PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 445 12th STREET, S.W. WASHINGTON, D.C. 20554 News Media Information: 202-418-0500 Fax-On-Demand: 202-418-2830 Internet: http://www.fcc.gov ftp: ftp.fcc.gov DA 99-904 May 13, 1999 PHASE II 220 MHz SERVICE SPECTRUM AUCTION Status of Applications to Participate in the Auction Report No. AUC-99-24-C (Auction No. 24) The Federal Communications Commission ("FCC") has received 20 FCC Form 175 applications to participate in Auction No. 24, which is scheduled to begin on Tuesday, June 8, 1999. Auction No. 24 will make available spectrum associated with 225 geographic area markets. The applications for participation in the auction have been reviewed for completeness and compliance with the Commission's Rules, and have been grouped into the following categories: ACCEPTED FOR FILING 12 Applications INCOMPLETE 8 Applications Accepted: Applications classified as accepted for filing are listed in Attachment A. These applicants will become qualified bidders upon receipt of the required upfront payment by 6:00 p.m. ET on Monday, May 24, 1999, as discussed below. With respect to their applications, these applicants need take no further action except as may be necessary to keep their applications up-to-date.1 Applicants are also advised that Attachment A includes FCC account numbers for each applicant. FCC account numbers are applicable for bidding only. Incomplete: Applications classified as incomplete are listed alphabetically in Attachment B. Applicants whose applications have been classified as incomplete will receive overnight correspondence indicating what information is required to make the applications acceptable for filing. These applicants will become qualified bidders only if they: (1) resubmit their applications by 5:30 p.m. ET on Monday May 24, 1999 and provide the requested information or correct the deficiencies indicated; and (2) make the required upfront payments by 6:00 p.m. ET on Monday, May 24, 1999, as discussed below. They must also keep their applications up-to-date as required.2 Applicants are also advised that Attachment B includes FCC account numbers for each applicant. FCC account numbers are applicable for bidding only. In addition to Attachments A and B, this Public Notice includes the following attachments: Attachment C: Remote Bidding Software Order Form Attachment D: FCC Remote Bidding System Hardware and Software Requirements Attachment E: How to Monitor FCC Auctions On-Line Attachment F: Accessing the FCC Network Please note that Attachment F is an updated version of Attachment F of the Auction No. 24 Public Notice.3 RESUBMISSION FILING DEADLINE The filing window for resubmitting FCC Form 175 applications is now open. The FCC Form 175 applications must be corrected via the electronic filing system by no later than 5:30 p.m. ET on May 24, 1999. This will be the only opportunity to cure FCC Form 175 defects; late resubmissions will not be accepted. In addition, if an application remains incomplete or otherwise deficient after the resubmission deadline has passed, it will be rejected. UPFRONT PAYMENT DEADLINE Upfront payments and accompanying FCC Remittance Advice (FCC Form 159) for this auction are due at Mellon Bank, Pittsburgh, Pennsylvania, by 6:00 p.m. ET on Monday, May 24, 1999. Payments must be made by wire transfer and applicants must include their Taxpayer Identification Numbers (TIN). No other payment method is acceptable for this auction.4 Applicants are reminded to use their TIN numbers, not their FCC Account Numbers, on the FCC Remittance Advice (FCC Form 159). Applicants that have filed applications classified by this Public Notice as incomplete must submit timely and sufficient upfront payments before the Commission will review their resubmitted applications. The upfront payments of applicants whose applications have been rejected after resubmission will be refunded automatically if the applicant has provided its TIN and wire transfer instructions. Detailed information regarding upfront payments can be found in the Public Notice announcing notice and filing requirements for Auction No. 24, DA 99-474, released March 8, 1999. OTHER IMPORTANT INFORMATION Qualified Bidders: A Public Notice listing all applicants qualified to bid in the auction will be released after upfront payments have been received, resubmitted FCC Form 175 applications have been processed and reviewed, and payments and applications have been correlated. The Public Notice will also include, among other things, the bidding schedule for the first two days of the auction. Reserve Price or Minimum Opening Bid: The Wireless Telecommunications Bureau has established minimum opening bid requirements for Auction No. 24.5 Prohibition of Collusion: To ensure the competitiveness of the auction process, Section 1.2105(c) of the Commission's Rules prohibits applicants for the same geographic license area from communicating with each other during the auction about bids, bidding strategies, or settlements. For Auction No. 24, this prohibition became effective at the filing deadline of short-form applications on Monday, May 10, 1999, and will end on the post-auction down payment due date to be announced in a future Public Notice. To comply with this rule, bidders competing for the same license(s) are encouraged not