bid withdrawal period. Following each bid withdrawal period, the FCC will compile additional reports reflecting any high bids withdrawn, post-withdrawal high bids, and minimum accepted bids for the next bid submission period. Again, bidders should allow some time for compilation and verification. Reports reflecting bidders' identities and bidder identification numbers will be available before and during the auction. Thus, bidders will know in advance of the auction the identities of the bidders against whom they are bidding. (7) Auction Announcements The FCC will use auction announcements to announce items such as schedule changes and stage transitions. All FCC auction announcements will be available on the FCC remote electronic bidding system, as well as the Internet and the FCC Bulletin Board System. (8) Other matters As noted in Part 3.B above, after the short-form filing deadline applicants may make only minor changes to their FCC Form 175 applications. For example, permissible minor changes include deletion and addition of authorized bidders (to a maximum of three) and revision of exhibits. Electronic filers should make these changes on-line, and submit a letter to Kathleen O'Brien Ham, Chief, Auctions Division (and mail a carbon copy to Ruby Hough, Auctions Division), briefly summarizing the changes. Manual filers must send a hard-copy amendment to the address given in Part 3.A(1)(b) above, plus fax a copy to 202-418-2082. Questions about other changes should be directed to the FCC Auctions Division at 202-418-0660. 5. POST-AUCTION PROCEDURES A. Down Payments and Withdrawn Bid Payments After bidding has ended, the FCC will issue a public notice declaring the auction closed ("auction closing notice"), identifying the winning bids and bidders for each license, and listing withdrawn bid payments due. Within five business days after release of the auction closing notice, each winning bidder must submit sufficient funds to bring the total amount of money on deposit with the government (upfront payment less any withdrawal payments) to 20 percent, unless it is an eligible small or very small business who elected to pay using the installment payment plan, then it must submit sufficient funds to bring the total amount of money on deposit with the government (upfront payment less any withdrawal payments) to 10 percent of its net winning bids (actual bids less any applicable bidding credits). See 47 C.F.R.  1.2107(b). In addition, by the same deadline all bidders must pay any withdrawn bid amounts due under Section 1.2104(g)(1) of the Commission's Rules, as discussed in Part 4.B(5) above. Upfront payments are applied first to satisfy any outstanding bid withdrawal payments before being applied toward down payments. B. Long-Form Application (FCC Form 600) Within ten business days after release of the auction closing notice, winning bidders must submit a properly completed FCC Form 600 application and required exhibits for each IVDS license won through the auction. Winning small business or very small business bidders must include an exhibit demonstrating their eligibility for the small business incentives. A copy of FCC Form 600 will be included in the Bidder Information Package. See 47 C.F.R.  1.2107(c) (d) and 95.816(c)(2)(ii). Further FCC Form 600 filing instructions will be provided to auction winners at the close of the auction. The FCC Form 600 may be filed electronically. Alternatively, a hard copy plus required microfiche or 3.5" properly-formatted diskette copies must be sent to: FCC Form 600 Filing, Auction No. 13 Federal Communications Commission Office of Operations 1270 Fairfield Road Gettysburg, PA 17325-7245 C. Application Processing and Grant; Final Payments and Installment Payments Once a high bidder has submitted its down payment and filed an acceptable FCC Form 600 application, the FCC will release a public notice announcing acceptance of the long-form application. After the FCC reviews an applicant's FCC Form 600, it will determine whether there are any reasons why the license should not be granted. If there are none, the Commission will grant the license conditioned on timely payments for the license; otherwise it will take appropriate action. Within five (5) business days after conditional license grant: þ Unless paying under an installment plan, winning bidders are required to pay the balance of their winning bids in a lump sum. 47 C.F.R.  95.816(c)(5). þ Eligible winning bidders who elected to pay for their licenses under the installment payment plan must bring the total amount on deposit with the FCC up to 20 percent of their net winning bids. See 47 C.F.R.  1.2110(e). These bidders will be required to execute a promissory note and security agreement for the balance due. The payments will be paid off in quarterly installments under the terms described in Part 2.B(3) above. Winning bidders will receive further instructions and detailed payment information after the auction closes. D. Refund of Remaining Upfront Payment Balance