Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Wilderness Communications, LLC ) Request for Waiver of ) Section 90.805 of the ) Commission's Rules ) ORDER Adopted: August 5, 1998 Released: August 5, 1998 By the Chief, Wireless Telecommunications Bureau: 1. The Wireless Telecommunications Bureau ("Bureau") has before it a Request for Waiver of Section 90.805 of the Commission's Rules filed by Wilderness Communications, L.L.C. ("Wilderness"). By this Order, we grant a partial waiver based on Wilderness' request. In addition, this Order assesses a bid withdrawal payment of $4,000.00 for License M002-L (Los Angeles/San Diego, California) in the 900 MHz Specialized Mobile Radio Service ("SMR") auction. 2. Background. On December 5, 1996, in Round 2 of the 900 MHz SMR auction, Wilderness submitted a bid of $67,010 for License M002-L. In Round 7, following the Commission's release of bidding results to the public, Wilderness withdrew its bid for License M002-L and contacted Commission staff to report that its bid had been in error. On April 15, 1996, the 900 MHz SMR auction closed. On April 17, 1996, Wilderness filed a "Request for Waiver" of the bid withdrawal payment provisions applicable to the 900 MHz SMR auction. In its Waiver Request, Wilderness alleges that it intended to submit a bid in the amount of $6,710.00. As in other cases of so-called "fat finger bidding," Wilderness claims that the inclusion of the extra zero resulted from a key punch error. Accordingly, Wilderness argues that it is entitled to a waiver of the bid withdrawal payment because the bid was an obvious error during an early stage of the process. Wilderness also claims that the Commission's auction software contributed to its error. Finally, Wilderness asserts that the purpose of the Commission's rules -- to deter strategic bidding -- will not be undercut by the grant of a waiver in these circumstances. 3. Discussion. At the time Wilderness submitted its erroneous bid, the Commission's bid withdrawal payment provisions did not contemplate erroneous, unintentional bids. In the subsequent Atlanta Trunking Orders, the Commission reviewed the status of unintentional and mistaken bids and provided guidance for determining waiver calculations. These decisions delegated authority to the Bureau to grant waivers and reductions of bid withdrawal payments on a case-by-case basis. Waivers or reductions are permissible in instances where there is no evidence of insincere or frivolous bidding or other acts of bad faith related to the actual bid. A complete waiver is available where the Commission's software is directly responsible for the error. Where the Commission's software is not at fault, the Atlanta Trunking Orders permit reductions only when the bidder has withdrawn the allegedly erroneous bid within two rounds of submission. 4. We find that Wilderness has failed to demonstrate that a complete waiver of Section 90.805 is warranted. Wilderness has not demonstrated that the Commission's bidding software contributed to its erroneous bid in the same manner as those parties who were granted complete waivers of the Commission's bid withdrawal rules in its 1997 Atlanta Trunking Order. Specifically, those parties granted complete waivers in the 1997 Atlanta Trunking Order all showed that the mistaken bids which they submitted were made using the "Go to market" function in the Commission's remote bidding system, which automatically placed a zero next to the cursor in the field in which the bid was submitted. These errors resulted in a bid that was exactly ten times as high as intended, when the bidder failed to delete the extra zero. In contrast, the extra decimal in Wilderness' bid is not at the end of the number, and was not due to the "Go to market" function in the bidding system. This error was due primarily to carelessness on Wilderness' part. 5. Moreover, Wilderness is precluded from requesting a bid reduction under the strict application of the Atlanta Trunking Orders criteria. Although there is no evidence that Wilderness' bidding error was deliberate, Wilderness did not withdraw its bid until Round 7, a full five rounds after it was placed. The early withdrawal requirement is of great significant here because erroneous bidders failing to notice their errors increase the potential for damaging the economic efficiency of the auction process. 6. Under the Commission's guidelines in the Atlanta Trunking Orders, Wilderness would be liable for a bid withdrawal payment of $30,958.50. Instead, we will assess a $4,000.00 bid withdrawal payment in keeping with our June 12, 1998 letter and Dismissal Order reducing the bid withdrawal payment for ClearComm, L.P.("ClearComm"). As with Wilderness, Clearcomm's conduct did not fit four-square into the criteria established in the Atlanta Trunking Orders, but the totality of the circumstances presented compelling reasons for an equitable reduction. Accordingly, we will reduce Wilderness' liability in a proportionate amount. 7. In reducing Wilderness' bid withdrawal payment, we note that most of the factors essential for bid withdrawal reduction cited in the Atlanta Trunking Orders and the ClearComm Letter are present here. Wilderness' conduct was unintentionally erroneous, it withdrew immediately upon discovery of its error (albeit five rounds later), the error occurred during an early phase of the auction, and the auction process corrected itself to prevent harm caused by the erroneous bid. The Bureau also determined that this withdrawal did not result in an alteration of the ultimate winning bid amount. Although these factors indicate that a reduction of the payment is warranted, we are mindful of the Commission's finding that erroneous bids may have a negative impact on the auctions process. An erroneous bid may distort the price information generated by the auction process and reduce efficiency. Distortions and inefficiency in such circumstances may result regardless of whether the bid was the result of an innocent error or was strategically placed. 8. We do find, however, that changed circumstances since the issuance of the Atlanta Trunking Orders mitigate in favor of Wilderness. As we noted in the ClearComm Letter, the Commission has implemented "click box bidding" in an effort to improve the auction process and eliminate erroneous bids. Also, the electronic bidding format has been modified to limit withdrawals. As a result, the possibility of future erroneous bids has been substantially reduced and the Commission has declared that prior policy directed at combatting speculative and strategic bidding is moot. 9. In light of these facts, we conclude that the guidelines set forth in the Atlanta Trunking Orders and the ClearComm Letter permit a partial grant of Wilderness' Request for Waiver. As such, Wilderness is liable for a $4,000.00 bid withdrawal payment for its bid for License M002-L. This amount is proportionate to the amount of the reduction in the ClearComm case. ORDERING CLAUSES 10. Accordingly, IT IS ORDERED that the Request for Waiver filed by Wilderness Communications, L.L.C., IS GRANTED IN PART. 11. IT IS FURTHER ORDERED that Wilderness Communications, L.L.C., is assessed a bid withdrawal payment in the amount of $4,000.00 for License M002-L (Los Angeles/San Diego, California). 12. IT IS FURTHER ORDERED that this amount will be deducted from the funds which Wilderness Communications, L.L.C., has remaining on deposit with the Commission. This action is taken pursuant to delegated authority, 47 C.F.R.  0.331. FEDERAL COMMUNICATIONS COMMISSION Daniel B. Phythyon Chief, Wireless Telecommunications Bureau