Fcc 19-63

PUBLIC NOTICE
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554

News Media Information 202-418-0500
Internet: www.fcc.gov
TTY: 888-835-5322

FCC 19-63
Released: July 11, 2019
INCENTIVE AUCTION OF UPPER MICROWAVE FLEXIBLE USE SERVICE LICENSES IN
THE UPPER 37 GHZ, 39 GHZ, AND 47 GHZ BANDS FOR NEXT-GENERATION WIRELESS
SERVICES
NOTICE AND FILING REQUIREMENTS, MINIMUM OPENING BIDS, UPFRONT
PAYMENTS, AND OTHER PROCEDURES FOR AUCTION 103
BIDDING IN AUCTION 103 SCHEDULED TO BEGIN DECEMBER 10, 2019
AU Docket No. 19-59
GN Docket No. 14-177
TABLE OF CONTENTS
Para.
I.

GENERAL INFORMATION .................................................................................................................1
A. Introduction.......................................................................................................................................1
B. Background and Relevant Authority ................................................................................................3
C. Description of Licenses to Be Offered in Auction 103.....................................................................6
D. Auction Specifics ............................................................................................................................10
1. Auction Title and Start Date.....................................................................................................10
2. Auction Dates and Deadlines ...................................................................................................11
3. Requirements for Participation.................................................................................................12
II. APPLYING TO PARTICIPATE IN AUCTION 103 ...........................................................................13
A. General Information Regarding Short-Form Applications .............................................................13
B. License Area Selection ...................................................................................................................23
C. Disclosure of Agreements and Bidding Arrangements...................................................................24
D. Ownership Disclosure Requirements..............................................................................................32
E. Foreign Ownership Disclosure Requirements ................................................................................34
F. Information Procedures During the Auction Process .....................................................................35
G. Prohibited Communications and Compliance with Antitrust Laws ...............................................41
1. Entities Subject to Section 1.2105(c) .......................................................................................42
2. Prohibition Applies Until Down Payment Deadline ................................................................45
3. Scope of Prohibition of Communications; Prohibition of Joint Bidding Agreements.............47
4. Communicating with Third Parties ..........................................................................................56
5. Section 1.2105(c) Certifications...............................................................................................60
6. Duty to Report Prohibited Communications ............................................................................61
7. Procedures for Reporting Prohibited Communications............................................................62
8. Winning Bidders Must Disclose Terms of Agreements...........................................................65
9. Additional Information Concerning Prohibition of Certain Communications in
Commission Auctions ..............................................................................................................66

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10. Antitrust Laws ..........................................................................................................................67
H. Provisions for Small Businesses and Rural Service Providers .......................................................69
1. Small Business Bidding Credit.................................................................................................73
2. Rural Service Provider Bidding Credit.....................................................................................77
3. Caps on Bidding Credits...........................................................................................................79
4. Attributable Interests ................................................................................................................81
I. Provisions Regarding Former and Current Defaulters....................................................................91
J. Optional Applicant Status Identification ........................................................................................96
K. Modifications to FCC Form 175.....................................................................................................97
1. Only Minor Modifications Allowed.........................................................................................97
2. Duty to Maintain Accuracy and Completeness of FCC Form 175 ..........................................98
3. Modifying an FCC Form 175 ...................................................................................................99
III. PREPARING FOR BIDDING IN AUCTION 103 .............................................................................106
A. Due Diligence ...............................................................................................................................106
B. Licensing Considerations..............................................................................................................111
1. Incumbency and Sharing Issues .............................................................................................111
2. International Coordination......................................................................................................113
3. Environmental Review Requirements....................................................................................114
4. Mobile Spectrum Holdings Policies.......................................................................................115
C. Bidder Education ..........................................................................................................................116
D. Short-Form Applications: Due Before 6:00 p.m. ET on September 9, 2019...............................119
E. Application Processing and Minor Modifications ........................................................................122
1. Public Notice of Applicant’s Initial Application Status and Opportunity for Minor
Modifications..........................................................................................................................122
2. Public Notice of Applicant’s Final Application Status After Upfront Payment
Deadline..................................................................................................................................122
F. Upfront Payments .........................................................................................................................126
1. Making Upfront Payments by Wire Transfer for Auction 103 ..............................................127
2. Completing and Submitting FCC Form 159 ..........................................................................133
3. Upfront Payments and Bidding Eligibility .............................................................................135
G. Auction Registration .....................................................................................................................142
H. Remote Electronic Bidding via the FCC Auction Bidding System ..............................................145
I. Mock Auction ...............................................................................................................................148
J. Fraud Alert ....................................................................................................................................150
IV. BIDDING IN AUCTION 103 .............................................................................................................153
A. Auction Structure ..........................................................................................................................153
1. Clock and Assignment Phases................................................................................................153
2. Generic Blocks and Bidding Categories.................................................................................155
3. Incentive Payments.................................................................................................................164
4. Net Revenue Requirement......................................................................................................167
5. FCC Auction Bidding System ................................................................................................171
6. Stopping Rule .........................................................................................................................177
7. Availability of Bidding Information.......................................................................................179
8. Auction Delay, Suspension, or Cancellation..........................................................................184
B. Clock Phase Bid Collection and Bid Processing Procedures........................................................185
1. Round Structure......................................................................................................................185
2. Eligibility and Activity Rule ..................................................................................................188
3. Acceptable Bid Amounts........................................................................................................196
4. Changing Demand, Bid Types, and Bid Processing ..............................................................207
5. Winning Bids in the Clock Phase...........................................................................................216
C. Assignment Phase Bid Collection and Bid Processing Procedures ..............................................218
1. Round Structure: Sequencing and Grouping of Rounds .......................................................221
2. Acceptable Bids and Bid Processing......................................................................................225
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3. Assignment Phase Payment Calculations...............................................................................230
D. Calculating Individual License Prices ..........................................................................................232
E. Auction Results .............................................................................................................................234
F. Auction Announcements...............................................................................................................235
V. POST-AUCTION PROCEDURES .....................................................................................................236
A. Down Payments ............................................................................................................................237
B. Final Payments..............................................................................................................................238
C. Long-Form Application (FCC Form 601) ....................................................................................239
D. Ownership Disclosure Information Report (FCC Form 602) .......................................................242
E. Tribal Lands Bidding Credit .........................................................................................................245
F. Default and Disqualification .........................................................................................................247
G. Refund of Remaining Upfront Payment Balance .........................................................................251
VI. PROCEDURAL MATTERS...............................................................................................................253
APPENDIX: Commenter Short Names
I.

GENERAL INFORMATION
A.

Introduction

1.
By this Public Notice, we establish the procedures to be used for Auction 103, the
incentive auction of Upper Microwave Flexible Use Service (UMFUS) licenses in the Upper 37 GHz
(37.6–38.6 GHz), 39 GHz (38.6–40 GHz), and 47 GHz (47.2–48.2 GHz) bands. Auction 103 is the
Commission’s third and largest auction of high-band spectrum that is intended to further the deployment
of fifth-generation (5G) wireless, the Internet of Things (IoT), and other advanced spectrum-based
services.
2.
The bidding for new licenses in Auction 103 is scheduled to commence on December 10,
2019. This Public Notice provides details regarding the procedures, terms, conditions, dates, and
deadlines governing participation in Auction 103 bidding, as well as an overview of the post-auction
application and payment processes. Although 39 GHz incumbents that accept modified licenses will not
be eligible to bid on new licenses in Auction 103,1 certain procedures adopted herein will affect how
those modified licenses will be assigned to specific frequencies.
B.

Background and Relevant Authority

3.
In the 2016 Spectrum Frontiers Order, the Commission made millimeter wave (mmW)
spectrum available through both licensed and unlicensed mechanisms.2 Among other things, the
Commission established licensing and operating rules for the UMFUS and decided to use its competitive
bidding rules to auction UMFUS licenses.3 In the Spectrum Frontiers Fourth R&O, the Commission
adopted an incentive auction for the Upper 37 GHz, 39 GHz, and 47 GHz bands that would help enable
1

See generally Notice of Initial 39 GHz Reconfiguration Procedures; Preparation for Incentive Auction of Upper
Microwave Flexible Use Service Licenses in the 37 GHz, 39 GHz, and 47 GHz Bands (Auction 103); Order of
Modification; 39 GHz License Transfer and Assignment Freeze, Public Notice, 34 FCC Rcd 1386 (WTB/OEA
2019) (Initial Reconfiguration Procedures Public Notice); Notice of Updated 39 GHz Reconfiguration Procedures;
Preparation for Incentive Auction of Upper Microwave Flexible Use Service Licenses in the 37 GHz, 39 GHz, and
47 GHz Bands (Auction 103); Order of Modification, Public Notice, DA 19-397 (WTB/OEA May 14, 2019)
(Updated Reconfiguration Procedures Public Notice); Reconfigured 39 GHz Incumbent Holdings; Initial
Commitment Options and Timeline; Preparation for Incentive Auction of Upper Microwave Flexible Use Service
Licenses in the Upper 37 GHz, 39 GHz, and 47 GHz Bands (Auction 103), Public Notice, DA 19-503 (WTB/OEA
June 5, 2019) (Reconfigured Holdings Public Notice).
2

See generally Use of Spectrum Bands Above 24 GHz for Mobile Radio Services et al., Report and Order and
Further Notice of Proposed Rulemaking, 31 FCC Rcd 8014 (2016) (2016 Spectrum Frontiers Order).
3

Id. at 8023-43, 8073-101, paras. 19-72, 159-254.

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both incumbent 39 GHz licensees and new licensees to provide valuable next-generation services
throughout these bands.4 On April 15, 2019, in accordance with section 309(j)(3) of the Communications
Act of 1934, as amended,5 we released a public notice seeking comment on competitive bidding
procedures and various other procedures to be used in Auction 103.6 We received comments from seven
parties in response to the Auction 103 Comment Public Notice, and five reply comments.7
4.
Other Commission rules and decisions provide the underlying authority for the
procedures we adopt today for Auction 103. Among other things, prospective applicants should
familiarize themselves with the Commission’s general competitive bidding rules,8 including recent
amendments and clarifications, as well as Commission decisions in proceedings regarding competitive
bidding procedures, application requirements, and obligations of Commission licensees.9 Prospective
applicants should also familiarize themselves with the Commission’s UMFUS rules and competitive
bidding requirements contained in Part 30 of the Commission’s rules,10 as well as Commission orders
concerning competitive bidding for UMFUS licenses.11 Applicants must also be thoroughly familiar with
the procedures, terms, and conditions contained in this Public Notice and any future public notices that
may be released in this proceeding.
5.
The terms contained in the Commission’s rules, relevant orders, and public notices are
not negotiable. The Commission may amend or supplement the information contained in its public
notices at any time and will issue public notices to convey any new or supplemental information to
applicants. In addition, we affirm the well-established authority of the Wireless Telecommunications
Bureau (Bureau) and Office of Economics and Analytics (Office) to establish further procedures during
the course of this auction.12 It is the responsibility of all applicants to remain current with all Commission
rules and with all public notices pertaining to Auction 103. Copies of most auctions-related Commission
4

See Use of Spectrum Bands Above 24 GHz for Mobile Radio Services, Fourth Report and Order, 33 FCC Rcd
12168 (2018) (Spectrum Frontiers Fourth R&O).
5

47 U.S.C. § 309(j)(3)(E)(i) (requirement to seek comment on proposed auction procedures); see also id.
§ 309(j)(4)(F) (authorization to prescribe reserve price or minimum bid); 47 CFR § 1.2104(c)-(d).
6

See Incentive Auction of Upper Microwave Flexible Use Service Licenses in the Upper 37 GHz, 39 GHz, and 47
GHz Bands for Next-Generation Wireless Services; Comment Sought on Competitive Bidding Procedures for
Auction 103, Public Notice, FCC 19-35 (Apr. 15, 2019) (Auction 103 Comment Public Notice). A summary of the
Auction 103 Comment Public Notice was published in the Federal Register at 84 Fed. Reg. 20077 (May 8, 2019).
7

These comments are available under proceeding 19-59 in the Commission’s Electronic Comment Filing System
(ECFS). The ECFS home page is publicly accessible at: www.fcc.gov/ecfs/. We generally note in the context of
discussing particular issues whether any commenter addressed those issues.
8

47 CFR Part 1, Subpart Q.

9

See, e.g., Updating Part 1 Competitive Bidding Rules et al., Report and Order, Order on Reconsideration of the First
Report and Order, Third Order on Reconsideration of the Second Report and Order, Third Report and Order, 30
FCC Rcd 7493 (2015) (2015 Part 1 Report and Order) (modified by Erratum, 30 FCC Rcd 8518 (2015));
Amendment of Part 1 of the Commission’s Rules–Competitive Bidding Procedures, Order, Memorandum Opinion
and Order and Notice of Proposed Rule Making, 12 FCC Rcd 5686 (1997) (Auction Procedures Consolidation
Order); Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice
of Proposed Rule Making, 15 FCC Rcd 15293 (2000) (Part 1 Fifth Report and Order) (modified by Erratum, 15
FCC Rcd 21520 (2000)); Seventh Report and Order, 16 FCC Rcd 17546 (2001) (Part 1 Seventh Report and Order);
Eighth Report and Order, 17 FCC Rcd 2962 (2002); Second Order on Reconsideration of the Third Report and
Order and Order on Reconsideration of the Fifth Report and Order, 18 FCC Rcd 10180 (2003) (Part 1 Third R&O
Second Recon/Part 1 Fifth R&O Recon); Second Order on Reconsideration of the Fifth Report and Order, 20 FCC
Rcd 1942 (2005) (Part 1 Fifth R&O Second Recon).
10

47 CFR §§ 30.1–30.407.

11

See 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8097-101, paras. 244-54.