All applicants who submitted upfront payments but were not winning bidders for any IVDS license may be entitled to a refund of their remaining upfront payment balance after the conclusion of the auction. No refund will be made unless there are excess funds on deposit from that applicant after any applicable bid withdrawal payments have been paid. Bidders who drop out of the auction completely may be eligible for a refund of their upfront payments before the close of the auction. However, bidders who reduce their eligibility and remain in the auction are not eligible for partial refunds of upfront payments until the close of the auction. Qualified bidders who have exhausted all their activity rule waivers, have no remaining bidding eligibility, and have not withdrawn a high bid during the auction must submit a written refund request, along with a Taxpayer Identification Number ("TIN") and a copy of their bidding eligibility screen print, to: Federal Communications Commission Attn: William Koch 1919 M Street, N.W., Room 452 Washington, D.C. 20554 Once the request has been approved, a refund will be sent to the address provided on the FCC Form 159. NOTE: Refund processing generally takes up to two weeks to complete. Bidders with questions about refunds should contact William Koch at 202-418-1995. E. Default and Disqualification Any high bidder that defaults or is disqualified after the close of the auction (i.e., fails to remit the required down payment within the prescribed period of time, fails to submit a timely long-form application, fails to make full payment, fails to make an installment payment, or is otherwise disqualified) will be subject to the payments described in Sections 1.2104(g) and 1.2109 of the Commission's Rules. In the event that the amount of those payments cannot be determined (i.e. until the license has been reauctioned), the FCC can require a "deposit" of at least three (3) percent of the defaulted bid amount. See In Re C. H. PCS, Inc., BTA No. B347 Frequency Block C, Order, DA 96-1825 (released November 4, 1996). See also Wireless Telecommunications Bureau Will Strictly Enforce Default Payment Rules, Public Notice, DA 96-41 (April 4, 1996). Under certain circumstances the FCC can also reauction the license to existing or new applicants, or offer it to the other highest bidders (in descending order) at their final bids. See 47 C.F.R.  1.2109(b) (c). In addition, if a default or disqualification involves gross misconduct, misrepresentation or bad faith by an applicant, the FCC 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 licenses held by the applicant. See 47 C.F.R.  1.2107(d). F. Service and Construction Requirements Construction requirements for IVDS licensees include making the service available to at least 30 percent of the population or land area within the service area within three years of the grant of an IVDS license, and fifty percent of the population or land area within five years of the grant of an IVDS license. See 47 C.F.R.  95.833. Subject to the initial construction requirements in Section 95.833 of the Commission's Rules as described above, each IVDS system licensee must make service available to at least fifty percent of the population or land area located within the service area. See 47 C.F.R.  95.831. - FCC - News Media Contact: Kara Palamaras at (202) 418-0654 Wireless Telecommunications Bureau Contacts: Ruby Hough, Howard Griboff, or Christina Eads Clearwater at (202) 418-0660 Attachment A LIST OF LICENSES OFFERED The following tables list the 983 Interactive Video and Data Service ("IVDS") licenses to be auctioned. The tables identify the following: the 127 MSA licenses where winning bidders from a previous auction have been found to be in default, plus two licenses (Frequency Blocks "A" and "B") in each of the 428 RSAs. Attachment B Electronic Filing of FCC Form 175 The Commission has implemented a remote access system to allow applicants to submit their FCC Form 175 applications electronically. The remote access system for initial filing of the FCC Form 175 applications will generally be available 24 hours per day beginning at approximately the same time as the release of this Public Notice. FCC Form 175 applications that are filed electronically using this remote access system must be submitted and confirmed by 5:30 p.m. EST on January 21, 1997. Late applications or unconfirmed submissions of electronic data will not be accepted. The electronic filing process consists of an initial filing period and a resubmission period to make minor corrections. Parties interested in filing FCC Form 175 applications electronically may do so via a (202) area code telephone service with no additional access charge or via the 900 number telephone service at a charge of $2.30 per minute. The first minute of connection time to the 900 number service will be at no charge. Similarly, parties interested in reviewing FCC Form 175 applications electronically will do so via the 900 telephone service at a charge