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AWS-3 Auction Announced; Comment Sought

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Released: May 19, 2014

PUBLIC NOTICE


Federal Communications Commission

News Media Information 202 / 418-0500


445 12th St., S.W.

Internet: http://www.fcc.gov


Washington, D.C. 20554


TTY: 1-888-835-5322




DA 14-669
May 19, 2014

AUCTION OF ADVANCED WIRELESS SERVICES LICENSES

SCHEDULED FOR NOVEMBER 13, 2014

COMMENT SOUGHT ON COMPETITIVE BIDDING PROCEDURES

FOR AUCTION 97


AU Docket No. 14-78

Comments Due: June 9, 2014
Reply Comments Due: June 23, 2014

TABLE OF CONTENTS

Heading
Paragraph #
I. INTRODUCTION .................................................................................................................................. 1
II. LICENSES TO BE OFFERED IN AUCTION 97 ................................................................................. 3
A. Description of Licenses .................................................................................................................... 3
B. Incumbency Issues ........................................................................................................................... 7
C. Commercial Spectrum Enhancement Act/Spectrum Act Requirements .......................................... 8
III. DUE DILIGENCE ............................................................................................................................... 11
IV. BUREAU SEEKS COMMENT ON AUCTION PROCEDURES ...................................................... 16
A. Auction Design .............................................................................................................................. 17
1. Simultaneous Multiple-Round Auction ................................................................................... 17
2. Anonymous Bidding ................................................................................................................ 18
3. Acknowledgement for Auction 97 Applicants ........................................................................ 24
B. Auction Structure ........................................................................................................................... 25
1. Bidding Rounds ....................................................................................................................... 25
2. Stopping Rule .......................................................................................................................... 28
3. Information Relating to Auction Delay, Suspension, or Cancellation .................................... 31
C. Auction Procedures ........................................................................................................................ 32
1. Upfront Payments and Bidding Eligibility .............................................................................. 32
2. Activity Rule ........................................................................................................................... 34
3. Activity Rule Waivers and Reducing Eligibility ..................................................................... 38
4. Reserve Price and Minimum Opening Bids ............................................................................ 43
a. Reserve Price .................................................................................................................... 46
b. Minimum Opening Bids ................................................................................................... 53
5. Bid Amounts ........................................................................................................................... 59
a. Minimum Acceptable Bids ............................................................................................... 60
b. Additional Bid Amounts ................................................................................................... 63
c. Bid Amount Changes ........................................................................................................ 65


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6. Provisionally Winning Bids .................................................................................................... 67
7. Bid Removal ............................................................................................................................ 70
8. Bid Withdrawal ....................................................................................................................... 71
D. Post-Auction Payments .................................................................................................................. 74
1. Interim Withdrawal Payment Percentage ................................................................................ 74
2. Additional Default Payment Percentage ................................................................................. 76
V. DEADLINES AND FILING PROCEDURES ..................................................................................... 79
VI. CONTACTS ......................................................................................................................................... 86
ATTACHMENT A: Licenses to Be Auctioned
ATTACHMENT B: Bid Formula


I.

INTRODUCTION

1.
By this Public Notice, the Wireless Telecommunications Bureau (“Bureau”) announces
an auction of 1,614 licenses in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands
(collectively, the “AWS-3” bands),1 and seeks comment on the procedures to be used for this auction.
This auction, which is designated as Auction 97, is scheduled to commence on November 13, 2014.
2.
The Commission is offering the licenses in Auction 97 pursuant to the Middle Class Tax
Relief and Job Creation Act of 2012 (“Spectrum Act”).2 The Spectrum Act requires, among other things,
that the Commission allocate for commercial use and license spectrum in certain specified frequency
bands using a system of competitive bidding no later than February 2015.3 In February 2013, the
National Telecommunications and Information Administration (“NTIA”) identified the 1695-1710 MHz
band for reallocation from Federal use to non-Federal use in satisfaction of its Spectrum Act obligation.4
In the AWS-3 Report and Order, the Commission identified the 1755-1780 MHz band in satisfaction of
the Spectrum Act’s requirement that it identify fifteen megahertz of contiguous spectrum in addition to
the bands specifically identified in the Spectrum Act.5

1Amendment of the Commission’s Rules with Regard to Commercial Operations in the 1695-1710 MHz, 1755-1780
MHz, and 2155-2180 MHz Bands, GN Docket No. 13-185, Report and Order, FCC 14-31 (rel. Mar. 31, 2014)
(“AWS-3 Report and Order”). All references to the Part 2 and 27 rules adopted by the Commission in the AWS-3
Report and Order
and cited herein will become effective on the dates announced in the Federal Register Notice
regarding the AWS-3 Report and Order.
2 See Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, 126 Stat. 156 (2012) (“Spectrum
Act”), codified at 47 U.S.C. § 1401 et seq.
3 See 47 U.S.C. § 1451(b)(1), (2); see also 47 U.S.C. § 309(j). The specified frequency bands are: 1915-1920 MHz,
1995-2000 MHz, 2155-2180 MHz, the fifteen megahertz of spectrum between 1675 and 1710 MHz to be identified
by the National Telecommunications and Information Administration (“NTIA”) pursuant to 47 U.S.C. § 1451(a)(3),
and the fifteen megahertz of contiguous spectrum to be identified by the Commission pursuant to 47 U.S.C. §
1451(b)(2)(E). The Commission completed its auction of the spectrum in the 1915-1920 MHz and 1995-2000 MHz
bands on February 27, 2014. See Auction of H Block Licenses in the 1915-1920 MHz and 1995-2000 MHz Bands
Closes; Winning Bidder Announced for Auction 96, AU Docket No. 13-178, Public Notice, DA 14-279 (WTB/AU
Feb. 28, 2014).
4 See Identification of 15 Megahertz of Spectrum Between 1675 and 1710 MHz for Reallocation from Federal Use to
Non-Federal Use Pursuant to the Middle Class Tax Relief and Job Creation Act of 2012
, Report to the President,
U.S. Department of Commerce (February 2013).
5 See AWS-3 Report and Order at ¶¶ 33, 37.
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II.

LICENSES TO BE OFFERED IN AUCTION 97

A.

Description of Licenses

3.
The 65 megahertz of AWS-3 spectrum available in Auction 97 will be licensed on a
geographic area basis. Of the 1,614 licenses offered in Auction 97, 880 will be Economic Area (“EA”)
licenses and 734 will be Cellular Market Area (“CMA”) licenses.6 The AWS-3 frequencies will be
licensed in five and ten megahertz blocks, with each license having a total bandwidth of five, ten, or
twenty megahertz.7
4.
The 1695-1710 MHz band will be licensed in an unpaired configuration for low-power
mobile transmit (i.e., uplink) operations.8 The 1755-1780 MHz band will be licensed paired with the
2155-2180 MHz band, with the 1755-1780 MHz band authorized for low-power mobile transmit (i.e.,
uplink) operations and the 2155-2180 MHz band authorized for base station and fixed (i.e., downlink)
operations.9
5.
Figure 1 shows the band plan for the 1695-1710 MHz band. Figure 2 shows the band
plans for the 1755-1780 MHz and 2155-2180 MHz bands. Table 1 contains summary information
regarding the AWS-3 licenses available in Auction 97.

Figure 1: 1695-1710 MHz Band Plan




6 In the AWS-3 Report and Order, the Commission concluded that all licenses in the 1695-1710 MHz band, and
most licenses in the 1755-1780 MHz and 2155-2180 MHz bands, should be awarded on an EA basis in all areas,
including the Gulf of Mexico, and that all licenses in the 1755-1760 MHz and 2155-2160 MHz bands should be
awarded on a CMA basis in all areas. See AWS-3 Report and Order at ¶¶ 2, 20, 48, 51. There are a total of 176 EAs
and 734 CMAs.
7 See AWS-3 Report and Order at ¶¶ 51-52.
8 See id. at ¶¶ 2, 19, 29.
9 See AWS-3 Report and Order at ¶¶ 2, 41, 43-45. Higher-power fixed and base station operations are also
prohibited in the 1755-1780 MHz band. See id. at ¶ 43.
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Figure 2: 1755-1780 and 2155-2180 MHz Band Plans



Table 1: AWS - 3 License Summary

Total

Geographic

Number of

Block

Frequencies (MHz)

Pairing

Bandwidth

Area Type

Licenses

A1
1695-1700 MHz
5 MHz
unpaired
EA
176
B1
1700-1710 MHz
10 MHz
unpaired
EA
176
G
1755-1760/2155-2160 MHz
10 MHz
2 x 5 MHz
CMA
734
H
1760-1765/2160-2165 MHz
10 MHz
2 x 5 MHz
EA
176
I
1765-1770/2165-2170 MHz
10 MHz
2 x 5 MHz
EA
176
J
1770-1780/2170-2180 MHz
20 MHz
2 x 10 MHz
EA
176

6.
A complete list of the licenses offered in Auction 97 is available in Attachment A to this
Public Notice.

B.