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documents, including public notices, can be retrieved from the Commission’s FCC Auctions Internet site
at www.fcc.gov/auctions. Additionally, documents are available at the Commission’s headquarters,
located at 445 12th Street, SW, Washington, DC 20554, during normal business hours.
C.

Description of Licenses to Be Offered in Auction 103

6.
We affirm that Auction 103 will offer UMFUS licenses for all available spectrum in the
Upper 37 GHz (37.6–38.6 GHz), 39 GHz (38.6–40 GHz), and 47 GHz (47.2–48.2 GHz) bands. We will
offer 100 megahertz blocks of spectrum licensed by Partial Economic Area (PEA) service area.13 In
combination, the Upper 37 GHz and the 39 GHz bands offer the largest amount of contiguous spectrum in
the millimeter wave bands for flexible-use wireless services—a total of 2,400 megahertz—and the 47
GHz band will provide an additional 1,000 megahertz of millimeter wave spectrum for such services. We
are limiting Auction 103 to only these bands, as proposed in the Auction 103 Comment Public Notice,14
because licenses for no other UMFUS spectrum bands are ready and/or suitable to be auctioned at this
time.
7.
The specific number of Upper 37 GHz and 39 GHz licenses to be auctioned in each PEA
will be determined by the Initial Commitments of 39 GHz incumbents as described in the Spectrum
Frontiers Fourth R&O, Initial Reconfiguration Procedures Public Notice, Updated Reconfiguration
Procedures Public Notice, and Reconfigured Holdings Public Notice.15 The licenses that will be available
in the auction depend, in part, on upcoming decisions made by existing 39 GHz licensees (referred to
herein as “incumbents”)16 to either accept modified licenses, reconfigured to conform with the new band
plan and service areas, or to relinquish all their existing spectrum usage rights in exchange for a share of
the auction proceeds and the opportunity to bid on new licenses in Auction 103.17 If all incumbents
choose to relinquish their licenses, we will offer new licenses for 3,400 megahertz of spectrum across all
three spectrum bands, or 34 licenses in every PEA.18 Following the deadline for incumbents to submit
their binding Initial Commitments, a public notice will announce the specific number of licenses available
in each PEA in the Upper 37 GHz and 39 GHz bands for auction.19 This public notice will be released
(Continued from previous page)
12 See generally 47 CFR §§ 0.21(m), 0.271(a), 0.131(r), 0.331.
13

RWA asserts that we should offer licenses in smaller geographic areas than PEAs, such as counties or census
block groups, in order to assist smaller providers that may not be able to serve an entire PEA. See RWA Comments
at 1-2. However, the Commission already decided to offer licenses by PEA in the Spectrum Frontiers Fourth R&O,
and the period in which RWA could seek reconsideration of that decision has expired. See 2016 Spectrum Frontiers
Order, 31 FCC Rcd at 8046-47, 8061, paras. 82, 121; see also Spectrum Frontiers Fourth R&O, 33 FCC Rcd at
12184, para. 52; AT&T Reply at 1 n.3; Hughes Reply at 1; T-Mobile Reply at 9; Verizon Reply at 4.
14

See Auction 103 Comment Public Notice at 2, para. 3.

15

See supra note 1.

16

In the Spectrum Frontiers Fourth R&O, the Commission decided that separate licenses held by entities that
control or are controlled by each other and/or have controlling ownership interests in common (“commonly
controlled entities”) will be treated as holdings by a single incumbent when reconfiguring existing 39 GHz licenses.
See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12176, para. 22. In addition, “incumbent” may refer to
existing 39 GHz licensee(s), individually or together with other commonly controlled existing 39 GHz licensees, or
to another entity that is not an existing 39 GHz licensee, but that is commonly controlled with existing 39 GHz
licensee(s) and serves as an FCC Form 175-A applicant for those licensees listed in the FCC Form 175-A. See
Reconfigured Holdings Public Notice at 2, para. 4.
See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12171, para. 17; see also Reconfigured Holdings Public
Notice at 3-5, paras. 7-16. Those incumbents that choose to retain their licenses and accept a reconfiguration of their
holdings may still choose to relinquish any partial PEA block holding for an incentive payment.
17

18

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12180, para. 37.

19

See Reconfigured Holdings Public Notice at 6, para. 17.

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prior to the deadline for the submission of short-form applications to bid in Auction 103 so that potential
applicants can make informed decisions about whether to apply.
8.
It is possible that an incumbent that chooses to receive modified licenses will decide to
retain its partial PEA holding (resulting in a modified license that will cover less than the full geographic
area of a PEA).20 The remaining portion of the spectrum block will thus have unassigned spectrum usage
rights. As proposed,21 we will not make this “white space” available in the auction. As discussed in the
Spectrum Frontiers Fourth R&O, the reconfiguration process will attempt to minimize this white space,
and leaving the remainder of the spectrum block unassigned will help preserve the structure of the new
band plan.22 We further expect that the total white space as a result of this process will be extremely low
relative to the total 39 GHz band.23 At most, only seven PEAs could possibly have white space, given
incumbents’ holdings and our reconfiguration procedures.24 Although GeoLinks and WISPA assert that
allowing bidding for this white space will encourage smaller providers to participate in the auction,25 we
are not convinced that the inclusion of a very few licenses for partial-geography PEAs will make an
appreciable difference in the participation decisions of potential bidders. We intend to encourage these
providers’ participation in Auction 103 via other means, including by providing bidding credits as
described below. At the same time, including white space in the auction would introduce additional
complexity to the auction by creating an additional bidding category or categories and complicating the
assignment of contiguous blocks of licenses to bidders whose winnings include those blocks.26 As a
result, any potential benefit from including blocks of white space in the auction is likely outweighed by
the cost.
9.
Each of the bands available in Auction 103 will be licensed on an unpaired basis in 100
megahertz channel blocks by PEA. A licensee in these bands may provide any services permitted under a
fixed or mobile allocation, as set forth in the non-Federal Government column of the Table of Frequency
Allocations in section 2.106 of the Commission’s rules.27
D.

Auction Specifics
1.

Auction Title and Start Date

10.
The auction of licenses in the Upper 37 GHz (37.6–38.6 GHz), 39 GHz (38.6–40 GHz),
and 47 GHz (47.2–48.2 GHz) bands will be referred to as “Auction 103.” Bidding in Auction 103 will
begin on Tuesday, December 10, 2019. Pre-bidding dates and deadlines are listed below. The initial
schedule for bidding rounds in Auction 103 will be announced by public notice at least one week before
bidding in the auction starts. Moreover, unless otherwise announced, bidding on all licenses will be
conducted on each business day until bidding has stopped on all licenses.

20

See generally id. at 4, para. 10.

21

See Auction 103 Comment Public Notice at 3, para. 5. Therefore, we decide this issue herein, contrary to AT&T’s
assertion that the Commission previously decided not to include white space in the auction. See AT&T Reply at 1
n.3.
22

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12178, para. 28.

23

Id.

24

See Updated Reconfiguration Procedures Public Notice at Attach. B; see also T-Mobile Reply at 8-9 (observing
that white spaces will likely be “limited in number”); Verizon Reply at 2.
25

See GeoLinks Comments at 2-3; WISPA Comments at 3.

26

See T-Mobile Reply at 8; Verizon Reply at 2.

27

47 CFR § 30.6.

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2.
11.

FCC 19-63

Auction Dates and Deadlines

The following dates and deadlines apply to Auction 103:

Auction Application Tutorial Available (via Internet) ......August 2, 2019
Short-Form Application (FCC Form 175)
Filing Window Opens........................................................August 26, 2019; 12:00 p.m. Eastern Time (ET)
Short-Form Application (FCC Form 175)
Filing Window Deadline ...................................................September 9, 2019; 6:00 p.m. ET
Upfront Payments (via wire transfer) ................................October 22, 2019; 6:00 p.m. ET
Bidding Tutorial Available (via Internet) .........................No later than November 19, 2019
Mock Auction ....................................................................Starting week of December 2, 2019
Bidding Begins in Auction 103 .........................................December 10, 2019
3.
12.

II.

Requirements for Participation

Those wishing to participate in Auction 103 must:



Submit a short-form application (FCC Form 175) electronically prior to 6:00 p.m. ET on
September 9, 2019, following the electronic filing procedures set forth in the FCC Form 175
Instructions.28



Submit a sufficient upfront payment and an FCC Remittance Advice Form (FCC Form 159) by
6:00 p.m. ET on October 22, 2019, following the procedures and instructions set forth in the FCC
Form 159 Instructions.



Comply with all provisions outlined in this Public Notice and applicable Commission rules.
APPLYING TO PARTICIPATE IN AUCTION 103
A.

General Information Regarding Short-Form Applications

13.
An application to participate in Auction 103, referred to as a short-form application or
FCC Form 175, provides information that the Commission uses to determine whether the applicant has
the legal, technical, and financial qualifications to participate in a Commission auction for spectrum
licenses.29 The short-form application is the first part of the Commission’s two-phased auction
application process. In the first phase, a party seeking to participate in Auction 103 must file a short-form
application in which it certifies, under penalty of perjury, its qualifications.30 Eligibility to participate in
Auction 103 is based on an applicant’s short-form application and certifications, and on the applicant’s
submission of a sufficient upfront payment for the auction.31 In the second phase of the process, each
winning bidder must file a more comprehensive post-auction, long-form application (FCC Form 601) for

28

We direct the Office, in conjunction with the Bureau, to prepare and release, concurrent with this Public Notice,
detailed instructions for submitting an FCC Form 175 for Auction 103 (FCC Form 175 Instructions).
29

See 47 CFR § 1.2105; see also Implementation of Section 309(j) of the Communications Act–Competitive Bidding,
Second Report and Order, 9 FCC Rcd 2348, 2376-77, para. 166 (Competitive Bidding Second Report and Order).
30

Competitive Bidding Second Report and Order, 9 FCC Rcd at 2376, para. 165.

31

See infra Section III.F.3 (Upfront Payments and Bidding Eligibility).

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the licenses it wins in the auction, and it must have a complete and accurate ownership disclosure
information report (FCC Form 602) on file with the Commission.32
14.
A party seeking to participate in Auction 103 must file an FCC Form 175 electronically
via the Auction Application System prior to 6:00 p.m. ET on September 9, 2019, following the
procedures prescribed in the FCC Form 175 Instructions. If an applicant claims eligibility for a bidding
credit, the information provided in its FCC Form 175 as of the filing date will be used to determine
whether the applicant may request the claimed bidding credit. Below we describe more fully the
information disclosures and certifications required in the short-form application. An applicant that files
an FCC Form 175 for Auction 103 will be subject to the Commission’s rule prohibiting certain
communications.33 An applicant is subject to the prohibition beginning at the deadline for filing shortform applications—6:00 p.m. ET on September 9, 2019.34
15.
An applicant bears full responsibility for submitting an accurate, complete, and timely
short-form application. Each applicant must make a series of certifications under penalty of perjury on its
FCC Form 175 related to the information provided in its application and its participation in the auction,
and it must confirm that it is legally, technically, financially, and otherwise qualified to hold a license.35
If an Auction 103 applicant fails to make the required certifications in its FCC Form 175 by the filing
deadline, its application will be deemed unacceptable for filing and cannot be corrected after the filing
deadline.36
16.
An applicant should note that submitting an FCC Form 175 (and any amendments
thereto) constitutes a representation by the certifying official that he or she is an authorized representative
of the applicant with authority to bind the applicant, that he or she has read the form’s instructions and
certifications, and that the contents of the application, its certifications, and any attachments are true and
correct.37 Submitting a false certification to the Commission may result in penalties, including monetary
forfeitures, license forfeitures, ineligibility to participate in future auctions, and/or criminal prosecution.
17.
Applicants are cautioned that because the required information submitted in FCC Form
175 bears on each applicant’s qualifications, requests for confidential treatment will not be routinely
granted. The Commission has held generally that it may publicly release confidential business
information where the party has put that information at issue in a Commission proceeding or where the
Commission has identified a compelling public interest in disclosing the information.38 In this regard, the
Commission has specifically held that information submitted in support of receiving bidding credits in
auction proceedings should be made available to the public.39
32

47 CFR § 1.2107. We remind applicants that being deemed qualified to bid in Auction 103 does not constitute a
determination that a party is qualified to hold a Commission license or is eligible for a designated entity bidding
credit.
33

Id. § 1.2105(c).