of $2.30 per minute. The first minute of connection time to the 900 number service will be at no charge. Those applicants who wish to file their FCC Form 175 electronically or review other FCC Form 175 applications on-line will need the following hardware and software: Hardware Requirements: o CPU: Intel 80486 or above o RAM: 8 MB (more recommended if you intend to open multiple applications) o Hard Disk: 12MB available disk space oModem: v.32bis 14.4kbps Hayes compatible modem oMonitor: VGA or above oMouse or other pointing device To create backup installation disks for the FCC Form 175 Application, you will need the following: o1.44MB 3.5" Floppy Drive oThree blank MS-DOS formatted 1.44MB floppy disks Software Requirements: o FCC Form 175 Application Software (available through the Internet and the FCC Bulletin Board System) oMicrosoft Windows 3.1 or Microsoft Windows for Workgroups v3.11 in an enhanced mode Note: The FCC Form 175 Application has not been tested in a Macintosh, OS/2, or Windows95 environment. Therefore, the FCC will not support operating systems other than Microsoft Windows 3.1 or Microsoft Windows for Workgroups v3.11 in an enhanced mode. This includes any other emulated Windows environment. If your Windows is in a networked environment, you should check with your local network administrator for any potential conflicts with the PPP (Point-to-Point Protocol) Dialer that is incorporated into the FCC Form 175 Application. This usually includes any TCP/IP installed network protocol. The PPP Dialer that is incorporated into the FCC Form 175 Application will establish a point-to-point connection from your PC to the FCC Network. THIS POINT-TO-POINT CONNECTION IS NOT ROUTED THROUGH THE INTERNET. Applicants who wish to file their FCC applications electronically or who wish to view other applicants applications must first download the software from either the Internet or the FCC Bulletin Board System. Applicants must download the following compressed files to install the software: f175v9a.exe, f175v9b.exe, f175v9c.exe. Internet Access: In order to download the compressed files from the Internet, you will need to have access to the Internet and an ftp client software as follows: oWorld Wide Web: ftp://ftp.fcc.gov Once you connect to the FCC ftp server, select the following directory and download the following files: Directory: /pub/Auctions/IVDS/Auction_13/Programs File: f175v9a.exe, f175v9b.exe, f175v9c.exe oFTP: The following instructions are for the command line version of ftp. 1. Connect to the FCC ftp server by typing: ftp ftp.fcc.gov 2. At the user name prompt, type: anonymous [Enter] 3. At the password prompt, type your Internet e-mail address [Enter] 4. To allow the file to be downloaded type: binary [Enter] 5. Change your current directory to the Programs directory by typing: cd /pub/Auctions/IVDS/Auction_13/Programs [Enter] 6. Use the get command to download the files from the FCC ftp server by typing: get f175v9a.exe [Enter] get f175v9b.exe [Enter] get f175v9c.exe [Enter] 7. If you wish to exit, type: bye [Enter] o Gopher: gopher.ftp.fcc.gov or use any gopher to get to "all the gophers in the world" then 'U.S.' then 'DC' then 'FCC'. Dial-In Access to the FCC Auction Bulletin Board System (BBS): The FCC Auction Bulletin Board System provides dial-in access for the FCC Form 175 Application Software. In order to access the FCC Auction BBS, use a communications package that can handle at least xmodem protocol (e.g., pcAnyWhere, Telix, Procomm) to dial in to (202) 682-5851. Use the settings of 8 data bits, no parity and 1 stop bit (8,N,1). o For new users follow steps 1-5, otherwise go to step 6 in the ANSI Protocol Instructions section or the Non-ANSI Protocol Instructions section (whichever is applicable): 1. Type New and press [Enter]. If the word ANSI is blinking, type Y for yes. If the word ANSI is not blinking, type N for No. 2. Type in your first and last name and press [Enter]. This will be your login name. 3. Type in Y and press [Enter] when asked to verify your login name. 4. Type in what you want your password to be and press [Enter] 5. Retype the password for verification and press [Enter] oANSI Protocol Instructions (once the account is generated): 6. Type I for IVDS Auction Files and press [Enter] 7. Type B for Auction 13 and press [Enter] 8. Type P for Programs and press [Enter] 9. Type C for Current Library and press [Enter] 10. Move the cursor to the file named f175v9a.exe and type [Control]-D (hold the Ctrl key down and press the D key) for Download and press [Enter] (You may need to change the transfer protocol first --- please see note below.) 