Incumbency Issues

7.
In the AWS-3 Report and Order, the Commission allocated the 1695-1710 MHz and
1755-1780 MHz bands for commercial use.10 Licenses in 1695-1710 MHz band are being made available
on a shared basis with incumbent Federal meteorological-satellite (MetSat) data users.11 Licenses in

10 See AWS-3 Report and Order at ¶¶ 2, 16, 33, 37, 198-200, 207. The Commission allocated the 1695-1710 MHz
band for non-Federal fixed and mobile (except aeronautical mobile) use and the 1755-1780 MHz band for non-
Federal fixed and mobile use. See id., App. A; 47 C.F.R. § 2.106.
11 See id. at ¶ 2. Operations in the 1695-1710 MHz band up to 20 dBm equivalent isotropically radiated power
(EIRP) will be subject to successful coordination with Federal incumbents in the twenty-seven Protection Zones
adopted by the Commission in the AWS-3 Report and Order for this band. For operations with a maximum EIRP
greater than 20 dBm, up to a maximum EIRP of 30 dBm, nationwide coordination will be required unless otherwise
specified by Commission rule, order, or notice. See id. at ¶¶ 19, 90 and App. A; 47 C.F.R. § 2.106, US note 88; 47
C.F.R. § 27.1134(c). See also AWS-3 Report and Order at ¶¶ 220-22. The forty-seven Federal earth stations located
in these Protection Zones will operate on a co-equal, primary basis with commercial AWS licensees. See 47 C.F.R.
§ 2.106, US note 88. In order to facilitate coordination, uplink/mobile transmit devices in the 1695-1710 MHz band
must be under the control of, or associated with, a base station as a means to facilitate shared use of the band and
prevent interference to Federal operations. See AWS-3 Report and Order at ¶¶ 19, 100-102.
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1755-1780 MHz band are being made available on a shared basis with a limited number of Federal
incumbents indefinitely, while many of the Federal systems will over time relocate out of the band.12
Licenses to operate in the 1695-1710 MHz and 1755-1780 MHz bands are subject to the condition that
the licensee must not cause harmful interference to an incumbent Federal entity relocating from these
bands under an approved Transition Plan.13 This condition remains in effect until NTIA terminates the
applicable authorization of the incumbent Federal entity.14 The 2155-2180 MHz band is already allocated
for exclusive non-Federal, commercial use. Although there are no Federal users currently licensed or
operating in this band, there are non-Federal incumbent Fixed Microwave and Broadband Radio Service
licensees in the band. AWS-3 licensees will have to protect or relocate and/or share in the cost of
relocating such incumbent licensees.15

C.

Commercial Spectrum Enhancement Act/Spectrum Act Requirements

8.
The spectrum in the 1695-1710 MHz and 1755-1780 MHz bands is covered by a
Congressional mandate that requires that auction proceeds fund the estimated relocation or sharing costs
of incumbent Federal entities.16 In 2004, the Commercial Spectrum Enhancement Act (“CSEA”)
established a Spectrum Relocation Fund (“SRF”) to reimburse eligible Federal agencies operating on
certain frequencies that have been reallocated from Federal to non-Federal use for the cost of relocating
their operations.17 The SRF is funded with cash proceeds attributable to “eligible frequencies” in an
auction of licenses involving such frequencies.18 The CSEA requires the NTIA to notify the Commission
at least six months in advance of a scheduled auction of eligible frequencies of eligible Federal entities’
estimated relocation or sharing costs and the timelines for such relocation or sharing.19

12 See AWS-3 Report and Order at ¶ 2. Operations in the 1755-1780 MHz band will be subject to successful
coordination with Federal incumbents in the Protection Zones adopted by the Commission in the AWS-3 Report and
Order
for this band. See id. at ¶¶ 91, 220-222 and App. A; 47 C.F.R. § 2.106, US note 91; 47 C.F.R. § 27.1134(f).
The default zone is nationwide unless otherwise specified by Commission rule, order, or notice. Id. The Federal
systems located in these Protection Zones will operate on a co-equal, primary basis with commercial AWS
licensees. See 47 C.F.R. § 2.106, US note 91. The Federal systems that will relocate from the band pursuant to an
approved transition plan will operate on a primary basis until they are reaccommodated. Id. In order to facilitate
coordination, uplink/mobile transmit devices in the 1755-1780 MHz band must be under the control of, or associated
with, a base station as a means to facilitate shared use of the band and prevent interference to Federal operations.
See AWS-3 Report and Order at ¶¶ 43, 100-102.
13 See AWS-3 Report and Order at ¶ 219 and App. A; 47 C.F.R. § 27.5(h) (Note). See also 47 U.S.C. §
309(j)(16)(C).
14 See id. Although this license condition does not apply to the permanent sharing scenario, the Commission’s rules
require successful coordination to avoid causing harmful interference to these Federal incumbents.
15 See AWS-3 Report and Order at ¶¶ 194-196 and App. A; 47 C.F.R. §§ 27.1111, 27.1131, 27.1132.
16 See 47 U.S.C. §§ 309(j)(8)(D), 923(g).
17 See 47 U.S.C. § 928.
18 See 47 U.S.C. §§ 309(j)(8)(D), 928(b). “Eligible frequencies” are defined as those in the 216-220 MHz, 1432-
1435 MHz, 1710-1755 MHz and 2385-2390 MHz bands, as well as any other band of frequencies reallocated from
Federal use to non-Federal use after January 1, 2003 that is assigned by the Commission through competitive
bidding pursuant to Section 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. § 309(j). See 47
U.S.C. § 923(g)(2).
19 See 47 U.S.C. § 923(g)(4). The Spectrum Act amendments to the CSEA require Federal agencies authorized to
use eligible frequencies to submit a transition plan no later than 240 days before an auction for such frequencies is
scheduled to begin. See 47 U.S.C. § 923(h)(1). The Federal agency transition plans are reviewed by a Technical
Panel, which must submit a report on the sufficiency of each transition plan to the NTIA and the applying Federal
agency no later than 30 days after submission of the plan. See 47 U.S.C. § 923(h)(4)(A); see 47 C.F.R. § 301.120(a).
If the Technical Panel finds a Federal agency’s plan to be insufficient with respect to the execution, timing, or cost
(continued….)
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9.
On May 13, 2014, pursuant to the CSEA, the NTIA notified the Commission of the
estimated relocation or sharing costs and relocation timelines for eligible Federal entities assigned to
frequencies in the 1695-1710 MHz and 1755-1780 MHz bands.20 The NTIA reported that the total
estimated relocation or sharing costs for the 1695-1710 MHz band equal $527,069,000, and that the total
estimated relocation or sharing costs for the 1755-1780 MHz band equal $4,575,603,000.21
10.
In addition to requiring that specified auction proceeds be deposited in the SRF, the
CSEA, as amended by the Spectrum Act, requires that the total cash proceeds from any auction of eligible
frequencies must equal at least 110 percent of the estimated relocation or sharing costs provided to the
Commission by NTIA, and prohibits the Commission from concluding any auction of eligible frequencies
that falls short of this revenue requirement.22 In the CSEA/Part 1 Declaratory Ruling, the Commission
determined, among other things, that “total cash proceeds” for purposes of meeting the CSEA’s revenue
requirement means winning bids net of any applicable bidding credit discounts at the end of bidding.23
Thus, whether CSEA’s revenue requirements regarding eligible frequencies have been met at the end of
an auction involving such frequencies depends upon whether winning bids that are attributable to such
spectrum, net of any applicable bidding credit discounts, equal at least 110 percent of estimated relocation
costs. In the CSEA/Part 1 Report and Order, the Commission, among other things, modified its reserve
price rule pursuant to the CSEA to ensure that the CSEA’s revenue requirement would be met.24

III.

DUE DILIGENCE

11.
Each potential bidder is solely responsible for investigating and evaluating all technical
and marketplace factors that may have a bearing on the value of the licenses that it is seeking in this
auction. Each bidder is responsible for assuring that, if it wins a license, it will be able to build and
operate facilities in accordance with the Commission’s rules.

The Commission makes no
representations or warranties about the use of this spectrum for particular services. Each
applicant should be aware that a Commission auction represents an opportunity to become a
Commission licensee, subject to certain conditions and regulations. A Commission auction does not
constitute an endorsement by the Commission of any particular service, technology, or product, nor
does a Commission license constitute a guarantee of business success.