34

As discussed below, the prohibition will end for applicants on the post-auction down payment deadline for
Auction 103. See infra Section II.G.2 (Prohibition Applies Until Down Payment Deadline).
35

47 CFR § 1.2105(a)(2).

36

See id. § 1.2105(b)(1).

37

As more fully explained below in Section II.K (Modifications to FCC Form 175), applicants are not permitted to
make major modifications to their FCC Form 175 applications after the filing deadline. See 47 CFR § 1.2105(b)(2).
A change in the required certifications is considered a major change and would therefore not be permitted.
38

See Examination of Current Policy Concerning Treatment of Confidential Information Submitted to the
Commission, Report and Order, 13 FCC Red 24816, 24822-23, para. 8 (1998).
39

See, e.g., SAL Spectrum, LLC – Request for Confidential Treatment of Subscriber Information Provided in FCC
Form 175, Letter Order, 31 FCC Rcd 3726 (WTB 2016) (denying a request for confidentiality of the number of
(continued….)

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18.
The same party may not bid based on more than one auction application, i.e., as more
than one applicant.40 If a party submits multiple short-form applications for an auction, only one
application may be the basis for that party to become qualified to bid in that auction.41
19.
Similarly, and consistent with the Commission’s general prohibition of joint bidding
agreements, a party is generally permitted to participate in a Commission auction only through a single
bidding entity.42 Accordingly, the filing of applications in Auction 103 by multiple entities controlled by
the same individual or set of individuals will generally not be permitted.43 As noted by the Commission
in adopting the prohibition of applications by commonly controlled entities, this rule, in conjunction with
the prohibition against joint bidding agreements, protects the competitiveness of our auctions.44
20.
A party that is a 39 GHz incumbent is eligible to submit FCC Form 175 to participate in
Auction 103 only if the party submitted an Initial Commitment to relinquish its spectrum usage rights
under all its 39 GHz licenses in exchange for an incentive payment.45 If an incumbent submits such an
Initial Commitment and wishes to offset any payments for new licenses with incentive payments, the
same entity, using the same FCC Registration Number (FRN), that filed FCC Form 175-A must also file
FCC Form 175.46 In all other cases, regardless of any relationship between an FCC Form 175 applicant
and an FCC Form 175-A applicant, a winning bidder will be obligated to pay its gross winning bids, i.e.,
without reduction by any incentive payment.47
21.
After the initial short-form application filing deadline, Commission staff will review all
timely submitted applications for Auction 103 to determine whether each application complies with the
application requirements and whether it has provided all required information concerning the applicant’s
qualifications for bidding. After this review is completed, a public notice will be released announcing the
status of applications and identifying the applications that are complete and those that are incomplete
because of minor defects that may be corrected. This public notice also will establish an application
resubmission filing window, during which an applicant may make permissible minor modifications to its
(Continued from previous page)
wireless, wireline, broadband, and cable subscribers submitted by an applicant for only those affiliates operating in
the United States).
40

See 47 CFR § 1.2105(a)(3); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7579, para. 205.

41

See 47 CFR § 1.2105(a)(3), (b)(1)(ii).

42

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7580-81, paras. 206-08.

43

See 47 CFR § 1.2105(a)(3), (a)(4)(i), (b)(1)(ii); 2015 Part 1 Report and Order, 30 FCC Rcd at 7580-81, paras.
206-08. This restriction applies across all applications, without regard to the geographic areas selected. See 2015
Part 1 Report and Order, 30 FCC Rcd at 7580, para. 206. The Commission adopted a limited exception to the
general prohibition of the filing of multiple applications by commonly-controlled entities for qualified rural wireless
partnerships and individual members of such partnerships. See 47 CFR § 1.2105(a)(3). Under this limited
exception, each qualifying rural wireless partnership and its individual members will be permitted to participate
separately in an auction. See id.; see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7582, para. 210.
44

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7580, para. 206.

45

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12180, para. 38; Reconfigured Holdings Public Notice at 3,
5, paras. 8, 15 (referring to this Initial Commitment as Option 3). An incumbent that submits an FCC Form 175, but
did not submit an Initial Commitment to relinquish all its 39 GHz spectrum usage rights will not be found qualified
to bid. Likewise, a party that is commonly controlled with an incumbent will not be found qualified to bid if the
incumbent did not submit an Initial Commitment to relinquish all its 39 GHz spectrum usage rights. See Updated
Reconfiguration Procedures Public Notice at 5, para.8 n.17.
46

See Updated Reconfiguration Procedures Public Notice at 13, para. 33.

47

Id.

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application to address identified deficiencies.48 The public notice will include the deadline for
resubmitting modified applications. To become a qualified bidder, an applicant must have a complete
application (i.e., have timely corrected any identified deficiencies) and make a timely and sufficient
upfront payment. Qualified bidders will be identified by public notice at least 10 days prior to the mock
auction.
22.
Below we discuss additional details regarding certain information required to be
submitted in the FCC Form 175. An applicant should consult the Commission’s rules to ensure that, in
addition to the materials described below, all required information is included in its short-form
application. To the extent the information in this Public Notice does not address a potential applicant’s
specific operating structure, or if the applicant needs additional information or guidance concerning the
following disclosure requirements, the applicant should review the educational materials for Auction 103
and/or use the contact information provided in this Public Notice to consult with Commission staff to
better understand the information it must submit in its short-form application.
B.

License Area Selection

23.
An applicant must select all the license areas on which it may want to bid from the list of
available PEAs on its FCC Form 175.49 An applicant must carefully review and verify its PEA selections
before the FCC Form 175 filing deadline because those selections cannot be changed after the auction
application filing deadline.50 The FCC Auction Bidding System (bidding system) will not accept bids for
blocks in PEAs that were not selected on the applicant’s FCC Form 175.
C.

Disclosure of Agreements and Bidding Arrangements

24.
An applicant must provide in its FCC Form 175 a brief description of, and identify each
party to, any partnerships, joint ventures, consortia or agreements, arrangements, or understandings of any
kind relating to the licenses being auctioned, including any agreements that address or communicate
directly or indirectly bids (including specific prices), bidding strategies (including the specific licenses on
which to bid or not to bid), or the post-auction market structure, to which the applicant, or any party that
controls or is controlled by the applicant, is a party.51 In connection with the agreement disclosure
requirement, the applicant must certify under penalty of perjury in its FCC Form 175 that it has described,
and identified each party to, any such agreements, arrangements, or understandings into which it has
entered.52 An auction applicant that enters into any agreement relating to the licenses being auctioned
during an auction is subject to the same disclosure obligations it would be for agreements existing at the
FCC Form 175 filing deadline, and it must maintain the accuracy and completeness of the information in
its pending auction application.53

48

47 CFR § 1.2105(b)(2).

49

Under our adopted clock auction design for Auction 103, an applicant will select on its auction application all the
PEAs on which it may want to bid from the list of available PEAs.
50

47 CFR § 1.2105(b)(2).

51

Id. § 1.2105(a)(2)(viii), (a)(4). As defined for purposes of this rule, a controlling interest includes all individuals
or entities with positive or negative de jure or de facto control of the licensee. See id. § 1.2105(a)(4)(i). This
definition is modeled on a similar term used in section 1.2110(c) (definitions for designated entities), though it
differs in some respects from that rule. Compare id. § 1.2105(a)(4)(i) with id. § 1.2110(c).
52

Id. § 1.2105(a)(2)(viii). As discussed below, an applicant may continue negotiating, discussing, or
communicating with respect to a new agreement after the FCC Form 175 filing deadline, provided that the
communications involved do not relate both to the licenses being auctioned and to bids or bidding strategies or postauction market structure. See infra Section II.G.3 (Scope of Prohibition of Communications; Prohibition of Joint
Bidding Agreements).
53

See Guidance Regarding the Prohibition of Certain Communications During the Incentive Auction, Auction 1000,
(continued….)

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25.
For purposes of making the required agreement disclosures on the FCC Form 175, if
parties agree in principle on all material terms prior to the application filing deadline, each party to the
agreement that is submitting an auction application must provide a brief description of, and identify the
other party or parties to, the agreement on its respective FCC Form 175,54 even if the agreement has not
been reduced to writing. However, if the parties have not agreed in principle by the FCC Form 175 filing
deadline, they should not describe, or include the names of parties to, the discussions on their
applications.55
26.
The Commission’s rules generally prohibit joint bidding and other arrangements
involving auction applicants (including any party that controls or is controlled by such applicants).56 For
purposes of the prohibition of joint bidding arrangements, “joint bidding arrangements” include
arrangements relating to the licenses being auctioned that address or communicate, directly or indirectly,
bidding at the auction, bidding strategies, including arrangements regarding price or the specific licenses
on which to bid, and any such arrangements relating to the post-auction market structure.57
27.
This prohibition applies to joint bidding arrangements involving two or more nationwide
providers, as well as joint bidding arrangements involving a nationwide provider and one or more nonnationwide providers,58 where any party to the arrangement is an applicant for the auction.59 As discussed
in the Auction 103 Comment Public Notice,60 we consider AT&T, Sprint, T-Mobile, and Verizon Wireless
to be “nationwide providers” for the purpose of implementing our competitive bidding rules in Auction
103. In addition, the prohibition applies to joint bidding arrangements between an applicant and an
incumbent that files an FCC Form 175-A (or any party that controls or is controlled by it) as part of the
process for it to make an Initial Commitment.61
28.
Non-nationwide providers may enter into agreements to form a consortium or a joint
venture (as applicable) that result in a single party applying to participate in an auction.62 Specifically, a

(Continued from previous page)
Public Notice, 30 FCC Rcd 10794, 10806-07, para. 34 (WTB 2015) (Prohibited Communications Guidance Public
Notice); see also 47 CFR §§ 1.65, 1.2105(b)(4); Auction of Advanced Wireless Services (AWS-3) Licenses Scheduled
for November 13, 2014; Notice and Filing Requirements, Reserve Prices, Minimum Opening Bids, Upfront
Payments, and Other Procedures for Auction 97, Public Notice, 29 FCC Rcd 8386, 8418, para. 109 (2014)
(discussing applicants’ obligation to maintain accuracy and completeness of information in pending auction
applications).
54

47 CFR § 1.2105(a)(2)(viii), (c)(1).

55

See generally Wireless Telecommunications Bureau Clarifies Spectrum Auction Anti-Collusion Rules, Public
Notice, 11 FCC Rcd 9645, 9646 (WTB 1995) (clarifying standard for determining when a disclosable agreement
exists, discussed in connection with an earlier version of section 1.2105 of the Commission’s rules).
56

See 47 CFR § 1.2105(a)(2)(ix); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7569-77, paras. 177-98.

57

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7575, para. 195.

58

A “non-nationwide provider” refers to any provider of communications services that is not a “nationwide
provider.” See id.
59

See 47 CFR § 1.2105(a)(2)(ix); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7571, 7573-75, paras.
182, 186, 191, 193.
60

Auction 103 Comment Public Notice at 4, paras. 9-10; see also Updated Reconfiguration Procedures Public
Notice at 14, para. 36.
61

See Auction 103 Comment Public Notice at 4-5, para. 10.

62

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7573-74, 7576, paras. 187, 190, 198. While two or more non(continued….)