11. The FCC Auction BBS will begin transferring the file. You may need to give your terminal emulation software a command to receive the file; please consult your terminal emulation software manual for instructions concerning how to do so. 12. Type X to return to the Programs menu. Repeat steps 10 and 11 to download the following files: f175v9b.exe, f175v9c.exe 13. Type X to return to the Programs menu, then type X again. Type X to Exit and press [Enter] and continue to do so until asked if you want to Exit the BBS. Press Y for Yes when asked to verify that you want to exit. oNon-ANSI Protocol Instructions (once the account is generated): 6. Type I for IVDS Auction Files and press [Enter] 7. Type B for Auction 13 and press [Enter] 8. Type P for Programs and press [Enter] 9. Type C for Current Library and press [Enter] 10. Type the letter next to the file named f175v9a.exe and press [Enter] 11. Type D for Download now and press [Enter] (You may need to change the transfer protocol first -- please see the note below.) 12. The FCC Auction BBS will begin transferring the file. You may need to give your terminal emulation software a command to receive the file; please consult your terminal emulation software manual for instructions concerning how to do so. 13. Repeat steps 10 through 12 to download the following files: f175v9b.exe, f175v9c.exe 14. Type X, then type X to Exit and press [Enter] and continue to do so until asked if you want to Exit the BBS. Press Y for Yes when asked to verify that you want to exit. NOTE: To download files, you will need to match the transfer protocol on your BBS account to the transfer protocol set in your terminal emulation software. To set the BBS transfer protocol, return to the initial menu and type L for Library and [Enter], P for Preferences and [Enter], and P for File Transfer Protocol and [Enter]. Type the letter next to the protocol you desire and press [Enter]. You may now download files. Extracting the FCC Form 175 Application: The FCC Form 175 Application files are downloaded in a self-extracting, compressed file format. When you have downloaded all of the compressed files for the FCC Form 175 Application, you must extract the FCC Form 175 Application from those files. To extract the software, start File Manager in the Main Program group, open the file folder where you downloaded the files, and double-click on f175v9a.exe. A message will appear listing the default directory to which the software will extract. If this directory does not exist, it will be created automatically. Press Unzip to begin extracting the software from the compressed file. When the extraction is complete, a message will appear listing the number of files that were unzipped. Press OK and repeat the above process for the remaining compressed files (f175v9b.exe, f175v9c.exe). Be sure to extract to the same directory as the first compressed file. Installing the FCC Form 175 Application: After you extract the software from the compressed files, you must install the FCC Form 175 Application. To install the software, start File Manager, open the file folder to which you extracted the software and double-click on setup.exe. When the setup program begins, a screen will appear listing the default directory to which the software will install. Press the Install button, then press OK to install to the specified directory. If the directory does not exist, the setup program will create it automatically. When the installation is complete, a message may appear asking you to restart Windows so that the changes made by the installation may take effect. Press Restart to restart Windows, or press Stay Here to prevent the restart. Do not use the FCC Form 175 Application until you restart Windows. Creating Backup Installation Disks for the FCC Form 175 Application: To create backup installation disks for the FCC Form 175 Application, go to File Manager, open the file folder to which you extracted the software, double-click on backup.bat, and follow the instructions on the screen. Running the FCC Form 175 Application: When the installation process is complete, you will have a new Program Manager group called FCC Form 175 Application v9 with the following icons: Configure PPP, FCC Form 175 Submit, FCC Form 175 Review, Suggestion Box, and Readme. You must verify/modify the parameters in the Configure PPP program prior to establishing a PPP connection. Please consult the readme.txt file included with the software for information regarding Configure PPP. Double-click on an icon to start the respective system. Uninstalling the FCC Form 175 Application: To uninstall the FCC Form 175 Application, start File Manager and delete the directory to which you installed the software, then switch to Program Manager and delete the FCC Form 175 Application v9 icons and group. If you have installed multiple versions of the FCC Form 175 Application to the same installation directory, delete the directory only when you wish to delete all the versions contained in that directory. You may delete the files and directory to which you extracted the software after installing the FCC Form 175 Application and (optionally) creating backup installation diskettes. DETAILED INSTRUCTIONS FOR USING ALL FCC REMOTE ELECTRONIC AUCTION SYSTEM SOFTWARE CAN BE FOUND IN THE README FILE ASSOCIATED WITH THE SOFTWARE AND IN THE CONTEXT-SENSITIVE HELP FUNCTION