to use the same individual authorized bidder. A violation of the anti-collusion rule could occur if an individual acts as the authorized bidder for two or more competing applicants, and conveys information concerning the substance of bids or bidding strategies between the bidders he/she is authorized to represent in the auction. Also, if the authorized bidders are different individuals employed by the same organization (e.g., law firm or consulting firm), a violation could similarly occur. At a minimum, in such a case, applicants should certify that precautionary steps have been taken to prevent communication between authorized bidders and that applicants and their bidding agents will comply with the anti-collusion rule.6 The Bureau cautions that merely filing a certifying statement as part of an application will not outweigh specific evidence that collusive behavior has occurred nor will it preclude the initiation of an investigation when warranted.7 In Auction No. 24, for example, the rule would apply to any applicants bidding for the same MEA or EA license. Therefore, applicants that apply to bid for "all markets" would be precluded from communicating with all other applicants after filing the FCC Form 175. However, applicants may enter into bidding agreements before filing their FCC Form 175 short-form applications, as long as they disclose the existence of the agreement(s) in their Form 175 short-form applications.8 By signing their FCC Form 175 short form applications, applicants are certifying their compliance with Section 1.2105(c). In addition, Section 1.65 of the Commission's Rules requires an applicant to maintain the accuracy and completeness of information furnished in its pending application and to notify the Commission within 30 days of any substantial change that may be of decisional significance to that application.9 Thus, Section 1.65 requires an auction applicant to notify the Commission of any violation of the anti-collusion rules upon learning of such violation. Bidders are therefore required to make such notification to the Commission immediately upon discovery. In addition, applicants are reminded that they are subject to the antitrust laws, which are designed to prevent anti-competitive behavior in the marketplace. Winning bidders will be required to disclose in their long-form applications the specific terms, conditions and parties involved in all bidding consortia, joint ventures, partnerships, and other arrangements entered into relating to the competitive bidding process. Bidders found to have violated the anti-collusion rule may be subject to sanctions.10 Ex Parte Rule: Applicants should also be aware that the Commission has generally exempted auction proceedings from the strict requirements of the ex parte rule (47 C.F.R. § 1.1208).11 Mock Auction: All applicants found to be qualified bidders are eligible to participate in a mock electronic auction on Friday, June 4, 1999. The Bureau will issue a Public Notice announcing when software for the mock auction is posted on the World Wide Web and BBS. Remote Bidding Software: Applicants are reminded that qualified bidders are eligible to bid either electronically or telephonically. To order the remote bidding software, applicants should complete the software order form attached to this Public Notice as Attachment C. To ensure timely delivery of remote bidding software before the auction begins, the Commission requests receipt of software orders by 5:30 p.m. ET on Tuesday, May 25, 1999. Attachment D to this Public Notice sets out the hardware and software specifications required for the FCC remote bidding system. Long-Form Applications: All applicants should be aware that at the long-form application stage, they will be subject to the more extensive reporting requirements contained in the Commission's Part 1 ownership disclosure rule.12 Bidder Alerts: All applicants must certify on their FCC Form 175 applications under penalty of perjury that they are legally, technically, financially and otherwise qualified to hold a license, and not in default on any payment for Commission licenses (including down payments) or delinquent on any non-tax debt owed to any Federal agency. Prospective bidders are reminded that submission of a false certification to the Commission is a serious matter that may result in severe penalties, including monetary forfeitures, license revocations, exclusion from participation in future auctions, and/or criminal prosecution. The FCC makes no representations or warranties about the use of this spectrum for particular services. Applicants should be aware that an FCC auction represents an opportunity to become an FCC licensee in this service, subject to certain conditions and regulations. An FCC auction does not constitute an endorsement by the FCC of any particular services, technologies or products, nor does an FCC license constitute a guarantee of business success. Applicants should perform their individual due diligence before proceeding as they would with any new business venture. As is the case with many business investment opportunities, some unscrupulous entrepreneurs may attempt to use Auction No. 24 to deceive and defraud unsuspecting investors. Common warning signals of fraud include the following: * The first contact is a "cold call" from a