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designated entity (DE) can participate in only one consortium or joint venture in an auction,63 which shall
be the exclusive bidding vehicle for its members in that auction, and non-nationwide providers that are
not designated entities may participate in an auction through only one joint venture, which also shall be
the exclusive bidding vehicle for its members in that auction.64 The general prohibition of joint bidding
arrangements excludes certain agreements, including those that are solely operational in nature,65 as
defined in section 1.2105(a)(2)(ix)(A)-(C) of the Commission’s rules.66
29.
To implement the prohibition of joint bidding arrangements, the Commission’s rules
require each applicant to certify in its short-form application that it has disclosed any arrangements or
understandings of any kind relating to the licenses being auctioned to which it (or any party that controls
or is controlled by it) is a party. The applicant must also certify that it (or any party that controls or is
controlled by it) has not entered and will not enter into any arrangement or understanding of any kind
relating directly or indirectly to bidding at auction with, among others, “any other applicant” or a
nationwide provider.67
30.
Although the Commission’s rules do not prohibit auction applicants from communicating
about matters that are within the scope of an excepted agreement that has been disclosed in an FCC Form
175,68 the Commission reminds applicants that certain discussions or exchanges could nonetheless touch
upon impermissible subject matters,69 and that compliance with the Commission’s rules will not insulate a
party from enforcement of the antitrust laws.70
31.
Applicants should bear in mind that a winning bidder will be required to disclose in its
FCC Form 601 post-auction application the specific terms, conditions, and parties involved in any
agreement relating to the licenses being auctioned into which it had entered prior to the time bidding was
completed.71 This applies to any bidding consortium, joint venture, partnership, or other agreement,
(Continued from previous page)
nationwide providers may participate in an auction through a joint venture, a nationwide and a non-nationwide
provider may not do so. See id. at 7575, para. 194.
63

See id. at 7576, para. 198. Pursuant to section 1.2105(a)(4)(ii), a consortium is an entity formed to apply as a
single applicant to bid at auction pursuant to an agreement by two or more separate and distinct legal entities that
individually are eligible to claim the same designated entity benefits under section 1.2110, provided that no member
of the consortium may be a nationwide provider. 47 CFR § 1.2105(a)(4)(ii).
64

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7576, para. 198. Under the Commission’s rule, a joint venture
means a legally cognizable entity formed to apply as a single applicant to bid at auction pursuant to an agreement by
two or more separate and distinct legal entities, provided that no member of the joint venture may be a nationwide
provider. 47 CFR § 1.2105(a)(4)(iii); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7575, para. 194.
65

See 47 CFR § 1.2105(a)(2)(ix)(A), (a)(4). Under the Commission’s rules, agreements that are solely operational
in nature are those that address operational aspects of providing a mobile service, such as agreements for roaming,
spectrum leasing and other spectrum use arrangements, or device acquisition, as well as agreements for assignment
or transfer of licenses, provided that any such agreement does not both relate to the licenses at auction and address
or communicate, directly or indirectly, bidding at auction (including specific prices to be bid) or bidding strategies
(including the specific licenses on which to bid or not to bid) or post-auction market structure. See id.
§ 1.2105(a)(4); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7576, para. 197.
66

See 47 CFR § 1.2105(a)(2)(ix); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7575-76, paras. 195-97.

67

“The short-form application must contain . . .
(viii) Certification that the applicant has provided in its application a brief description of, and identified
each party to, any partnerships, joint ventures, consortia or other agreements, arrangements or
understandings of any kind relating to the licenses being auctioned, including any agreements that address
or communicate directly or indirectly bids (including specific prices), bidding strategies (including the
specific licenses on which to bid or not to bid), or the post-auction market structure, to which the
applicant, or any party that controls as defined in paragraph (a)(4) of this Section or is controlled by the
applicant, is a party.
(continued….)

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arrangement, or understanding of any kind entered into relating to the competitive bidding process,
including any agreements relating to the licenses being auctioned that address or communicate directly or
indirectly bids (including specific prices), bidding strategies (including the specific licenses on which to
bid or not to bid), or the post-auction market structure, to which the applicant, or any party that controls or
is controlled by the applicant, is a party.72
D.

Ownership Disclosure Requirements

32.
Each applicant must comply with the applicable Part 1 ownership disclosure
requirements and provide information required by sections 1.2105 and 1.2112, and, where applicable,
section 1.2110, of the Commission’s rules.73 Specifically, in completing FCC Form 175, an applicant
must fully disclose information regarding the real party- or parties-in-interest in the applicant or
application and the ownership structure of the applicant, including both direct and indirect ownership
interests of 10% or more, as prescribed in sections 1.2105 and 1.2112, and, where applicable, section
1.2110, of the Commission’s rules.74 Each applicant is responsible for ensuring that information
submitted in its short-form application is complete and accurate.
33.
In certain circumstances, an applicant may have previously filed an FCC Form 602
ownership disclosure information report or filed an auction application for a previous auction in which
ownership information was disclosed. The most current ownership information contained in any FCC
Form 602 or previous auction application on file with the Commission that used the same FRN the
applicant is using to submit its FCC Form 175 will automatically be pre-filled into certain ownership
sections on the applicant’s FCC Form 175,75 if such information is in an electronic format compatible
with FCC Form 175.76 Each applicant must carefully review any ownership information automatically
entered into its FCC Form 175, including any ownership attachments, to confirm that all information
(Continued from previous page)
(ix) Certification that the applicant (or any party that controls as defined in paragraph (a)(4) of this
Section or is controlled by the applicant) has not entered and will not enter into any partnerships, joint
ventures, consortia or other agreements, arrangements, or understandings of any kind relating to the
licenses being auctioned that address or communicate, directly or indirectly, bidding at auction (including
specific prices to be bid) or bidding strategies (including the specific licenses on which to bid or not to
bid), or post-auction market structure with: any other applicant (or any party that controls or is controlled
by another applicant); with a nationwide provider that is not an applicant (or any party that controls or is
controlled by such a nationwide provider); or, if the applicant is a nationwide provider, with any nonnationwide provider that is not an applicant (or with any party that controls or is controlled by such a nonnationwide provider), other than:
(A) Agreements, arrangements, or understandings of any kind that are solely operational as
defined under paragraph (a)(4) of this Section;
(B) Agreements, arrangements, or understandings of any kind to form consortia or joint ventures
as defined under paragraph (a)(4) of this Section;
(C) Agreements, arrangements or understandings of any kind with respect to the transfer or assignment of
licenses, provided that such agreements, arrangements or understandings do not both relate to the licenses
at auction and address or communicate, directly or indirectly, bidding at auction (including specific prices
to be bid), or bidding strategies (including the specific licenses on which to bid or not to bid), or postauction market structure.”
47 CFR § 1.2105(a)(2)(viii)-(ix); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7570-78, paras. 180-201.
68

47 CFR § 1.2105(a)(2)(viii), (a)(2)(ix)(A)-(C), (a)(2)(viii), (c)(1).

69

See Amendment of Part 1 of the Commission’s Rules—Competitive Bidding Procedures, Third Report and Order
and Second Further Notice of Proposed Rule Making, 13 FCC Rcd 374, 467-68, para. 163 (1997) (Part 1 Third
Report and Order); see generally Prohibited Communications Guidance Public Notice, 30 FCC Rcd 10794.
70

47 CFR § 1.2105(a)(2)(ix)(A)-(C), (a)(2)(viii); see also Part 1 Report and Order, 30 FCC Rcd at 7571, para. 181;
Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10809, para. 43.

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supplied on FCC Form 175 is complete and accurate as of the application filing deadline. Any
information that needs to be corrected or updated must be changed directly in FCC Form 175.
E.

Foreign Ownership Disclosure Requirements

34.
Section 310 of the Communications Act requires the Commission to review foreign
investment in radio station licenses and imposes specific restrictions on who may hold certain types of
radio licenses.77 Section 310 applies to applications for initial radio licenses, applications for assignments
and transfers of control of radio licenses, and spectrum leasing arrangements under the Commission’s
secondary market rules.78 In completing FCC Form 175, an applicant is required to disclose information
concerning foreign ownership of the applicant. If an applicant has foreign ownership interests in excess
of the applicable limit or benchmark set forth in section 310(b), it may seek to participate in Auction 103
as long as it has filed a petition for declaratory ruling with the Commission prior to the FCC Form 175
filing deadline. An applicant must certify in its FCC Form 175 that, as of the deadline for filing its
application to participate in the auction, the applicant either is in compliance with the foreign ownership
provisions of section 310 or has filed a petition for declaratory ruling requesting Commission approval to
exceed the applicable foreign ownership limit or benchmark in section 310(b) that is pending before, or
has been granted by, the Commission.79

(Continued from previous page)
71 47 CFR § 1.2107(d); see also id. § 1.2105(a)(2)(ix)(A)-(C), (a)(2)(viii).
72

Id. § 1.2107(d); see also id. § 1.2105(a)(2)(ix)(A)-(C), (a)(2)(viii).

73

Section 1.2105 requires the disclosure on the FCC Form 175 of the applicant’s ownership information as set forth
in sections 1.2105 and 1.2112. See id. § 1.2105. In addition, each applicant should ensure that its disclosures
comply with the ownership disclosure requirements in the Part 1 rules. See generally 2015 Part 1 Report and
Order, 30 FCC Rcd 7493.
74

47 CFR §§ 1.2105, 1.2112.

75

The FCC Form 175 instructions provide additional details on pre-filled information.

76

Applicants are encouraged to submit an FCC Form 602 ownership report or update any ownership information on
file with the Commission in an FCC Form 602 ownership report prior to starting an application for Auction 103 to
ensure that their most recent ownership information is pre-filled into their short-form applications.
77

See 47 U.S.C. § 310(a), (b).

78

See Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio Licensees under Section
310(b)(4) of the Communications Act of 1934, as Amended, Second Report and Order, 28 FCC Rcd 5741, 5747-48,
para. 7 (2013). The Commission amended its foreign ownership rules in Review of Foreign Ownership Policies for
Broadcast, Common Carrier and Aeronautical Radio Licensees under Section 310(b)(4) of the Communications Act
of 1934, as Amended, Report and Order, 31 FCC Rcd 11272 (2016). The rules are now codified in 47 CFR §§
1.5000-1.5004.
79

See 47 CFR § 1.2105(a)(2)(v), (vi). Additional information concerning foreign ownership disclosure
requirements is provided in the FCC Form 175 Filing Instructions.

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F.

FCC 19-63

Information Procedures During the Auction Process

35.
Consistent with past practice in several prior spectrum license auctions,80 we adopt our
proposal to limit information available in Auction 103 in order to prevent the identification of bidders
placing particular bids until after the bidding has closed.81 More specifically, we will not make public
until after bidding has closed: (1) the license areas that an applicant selects for bidding in its short-form
application, (2) the amount of any upfront payment made by or on behalf of an applicant, (3) any
applicant’s bidding eligibility, and (4) any other bidding-related information that might reveal the identity
of the bidder placing a bid.
36.
The limited information disclosure procedures used in past auctions have helped
safeguard against potential anticompetitive behavior such as retaliatory bidding and collusion.82 We find
nothing in the record even suggesting that we depart from our now-established practice of implementing
these procedures in wireless spectrum auctions. We find that the competitive benefits associated with
limiting information disclosure support adoption of such procedures and outweigh the potential benefits
of full disclosure.83
37.
Once the bidding in Auction 103 starts, under the limited information procedures
(sometimes also referred to as anonymous bidding), information to be made public after each round of
bidding will include for each category of license in each geographic area, the supply, the aggregate
demand, the price at the end of the last completed round, and the price for the next round. The identities
of bidders placing specific bids and the net bid amounts (reflecting bidding credits or incentive payments)
will not be disclosed until after the close of bidding.84
38.
Throughout the auction, bidders will have access to additional information related to their
own bidding and bid eligibility through the Commission’s bidding system. For example, bidders will be
able to view their own level of eligibility, before and during the auction. Each incumbent bidder will also
be apprised of the size of its potential incentive payment on a round-by-round basis during the clock
phase.85
80

See, e.g., Auctions of Upper Microwave Flexible Use Licenses for Next-Generation Wireless Services; Notice and
Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auctions 101 (28 GHz)
and 102 (24 GHz); Bidding in Auction 101 Scheduled to Begin November 14, 2018, Public Notice, 33 FCC Rcd
7575, 7596-98, paras. 50-56 (2018) (Auctions 101 and 102 Procedures Public Notice); Broadcast Incentive Auction
Scheduled to Begin on March 29, 2016; Procedures for Competitive Bidding in Auction 1000, Including Initial
Clearing Target Determination, Qualifying to Bid, and Bidding in Auctions 1001 (Reverse) and 1002 (Forward),
Public Notice, 30 FCC Rcd 8975, 9046, para. 138 (2015); see also 47 CFR § 1.2104(h).
81

See Auction 103 Comment Public Notice at 7-8, para. 18.

82

See Auction of AWS-1 and Broadband PCS Licenses Rescheduled for August 13, 2008; Notice and Filing
Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 78, Public Notice, 23
FCC Rcd 7496, 7536, para. 157 (WTB 2008) (recognizing that limited information procedures may have overall
competitive benefits from reduced opportunities for bid signaling, retaliatory bidding, or other anti-competitive
strategic bidding) (Auction 78 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, 26 FCC Rcd 3342, 3372, paras. 128 (WTB 2011) (finding that the competitive benefits
associated with limited information disclosure procedures support adoption of such procedures).
83

See Auction 78 Procedures Public Notice, 23 FCC Rcd at 7536, para. 157.

84

See Auction 103 Comment Public Notice at 8, para. 19.

85

See T-Mobile Comments at 7; AT&T Reply at 3; Verizon Reply at 6-7. The bidding system will provide bidders
with a single number, which aggregates the potential payment for each relinquished 39 GHz holding. See Auction
103 Assignment Phase Technical Guide, Sec. 6. Bidders will be able to download this figure after each round. See
Verizon Reply at 7.

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39.
After the close of bidding, bidders’ PEA selections, upfront payment amounts, bidding
eligibility, bids, and other bidding-related actions will be made publicly available.
40.
We warn applicants that the direct or indirect communication to other applicants or the
public disclosure of non-public information (e.g., reductions in eligibility, identities of bidders) could
violate the Commission’s rule prohibiting certain communications.86 Therefore, to the extent an
applicant believes that such a disclosure is required by law or regulation, including regulations
issued by the SEC, we strongly urge that the applicant consult with the Commission staff in the
Auctions Division before making such disclosure.
G.