ASSOCIATED WITH EACH SOFTWARE SYSTEM. HELP: For technical assistance in installing or using the FCC Form 175 Application, contact the FCC Technical Support Hotline at (202) 414-1250. The FCC Technical Support Hotline will be generally available Monday through Friday, from 9 a.m. to 6 p.m. EST. Attachment C GUIDELINES FOR COMPLETING FCC FORM 175 AND EXHIBITS A. FCC Form 175 Because of the significance of the Form 175 application to the auction, bidders should especially note the following: Paper form version: Manual filers must use the October 1995 editions of FCC Forms 175 and 175-S. Earlier versions will not be accepted. Items 2-5: Give a street address (not a Post Office box number) for the applicant, suitable for mail or private parcel delivery. The FCC will send all registration materials and other written communications to the applicant at this address. Item 6: The Interactive Video and Data Services auction will be the thirteenth auction conducted by the FCC. For "Auction No." in item 6 of FCC Form 175, enter "13". Item 7: Applicants must create a ten-digit FCC Account Number, which the Commission will use to identify and track applicants: þ A bidder that has a taxpayer identification number (TIN) must create this FCC account number by using its TIN, plus the prefix of "0" (i.e., 0123456789). A TIN is either the Employer Identification Number (EIN) in the case of a business, or the Social Security Account Number (SSAN) in the case of an individual. þ If--and only if--an applicant does not have a taxpayer identification number, the applicant should use its ten-digit area code and telephone number (i.e., 2025551234) on an interim basis. However, the FCC must have a TIN before it will be able to issue a license or refund upfront payments. Each applicant must include its FCC Account Number when submitting amendments, additional information, or other correspondence or inquiries regarding its application, and must include this same number on each FCC Form 159 (FCC Remittance Advice) accompanying required auction deposits or payments. Item 8: Applicants must indicate their legal classification. Limited liability companies or joint ventures should check the "Other" box and indicate their classification in the blank. Items 9 and 10: A box does not need to be checked in Item 9 unless small business status is selected in Item 10. Applicants should be aware that they will be committed to their election choices. (Applicants are also requested to indicate their status as a rural telephone company, minority-owned business or woman-owned business as well, so the FCC can monitor its performance in promoting economic opportunities for these designated entities.) Be advised that this is the sole opportunity applicants have to elect small business status, bidding credit level (if applicable), and payment by the installment payment plan (if eligible) and there is no opportunity to change the election(s) made once the short-form filing deadline passes. þ Small or very small business applicants eligible for bidding credits should check that gross revenues do not exceed the maximum dollar amount specified in the FCC rules governing the auctionable service in Item 9. þ Small or very small business applicants should enter the applicable bidding credit in Item 10: either 10 or 15 percent. Applicants should be aware that this is the sole opportunity that they will have to elect the appropriate bidding credit. þ Small or very small business applicants (if eligible) intending to use the installment payment plan should enter Plan Type "A" in Item 10. Applicants not intending to use the installment payment plan should leave the Plan Type blank. All applicants should pay particular attention to the provisions of 47 C.F.R.  95.816(d). In accordance with 47 C.F.R.  95.816(d)(3), the FCC will conduct random audits to ensure that applicants meet the eligibility requirements. Item 11: For each license on which they seek bidding eligibility, applicants must identify the market number (for example, R307) in the Market No. column, and the frequency block or blocks in the Frequency Block set of columns. The market number for each RSA or MSA subject to reauction is listed in Attachment A; frequency blocks are A or B. Applicants that wish to bid on both frequency blocks on all markets should check the "ALL" boxes in the Market No. and Frequency Block/Channel No. headings. Applicants that wish to bid on both frequency blocks for each identified market should check the "ALL" box in the Frequency Block/Channel No. column and list the RSA or MSA market(s) desired in the Market No. columns. However, applicants who wish to bid on both frequency blocks for only some of the markets should not check the "ALL" box in the Frequency Block/Channel Block No. heading, but instead should list separately the frequency blocks for each market in the Frequency Block/Channel No. columns. Since FCC Form 175 provides space to list only five markets, applicants should use one or more FCC Form(s) 175- S to list