12.
An applicant should perform its due diligence research and analysis before proceeding, as
it would with any new business venture. Each potential bidder should perform technical analyses and/or
refresh any previous analyses to assure itself that, should it become a winning bidder for any Auction 97
license, it will be able to build and operate facilities that will fully comply with all applicable technical
and regulatory requirements. We strongly encourage each applicant to inspect any prospective transmitter
(Continued from previous page)
of the agency’s planned transition, the agency must submit a revised plan within 90 days. See 47 U.S.C. §
923(h)(4)(B). The NTIA must make the transition plans available on its website (with the exception of any
classified information contained therein) no later than 120 days before the auction’s scheduled start date. See 47
U.S.C. § 923(h)(5).
20 See 47 U.S.C. § 923(g)(4)(A).
21 Letter from Lawrence E. Strickling, Assistant Secretary for Communications and Information, U.S. Department of
Commerce, to Tom Wheeler, Chairman, Federal Communications Commission at Attachments B1 and B2 (May 13,
2014) (“NTIA May 13 Notification Letter”), available athttp://www.ntia.doc.gov/category/aws-3-transition"> http://www.ntia.doc.gov/category/aws-3-transition.
22 See 47 U.S.C. § 309(j)(16)(A), (B).
23 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's
Competitive Bidding Rules and Procedures, WT Docket No. 05-211, Declaratory Ruling and Notice of Proposed
Rule Making
, 20 FCC Rcd 11268, 11270-72 ¶¶ 5-12 (2005).
24 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s
Competitive Bidding Rules and Procedures, Report and Order, 21 FCC Rcd 891, 894 ¶¶ 6-7 (2006) (“CSEA/Part 1
Report and Order
”); 47 C.F.R. § 1.2104(c).
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sites located in, or near, the geographic area for which it plans to bid; confirm the availability of such
sites; and familiarize itself with the Commission’s rules regarding the National Environmental Policy
Act.25
13.
We strongly encourage each applicant to conduct its own research prior to Auction 97 in
order to determine the existence of pending administrative, rulemaking, or judicial proceedings that might
affect its decisions regarding participation in the auction.
14.
We strongly encourage participants in Auction 97 to continue such research throughout
the auction. The due diligence considerations mentioned in this Public Notice do not constitute an
exhaustive list of steps that should be undertaken prior to participating in this auction. As always, the
burden is on the potential bidder to determine how much research to undertake, depending upon the
specific facts and circumstances related to its interests.
15.
In addition to the foregoing due diligence considerations, which we encourage of bidders
in all auctions, we call particular attention in this auction to the unique requirements presented by the
occupancy of some of the available frequencies by incumbent Federal users. The AWS-3 Report & Order
explains that AWS-3 licensees can expect to share portions of the AWS-3 bands with various incumbent
Federal users for a period of time as such users transition out of the bands, which may vary by geography
and frequency. Moreover, some Federal users will remain in the AWS-3 bands, with shared use
continuing indefinitely. The AWS-3 Report & Order further explains that the Commission and the NTIA
intend to release additional information regarding the extent of sharing in the AWS-3 bands and the
methods of coordination between commercial and Federal users. Additionally, as discussed in Section
II.C. above, the CSEA, as amended by the Spectrum Act, stipulates that Federal agencies that will receive
reimbursement for their costs in relocating their operations from, or sharing, the “eligible frequencies”
offered in this auction based on their approved transition plans, which the NTIA will make available to
the public. We expect that all of this information will be material to an applicant’s potential participation
in Auction 97. Therefore, we strongly encourage each applicant to closely follow releases from the
Commission and the NTIA concerning these issues and to carefully consider the technical and economic
implications for commercial use of the AWS-3 bands.

IV.

BUREAU SEEKS COMMENT ON AUCTION PROCEDURES

16.
Consistent with the provisions of section 309(j)(3)(E)(i) of the Communications Act of
1934, as amended, and to ensure that potential bidders have adequate time to familiarize themselves with
the specific rules that will govern the day-to-day conduct of a given auction, the Commission directed the
Bureau, under its existing delegated authority, to seek comment on a variety of auction-specific
procedures prior to the start of each auction.26 We therefore seek comment on the following issues
relating to the conduct of Auction 97.

25 47 C.F.R. Chapter 1, Part 1, Subpart I.
26 47 U.S.C. § 309(j)(3)(E)(i). See Amendment of Part 1 of the Commission’s Rules—Competitive Bidding
Procedures, WT Docket No. 97-82, Third Report and Order and Second Further Notice of Proposed Rule Making,
FCC 97-413, 13 FCC Rcd 374, 447-49 ¶¶ 124-25 (1997) (“Part 1 Third Report and Order”) (directing WTB to seek
comment on specific mechanisms related to day-to-day auction conduct including, for example, the structure of
bidding rounds and stages, establishment of minimum opening bids or reserve prices, minimum acceptable bids,
initial maximum eligibility for each bidder, activity requirements for each stage of the auction, activity rule waivers,
criteria for determining reductions in eligibility, information regarding bid withdrawal and bid removal, stopping
rules, and information relating to auction delay, suspension or cancellation). See also 47 C.F.R. § 0.131;
Amendment of Part 1 of the Commission’s Rules—Competitive Bidding Proceeding, WT Docket No. 97-82, Order,
Memorandum Opinion and Order and Notice of Proposed Rule Making
, FCC 97-60, 12 FCC Rcd 5686, 5697-98
¶ 16 (1997) (“Part 1 Order”).
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A.

Auction Design

1.

Simultaneous Multiple-Round Auction

17.
The Bureau proposes to conduct Auction 97 using a simultaneous multiple-round
(“SMR”) auction format.27 As described further below, an SMR auction offers every license for bid at the
same time and consists of successive bidding rounds in which eligible bidders may place bids. Typically,
bidding remains open on all licenses until bidding stops on every license. The Bureau seeks comment on
this proposal.28
2.

Anonymous Bidding

18.
Consistent with past practice, the Bureau proposes to adopt procedures for limited
information disclosure or “anonymous bidding” for Auction 97.29 Specifically, the Bureau proposes to
withhold, until after the close of bidding, public release of (1) bidders’ license selections on their short-
form applications (FCC Form 175), (2) the amounts of bidders’ upfront payments and bidding eligibility,
and (3) information that may reveal the identities of bidders placing bids and taking other bidding-related
actions.
19.
Under these proposed limited information procedures, the amount of every bid placed
and whether a bid was withdrawn (if withdrawals are permitted) would be disclosed after the close of
every round, but the identities of bidders placing specific bids or withdrawals (if permitted) and the net
bid amounts (reflecting bidding credits) would not be disclosed until after the close of the auction.
20.
Bidders would have access to additional information about their own bids. For example,
bidders would be able to view their own level of eligibility, before and during the auction, through the
FCC Auction System.30
21.
Moreover, for the purpose of complying with section 1.2105(c), the Commission’s rule
prohibiting certain communications between applicants (formerly referred to as the “anti-collusion rule”),
applicants would be made aware of other applicants with which they will not be permitted to cooperate,
collaborate, or communicate—including discussing bids, bidding strategies, or post-auction market
structure.31 Specifically, the Bureau would notify separately each applicant with a short-form application
on file for participation in Auction 97 whether applicants with short-form applications to participate in a
pending auction, including but not limited to Auction 97, have applied for licenses in any of the same or
overlapping geographic areas as that applicant.
22.
After the close of bidding, bidders’ license selections, upfront payment amounts, bidding
eligibility, bids, and other bidding-related actions would be made publicly available.

27 See Implementation of Section 309(j) of the Communications Act—Competitive Bidding, PP Docket No. 93-253,
Second Report and Order, FCC 94-61, 9 FCC Rcd 2348, 2360-75 ¶¶ 68-159 (1994) (“Second Report and Order”)
for a general discussion of competitive bidding design.
28 If any commenter proposes an alternative auction format, they should specify that format, including whether it
should apply to all licenses, and describe the advantages compared with the proposed SMR format.
29 See, e.g., Auction 73 and 76 Procedures Public Notice, 22 FCC Rcd at 18181-85 ¶¶ 145-56; Auction of Advanced
Wireless Services Licenses Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum Opening Bids,
Upfront Payments and Other Procedures for Auction No. 66, Public Notice, FCC 06-47, 21 FCC Rcd 4562, 4600-05
¶¶ 140-57 (2006) (“Auction 66 Procedures Public Notice”); Auction of 700 MHz Band Licenses Scheduled for July
19, 2011; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for
Auction 92, Public Notice, DA 11-420, 26 FCC Rcd 3342, 3372-73 ¶¶ 126-29 (2011).
30 The FCC Auction System is also known as the “Integrated Spectrum Auction System” or “ISAS.”
31 See 47 C.F.R. § 1.2105(c).
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23.
The Bureau seeks comment on the details of its proposal for implementing anonymous
bidding in Auction 97. The Bureau also seeks comment on alternatives to the use of anonymous bidding
procedures for Auction 97. When the Commission originally proposed limited information disclosure
procedures, it did so in response to analysis suggesting that under certain circumstances the
competitiveness and economic efficiency of a simultaneous multiple-round auction may be enhanced if
such information is withheld until after the close of the auction.32 The Bureau encourages parties to
provide information about the benefits and costs of complying with limited information procedures in this
auction as compared with the benefits and costs of alternative procedures that would provide for the
disclosure of more information on bidder identities and interests in the auction. If commenters believe
that the Bureau should not adopt procedures to limit the disclosure of certain bidder-specific information
in Auction 97 until after the auction, they should explain their reasoning.
3.

Acknowledgement for Auction 97 Applicants

24.
As discussed in Section II.B. above, there are Federal incumbent users in the 1695-1710
MHz and 1755-1780 MHz bands. In the AWS-3 Report and Order, the Commission adopted rules to
address commercial operations in these bands in light of the temporary and indefinite sharing of the bands
by Federal incumbent users and commercial licensees, including a requirement that commercial licensees
operate on a co-equal, primary operations with Federal systems within specified geographic zones,33 and a
requirement that licensees in the 1755-1780 MHz band accept interference from Federal systems as long
as such systems remain in the band.34 To implement these rules, we propose to require an Auction 97
applicant to submit with its short-form application a signed statement acknowledging that the applicant’s
operations the 1755-1780 MHz band may be subject to interference from Federal systems in certain
geographic zones, that the applicant must accept interference from such Federal systems in those zones,
and that the applicant has considered these risks before submitting any bids for applicable licenses in
Auction 97. We seek comment on this proposal.

B.

Auction Structure

1.

Bidding Rounds

25.
Under our proposal to use an SMR auction format, Auction 97 will consist of sequential
bidding rounds. The initial bidding schedule will be announced in a public notice to be released at least
one week before the start of the auction.
26.
The Commission will conduct Auction 97 over the Internet using the FCC Auction
System. Bidders will also have the option of placing bids by telephone through a dedicated, toll-free
Auction Bidder Line. The toll-free telephone number for the Auction Bidder Line will be provided to
qualified bidders prior to the start of the auction.
27.
The Bureau proposes to retain the discretion to change the bidding schedule in order to
foster an auction pace that reasonably balances speed with the bidders’ need to study round results and
adjust their bidding strategies. Under this proposal, the Bureau 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. The Bureau seeks comment on this proposal. Commenters should
address the role of the bidding schedule in managing the pace of the auction, specifically discussing the
tradeoffs in managing auction pace by bidding schedule changes, by changing the activity requirements or
bid amount parameters, or by using other means.