Prohibited Communications and Compliance with Antitrust Laws

41.
The rules prohibiting certain communications set forth in section 1.2105(c) apply to each
applicant that files a short-form application (FCC Form 175) in Auction 103.87 Section 1.2105(c)(1) of
the Commission’s rules provides that, subject to specified exceptions, “[a]fter the short-form application
filing deadline, all applicants are prohibited from cooperating or collaborating with respect to,
communicating with or disclosing, to each other or any nationwide provider [of communications services]
that is not an applicant, or, if the applicant is a nationwide provider, any non-nationwide provider that is
not an applicant, in any manner the substance of their own, or each other’s, or any other applicants’ bids
or bidding strategies (including post-auction market structure), or discussing or negotiating settlement
agreements, until after the down payment deadline[.]”88
1.

Entities Subject to Section 1.2105(c)

42.
An “applicant” for purposes of this rule includes all “controlling interests” in the entity
submitting the FCC Form 175 auction application, as well as all holders of interests amounting to 10% or
more of the entity, and all officers and directors of that entity.89 Under section 1.2105(c), a party that
submits an application becomes an “applicant” under the rule at the application deadline, and that status
does not change based on later developments.90
43.
We consider AT&T, Sprint, T-Mobile, and Verizon Wireless to be “nationwide
providers” for the purposes of the prohibited communications rule for Auction 103.91
44.
Moreover, for Auction 103, the prohibited communications rule shall apply to
communications between a short-form applicant and an incumbent that files an application (FCC Form
175-A) as part of the Initial Commitment process.92 The rule applies even if such an incumbent chooses
not to file FCC Form 175 to bid for licenses in Auction 103.
86

See 47 CFR § 1.2105(c); see also infra Section II.G (Prohibited Communications and Compliance with Antitrust
Laws).
87

See 47 CFR § 1.2105(c).

88

Id.

89

Id. § 1.2105(c)(5)(i).

90

See Star Wireless, LLC v. FCC, 522 F.3d 469, 473-74 (D.C. Cir. 2008). Thus, an auction applicant that does not
correct deficiencies in its application, fails to submit a timely and sufficient upfront payment, or does not otherwise
become qualified, remains an “applicant” for purposes of the rule and remains subject to the prohibition of certain
communications until the Auction 103 down payment deadline.
91

See supra Section II.C (Disclosure of Agreements and Bidding Arrangements).

92

See Auction 103 Comment Public Notice at 4, para. 9; see also Initial Reconfiguration Procedures Public Notice,
34 FCC Rcd at 1402-04, paras. 53-57. For purposes of Auction 103, incumbents filing FCC Form 175-A includes
all applicants and listed licensees on FCC Form 175-A. See Updated Reconfiguration Procedures Public Notice at
13-14, para. 36. No later than the opening of the Initial Commitment filing window (i.e., before the window for
filing FCC Form 175 for Auction 103), a public notice will announce the availability of FCC Form 175-A in the
(continued….)

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2.

FCC 19-63

Prohibition Applies Until Down Payment Deadline

45.
Section 1.2105(c)’s prohibition of certain communications begins at an auction’s shortform application filing deadline and ends at the auction’s down payment deadline after the auction closes,
which will be announced in a future public notice.93 In addition, for an incumbent that files and/or is
identified in an FCC Form 175-A, the Incumbent 39 GHz Licensee Short-Form Application, the
prohibition of certain communications begins at the FCC Form 175-A filing deadline on July 15, 2019.94
46.
AT&T and T-Mobile ask that the Commission delay the application of the prohibition for
incumbents, with AT&T specifically requesting that it be delayed until the filing deadline for FCC Form
175, the application to participate in bidding on new licenses.95 We disagree and affirm the decision in
the Updated Reconfiguration Procedures Public Notice to start the prohibition at the FCC Form 175-A
deadline. Incumbents must file FCC Form 175-A in order to make an affirmative Initial Commitment
with respect to existing licenses.96 The filing of FCC Form 175-A indicates an incumbent’s interest in the
auction and in possibly relinquishing its existing spectrum usage rights in exchange for an incentive
payment based on bidding in the auction.97 For non-incumbents, the analogous filing is FCC Form 175,
which indicates an interest in possibly bidding for new licenses. Thus, applying the prohibition for
incumbents at the deadline for filing FCC Form 175-A is consistent with the principle underlying the
application of the prohibition at the deadline for non-incumbents to file FCC Form 175. Our strong
interest in promoting the integrity of the auction process by prohibiting communications that would
facilitate coordinated conduct outweigh the reasons provided by AT&T and T-Mobile to depart from this
approach.98
3.

Scope of Prohibition of Communications; Prohibition of Joint Bidding
Agreements

47.
The Commission updated and revised section 1.2105(c)’s prohibition of communications
by auction applicants twice in recent years.99 In 2015, the Commission amended section 1.2105(c) to
(Continued from previous page)
Commission’s system, thereby making available to the public information on all covered incumbents. See
Reconfigured Holdings Public Notice at 6, para. 18.
93

47 CFR § 1.2105(c)(1).

94

See Updated Reconfiguration Procedures Public Notice at 13, paras. 35-36.

95

See Letter from Jessica B. Lyons, Assistant Vice President–Senior Legal Counsel, AT&T, to Marlene H. Dortch,
Secretary, FCC, GN Docket No. 14-177 et al., at 1-2 (filed June 12, 2019) (asserting that the deadline “risks
deterring the continued provision of 5G service in the [39 GHz] band”); Letter from Steve B. Sharkey, Vice
President, Government Affairs, Technology and Engineering Policy, T-Mobile, to Marlene H. Dortch, Secretary,
FCC, GN Docket No. 14-177 et al., at 2 (filed June 12, 2019).
96

See Updated Reconfiguration Procedures Public Notice at 12, paras. 31-32.

97

See Initial Reconfiguration Procedures Public Notice, 34 FCC Rcd at 1403, para. 54.

98

AT&T and T-Mobile also request additional guidance on the application of the prohibited communications rule.
As is typical for each auction, we provide guidance on the application of the rule in this Public Notice, based on
previous Commission decisions and experience in other auctions. See also Updated Reconfiguration Procedures
Public Notice at 13, para. 35 n.69. In addition, consistent with our long-standing practice, we cannot provide safeharbors for any communications in advance, as a case-by-base factual analysis is almost always required to
determine whether the prohibition has been violated. See Prohibited Communications Guidance Public Notice, 30
FCC Rcd at 10808, para. 40 (“As with any communication, all of the surrounding facts and circumstances must be
considered when determining whether a particular communication violates the rule.”).
99

See generally, e.g., 2015 Part 1 Report and Order, 30 FCC Rcd 7494; Procedural Amendments to Commission
Part 1 Competitive Bidding Rules, Order, 25 FCC Rcd 521 (2010) (Part 1 Procedural Amendments Order).

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extend the prohibition of communications to cover all applicants for an auction regardless of whether the
applicants seek permits or licenses in the same geographic area, or market.100 In addition, the rule now
applies to communications by applicants with non-applicant nationwide providers of communications
services and by nationwide applicants with non-applicant non-nationwide providers.101 In connection
with those 2015 amendments to the competitive bidding rules, and as discussed above, the Commission
now prohibits a “joint bidding arrangement,” including arrangements relating to the permits or licenses
being auctioned that address or communicate, directly or indirectly, bidding at the auction, bidding
strategies, including arrangements regarding price or the specific permits or licenses on which to bid, and
any such arrangements relating to the post-auction market structure.102 The revised rule provides limited
exceptions for a communication within the scope of any arrangement consistent with the exclusion from
our rule prohibiting joint bidding, provided such arrangement is disclosed on the applicant’s auction
application.103 Applicants may continue to communicate pursuant to any pre-existing agreements,
arrangements, or understandings that are solely operational or that provide for the transfer or assignment
of licenses, provided that such agreements, arrangements, or understandings are disclosed on their
applications and do not both relate to the licenses at auction and address or communicate bids (including
amounts), bidding strategies, or the particular permits or licenses on which to bid or the post-auction
market structure.104
48.
In addition to express statements of bids and bidding strategies, the prohibition against
communicating “in any manner” includes public disclosures as well as private communications and
indirect or implicit communications.105 Consequently, an applicant must take care to determine whether
its auction-related communications may reach another applicant.106
49.
Parties subject to section 1.2105(c) should take special care in circumstances where their
officers, directors, and employees may receive information directly or indirectly relating to any
applicant’s bids or bidding strategies. Such information may be deemed to have been received by the
applicant under certain circumstances. For example, Commission staff have found that, where an
individual serves as an officer and director for two or more applicants, the bids and bidding strategies of
one applicant are presumed conveyed to the other applicant through the shared officer, which creates an
apparent violation of the rule.107
100

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7577, para. 199; 47 CFR § 1.2105(a)(2)(ix), (c)(1).

101

47 CFR § 1.2105(c)(1); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7577, para. 199.

102

See 47 CFR § 1.2105(a)(2)(ix); 2015 Part 1 Report and Order, 30 FCC Rcd at 7575-76, para. 195.

103

See 47 CFR § 1.2105(a)(2)(viii), (ix)(A)-(C); 2015 Part 1 Report and Order, 30 FCC Rcd at 7576-77, paras.
197-99.
104

47 CFR § 1.2105(a)(2)(ix)(A)-(C); see generally Prohibited Communications Guidance Public Notice, 30 FCC
Rcd 10794.
105

See generally 2015 Part 1 Report and Order, 30 FCC Rcd at 7577, para. 199; Cascade Access, LLC, Forfeiture
Order, 28 FCC Rcd 141, 144, para. 7 (EB 2013) (rejecting argument that the communication was not prohibited
because it did not reveal the “substance” of Cascade’s bids or bidding strategies).
106

We remind applicants that they must determine whether their communications with other parties are permissible
under the rule once the prohibition begins at the deadline for submitting applications, even before the public notice
identifying applicants is released.
107

See, e.g., Letter from Barbara A. Kreisman, Chief, Video Division, Media Bureau, and Margaret W. Wiener,
Chief, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, FCC, to Colby M. May,
TCCSA, Inc., d/b/a Trinity Broadcasting Network, 20 FCC Rcd 14648, 14648-49 (2005) (finding apparent violation
of communication prohibitions of section 1.2105(c) where applicants with mutually exclusive applications reported
sharing same individual as an officer and director and reported having no bidding agreement, which under the rule
then in effect would have made an exception to the prohibition applicable).

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50.
Subject to the exception described above, section 1.2105(c)(1) prohibits applicants from
communicating with specified other parties only with respect to “their own, or each other’s, or any other
applicant’s bids or bidding strategies.”108 The Prohibited Communications Guidance Public Notice
released in advance of the broadcast incentive auction (Auction 1000) reviewed the scope of the
prohibition generally, as well as in that specific auction’s forward auction of spectrum licenses and
reverse auction to relinquish broadcast licenses.109 As the Commission explained therein, a
communication conveying “bids or bidding strategies (including post-auction market structure)” must
also relate to the “licenses being auctioned” in order to be covered by the prohibition.110 Thus, the
prohibition is limited in scope and does not apply to all communications between or among the specified
parties. The Commission consistently has made clear that application of the rule prohibiting
communications has never required total suspension of essential ongoing business.111 Entities subject to
the prohibition may negotiate agreements during the prohibition period, provided that the
communications involved do not relate both (1) to the licenses being auctioned and (2) to bids or bidding
strategies or post-auction market structure.112
51.
Accordingly, business discussions and negotiations that are unrelated to bidding in
Auction 103 and that do not convey information about the bids or bidding strategies, including the postauction market structure, of an applicant are not prohibited by the rule.113 Moreover, not even all auctionrelated information is covered by the prohibition. For example, communicating merely whether a party
has or has not applied to participate in Auction 103 will not violate the rule.114 In contrast,
communicating, among other things, how a party will participate, including specific geographic areas
selected, specific bid amounts, and/or whether or not the party is placing bids, would convey bids or
bidding strategies and would be prohibited.115
52.
While section 1.2105(c) does not prohibit business discussions and negotiations among
auction applicants that are not auction related, each applicant must remain vigilant not to communicate,
directly or indirectly, information that affects, or could affect, bids or bidding strategies. Certain
discussions might touch upon subject matters that could convey price or geographic information related to
bidding strategies. Such subject areas include, but are not limited to, management, sales, local marketing
agreements, and other transactional agreements.
53.
We caution applicants that bids or bidding strategies may be communicated outside of
situations that involve one party subject to the prohibition communicating privately and directly with
another such party. For example, the Commission has warned that prohibited “communications
concerning bids and bidding strategies may include communications regarding capital calls or requests for
108

47 CFR § 1.2105(c)(1).

109

See Updated Reconfiguration Procedures Public Notice at 13, para. 33 (citing resources regarding the operation
of the prohibition, including the Auctions 101 and 102 Procedures Public Notice and the Prohibited
Communications Guidance Public Notice).
110

Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10806, para. 32.