any additional markets applied for. Applicants should identify all licenses they want to be eligible to bid on in the auction in Item 11. Be advised that there is no opportunity to change this list once the short-form filing deadline passes. The FCC auction system will not accept bids on licenses an applicant has not applied for on its FCC Form 175. Item 12: Applicants must list the name(s) of the person(s) (no more than three) authorized to represent them at the auction. Only those individuals listed on the FCC Form 175 will be authorized to place or withdraw bids for the applicant during the auction. Certifications: Applicants should carefully read the list of certifications on the FCC Form 175. These certifications help to ensure a fair and competitive auction and require, among other things, disclosure to the Commission of certain information on applicant ownership and agreements or arrangements concerning the auction. Submission of an FCC Form 175 application constitutes a representation by the certifying official that he or she is an authorized representative of the applicant, has read the form's instructions and certifications, and that the contents of the application and its attachments are true and correct. Submission of a false certification to the Commission may result in penalties, including monetary forfeitures, license forfeitures, ineligibility to participate in future auctions, and/or criminal prosecution. Contact person: If the Commission wishes to communicate with the applicant by telephone or fax, those communications will be directed to the contact person identified on the FCC Form 175. Space is provided for a telephone number, fax number, and e-mail address. All written communications and registration information will be directed to the applicant's contact person at the address specified on the FCC Form 175. Applicants must provide a street address; no P.O. Box addresses may be used. Signature: Manually filed FCC Form 175s must bear an original signature. Absence of an original signature will result in dismissal of the application and disqualification from participating in the auction. (Applicants filing electronically should type the name of the certifying official in the signature block.) Microfiche or Diskette Copies: Microfiche copies must be submitted with any manually filed FCC Form 175 and 175-S that exceeds five pages in length. For this auction the FCC will accept, in lieu of microfiche copies, a 3.5-inch diskette which contains ASCII text (.TXT) files of all exhibit documentation attached to the FCC Form 175. (Applicants that use a word processing program to prepare these files must be sure to save the files in the ASCII format before submitting the diskette, and verify that the ASCII files contain all exhibit information.) Completeness: Applicants must submit all information required by FCC Form 175 and by applicable rules, including a certifying signature on manual filings. Failure to submit required information will result in dismissal of the application and inability to participate in the auction. Continuing Accuracy: Each applicant is responsible for the continuing accuracy and completeness of information furnished in the FCC Form 175 and its exhibits. See 47 C.F.R.  1.65. It is the staff's position that ten business days from a reportable change is a reasonable period of time in which applicants must amend their FCC Form 175s. Applicants are reminded that Certification (6) on FCC Form 175 includes consent to be audited. See 47 C.F.R.  95.816(d)(3). B. Exhibits and Attachments In addition to FCC Form 175 itself, applicants must submit additional information required by the FCC's rules. Although we do not require a particular organization or format for this information, we have developed the following guidelines that will facilitate the processing of short-form applications. We encourage applicants filing both electronically and manually to submit this information using the following format. Exhibit A Applicant Identity and Ownership Information: 47 C.F.R.  1.2105(a)(2) requires each applicant to fully disclose the real party or parties-in-interest in an exhibit to its FCC Form 175 application. This information should provide the name, citizenship and address of all partners, if the applicant is a partnership; of a responsible officer or director, if the applicant is a corporation; of the trustee, if the applicant is a trust; or, if the applicant is none of the foregoing, list the name, address and citizenship of a principal or other responsible person. Exhibit B Agreements with Other Parties/Joint Bidding Arrangements: Applicants must attach an exhibit identifying all parties with whom the applicant has entered into partnerships, joint ventures, consortia or other agreements, arrangement or undertakings of any kind, relating to the licenses being auctioned, including any such agreements relating to post- auction market structure. 