32 Auction 66 Comment Public Notice, 21 FCC Rcd at 799.
33 See 47 C.F.R. § 2.106, US note 88 and US note 91.
34 See 47 C.F.R. §27.1134(f). See also See 47 C.F.R. § 2.106, US note 91.
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2.

Stopping Rule

28.
The Bureau has discretion to establish stopping rules before or during multiple round
auctions in order to complete the auction within a reasonable time.35 For Auction 97, under our SMR
auction proposal, we propose to employ a simultaneous stopping rule approach. Using a simultaneous
stopping rule means all licenses remain available for bidding until bidding stops on every license. More
specifically, bidding will close on all licenses after the first round in which no bidder submits any new
bids, applies a proactive waiver, or withdraws any provisionally winning bids (if withdrawals are
permitted).36 Thus, under our SMR proposal, unless we announce alternative stopping procedures, the
simultaneous stopping rule will be used in this auction, and bidding will remain open on all licenses until
bidding stops on every license, regardless of whether bids are placed on individual licenses of licenses.
Consequently, it is not possible to determine in advance how long Auction 97 will last.
29.
Further, we propose to retain the discretion to exercise any of the following options
during Auction 97:
a) Use a modified version of the simultaneous stopping rule that would close the auction for all
licenses after the first round in which no bidder applies a waiver, withdraws a provisionally
winning bid, or places any new bids on a license for which it is not the provisionally winning
bidder. Thus, absent any other bidding activity, a bidder placing a new bid on a license for
which it is the provisionally winning bidder would not keep the auction open under this
modified stopping rule.
b) Use a modified version of the simultaneous stopping rule that would close the auction for all
licenses after the first round in which no bidder applies a waiver, withdraws a provisionally
winning bid, or places any new bids on a license that is not FCC-held. Thus, absent any other
bidding activity, a bidder placing a new bid on a license that does not already have a
provisionally winning bid (an “FCC-held” license) would not keep the auction open under
this modified stopping rule.
c) Use a modified version of the simultaneous stopping rule that combines (a) and (b) above.
d) Declare that the auction will end after a specified number of additional rounds (“special
stopping rule”). If the Bureau invokes this special stopping rule, it will accept bids in the
specified final round(s), after which the auction will close.
e) Keep the auction open even if no bidder places any new bids, applies a waiver, or withdraws
(if withdrawals are permitted) any provisionally winning bids. In this event, the effect will be
the same as if a bidder had applied a waiver. The activity rule will apply as usual, and a
bidder with insufficient activity will either lose bidding eligibility or use a waiver.
30.
We propose to exercise these options only in certain circumstances, for example, where
the auction is proceeding unusually slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable period of time or will close prematurely.
Before exercising these options, we are likely to attempt to change the pace of the auction by, for
example, changing the number of bidding rounds per day and/or the minimum acceptable bids. We

35 47 C.F.R. § 1.2104(e).
36 Provisionally winning bids are bids that would become final winning bids if the auction were to close in that given
round. They are discussed in Section IV.C.6. (Provisionally Winning Bids). Proactive waivers are described in
Section IV.C.3. (Activity Rule Waivers and Reducing Eligibility), and bid withdrawals are described in Section
IV.C.8. (Bid Withdrawal) below.
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propose to retain the discretion to exercise any of these options with or without prior announcement
during the auction. We seek comment on these proposals.
3.

Information Relating to Auction Delay, Suspension, or Cancellation

31.
We propose that the Bureau may delay, suspend, or cancel Auction 97 in the event of a
natural disaster, technical obstacle, 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.37 We will notify participants of any such delay, suspension or cancellation by public
notice and/or through the FCC Auction System’s announcement function. If the auction is delayed or
suspended, we may, in our sole discretion, elect to resume the auction starting from the beginning of the
current round or from some previous round, or cancel the auction in its entirety. Network interruption
may cause the Bureau to delay or suspend the auction. We emphasize that we will exercise this authority
solely at our discretion, and note that the exercise of our authority in this regard is not intended to be a
substitute for situations in which bidders may wish to apply their activity rule waivers. We seek comment
on this proposal.

C.

Auction Procedures

1.

Upfront Payments and Bidding Eligibility

32.
The Bureau has delegated authority and discretion to determine an appropriate upfront
payment for each license being auctioned, taking into account such factors as the efficiency of the auction
process and the potential value of similar licenses.38 An upfront payment is a refundable deposit made by
each bidder to establish its eligibility to bid on licenses. Upfront payments that are related to the specific
licenses being auctioned protect against frivolous or insincere bidding and provide the Commission with a
source of funds from which to collect payments owed at the close of the auction.39 For Auction 97, we
propose to make the upfront payments equal to approximately half the proposed minimum opening bids,
which are established as described in Section IV.C.4., below.40 The upfront payments for each license are
set forth in Attachment A to this Public Notice. We seek comment on this proposal.
33.
The Bureau further proposes that the amount of the upfront payment submitted by a
bidder will determine its initial bidding eligibility in bidding units. We propose to assign each license a
specific number of bidding units, equal to one bidding unit per dollar of the upfront payment proposed for
the license. The specific bidding units for each license are set forth in Attachment A to this Public
Notice. The number of bidding units for a given license is fixed and does not change during the auction
as prices change. A bidder’s upfront payment is not attributed to specific licenses of licenses. Rather, a
bidder may place bids on any combination of the licenses it selected on its short-form application (FCC
Form 175), provided that the total number of bidding units associated with those licenses does not exceed
its current eligibility. Table 2 below provides an example of how this process operates. A bidder cannot

37 47 C.F.R. § 1.2104(i). Additionally, with respect to the “eligible frequencies” being auctioned in Auction 97, the
Commission is required by the CSEA to cancel an auction of those frequencies if the total cash proceeds attributable
to any such frequencies do not equal at least 110 of the estimated relocation or sharing expenses of incumbent
Federal entities. See 47 U.S.C. §§ 309(j)(16)(B).
38 See Part 1 Order, 12 FCC Rcd at 5697-98 ¶ 16. See also Part 1 Third Report and Order, 13 FCC Rcd at 425
¶ 86; Second Report and Order, 9 FCC Rcd at 2377-79 ¶¶ 169-75.
39 See Second Report and Order, 9 FCC Rcd at 2377-79 ¶¶ 169-76.
40 As described in Section IV.C.4., the minimum opening bids are calculated using a formula based on bandwidth
and license area population, adjusted using an index of relative winning bid amounts in previous auctions. The
results of those calculations are then rounded and subject to a minimum of $2,500 per license. Our proposed
calculation of upfront payment amounts divides by two the unrounded result of the minimum opening bid
calculation, prior to applying the $2,500 minimum per license. Our standard rounding procedures are then applied.
See note 68 (concerning rounding), below.
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increase its eligibility during the auction; it can only maintain its eligibility or decrease its eligibility.
Thus, in calculating its upfront payment amount and hence its initial bidding eligibility, 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. We seek comment on these proposals.

Table 2: Upfront Payments, Bidding Eligibility, and Bidding Flexibility Example

License

Market

Description

Bidding Units

Upfront Payment

AW-CMA247-G
CMA247
Lafayette, IN
23,000
$23,000
AW-CMA282-G
CMA282
Bloomington, IN
24,000
$24,000

If a bidder wishes to bid on both licenses in a round, it must have selected both on its FCC Form 175 and
purchased at least 47,000 bidding units (23,000 + 24,000) of bidding eligibility. If a bidder only wishes
to bid on one of these licenses, purchasing 24,000 bidding units would meet the eligibility requirement
for either license. The bidder would be able to bid on either license, but not both at the same time. If the
bidder purchased only 23,000 bidding units, it would have enough eligibility for the Lafayette license but
not the Bloomington license.

2.

Activity Rule

34.
An activity rule requires bidders to bid actively throughout the auction, rather than wait
until late in the auction before participating. A bidder’s activity in a round will be the sum of the bidding
units associated with any licenses upon which it places bids during the current round and the bidding units
associated with any licenses for which it holds provisionally winning bids placed in previous rounds.
Bidders are required to be active on a specific percentage of their current bidding eligibility 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 additional bids in the auction.41
35.
The Bureau proposes to divide the auction into at least two stages, each characterized by
a different activity requirement.42 The auction will start in Stage One. The Bureau proposes to advance
the auction to the next stage by announcement during the auction. In exercising this discretion, the
Bureau will consider a variety of measures of auction activity, including but not limited to the percentage
of bidding units associated with licenses on which there are new bids,43 the number of new bids, and the
increase in revenue. The Bureau seeks comment on these proposals.
36.
The Bureau proposes the following activity requirements, while noting again that the
Bureau retains the discretion to change stages unilaterally by announcement during the auction:

Stage One:

In each round of the first stage of the auction, a bidder desiring to maintain its
current bidding eligibility is required to be active on bidding units associated with licenses
representing at least 80 percent of its current bidding eligibility. Failure to maintain the required
activity level will result in the use of an activity rule waiver or a reduction in the bidder’s bidding
eligibility for the next round of bidding. During Stage One, a bidder’s reduced eligibility for the

41 See Section IV.C.3. (Activity Rule Waivers and Reducing Eligibility) below.
42 See 47 C.F.R. § 1.2104(f).
43 For example, when monitoring activity for determining when to change stages, the Bureau may consider the
percentage of bidding units of the licenses receiving new provisionally winning bids, excluding any FCC-held
licenses. In past auctions, the Bureau has generally—but not always—changed stages when this measure was
approximately twenty percent or below for three consecutive rounds of bidding.
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next round will be calculated by multiplying the bidder’s current round activity by five-fourths
(5/4).