111

See, e.g., Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions,
Report and Order, 29 FCC Rcd 6567, 6770-71, para. 492 (2014) (citing Application of Todd Stuart Noordyk for a
New FM Station on Channel 260A at Manistique, Michigan, Memorandum Opinion and Order, 16 FCC Rcd 18113,
18116–17, para. 12 (2001) (“Our rules do not require the suspension of all relations among auction participants
while an auction is pending.”)).
112

Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10806, paras. 33-34.

113

Id. at 10806, para. 32.

114

Id. at 10796, paras. 6-7.

115

Id. at 10796-97, paras. 8-9.

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additional funds in support of bids or bidding strategies to the extent such communications convey
information concerning the bids and bidding strategies directly or indirectly.”116 Moreover, the
Commission found a violation of the rule against prohibited communications when an applicant used the
Commission’s bidding system to disclose “its bidding strategy in a manner that explicitly invited other
auction participants to cooperate and collaborate . . . in specific markets”117 and has placed auction
participants on notice that the use of its bidding system “to disclose market information to competitors
will not be tolerated and will subject bidders to sanctions.”118
54.
Likewise, when completing a short-form application, each applicant should avoid any
statements or disclosures that may violate section 1.2105(c), particularly in light of the limited
information procedures in effect for Auction 103. Specifically, an applicant should avoid including any
information in its short-form application that might convey information regarding its PEA selections,
such as referring to certain markets in describing agreements, including any information in application
attachments that will be publicly available that may otherwise disclose the applicant’s PEA selections, or
using applicant names that refer to licenses being offered.
55.
Applicants also should be mindful that communicating non-public application or bidding
information publicly or privately to another applicant may violate section 1.2105(c) even though that
information subsequently may be made public during later periods of the application or bidding
processes.
4.

Communicating with Third Parties

56.
Section 1.2105(c) does not prohibit an applicant from communicating bids or bidding
strategies to a third-party, such as a consultant or consulting firm, counsel, or lender. The applicant
should take appropriate steps, however, to ensure that any third party it employs for advice pertaining to
its bids or bidding strategies does not become a conduit for prohibited communications to other specified
parties, as that would violate the rule.119 For example, an applicant might require a third party, such as a
lender, to sign a non-disclosure agreement before the applicant communicates any information regarding
bids or bidding strategy to the third party.120 Within third-party firms, separate individual employees,
such as attorneys or auction consultants, may advise individual applicants on bids or bidding strategies, as
long as such firms implement firewalls and other compliance procedures that prevent such individuals
from communicating the bids or bidding strategies of one applicant to other individuals representing
separate applicants.121 Although firewalls and/or other procedures should be used, their existence is not
an absolute defense to liability if a violation of the rule has occurred.122
57.

As Commission staff have explained in the context of the Broadcast Incentive Auction, in

116

Implementation of Section 309(j) of the Communications Act–Competitive Bidding, Memorandum Opinion and
Order, 9 FCC Rcd 7684, 7689, para. 12 (1994) (Competitive Bidding Memorandum Opinion and Order).
117

Mercury PCS II, LLC, Notice of Apparent Liability for Forfeiture, 12 FCC Rcd 17970, 17976, para. 17 (1997).

118

Mercury PCS II, LLC, Memorandum Opinion and Order, 13 FCC Rcd 23755, 23760, para. 11 (1998).

119

See, e.g., Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10798, para. 13 (describing the
use of non-disclosure agreements and, for third parties that may be advising multiple applicants, firewalls).
120

Id.

121

Id.; see also 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, 11978, para. 12 (1998) (Nevada Wireless Order) (strongly encouraging applicants to implement any
firewall procedures necessary and to provide information in their auction applications regarding the procedures).
122

See Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10799, para. 14; Nevada Wireless
Order, 13 FCC Rcd at 11978, para. 13.

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the case of an individual, the objective precautionary measure of a firewall is not available.123 As a result,
an individual that is privy to bids or bidding information of more than one applicant presents a greater risk
of becoming a conduit for a prohibited communication.124 We will take the same approach to interpreting
the prohibited communications rule in Auction 103. We emphasize that whether a prohibited
communication has taken place in a given case will depend on all the facts pertaining to the case,
including who possessed what information, what information was conveyed to whom, and the course of
bidding in the auction.125
58.
We remind potential applicants that they may discuss the short-form application or bids
for specific licenses or license areas with the counsel, consultant, or expert of their choice before the
short-form application deadline. Furthermore, the same third-party individual could continue to give
advice after the short-form deadline regarding the application, provided that no information pertaining to
bids or bidding strategies, including PEAs selected on the short-form application, is conveyed to that
individual. To the extent potential applicants can develop bidding instructions prior to the short-form
deadline that a third party could implement without changes during bidding, the third party could follow
such instructions for multiple applicants provided that those applicants do not communicate with the third
party during the prohibition period.126
59.
Applicants also should use caution in their dealings with other parties, such as members
of the press, financial analysts, or others who might become conduits for the communication of prohibited
bidding information. For example, even though communicating that it has applied to participate in the
auction will not violate the rule, an applicant’s statement to the press that it intends to stop bidding in an
auction could give rise to a finding of a section 1.2105 violation.127 Similarly, an applicant’s public
statement of intent not to place bids during bidding in Auction 103 could also violate the rule.
5.

Section 1.2105(c) Certifications

60.
By electronically submitting its FCC Form 175 auction application, each applicant for
Auction 103 certifies its compliance with section 1.2105(c) of the rules.128 However, the mere filing of a
certifying statement as part of an application will not outweigh specific evidence that a prohibited
communication has occurred, nor will it preclude the initiation of an investigation when warranted.129
Any applicant found to have violated these communication prohibitions may be subject to sanctions.130

123

Prohibited Communications Guidance Public Notice, 30 FCC Rcd at 10800, para. 15.

124

Id.

125

See id.

126

Id. at 10802, para. 20.

127

Cf. Wireless Telecommunications Bureau Responds to Questions About the Local Multipoint Distribution Service
Auction, Public Notice, 13 FCC Rcd 341, 347-48 (WTB 1998) (“Public statements can give rise to collusion
concerns. This has occurred in the antitrust context, where certain public statements can support other evidence
which tends to indicate the existence of a conspiracy.”).
128

47 CFR § 1.2105(a)(2)(ix). In accordance with the 2015 Part 1 Report and Order, if an applicant has a noncontrolling interest with respect to more than one application, the applicant must certify that it has established
internal control procedures to preclude any person acting on behalf of the applicant from possessing information
about the bids or bidding strategies of more than one applicant or communicating such information with respect to
either applicant to another person acting on behalf of and possessing such information regarding another applicant.
2015 Part 1 Report and Order, 30 FCC Rcd at 7577, para. 199.
129

Nevada Wireless Order, 13 FCC Rcd at 11978, para. 13; see also Competitive Bidding Memorandum Opinion
and Order, 9 FCC Rcd at 7689, para. 12.
130

See 47 CFR §§ 1.2105(c), 1.2107(d), 1.2109(d).

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6.

FCC 19-63

Duty to Report Prohibited Communications

61.
Section 1.2105(c)(4) requires that any applicant that makes or receives a communication
that appears to violate section 1.2105(c) must report such communication in writing to the Commission
immediately, and in no case later than five business days after the communication occurs.131 Each
applicant’s obligation to report any such communication continues beyond the five-day period after the
communication is made, even if the report is not made within the five-day period.132
7.

Procedures for Reporting Prohibited Communications

62.
A party reporting any information or communication pursuant to sections 1.65,
1.2105(a)(2), or 1.2105(c)(4) must take care to ensure that any report of a prohibited communication does
not itself give rise to a violation of section 1.2105(c). For example, a party’s report of a prohibited
communication could violate the rule by communicating prohibited information to other parties specified
under the rule through the use of Commission filing procedures that allow such materials to be made
available for public inspection.
63.
Parties must file only a single report concerning a prohibited communication and must
file that report with the Commission personnel expressly charged with administering the Commission’s
auctions.133 This rule is designed to minimize the risk of inadvertent dissemination of information in such
reports. Any reports required by section 1.2105(c) must be filed consistent with the instructions set forth
in this Public Notice.134 For Auction 103, such reports must be filed with Margaret W. Wiener, the Chief
of the Auctions Division, Office of Economics and Analytics, by the most expeditious means available.
Any such report should be submitted by email to Ms. Wiener and sent to auction103@fcc.gov. If you
choose instead to submit a report in hard copy, any such report must be delivered only to: Margaret W.
Wiener, Chief, Auctions Division, Office of Economics and Analytics, Federal Communications
Commission, 445 12th Street, SW, Room 6-C466, Washington, DC 20554.
64.
Given the potential competitive sensitivity of public disclosure of information in such a
report, a party seeking to report such a prohibited communication should consider submitting its report
with a request that the report or portions of the submission be withheld from public inspection by
following the procedures specified in section 0.459 of the Commission’s rules.135 We encourage such
parties to coordinate with the Auctions Division staff about the procedures for submitting such reports.136
8.
65.
131

Winning Bidders Must Disclose Terms of Agreements

Each applicant that is a winning bidder will be required to provide as part of its long-form

Id. § 1.2105(c)(4); see also Part 1 Seventh Report and Order, 16 FCC Rcd at 17553-55 paras. 13-17.

132

Service Rules for the 698-746, 747-762 and 777-792 MHz bands et al., 22 FCC Rcd 15289, 15395, paras. 285-86
(2007); see Part 1 Procedural Amendments Order, 25 FCC Rcd at 523, para. 8; see also 47 CFR § 1.65; Part 1
Seventh Report and Order, 16 FCC Rcd at 17550-51, para. 9.
133

Part 1 Procedural Amendments Order, 25 FCC Rcd at 522, para. 4. This process differs from filing procedures
used in connection with other Commission rules and processes, which may call for submission of filings to the
Commission’s Office of the Secretary or ECFS. Filing through the Office of Secretary or ECFS could allow the
report to become publicly available and might result in the communication of prohibited information to other
auction applicants.
134

Id.

135

See 47 CFR § 0.459. Filers requesting confidential treatment of documents must be sure that the cover page of
the filing prominently displays that the documents seek confidential treatment. For example, a filing might include a
cover page stamped with “Request for Confidential Treatment Attached” or “Not for Public Inspection.” Any such
request must cover all the material to which the request applies. Id. § 0.459(a)(1).
136

See infra Section VII (Procedural Matters).

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application any agreement or arrangement it has entered into and a summary of the specific terms,
conditions, and parties involved in any agreement it has entered into.137 This applies to any bidding
consortia, joint venture, partnership, or agreement, understanding, or other arrangement entered into
relating to the competitive bidding process, including any agreement relating to the post-auction market
structure.138 Failure to comply with the Commission’s rules can result in enforcement action.
9.

Additional Information Concerning Prohibition of Certain Communications
in Commission Auctions

66.
A summary listing of documents issued by the Commission and the Bureau/Office
addressing the application of section 1.2105(c) is available on the Commission’s auction web page at
www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certaincommunications.
10.

Antitrust Laws

67.
Regardless of compliance with the Commission’s rules, applicants remain subject to the
antitrust laws, which are designed to prevent anticompetitive behavior in the marketplace.139 Compliance
with the disclosure requirements of section 1.2105(c)(4) will not insulate a party from enforcement of the
antitrust laws.140 For instance, a violation of the antitrust laws could arise out of actions taking place well
before any party submits a short-form application.141 The Commission has cited a number of examples of
potentially anticompetitive actions that would be prohibited under antitrust laws: for example, actual or
potential competitors may not agree to divide territories in order to minimize competition, regardless of
whether they split a market in which they both do business, or whether they merely reserve one market
for one and another market for the other.142
68.
To the extent we become aware of specific allegations that suggest that violations of the
federal antitrust laws may have occurred, we may refer such allegations to the United States Department
of Justice for investigation.143 If an applicant is found to have violated the antitrust laws or the
Commission’s rules in connection with its participation in the competitive bidding process, it may be
subject to a forfeiture and may be prohibited from participating further in Auction 103 and in future

137

47 CFR § 1.2107(d); see also infra Section V.C (Long-Form Application (FCC Form 601)). Such agreements
must have been entered into prior to the filing of short-form applications pursuant to section 1.2105. 47 CFR
§ 1.2107(d); see id. § 1.2105.
138

47 CFR § 1.2107(d).

139

See Amendment of Part 1 of the Commission’s Rules–Competitive Bidding Procedures, Third Further Notice of
Proposed Rulemaking, 14 FCC Rcd 21558, 21560-61, para. 4 & n.17 (1999) (quoting Competitive Bidding
Memorandum Opinion and Order, 9 FCC Rcd at 7689, para. 12) (“[W]e wish to emphasize that all applicants and
their owners continue to be subject to existing antitrust laws. Applicants should note that conduct that is permissible
under the Commission’s Rules may be prohibited by the antitrust laws.”); Implementation of Section 309(j) of the
Communications Act–Competitive Bidding, Fourth Memorandum Opinion and Order, 9 FCC Rcd 6858, 6869, para.
64 n.134 (1994) (“[A]pplicants will also be subject to existing antitrust laws.”) (Fourth Memorandum Opinion and
Order).
140

See Competitive Bidding Memorandum Opinion and Order, 9 FCC Rcd at 7689, para. 12; see also Press Release,
Dep’t of Justice, Justice Department Sues Three Firms Over FCC Auction Practices (Nov. 10, 1998),
https://www.justice.gov/archive/atr/public/press_releases/1998/2068.htm.
141

See, e.g., Fourth Memorandum Opinion and Order, 9 FCC Rcd at 6869, para. 59 n.134.