telemarketer, or is made in response to an inquiry prompted by a radio or television infomercial. * The offering materials used to invest in the venture appear to be targeted at IRA funds, for example by including all documents and papers needed for the transfer of funds maintained in IRA accounts. * The amount of the minimum investment is less than $25,000. * The sales representative makes verbal representations that: (a) the Internal Revenue Service ("IRS"), Federal Trade Commission ("FTC"), Securities and Exchange Commission ("SEC"), FCC, or other government agency has approved the investment; (b) the investment is not subject to state or federal securities laws; or (c) the investment will yield unrealistically high short-term profits. In addition, the offering materials often include copies of actual FCC releases, or quotes from FCC personnel, giving the appearance of FCC knowledge or approval of the solicitation. Information about deceptive telemarketing investment schemes is available from the FTC at (202) 326-2222 and from the SEC at (202) 942-7040. Complaints about specific deceptive telemarketing investment schemes should be directed to the FTC, the SEC, or the National Fraud Information Center at (800) 876-7060. Consumers who have concerns about specific Phase II 220 MHz Service proposals may also call the FCC National Call Center at (888) CALL-FCC ((888) 225-5322). NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS Licensees must comply with the Commission's rules regarding the National Environmental Policy Act (NEPA). The construction of a wireless antenna facility is a federal action and licensees must comply with the Commission's NEPA rules for each wireless facility.13 The Commission's NEPA rules require that, among other things, licensees consult with expert agencies having NEPA responsibilities including the U.S. Fish and Wildlife Service, the State Historic Preservation Office, the Army Corp of Engineers and the Federal Emergency Management Agency (through the local authority with jurisdiction over floodplains). Licensees must prepare environmental assessments for wireless facilities that may have a significant impact in or on wilderness areas, wildlife preserves, threatened or endangered species or designated critical habitats, historical or archaeologic sites, Indian religious sites, floodplains, and surface features. Licensees must also prepare environmental assessments for wireless facilities that include high intensity white lights in residential neighborhoods or excessive radiofrequency emission. * * * * * CONTACT INFORMATION For questions about payment or instructions for wiring upfront payments, contact Gail Glasser or Linwood Jenkins, Auctions Accounting Group, at (202) 418-1995. For specific questions about an applicant's incomplete status, the applicant should contact the designated attorney identified in the correspondence sent to the applicants by overnight mail. For additional information, contact: Anne Napoli, Legal Branch at (202) 418-0660 (regarding legal questions); Ruby Hough, Auctions Operations at (202) 418-0660 (regarding bidding and general filing status); and Tim Salmon, Auctions Operation at (202) 418-0660 (regarding bidding and auction design). For information regarding FCC rules concerning compliance with the National Environmental Policy Act (NEPA), please contact Frank Stilwell or Rose Crellin, at (202) 418-0569. For technical questions regarding filing software, call FCC technical support at (202) 414-1250. - FCC - 1 See 47 C.F.R. §§ 1.65 and 1.2106. 2 Id. 3 See "Phase II 220 MHz Service Spectrum Auction; Notice and Filing Requirements for Auction of Phase II 220 MHz Service Spectrum Scheduled for June 8, 1999; Minimum Opening Bids and Other Procedural Issues," Public Notice, DA 99-474 (rel. March 8, 1999) ("Auction No. 24 Public Notice"). This and other documents are available on the FCC Web Site at: http://www.fcc.gov/wtb/auctions. 4 See Auction No. 24 Public Notice for detailed remittance and upfront payment instructions. 5 For general information about how the minimum opening bids for the Auction No. 24 were calculated or to find out the minimum opening bid for each of the 225 licenses to be auctioned, see Auction No. 24 Public Notice. 6 See, e.g., "Wireless Telecommunications Bureau Responds to Questions About the Local Multipoint Distribution Service Auction," Public Notice, 13 FCC Rcd 341 (WTB 1998); In re Application of Nevada Wireless for a License to Provide 800 MHz Specialized Mobile Radio Service in the Farmington, NM-CO Economic Area (EA-155) Frequency Band A, Memorandum Opinion and Order, 13 FCC Rcd 11973, 11977, ¶ 11 (WTB 1998) ("Nevada Wireless"). These and other documents addressing the Commission's anti-collusion rule are available on the FCC Web Site at: http://www.fcc.gov/wtb/auctions. 7 See Nevada Wireless, 13 FCC Rcd at 11978, ¶ 13. 8 See 47 C.F.R. § 1.2105(c). 9 See 47 C.F.R. § 1.65. 10 See 47 C.F.R. §§ 1.2105(c), 1.2107(d), and 1.2109(d). 11 See 47 C.F.R. § 1.1202(d) note (1); see also "Commission Announces that Mutually Exclusive 'Short-Form' Applications (Form 175) to Participate in Competitive Bidding Process ('Auctions') Are Treated as Exempt for Ex Parte Purposes." Public Notice, 9 FCC Rcd 6760 (1994). 12 See 47 C.F.R. § 1.2112(b). 13 See 47 C.F.R. §§ 1.1305-1.1319. 1 6