Stage Two:

In each round of the second stage, a bidder desiring to maintain its current bidding
eligibility is required to be active on 95 percent of its current bidding eligibility. Failure to
maintain the required activity level will result in the use of an activity rule waiver or a reduction
in the bidder’s bidding eligibility for the next round of bidding. During Stage Two, a bidder’s
reduced eligibility for the next round will be calculated by multiplying the bidder’s current round
activity by twenty-nineteenths (20/19).
37.
The Bureau seeks comment on these activity requirements. Under this proposal, the
Bureau will retain the discretion to change the activity requirements during the auction. For example, the
Bureau could decide to add an additional stage with a higher activity requirement, not to transition to
Stage Two if it believes the auction is progressing satisfactorily under the Stage One activity requirement,
or to transition to Stage Two with an activity requirement that is higher or lower than the 95 percent
proposed herein.44 If the Bureau exercises this discretion, it will alert bidders by announcement in the
FCC Auction System.
3.

Activity Rule Waivers and Reducing Eligibility

38.
When a bidder’s eligibility in the current round is below the required minimum level, it
may preserve its current level of eligibility through an activity rule waiver. An activity rule waiver
applies to an entire round of bidding, not to a particular bid. Activity rule waivers, which can be either
proactive or automatic, 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.
39.
The FCC Auction System assumes 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 waivers
remaining, or (2) the bidder overrides the automatic application of a waiver by reducing eligibility,
thereby meeting the activity requirement. If a 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.
40.
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 System. In this
case, the bidder’s eligibility is permanently reduced to bring it into compliance with the activity rule
described above. Reducing eligibility is an irreversible action; once eligibility has been reduced, a bidder
will not be permitted to regain its lost bidding eligibility, even if the round has not yet closed.
41.
Under the proposed simultaneous stopping rule, 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 “apply waiver” function in the FCC Auction System) during a
bidding round in which no bids are placed or withdrawn, the auction will remain open and the bidder’s
eligibility will be preserved. An automatic waiver applied by the FCC Auction System in a round in
which there are no new bids, withdrawals (if permitted), or proactive waivers will not keep the auction
open. A bidder cannot apply a proactive waiver after bidding in a round, and applying a proactive waiver

44 If the Bureau implements stages with activity requirements other than the ones listed above, a bidder’s reduced
eligibility for the next round will be calculated by multiplying the bidder’s current round activity by the reciprocal of
the activity requirement. For example, with a 98 percent activity requirement, the bidder’s current round activity
would be multiplied by 50/49; with a 100 percent activity requirement, the bidder’s current round activity would
become its bidding eligibility (current round activity would be multiplied by 1/1).
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will preclude it from placing any bids in that round.45 Applying a waiver is irreversible; once a proactive
waiver is submitted, it cannot be unsubmitted, even if the round has not yet closed.
42.
Consistent with recent Commission auctions, the Bureau proposes that each bidder in
Auction 97 be provided with a total of three activity rule waivers that may be used as set forth above at
the bidder’s discretion during the course of the auction. The Bureau seeks comment on this proposal.
4.

Reserve Price and Minimum Opening Bids

43.
Section 309(j) calls upon the Commission to prescribe methods for establishing a
reasonable reserve price or a minimum opening bid amount when Commission licenses are subject to
auction, unless the Commission determines that a reserve price or minimum opening bid amount is not in
the public interest.46 Consistent with this mandate, the Commission has directed the Bureau to seek
comment on the use of a minimum opening bid amount and/or reserve price prior to the start of each
auction.47
44.
Normally, a reserve price is an absolute minimum price below which an item or items
will not be sold in a given auction. If a reserve price is utilized, the specific amount of the reserve price
may be disclosed or undisclosed.48 A minimum opening bid, on the other hand, is the minimum bid price
set at the beginning of the auction below which no bids are accepted. It is generally used to accelerate the
competitive bidding process. It is possible for the minimum opening bid and the reserve price to be the
same amount.
45.
Among other factors the Bureau must consider in deciding whether to employ either or
both of these mechanisms is the amount of spectrum being auctioned, levels of incumbency, the
availability of technology to provide service, the size of the geographic service areas, the extent of
interference with other spectrum bands, and any other relevant factors that could have an impact on the
spectrum being auctioned.49
a. Reserve Price
46.
The Commission is statutorily obliged to consider and balance a variety of public
interests and objectives when establishing service rules and licensing procedures with respect to the
public spectrum resource. These objectives include promoting recovery for the public a portion of the
value of that resource.50 As discussed above, certain of the frequencies in the AWS-3 bands are “eligible
frequencies” under the CSEA, and the CSEA requires that auction proceeds fund the estimated relocation
or sharing costs of incumbent federal entities operating on these frequencies.51 In view of this, we will
establish reserve prices for the AWS-3 licenses offered in Auction 97.
47.
The CSEA requires that the total cash proceeds attributable to “eligible frequencies” be at
least 110 percent of the total estimated relocation or sharing costs provided to the Commission pursuant
to the CSEA before the Commission may conclude an auction involving such frequencies.52 If this

45 In general, once a bidder places a proactive waiver during a round, the FCC Auction System does not allow the
bidder to take any other bidding-related action in that round, including placing bids or withdrawing bids.
46 47 U.S.C. § 309(j)(4)(F). See also 47 C.F.R. § 1.2104(c) and (d).
47 Part 1 Third Report and Order, 13 FCC Rcd at 454-56 ¶ 141. See also 47 C.F.R. § 1.2104(c).
48 See 47 C.F.R. § 1.2104(c). See also Part 1 Third Report and Order, 13 FCC Rcd at 455 ¶ 140.
49 Part 1 Third Report and Order, 13 FCC Rcd at 454-56 ¶ 141.
50 47 U.S.C. § 309(j)(3)(C).
51 See 47 U.S.C. §§ 309(j)(8)(D), 923(g); see also Section II.C. (Commercial Spectrum Enhancement Act/Spectrum
Act Requirements) above.
52 See 47 U.S.C. § 309(j)(16)(B).
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condition is not met, the CSEA requires the Commission to cancel the auction.53 For purposes of
determining whether the CSEA’s revenue requirement has been met, the Commission has determined that
“total cash proceeds” means winning bids net of any applicable bidding credit discounts at the end of
bidding (e.g., exclusive of any Tribal lands bidding credit).54
48.
The NTIA has notified the Commission that the total estimated relocation or sharing
costs for the 1695-1710 MHz band equal $527,069,000, and that the total estimated relocation or sharing
costs for the 1755-1780 MHz band equal $4,575,603,000.55 Accordingly, we propose one aggregate
reserve price for the 1695-1710 MHz band and a separate aggregate reserve price for the paired 1755-
1780/2155-2180 MHz band.
49.
We propose to establish an aggregate reserve price of $579,775,900 for the licenses in the
1695-1710 MHz band. This aggregate reserve price is 110 percent of total estimated relocation or sharing
costs of $527,069,000 provided by the NTIA for this band and, therefore, the minimum reserve price
required by the CSEA. Given that the 1695-1710 MHz band consists entirely of “eligible frequencies,”
we propose that the winning bid for each license in this band (i.e., the licenses in Blocks A1 and B1), net
of any applicable bidding credit discounts at the end of bidding (e.g., exclusive of any Tribal lands
bidding credit), will be counted toward meeting the reserve price for the band. Thus, the aggregate
reserve price will be met if the total winning bids for the licenses in Blocks A1 and B1, net of any
applicable bidding credit discounts at the end of bidding (e.g., exclusive of any Tribal lands bidding
credit), is at least $579,775,900.56
50.
As discussed in Section II.A. above, the 1755-1780 MHz band will be licensed paired
with the 2155-2180 MHz band. The lower half of the frequencies in each paired license, i.e., those in the
1755-1780 MHz band, are “eligible frequencies” and are thus subject to CSEA requirements.57 To meet
CSEA’s requirements, we propose to establish an aggregate reserve price of $5,033,163,300 for the 1755-
1780 MHz frequencies. This aggregate reserve price is 110 percent of total estimated relocation or
sharing costs of $4,575,603,000 for the 1755-1780 MHz band provided by the NTIA and, therefore, the
minimum reserve price required by CSEA. Because these frequencies are one half of the frequencies
authorized for use by each of the 1755-1780/2155-2180 MHz paired licenses, we propose that one-half of
each winning bid for each of the paired 1755-1780/2155-2180 MHz licenses (i.e., the licenses in Blocks
G, H, I, and J), net of any applicable bidding credit discounts at the end of bidding, will be counted
toward meeting the reserve price. The aggregate reserve price will be met if one half of the total winning
bids for the licenses in Blocks G, H, I, and J, net of any applicable bidding credit discounts at the end of