142

Id.

143

Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388, para. 226.

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auctions, among other sanctions.144
H.

Provisions for Small Businesses and Rural Service Providers

69.
In the 2015 Part 1 Report and Order, the Commission revised the designated entity rules
that apply to all licenses acquired with bidding credits, including those won in Auction 103. A bidding
credit represents an amount by which a bidder’s winning bid will be discounted, subject to the caps
discussed below.145 As set forth in section 1.2110 of the Commission’s rules,146 and as described below,
these rule revisions include, but are not limited to (1) adopting a two-pronged standard for evaluating
eligibility for small business benefits and eliminating the attributable material relationship (AMR) rule,147
(2) establishing a new attribution rule for certain disclosable interest holders of applicants claiming
designated entity benefits,148 (3) updating the gross revenue amounts defining eligibility for small
business benefits,149 (4) creating a separate bidding credit for eligible rural service providers,150 and (5)
establishing caps on the total amount of designated entity benefits any eligible winning bidder may
receive.151
70.
In Auction 103, designated entity bidding credits will be available to applicants
demonstrating eligibility for a small business or a rural service provider bidding credit and subsequently
winning license(s). These bidding credits will not be cumulative—an applicant is permitted to claim
either a small business bidding credit or a rural service provider bidding credit, but not both.152 Each
applicant must also certify that it is eligible for the claimed bidding credit in its FCC Form 175. In
addition to the information provided below, each applicant should review carefully the Commission’s
decisions regarding the designated entity provisions as well as the Part 1 rules.153
71.
In particular, we remind applicants applying for designated entity bidding credits that
they should take due account of the requirements of the Commission’s rules and implementing orders
regarding de jure and de facto control of such applicants.154 These rules include a prohibition, which
applies to all applicants (whether or not seeking bidding credits), against changes in ownership of the
144

See id.; 47 CFR § 1.2109(d).

145

Applicants should note that all references to a “winning bid” discussed herein in the context of designated entity
bidding credits for Auction 103 (e.g., the application of a small business discount to an applicant’s winning bid)
refer to the calculated license price discussed in Section IV.B.5 (Winning Bids in the Clock Phase), below.
146

47 CFR § 1.2110.

147

Id. § 1.2110(b)(3); see 2015 Part 1 Report and Order, 30 FCC Rcd at 7502-10, paras. 18-34.

148

47 CFR § 1.2110(c)(2)(ii)(J); see 2015 Part 1 Report and Order, 30 FCC Rcd at 7512-16, paras. 42-53. For
purposes of this rule, a disclosable interest holder of an applicant seeking designated entity benefits is defined as any
individual or entity holding a 10% or greater interest of any kind in the applicant, including but not limited to, a 10%
or greater interest in any class of stock, warrants, options, or debt securities in the applicant or licensee. 47 CFR
§ 1.2110(c)(2)(ii)(J). The Commission also clarified its designated entity reporting requirements under 47 CFR
§ 1.2110(n).
149

47 CFR § 1.2110(f)(2); see 2015 Part 1 Report and Order, 30 FCC Rcd at 7523-25, paras. 72-75.

150

47 CFR § 1.2110(f)(4); see 2015 Part 1 Report and Order, 30 FCC Rcd at 7530-38, paras. 88-108.

151

See 47 CFR § 1.2110(f)(2)(ii), (f)(4)(ii); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7539-48, paras.
110-30.
152

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7538, para. 108.

153

See generally 2015 Part 1 Report and Order, 30 FCC Rcd 7493; see also, e.g., 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 (2006) (CSEA/Part 1 Report and Order); Second Report and Order
and Second Further Notice of Proposed Rule Making, 21 FCC Rcd 4753 (2006); Order on Reconsideration of the
(continued….)

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applicant that would constitute an assignment or transfer of control.155 Applicants should not expect to
receive any opportunities to revise their ownership structure after the filing of their short- and
long-form applications, including making revisions to their agreements or other arrangements with
interest holders, lenders, or others in order to address potential concerns relating to compliance
with the designated entity bidding credit requirements. This policy will help to ensure compliance
with the Commission’s rules applicable to the award of bidding credits prior to the conduct of the auction,
which will involve competing bids from those that do and do not seek bidding credits, and thus preserves
the integrity of the auction process. We also believe that this will meet the Commission’s objectives in
awarding licenses through the competitive bidding process.156
72.
In Auction 103, an incumbent bidding in the auction and claiming a bidding credit may
receive a bidding credit discount only on winning bid amounts that exceed any incentive payment to that
incumbent.157 This limitation applies even if the incumbent uses different entities that are commonly
controlled to submit FCC Form 175-A and FCC Form 175.158 The ownership information that an
applicant is required to submit at both the short-form and long-form application stages will permit
Commission staff to uncover any controlling interest in common in the two entities and ensure that
bidding credit discounts are properly calculated when determining payments due.
1.

Small Business Bidding Credit

73.
For Auction 103, bidding credits will be available to eligible small businesses and
consortia thereof, subject to the caps discussed below.159 Under the service rules applicable to the
UMFUS licenses to be offered in Auction 103, the level of bidding credit available is determined as
follows:


A bidder with attributed average annual gross revenues that do not exceed $55 million for the
preceding three years is eligible to receive a 15% discount on its winning bid.160



A bidder with attributed average annual gross revenues that do not exceed $20 million for the
preceding three years is eligible to receive a 25% discount on its winning bid.161

74.
The Commission adopted this two-tiered approach in 2016 and made clear that the same
two tiers will apply to all bands in the UMFUS.162 As the Commission observed at the time, this
(Continued from previous page)
Second Report and Order, 21 FCC Rcd 6703 (2006).
154

See, e.g., 47 CFR §§ 1.2110-11.

155

Id. § 1.2105(b)(2). Pursuant to 47 CFR § 1.929(a)(2), any substantial change in ownership or control is classified
as a major amendment. See also id. § 1.927(a)-(b), (h).
156

The Commission’s objectives when awarding licenses through competitive bidding include “the development
and rapid deployment of new technologies, products, and services for the benefit of the public . . . without
administrative or judicial delays” and “promoting economic opportunity and competition and ensuring that new and
innovative technologies are readily accessible to the American people by avoiding excessive concentration of
licenses and by disseminating licenses among a wide variety of applicants, including small businesses.” 47 U.S.C.
§ 309(j)(3)(A)-(B); see also 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8097-101, paras. 244-54.
157

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12173-74, para. 43; Updated Reconfiguration Procedures
Public Notice at 13, para. 34.
158

See Updated Reconfiguration Procedures Public Notice at 13, para. 34.

159

See infra Section II.H.3 (Caps on Bidding Credits).

160

See 47 CFR §§ 1.2110(f)(2)(i)(C), 30.302(a)(1), (b).

161

See id. §§ 1.2110(f)(2)(i)(B), 30.302(a)(2), (b).

162

See 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8099, paras. 249-50.

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approach was successful in the past and provides consistency and predictability for small businesses.163
Although the time in which we could reconsider the Commission’s decision in the 2016 Spectrum
Frontiers Order has long passed, WISPA proposes that we establish a third tier with a higher bidding
credit percentage.164 But neither WISPA—nor any other commenter—provides any evidence that the two
tiers of bidding credit discounts adopted by the Commission was unsuccessful in attracting small business
participation in the first two auctions of mmW spectrum (Auctions 101 and 102). As a result, the
Commission’s rationale from 2016 still holds, and we continue to favor a consistent approach to bidding
credit discounts for mmW spectrum in Auction 103.
75.
Small business bidding credits are not cumulative; an eligible applicant may receive
either the 15% or the 25% bidding credit on its winning bid, but not both. The Commission’s unjust
enrichment provisions also apply to a winning bidder that uses a bidding credit and subsequently seeks to
assign or transfer control of its license within a certain period to an entity not qualifying for the same
level of small business bidding credit.165
76.
Each applicant claiming a small business bidding credit must disclose the gross revenues
for the preceding three years for each of the following: (1) the applicant, (2) its affiliates, (3) its
controlling interests, and (4) the affiliates of its controlling interests.166 The applicant must also submit an
attachment that lists all parties with which the applicant has entered into any spectrum use agreements or
arrangements for any licenses that be may won by the applicant in Auction 103.167 In addition, to the
extent that an applicant has an agreement with any disclosable interest holder for the use of more than
25% of the spectrum capacity of any license that may be won in Auction 103, the identity and the
attributable gross revenues of any such disclosable interest holder must be disclosed. This attribution rule
will be applied on a license-by-license basis.168 As a result, an applicant may be eligible for a bidding
credit on some, but not all, of the licenses for which it is bidding in Auction 103.169 If an applicant is
applying as a consortium of small businesses, the disclosures described in this paragraph must be
provided for each consortium member.170
2.

Rural Service Provider Bidding Credit

77.
An eligible applicant may request a 15% discount on its winning bid using a rural service
provider bidding credit,171 subject to the $10 million cap discussed below.172 To be eligible for a rural
163

Id. at 8100, para. 250.

164

See WISPA Comments at 4-5 (suggesting a 35% bidding credit discount for certain entities).

165

See id. § 1.2111. Thus, for example, the Commission’s unjust enrichment provisions would not apply to a
winning bidder that uses the 15% small business bidding credit and seeks to transfer control of its license to an
entity that qualifies for either the 15% small business bidding credit or the rural service provider bidding credit. See
infra Section II.H.2 (Rural Service Provider Bidding Credit). The provisions would apply, however, if that same
winning bidder uses the 25% small business bidding credit, unless the proposed transferee also qualifies for the 25%
small business bidding credit.
166

47 CFR §§ 1.2110(b)(1)(i), 1.2112(b)(1)(iv).

167

See id. § 1.2112(b)(1)(iii).

168

See id. § 1.2110(c)(2)(ii)(J).

169

See id.

170

Id. §§ 1.2110(b)(4)(i), 1.2110(c)(6), 1.2110(k), 1.2112(b)(1)(vi).

171

2016 Spectrum Frontiers Order, 31 FCC Rcd at 8100, para. 251; see also 47 CFR § 30.302(c). The Commission
determines eligibility for bidding credits, including the rural service provider bidding credit, on a service-by-service
basis. See 47 CFR § 1.2110(f)(1); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7529, para. 85.
172

See infra Section II.H.3 (Caps on Bidding Credits).

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service provider bidding credit, an applicant must (1) be a service provider that is in the business of
providing commercial communications services and, together with its controlling interests, affiliates, and
the affiliates of its controlling interests, has fewer than 250,000 combined wireless, wireline, broadband,
and cable subscribers; and (2) serve predominantly rural areas, defined as counties with a population
density of 100 or fewer persons per square mile.173 These eligibility requirements must be satisfied by the
FCC Form 175 filing deadline. Additionally, an applicant may count any subscriber as a single
subscriber even if that subscriber receives more than one service.174
78.
Each applicant seeking a rural service provider bidding credit must disclose the number
of subscribers it has, along with the number of subscribers of its affiliates, controlling interests, and the
affiliates of its controlling interests.175 The applicant must also submit an attachment that lists all parties
with which the applicant has entered into any spectrum use agreements or arrangements for any licenses
that be may won by the applicant in Auction 103.176 In addition, to the extent that an applicant has an
agreement with any disclosable interest holder for the use of more than 25% of the spectrum capacity of
any license that may be won in Auction 103, the identity and the attributable subscribers of any such
disclosable interest holder must be disclosed.177 Like applicants seeking eligibility for small business
bidding credits, eligible rural service providers may also form a consortium.178 If an applicant is applying
as a consortium of rural service providers, the disclosures described in this paragraph, including the
certification, must be provided for each consortium member.179
3.