47 C.F.R.  1.2105(a)(2)(viii). Be aware that pursuant to Certification (4) on the FCC Form 175, the applicant certifies that it will not enter into any explicit or implicit agreements or understandings of any kind with parties not identified in the application regarding the amount to be bid, bidding strategies or the particular licenses on which the applicant will or will not bid. See 47 C.F.R.  1.2105(a)(2)(ix). To prevent collusion, the Commission's rules generally prohibit communications during the course of the auction among applicants for the same license areas when such communications concern bids, bidding strategies, or settlements. 47 C.F.R.  1.2105(c). Exhibit C Status as a Small or Very Small Business Applicant: Applicants claiming status as a small or very small business must attach an exhibit regarding this status. þ Small or very small business applicants must state the average gross revenues for the preceding three years for the applicant (including affiliates), as prescribed by 47 C.F.R.  95.816(d)(4). Certification that the average gross revenues for the preceding three years do not exceed the required limit is not sufficient. Exhibit D Information Requested of Designated Entities: Applicants owned by minorities or women as defined in 47 C.F.R.  1.2110(b), or who are rural telephone companies, may attach an exhibit regarding this status. This information, in conjunction with the information in Item 10, will assist the Commission in monitoring the participation of designated entities in its auctions. Exhibit E Miscellaneous Information: Applicants wishing to submit additional information should include it in Exhibit E. Applicants are reminded that all information required in connection with applications to participate in spectrum auctions is necessary to determine the applicants' qualifications, and as such will be available for public inspection. Required proprietary information may be redacted, or confidentiality may be requested, following the procedures set out in 47 C.F.R.  0.459. Any such requests must be submitted manually, even if the applicant chooses to file electronically, in which case the applicant must indicate in Exhibit E that it has filed a confidentiality request. Because the required information bears on applicants' qualifications, the FCC envisions that confidentiality requests will not be routinely granted. Waivers: Applicants requesting waiver of any rules must submit a statement of reasons sufficient to justify the waiver sought. Cross-References: To ensure that the FCC considers all information submitted, manual filers must list the number of Forms 175-S and the number of supplemental exhibits at the end of Item 11 on FCC Form 175. Attachment D Summary Listing of Documents from the Commission and the Wireless Telecommunications Bureau Addressing Application of the Anti-Collusion Rules To date, discussion concerning the anti-collusion rules may be found in the following Commission and Bureau items: Commission Decisions: Second Report and Order in PP Docket No. 93-253, FCC 94-61, 9 FCC Rcd 2348 (1994), paragraphs 221-226. Fifth Report and Order in PP Docket No. 93-253, FCC 94-178, 9 FCC Rcd 5532 (1994), paragraphs 91-92. Second Memorandum Opinion and Order in PP Docket No. 93-253, FCC 94-215, 9 FCC Rcd 7245 (1994), paragraphs 48-55. Fourth Memorandum Opinion and Order in PP Docket No. 93-253, FCC 94-264, 9 FCC Rcd 6858 (1994), paragraphs 47-60. Memorandum Opinion and Order in PP Docket No. 93-253, FCC 94-295, 9 FCC Rcd 7684 (1994), paragraphs 8-12. Wireless Telecommunications Bureau Decisions: Order in PP Docket No. 93-253 and MM Docket No. 94-131, DA 95-2292, (released November 3, 1995). Public Notices: "Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti-Collusion Rules," Public Notice, DA 95-2244 (released October 26, 1995). "Wireless Telecommunications Bureau Provides Guidance on the Anti-Collusion Rule for D, E and F Block Bidders," Public Notice, DA 96-1460 (released August 28, 1996). Letters from the Office of General Counsel and the Wireless Telecommunications Bureau: Letter to Gary M. Epstein and James H. Barker from William E. Kennard, General Counsel, Federal Communications Commission (released October 25, 1994). Letter to Alan F. Ciamporcero from William E. Kennard, General Counsel, Federal Communications Commission (released October 25, 1996). Letter to R Michael Senkowski from Rosalind K. Allen, Acting Chief, Commercial Radio Division, Wireless Telecommunications Bureau (released December 1, 1994). Letter to Leonard J. Kennedy from Rosalind K. Allen, Acting Chief, Commercial Radio Division, Wireless Telecommunications Bureau (released December 14, 1994). Letter to Jonathan D. Blake and Robert J. Rini from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, DA 95-2404 (released November 28, 1995). Letter to Mark Grady from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, DA 96-587 (released April 16, 1996). Letter to David L. Nace from Kathleen O'Brien Ham, Chief, Auctions Division, Wireless Telecommunications Bureau, DA 96-1566 (released September 17, 1996).