53 Id.
54 See CSEA/Part 1 Declaratory Ruling, 20 FCC Rcd at 11270-72, ¶¶ 5-12.
55 See NTIA May 13 Notification Letter at Attachments B1 and B2, available at
http://www.ntia.doc.gov/category/aws-3-transition">http://www.ntia.doc.gov/category/aws-3-transition. These figures are the current total estimated relocation or
sharing costs contained in the Federal agencies’ approved transition plans. We note that Federal agencies are
required to periodically update their transition plans as such plans are implemented to reflect any changed
circumstances, including changes in estimated relocation or sharing costs or the timeline for relocation or sharing.
See 47 U.S.C. § 923(h)(6).
56 Our proposed aggregate reserve price for licenses in the 1695-1710 MHz band is calculated based on the current
total estimated relocation or sharing costs contained in the Federal agencies’ approved transition plans. To the
extent that total estimated relocation or sharing costs changes as the result of any transition plan updates, the
aggregate reserve price for Auction 97 will be adjusted accordingly to ensure that it represents 110 percent of the
total estimated relocation or sharing costs consistent with the CSEA’s requirement. However, we will apply the
same formula for determining whether the reserve has been met regardless of any adjustment to the aggregate
reserve price.
57 See Section II. (Licenses to be Offered in Auction 97) above.
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bidding (e.g., exclusive of any Tribal lands bidding credit), is at least $5,033,163,300.58 Therefore, the
winning “net” bids for the paired 1755-1780/2155-2180 MHz licenses must be at least twice that amount,
or $10,066,326,600, in order for the Commission to conclude the auction.
51.
We seek comment on our proposed reserve prices for Auction 97 and our proposals for
implementing them. We encourage commenters to address any additional specific issues related to the
use of reserve prices. We ask that commenters describe in detail the specific factors that lead them to
their conclusions.
52.
In light of our proposal to adopt procedures for limited information disclosure for
Auction 97,59 if information regarding net bid amounts is not provided during the auction, we propose to
issue an announcement in the FCC Auction System, viewable by bidders and the general public, stating
that a reserve price has been met immediately following the first round in which that occurs. However,
due to factors such as bid withdrawals and the effect of bidding credits, an announcement that the reserve
price has been met following a round of the auction does not guarantee that the reserve price will continue
to be met. Accordingly, we will make a further announcement in the FCC Auction System after any
round in which the reserve price status changes. We seek comment this proposal.
b. Minimum Opening Bids
53.
In light of section 309(j)’s requirements, the Bureau proposes to establish minimum
opening bid amounts for Auction 97. The Bureau believes a minimum opening bid amount, which has
been used in other auctions, is an effective bidding tool for accelerating the competitive bidding process.60
We propose minimum opening bids that should accelerate the progress of the auction toward meeting
(1) the reserve prices established to meet CSEA requirements and (2) the Spectrum Act deadline for
licensing identified frequencies.61 The proposed minimum opening bids are higher than the proposed
upfront payments so that the competitive bidding process can be accelerated without increasing the cost
of eligibility.62
54.
The Bureau proposes to calculate minimum opening bid amounts for Auction 97 on a
license-by-license basis using a formula based on bandwidth and license area population,63 similar to our
approach in many previous spectrum auctions. We propose to use a calculation based on $0.15 per

58 Our proposed aggregate reserve price for the paired 1755-1780/2155-2180 MHz licenses is calculated based on
the current total estimated relocation or sharing costs contained in the Federal agencies’ approved transition plans
for the 1755-1780 MHz band. To the extent that total estimated relocation or sharing costs for this band changes as
the result of any transition plan updates, the aggregate reserve price for Auction 97 will be adjusted accordingly to
ensure that it represents 110 percent of the total estimated relocation or sharing costs for the 1755-1780 MHz band
consistent with the CSEA’s requirement. However, we will apply the same formula for determining whether the
reserve has been met regardless of any adjustment to the aggregate reserve price.
59 See Section IV.A.2. (Anonymous Bidding) above.
60 See, e.g., Auction of 800 MHz SMR Upper 10 MHz Band, Minimum Opening Bids or Reserve Prices, Order, DA
97-2147, 12 FCC Rcd 16354 (1997); Auction of the Phase II 220 MHz Service Licenses, Auction Notice and Filing
Requirements for 908 Licenses Consisting of Economic Area (EA), Economic Area Grouping (EAG), and
Nationwide Licenses, Scheduled for September 15, 1998, Minimum Opening Bids and Other Procedural Issues,
Public Notice, DA 98-1010, 13 FCC Rcd 16445 (1998).
61 See discussion above in Section I. (Introduction) and Section II.C. (Commercial Spectrum Enhancement
Act/Spectrum Act Requirements).
62 The proposed upfront payments are similar to those used in the recent auction of H Block licenses in the
1915-1920 MHz and 1995-2000 MHz bands, which were established using $0.07 per MHz-pop.
63 All population figures are from the 2010 U.S. Census, U.S. Department of Commerce, Bureau of the Census. See
Census 2010 Summary File 1 (SF1) and Island Areas: 2010 Census Summary File (covering the U.S. Virgin Islands,
Guam, the Northern Mariana Islands, and American Samoa).
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megahertz of bandwidth per population (per “MHz-pop”) for paired licenses and $0.05 per MHz-pop for
unpaired licenses, adjusted for past geographic variations. Specifically, we propose to incorporate pricing
information from previous auctions to adjust the minimum opening bid calculations based on an index of
relative winning bid amounts for licenses in each CMA and EA, subject to a minimum of $0.01 per MHz-
pop.64 This modification results in amounts ranging from $0.01 per MHz-pop to $0.53 per MHz-pop.
We further propose a minimum of $2,500 per license. We propose to set the minimum opening bid
amounts for the licenses covering the Gulf of Mexico at $2,000 per megahertz.
55.
The proposed minimum opening bid amount for each AWS-3 license available in
Auction 97, calculated pursuant to the procedures described above, is set forth in Attachment A.
56.
The Bureau seeks comment on all of the above proposals concerning minimum opening
bids. If commenters believe that these minimum opening bid amounts will result in unsold licenses, or
are not reasonable amounts, they should explain why this is so and comment on the desirability of an
alternative approach. If a commenter requests an alternative approach for a specific frequency block or a
lower minimum opening bid amount for a specific license, it should justify the requested change in detail.
If commenters disagree with our proposed use of $0.15 per MHz-pop and $0.05 per MHz-pop, our
approach to tailoring minimum opening bid amounts to account for relative prices among the CMAs and
EAs in past auctions, or our selection of which past results to consider, we ask commenters to support
their claims with valuation analyses and suggested minimum opening bid amount levels or formulas.
57.
In establishing minimum opening bid amounts, we particularly seek comment on factors
that could reasonably have an impact on valuation of the licenses being auctioned, including the amount
of spectrum being auctioned, levels of incumbency, the availability of technology to provide service, the
size of the service areas, the size of the geographic service areas, issues of interference with other
spectrum bands and any other relevant factors. The Bureau also seeks comment on whether, consistent
with section 309(j), the public interest would be served by having no minimum opening bid amount.
58.
Commenters may also wish to address the general role of minimum opening bids in
managing the pace of the auction. For example, commenters could compare using minimum opening
bids—e.g., by setting higher minimum opening bids to reduce the number of rounds it takes licenses to
reach their final prices—to other means of controlling auction pace, such as changes to bidding schedules
or activity requirements.
5.

Bid Amounts

59.
The Bureau proposes that, in each round, an eligible bidder will be able to place a bid on
a given license using one or more pre-defined bid amounts.65 Under this proposal, the FCC Auction
System interface will list the acceptable bid amounts for each license. The Bureau proposes to calculate
bid amounts as described below.
a.

Minimum Acceptable Bids

60.
The first of the acceptable bid amounts is called the minimum acceptable bid amount.
The minimum acceptable bid amount for a license will be equal to its minimum opening bid amount until
there is a provisionally winning bid on the license. The Bureau proposes to calculate minimum
acceptable bids based on provisionally winning bids and an activity-based formula.
61.
After there is a provisionally winning bid for a license, the minimum acceptable bid
amount for that license will be equal to the amount of the provisionally winning bid plus a percentage of
that bid amount calculated using the activity-based formula described below. In general, the percentage

64 The index of the relative price difference will be calculated using the winning bid amounts for the CMA and EA
licenses in Auctions 66, 73, and 96.
65 Bidders must have sufficient eligibility to place a bid on the particular license. See Section IV.C.1. (Upfront
Payments and Bidding Eligibility) above.
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will be higher for a license receiving many bids than for a license receiving few bids. In the case of a
license for which the provisionally winning bid has been withdrawn, the minimum acceptable bid amount
will equal the second highest bid received for the license.66
62.
The percentage of the provisionally winning bid used to establish the minimum
acceptable bid amount (“the additional percentage”) is calculated based on an activity index at the end of
each round. The activity index is a weighted average of (a) the number of distinct bidders placing a bid
on the license in that round, and (b) the activity index from the prior round.67 The additional percentage is
determined as one plus the activity index times a minimum percentage amount, with the result not to
exceed a given maximum. The additional percentage is then multiplied by the provisionally winning bid
amount to obtain the minimum acceptable bid for the next round.68 The Bureau proposes initially to set
the weighting factor at 0.5, the minimum percentage at 0.1 (10%), and the maximum percentage at 0.3
(30%). Hence, at these initial settings, the minimum acceptable bid for a license will be between ten
percent and thirty percent higher than the provisionally winning bid, depending upon the bidding activity
for the license. Equations and examples are shown in Attachment B. We seek comment on whether to
use this activity-based formula or a different approach.
b.

Additional Bid Amounts

63.
The Bureau proposes to calculate any additional bid amounts using the minimum
acceptable bid amount and a bid increment percentage—more specifically, by multiplying the minimum
acceptable bid by one plus successively higher multiples of the bid increment percentage. If, for example,
the bid increment percentage is 5 percent, the calculation of the first additional acceptable bid amount is
(minimum acceptable bid amount) * (1 + 0.05), rounded, or (minimum acceptable bid amount) * 1.05,
rounded; the second additional acceptable bid amount equals the minimum acceptable bid amount times
one plus two times the bid increment percentage, rounded, or (minimum acceptable bid amount) * 1.10,
rounded; etc. The Bureau will round the results using the Commission’s standard rounding procedures
for auctions.69 The Bureau proposes initially to set the bid increment percentage at 5 percent.
64.
For Auction 97, the Bureau proposes to begin the auction with nine acceptable bid
amounts per license (the minimum acceptable bid amount and eight additional bid amounts).
c.

Bid Amount Changes

65.
The Bureau retains the discretion to change the minimum acceptable bid amounts, the
additional bid amounts, the number of acceptable bid amounts, and the parameters of the formulas used to
calculate minimum acceptable bid amounts and additional bid amounts if the Bureau determines that
circumstances so dictate. Further, the Bureau retains the discretion to do so on a license-by-license basis.
The Bureau also retains the discretion to limit (a) the amount by which a minimum acceptable bid for a
license 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, the Bureau could set a $10 million limit on increases in minimum acceptable bid
amounts over provisionally winning bids. Thus, if the activity-based formula calculates a minimum
acceptable bid amount that is $20 million higher than the provisionally winning bid on a license, the

66 See Section IV.B.7. (Bid Removal) and Section IV.B.8. (Bid Withdrawal) below.
67 Specifically, the activity index is equal to a weighting factor times the number of bidders placing a bid covering
the license in the most recent bidding round plus one minus the weighting factor times the activity index from the
prior round. For Round 1 calculations, because there is no prior round (i.e., no round 0), the activity index from the
prior round is set at 0.
68 The Bureau will round the result using its standard rounding procedures: 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 $1,000
are rounded to the nearest $10.
69 See note 68 (concerning rounding), above.
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minimum acceptable bid amount would instead be capped at $10 million above the provisionally winning
bid. The Bureau seeks comment on the circumstances under which we should employ such a limit,
factors we should consider when determining the dollar amount of the limit, and the tradeoffs in setting
such a limit or changing other parameters—such as changing the minimum acceptable bid percentage, the
bid increment percentage, or the number of acceptable bid amounts. If the Bureau exercises this
discretion, it will alert bidders by announcement in the FCC Auction System.
66.
The Bureau seeks comment on the above proposals. If commenters disagree with the
proposal to begin the auction with nine acceptable bid amounts per license, they should suggest an
alternative number of acceptable bid amounts to use at the beginning of the auction and an alternative
number to use later in the auction. Commenters may wish to address the role of the minimum acceptable
bids and the number of acceptable bid amounts in managing the pace of the auction and the tradeoffs in
managing auction pace by changing the bidding schedule, activity requirements, or bid amounts, or by
using other means.
6.

Provisionally Winning Bids

67.
Provisionally winning bids are bids that would become final winning bids if the auction
were to close in that given round. At the end of a bidding round, the FCC Auction System determines a
provisionally winning bid for each license based on the highest bid amount received for the license.
These bids become the provisionally winning bids for the round.
68.
If identical high bid amounts are submitted on a license in any given round (i.e., tied
bids), the FCC Auction System will use a random number generator to select a single provisionally
winning bid from among the tied bids. (The Auction System assigns a random number to each bid when
the bid is entered. The tied bid with the highest random number wins the tiebreaker.) The remaining
bidders, as well as the provisionally winning bidder, can submit higher bids in subsequent rounds.
However, if the auction were to end with no other bids being placed, the winning bidder would be the one
that placed the provisionally winning bid.
69.
The set of provisionally winning bids is determined after every round in which new bids
are submitted. As stated above, the provisionally winning bids at the end of the auction become winning
bids, provided that any applicable reserve prices have been met. We remind bidders that provisionally
winning bids count toward activity for purposes of the activity rule.70
7.

Bid Removal

70.
For Auction 97, the Bureau proposes the following bid removal procedures. Before the
close of a bidding round, a bidder has the option of removing any bid placed in that round. By removing
a selected bid in the FCC Auction System, a bidder may effectively “undo” any bid placed within that
round. Once a round closes, a bidder may no longer remove a bid. We seek comment on this bid removal
proposal.
8.

Bid Withdrawal

71.
When permitted in an auction, bid withdrawals provide a bidder with the option of
withdrawing bids placed in prior rounds that have become provisionally winning bids. In the Part 1
Third Report and Order
, the Commission explained that allowing bid withdrawals facilitates efficient
aggregation of licenses and the pursuit of backup strategies as information becomes available during the
course of an auction.71 The Commission noted, however, that in some instances bidders may seek to
withdraw bids for improper reasons. The Bureau, therefore, has discretion in managing the auction to
limit the number of withdrawals to prevent any bidding abuses.

70 See Section IV.C.2. (Activity Rule) above.
71 Part 1 Third Report and Order, 13 FCC Rcd at 459-60 ¶ 150.
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72.
Applying this reasoning to Auction 97, the Bureau proposes to allow each bidder to
withdraw provisionally winning bids in no more than two rounds during the course of the auction. To
permit a bidder to withdraw bids in more than two rounds may encourage insincere bidding or the use of
withdrawals for anti-competitive purposes. The two rounds in which a bidder may withdraw
provisionally winning bids will be at the bidder’s discretion, and there is no limit on the number of
provisionally winning bids that a bidder may withdraw in either of the rounds in which it withdraws bids.
Withdrawals must be in accordance with the Commission’s rules, including the bid withdrawal payment
provisions specified in section 1.2104(g).72
73.
We seek comment on this proposal. If commenters disagree with this proposal, we ask
them to support their arguments by taking into account the licenses available, the impact on auction
dynamics and the pricing mechanism, and the effects on the bidding strategies of other bidders.

D.

Post-Auction Payments

1.

Interim Withdrawal Payment Percentage

74.
The Bureau seeks comment on the appropriate percentage of a withdrawn bid that should
be assessed as an interim withdrawal payment in the event that a final withdrawal payment cannot be
determined at the close of the auction. In general, the Commission’s rules provide that a bidder that
withdraws a bid during an auction is subject to a withdrawal payment equal to the difference between the
amount of the withdrawn bid and the amount of the winning bid in the same or subsequent auction(s).73 If
a bid is withdrawn and no subsequent higher bid is placed and/or the license is not won in the same
auction, the final withdrawal payment cannot be calculated until after the close of a subsequent auction in
which a higher bid for the license (or the equivalent to the license) is placed or the license is won.74
When that final payment cannot yet be calculated, the bidder responsible for the withdrawn bid is
assessed an interim bid withdrawal payment, which will be applied toward any final bid withdrawal
payment that is ultimately assessed.75 Section 1.2104(g)(1) of the Commission’s rules requires that the
percentage of the withdrawn bid to be assessed as an interim bid withdrawal payment be between three
percent and twenty percent and that it be set in advance of the auction.76
75.
The Commission has determined that the level of the interim withdrawal payment in a
particular auction will be based on the nature of the service and the inventory of the licenses being
offered.77 The Commission has noted that it may impose a higher interim withdrawal payment percentage
to deter the anti-competitive use of withdrawals when, for example, bidders likely will not need to
aggregate the licenses being offered in the auction, such as when few licenses are offered that are on
adjacent frequencies or in adjacent areas, or when there are few synergies to be captured by combining
licenses.78 With respect to the AWS-3 licenses being offered in Auction 97, the service rules permit a
wide variety of advanced services, some of which may best be offered by combining licenses on adjacent
frequencies or in adjacent areas, and the licenses will be offered under different geographic licensing
schemes and bandwidth sizes. Balancing the potential need for bidders to use withdrawals to avoid

72 See 47 C.F.R. §§ 1.2104(g). See also 47 C.F.R. § 1.2109.
73 See 47 C.F.R. § 1.2104(g)(1). The withdrawal payment amount is deducted from any upfront payments or down
payments that the withdrawing bidder has deposited with the Commission. No withdrawal payment is assessed for a
withdrawn bid if either the subsequent winning bid or any of the intervening subsequent withdrawn bids equals or
exceeds that withdrawn bid. Id.
74 Id.
75 Id.
76 See id., as amended by CSEA/Part 1 Report and Order, 21 FCC Rcd at 901-04 ¶¶ 27-32.
77 See CSEA/Part 1 Report and Order, 21 FCC Rcd at 903-04 ¶ 31.
78 See id. at 904 n.57.
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winning incomplete combinations of licenses with the Bureau’s interest in deterring undesirable strategic
use of withdrawals, the Bureau proposes a percentage below the maximum twenty percent permitted
under the current rules but above the three percent previously provided by the Commission’s rules.
Specifically, the Bureau proposes to establish an interim bid withdrawal payment of ten percent of the
withdrawn bid for this auction. The Bureau seeks comment on this proposal.
2.

Additional Default Payment Percentage

76.
Any winning bidder that defaults or is disqualified after the close of an auction (i.e., fails
to remit the required down payment within the prescribed period of time, fails to submit a timely long-
form application, fails to make full and timely final payment, or is otherwise disqualified) is liable for a
default payment under 47 C.F.R. § 1.2104(g)(2). This payment consists of a deficiency payment, equal to
the difference between the amount of the Auction 97 bidder’s winning bid and the amount of the winning
bid the next time a license 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.
77.
The Commission’s rules provide that, in advance of each auction, it will establish a
percentage between three and twenty percent of the applicable bid to be assessed as an additional default
payment.79 As the Commission has indicated, the level of this additional payment in each auction will
vary based on the nature of the service and the inventory of the licenses being offered.80
78.
As noted in the CSEA/Part 1 Report and Order, defaults weaken the integrity of the
auction process and may impede the deployment of service to the public, and an additional default
payment of up to twenty percent will be more effective in deterring defaults than the three percent used in
some earlier auctions.81 At the same time, we do not believe the detrimental effects of any defaults in
Auction 97 are likely to be unusually great. Balancing these considerations, for Auction 97, we propose
to establish an additional default payment of fifteen percent of the applicable bid. The Bureau seeks
comment on this proposal.

V.

DEADLINES AND FILING PROCEDURES

79.
Comments are due on or before June 9, 2014, and reply comments are due on or before
June 23, 2014. All filings related to procedures for Auction 97 must refer to AU Docket No. 14-78.
Comments may be submitted using the Commission’s Electronic Comment Filing System (“ECFS”) or by
filing paper copies.82 We strongly encourage interested parties to file comments electronically.
80.
Electronic Filers: Comments may be filed electronically using the Internet by accessing
the ECFS ahttp://www.fcc.gov/cgb/ecfs">t http://www.fcc.gov/cgb/ecfs. Filers should follow the instructions provided on the website
for submitting comments. In completing the transmittal screen, filers should include their full name, U.S.
Postal Service mailing address, and the applicable docket number, AU Docket No. 14-78. To get filing
instructions, filers should send an e-mail to ecfs@fcc.gov, and include the following words in the body of
the message: “get form.” A sample form and directions will be sent in response.
81.
Paper Filers: Parties who choose to file by paper must file an original and four copies of
each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s
Secretary Attn: WTB/ASAD, Office of the Secretary, Federal Communications Commission.

79 See 47 C.F.R. § 1.2104(g)(2)(ii).
80 See CSEA/Part 1 Report and Order, 21 FCC Rcd at 903-04 ¶¶ 30-31.
81 Id. at 902-04 ¶ 29-31.
82 See Electronic Filing of Documents in Rulemaking Proceedings, GC Docket No. 97-113, Report and Order, FCC
98-56, 13 FCC Rcd 11322 (1998).
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• The Commission’s contractor will receive hand-delivered or messenger-delivered paper filings
for the Commission’s Secretary at the FCC Headquarters building located at 445 12th Street, SW,
Room TW-A325, Washington, DC 20554. The filing hours at this location are 8:00 a.m. to 7:00
p.m. Eastern Time (ET). All hand deliveries must be held together with rubber bands or
fasteners. Any envelopes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must
be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street,
SW, Washington DC 20554.

82.
Auction 97 E-mail: We also request that a copy of all comments and reply comments be
submitted electronically to the following address: auction97@fcc.gov.
83.
Copies of comments and reply comments will be available for public inspection between
8:00 a.m. and 4:30 p.m. ET Monday through Thursday, or 8:00 a.m. to 11:30 a.m. ET on Fridays, in the
FCC Reference Information Center, Room CY-A257, 445 12th Street, SW, Washington, DC 20554, and
will also be accessible through the search function on the ECFS web page athttp://www.fcc.gov/cgb/ecfs"> http://www.fcc.gov/cgb/ecfs.
84.
This proceeding has been designated as a “permit-but-disclose” proceeding in accordance
with the Commission’s ex parte rules.83 Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentations must contain summaries of the substance of the presentations
and not merely a listing of the subjects discussed. More than a one or two sentence description of the
views and arguments presented is generally required. Other provisions pertaining to oral and written ex
parte
presentations in permit-but-disclose proceedings are set forth in section 1.1206(b) of the
Commission’s rules. 84
85.
To request materials in accessible formats (Braille, large print, electronic files, audio
format) for people with disabilities, send an e-mail to fcc504@fcc.gov or call the Consumer and
Government Affairs Bureau at (202) 418-0530 or (202) 418-0432 (TTY).

VI.

CONTACTS

86.
For further information concerning this proceeding, contact the offices listed below:

Broadband Division, Wireless Telecommunications Bureau


For AWS-3 service rule questions:
Nancy Zaczek (legal) or Janet Young
(technical), at (202) 418-2487

Auctions and Spectrum Access Division, Wireless Telecommunications Bureau

For general auction questions:
Jeff Crooks at (202) 418-0660 or Linda
Sanderson at (717) 338-2868


83 47 C.F.R. §§ 1.1200(a), 1.1206.
84 The Commission substantially revised its ex parte rules in 2011. These revised rules require for example, that an
ex parte notice must be filed for each oral ex parte presentation, not just for those presentations that involve new
information or arguments not already in the record. Further, a filer typically must submit an ex parte notice
electronically in machine-readable format. A filer may not submit a PDF image created by scanning a paper
document, except in a situation in which a word processing version of the document is not available. See
Amendment of the Commission’s Ex Parte Rules and Other Procedural Rules, GC Docket No. 10-43, Report and
Order and Further Notice of Proposed Rulemaking
, FCC 11-11, 26 FCC Rcd 4517 (2011).
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For auctions legal questions:
Valerie Barrish at (202) 418-0660

Office of Communications Business Opportunities



For questions concerning small business inquiries:
(202) 418-0990

- FCC -
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ATTACHMENT A


Licenses to Be Auctioned



This page was intentionally inserted as a placeholder for Attachment A, which is available as a separate
file.
A-1


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ATTACHMENT B


Minimum Acceptable Bid Formula



The following formula used to calculate minimum acceptable bids is based on activity. After there is a
provisionally winning bid for a license, the minimum acceptable bid amount for that license will be equal
to the amount of the provisionally winning bid plus a percentage of the bid amount, calculated using the
formula below. In general, the percentage will be higher for a license receiving many bids than for a
license receiving few bids.

Ai = (C * Bi) + ((1-C) * Ai-1)
Ii+1 = smaller of ((1 + Ai) * N) and M
Xi+1 = Ii+1 * Yi
where
Ai = activity index for the current round (round i)
C
= activity weight factor
Bi = number of bidders submitting bids on the license in the current round (round i)
Ai-1 = activity index from previous round (round i-1), A0 is 0
Ii+1 = additional percentage for the next round (round i+1)
N
= minimum additional percentage or floor
M
= maximum additional percentage or ceiling
Xi+1 = dollar amount corresponding to the additional percentage
Yi = provisionally winning bid for the license from the current round


Examples

C = 0.5, N = 0.1, M = 0.2
Please note that these values are for illustrative purposes only and might not be the same as those
used in the auction.


Round 1 (2 bidders submitting bids, provisionally winning bid = $1,000,000)

1. Calculation of additional percentage for round 2:

A1 = (0.5 * 2) + (0.5 * 0) = 1
I2 = The smaller of [((1 + 1) * 0.1) = 0.2] and 0.2 (the maximum additional percentage)


= 0.2

2. Calculation of dollar amount associated with the additional percentage for round 2 (using I2 from
above):

X2 = 0.2 * $1,000,000 = $200,000

3. Minimum acceptable bid amount for round 2 = $1,200,000

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Round 2 (3 bidders submitting bids, provisionally winning bid = $2,000,000)

1. Calculation of additional percentage for round 3:

A2 = (0.5 * 3) + (0.5 * 1) = 2
I3 = The smaller of [((1 + 2) * 0.1) = 0.3] and 0.2 (the maximum additional percentage)


= 0.2

2. Calculation of dollar amount associated with the additional percentage for round 3 (using I3 from
above):

X3 = 0.2 * $2,000,000 = $400,000

3. Minimum acceptable bid amount for round 3 = $2,400,000


Round 3 (1 bidder submitting bids, provisionally winning bid = $2,400,000)

1. Calculation of additional percentage for round 4:

A3 = (0.5 * 1) + (0.5 * 2) = 1.5
I4 = The smaller of [((1 + 1.5) * 0.1) = 0.25] and 0.2 (the maximum additional percentage)


= 0.2

2. Calculation of dollar amount associated with the additional percentage for round 4 (using I4 from
above):

X4 = 0.2 * $2,400,000 = $480,000

3. Minimum acceptable bid amount for round 4 = $2,880,000

B-2

Document Outline

  • I. INTRODUCTION
  • II. LICENSES TO BE OFFERED IN AUCTION 97
    • A. Description of Licenses
    • B. Incumbency Issues
    • C. Commercial Spectrum Enhancement Act/Spectrum Act Requirements
  • III. DUE DILIGENCE
  • IV. BUREAU SEEKS COMMENT ON AUCTION PROCEDURES
    • A. Auction Design
      • 1. Simultaneous Multiple-Round Auction
      • 2. Anonymous Bidding
      • 3. Acknowledgement for Auction 97 Applicants
    • B. Auction Structure
      • 1. Bidding Rounds
      • 2. Stopping Rule
      • 3. Information Relating to Auction Delay, Suspension, or Cancellation
    • C. Auction Procedures
      • 1. Upfront Payments and Bidding Eligibility
      • 2. Activity Rule
      • 3. Activity Rule Waivers and Reducing Eligibility
      • 4. Reserve Price and Minimum Opening Bids
        • a. Reserve Price
        • b. Minimum Opening Bids
      • 5. Bid Amounts
        • a. Minimum Acceptable Bids
        • b. Additional Bid Amounts
        • c. Bid Amount Changes
      • 6. Provisionally Winning Bids
      • 7. Bid Removal
      • 8. Bid Withdrawal
    • D. Post-Auction Payments
      • 1. Interim Withdrawal Payment Percentage
      • 2. Additional Default Payment Percentage
  • V. DEADLINES AND FILING PROCEDURES
  • VI. CONTACTS
  • ATTACHMENT A
  • ATTACHMENT B

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