Caps on Bidding Credits

79.
As noted above, eligible applicants claiming either a small business or rural service
provider bidding credit will be subject to certain caps on the total amount of bidding credit discounts that
any eligible applicant may receive.180 For the reasons discussed in the Auction 103 Comment Public
Notice and consistent with RWA’s comments,181 we adopt our proposals concerning bidding credit caps
for Auction 103.182 Specifically, we adopt a $25 million cap on the total amount of bidding credit
discounts that may be awarded to an eligible small business. Additionally, we adopt a $10 million cap on
the total amount of bidding credit discounts that may be awarded to an eligible rural service provider. To
create parity among eligible small businesses and rural service providers competing against each other in

173

47 CFR § 1.2110(f)(4)(i); 2015 Part 1 Report and Order, 30 FCC Rcd at 7536-37, para. 104 & n.340. As noted
in the 2015 Part 1 Report and Order, the Commission declined “to adopt a specific threshold for the proportion of
an applicant’s customers who are located in rural areas, but put prospective applicants on notice that it is [the
Commission’s] intent that in order for an applicant to be eligible for a rural service provider bidding credit, the
primary focus of its business activity must be the provision of services to rural areas.” 2015 Part 1 Report and
Order, 30 FCC Rcd at 7533, para. 94 n.312.
174

For instance, a subscriber receiving both wireline and telephone service and broadband would be counted as a
single subscriber. 2015 Part 1 Report and Order, 30 FCC Rcd at 7534, para. 98 n.326.
175

See 47 CFR § 1.2112(b)(1)(v); see also id. § 1.2110(f)(4)(i)(C).

176

See id. § 1.2112(b)(1)(iii).

177

See id. § 1.2110(c)(2)(ii)(J).

178

See id. § 1.2110(b)(4)(i), (c)(6).

179

Id. § 1.2112(b)(1)(vi).

180

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7541, para. 114; see also 47 CFR § 1.2110(f)(2)(ii), (4)(ii).

181

See RWA Comments at 2-3.

182

See Auction 103 Comment Public Notice at 6-7, paras. 14-15.

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smaller markets, no winning designated entity bidder will be able to obtain more than $10 million in
bidding credit discounts in total for licenses won in markets with a population of 500,000 or less.183
80.
We reject GeoLink’s suggestion that we refrain from imposing any bidding credit caps in
Auction 103 to further level the playing field for all bidders.184 The Commission decided in 2015, in a
comprehensive reexamination of its competitive-bidding rules, that the amount of bidding credits a
designated entity could receive in an auction would be limited.185 As the Commission explained,
establishing appropriate bidding credit caps “protect[s] the integrity of the [Designated Entity] program
by providing opportunities for qualified designated entities, while mitigating the incentives for abuse,
consistent with our statutory mandates.”186 At that time, the Commission did “not foresee it likely that
any subsequent auction would include a bidding [credit] cap that exceeds” the caps established for the
Broadcast Incentive Auction.187 We applied the same bidding credit caps for Auctions 101 and 102 as we
are adopting for Auction 103, and we have no indication that the caps stifled participation in those
auctions, as RWA points out.188 In Auctions 101 and 102, no bidder came close to being constrained by
the caps, which were set to the same levels as those we adopt here.189 As such, we are not convinced we
should abandon or increase such caps for Auction 103.
4.

Attributable Interests
a.

Controlling Interests and Affiliates

81.
Pursuant to section 1.2110 of the Commission’s rules, an applicant’s eligibility for
designated entity benefits is determined by attributing the gross revenues (for those seeking small
business benefits) or subscribers (for those seeking rural service provider benefits) of the applicant, its
affiliates, its controlling interests, and the affiliates of its controlling interests. Controlling interests of an
applicant include individuals and entities with either de facto or de jure control of the applicant.
Typically, ownership of greater than 50% of an entity’s voting stock evidences de jure control.190 De
facto control is determined on a case-by-case basis based on the totality of the circumstances.191 The
following are some common indicia of de facto control:
183

As proposed, markets that are subject to the small market bidding credit cap are PEAs 118–416, excluding PEA
412 (Puerto Rico). See Auction 103 Comment Public Notice at 7 n.32. To be clear, if an applicant seeking a small
business bidding credit does not claim the full $10 million in bidding credits in those smaller markets, it may apply
the remaining balance to its winning bids on licenses in larger markets, up to the aggregate $25 million cap.
184

See GeoLinks Comments at 3-4.

185

See 2015 Part 1 Report and Order, 30 FCC Rcd at 7539, para. 110. The Commission decided in 2015 that only
the size—not the existence—of the cap may be determined on an auction-by-auction basis. Id. at 7541, para. 114.
186

Id. at 7544, para. 119.

187

Id. at 7541, para. 114.

188

See RWA Comments at 3 (“Forty percent of the eligible bidders in Auction 101 (28 GHz) and nearly a quarter of
the eligible bidders in Auction 102 (24 GHz) sought rural service provider bidding credits. Similarly, at least twenty
percent of the eligible bidders in both Auction 101 and Auction 102 sought small business bidding credits.”).
189

No bidder in Auction 101 or Auction 102 will receive a bidding credit discount greater than approximately
$675,000. See Winning Bidders Announced for Auction of 28 GHz Upper Microwave Flexible Use Service Licenses
(Auction 101), Public Notice, DA 19-484, Attach. A (WTB/OEA June 3, 2019); Auction of 24 GHz Upper
Microwave Flexible Use Service Licenses Closes; Winning Bidders Announced for Auction 102, Public Notice, DA
19-485, Attach. A (WTB/OEA June 3, 2019).
190

47 CFR § 1.2110(c)(2)(i).

191

See id.; see also, e.g., Implementation of Section 309(j) of the Communications Act–Competitive Bidding, Fifth
Memorandum Opinion & Order, 10 FCC Rcd 403, 447-49, 451, 455-56, paras. 80-82, 85-86, 95-96 (1994);
Intermountain Microwave, Public Notice, 12 FCC 2d 559, 559-60 (1963) (Intermountain Microwave); Application
(continued….)

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

the entity constitutes or appoints more than 50% of the board of directors or management
committee;



the entity has authority to appoint, promote, demote, and fire senior executives that
control the day-to-day activities of the licensee;



the entity plays an integral role in management decisions.192

82.
Applicants should refer to section 1.2110(c)(2) of the Commission’s rules and the FCC
Form 175 Instructions to understand how certain interests are calculated in determining control for
purposes of attributing gross revenues. For example, officers and directors of an applicant are considered
to have a controlling interest in the applicant.193
83.
Affiliates of an applicant or controlling interest include an individual or entity that
(1) directly or indirectly controls or has the power to control the applicant, (2) is directly or indirectly
controlled by the applicant, (3) is directly or indirectly controlled by a third party that also controls or has
the power to control the applicant, or (4) has an “identity of interest” with the applicant.194 The
Commission’s definition of an affiliate of the applicant encompasses both controlling interests of the
applicant and affiliates of controlling interests of the applicant.195 For more information on the
application requirements regarding controlling interests and affiliates, applicants should refer to sections
1.2110(c)(2) and (c)(5) respectively, as well as the FCC Form 175 Instructions.196
84.
An applicant seeking a small business bidding credit must demonstrate its eligibility for
the bidding credit by (1) meeting the applicable small business size standard, based on the controlling
interest and affiliation rules discussed above, and (2) retaining control, on a license-by-license basis, over
the spectrum associated with the licenses for which it seeks small business benefits.197 For purposes of
the first prong of the standard, applicants should note that control and affiliation may arise through,
among other things, ownership interests, voting interests, management and other operating agreements, or
the terms of any other types of agreements—including spectrum lease agreements—that independently or
together create a controlling, or potentially controlling, interest in the applicant’s or licensee’s business as
a whole.198 In addition, once an applicant demonstrates eligibility as a small business under the first
(Continued from previous page)
of Ellis Thompson Corp., Memorandum Opinion and Order and Hearing Designation Order, 9 FCC Rcd 7138, 713839, paras. 9-11 (1994); Baker Creek Commc’ns, L.P., Memorandum Opinion and Order, 13 FCC Rcd 18709, 1871314, paras. 7-8 (WTB 1998); Northstar Wireless, LLC, SNR Wireless LicenseCo, LLC, Applications for New Licenses
in the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz Bands, Memorandum Opinion and Order, 30 FCC
Rcd 8887, 8889-91, paras. 4-9 (2015), aff’d on this issue and remanded on other grounds sub nom. SNR Wireless
LicenseCo, LLC, et al. v. FCC, 868 F.3d 1021 (D.C. Cir. 2017), cert. denied, No. 17-1058, 138 S. Ct. 2674 (2018).
192

47 CFR § 1.2110(c)(2)(i)(A)-(C).

193

Id. § 1.2110(c)(2)(ii)(F).

194

Id. § 1.2110(c)(5).

195

Id.

196

Id. § 1.2110(c)(2), (c)(5).

197

See id. § 1.2110(b)(3); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7507-10, paras. 29-34.

198

See 47 CFR § 1.2105(a)(2)(iv); 2015 Part 1 Report and Order, 30 FCC Rcd at 7507-09, paras. 29-33; see also,
e.g., 47 CFR § 1.2110(c)(5)(vii)-(x) (explaining how affiliation can arise where one concern has the power to control
or potentially control the other concern). As discussed below, except under the limited provisions provided for
spectrum manager lessors, the Commission’s decision to discontinue its policy requiring designated entity licensees
to operate as primarily facilities-based providers of service directly to the public does not alter the rules that require
the Commission to consider whether any particular use agreement may confer control of or create affiliation with the
applicant. See 2015 Part 1 Report and Order, 30 FCC Rcd at 7509, para. 33.

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prong, it must also be eligible for benefits on a license-by-license basis under the second prong. As part
of making the FCC Form 175 certification that it is qualified as a designated entity under section 1.2110,
an applicant is certifying that it does not have any spectrum use or other agreements that would confer de
jure and de facto control of any license it seeks to acquire with bidding credits.199
85.
Applicants should note that, under this standard for evaluating eligibility for small
business bidding credits, if an applicant executes a spectrum use agreement that does not comply with the
Commission’s relevant standard of de facto control,200 it will be subject to unjust enrichment obligations
for the benefits associated with that particular license, as well as the penalties associated with any
violation of section 310(d) of the Communications Act and related regulations, which require
Commission approval of transfers of control.201 If that spectrum use agreement (either alone or in
combination with the designated entity controlling interest and attribution rules described above), goes so
far as to confer control of the applicant’s overall business, the gross revenues of the additional interest
holders will be attributed to the applicant, which could render the applicant ineligible for all current and
future small business benefits on all licenses.202
b.

Limitation on Spectrum Use

86.
The Commission determined that a new attribution rule will apply going forward under
which the gross revenues (or the subscribers, in the case of a rural service provider) of an applicant’s
disclosable interest holder are attributable to the applicant, on a license-by-license basis, if the disclosable
interest holder has an agreement with the applicant to use, in any manner, more than 25% of the spectrum
capacity of any license won by the applicant and acquired with a bidding credit during the five-year
unjust enrichment period for the applicable license.203 For purposes of this rule, a disclosable interest
holder of an applicant seeking designated entity benefits is defined as any individual or entity holding a
10% or greater interest of any kind in the applicant, including but not limited to, a 10% or greater interest
in any class of stock, warrants, options, or debt securities in the applicant or licensee.204 Any applicant
199

See 47 CFR § 1.2105(a)(2)(iv); 2015 Part 1 Report and Order, 30 FCC Rcd at 7509-10, paras. 33-34; see also 47
CFR § 1.2110(c)(2)(ii)(A). For instance, if an applicant has a spectrum use agreement on a particular license that
calls into question whether, under the Commission’s affiliation rules, the user’s revenues should be attributed to the
applicant for that particular license, rather than for its overall business operations, the applicant could be ineligible to
acquire or retain benefits with respect to that particular license. By taking this license-by-license approach, an
applicant need not be eligible for small business benefits on each of the spectrum licenses it holds in order to
demonstrate its overall eligibility for such benefits. 2015 Part 1 Report and Order, 30 FCC Rcd at 7509, para. 33.
200

See 47 CFR § 1.9010 (defining de facto control for spectrum leasing arrangements); see also Intermountain
Microwave, 12 FCC 2d at 559-60 (describing de facto control for non-leasing situations); 47 CFR § 1.2110(c)(2)
(defining de facto control for designated entities); Part 1 Fifth Report and Order, 15 FCC Rcd at 15324, para. 61
(incorporating the Intermountain Microwave principles of control into section 1.2110 of the Commission’s rules).
201

Although in this scenario the applicant may not be eligible for a bidding credit and may be subject to the
Commission’s unjust enrichment rules, the applicant need not be eligible for small business benefits on each of the
spectrum licenses it holds in order to demonstrate its overall eligibility for such benefits.
202

This rule does not alter the requirement of full dilution in 47 CFR § 1.2110(c)(2)(ii)(A). Except where the
leasing standard of de facto control applies under sections 1.9010 and 1.9020 of the secondary market rules, the
criteria of Intermountain Microwave and Ellis Thompson will continue to apply to every Commission licensee for
purposes of assessing whether it can demonstrate that it retains de facto control of its business venture and spectrum
license. 47 CFR §§ 1.9010, 1.9020; Application of Ellis Thompson Corporation, Summary Decision, 10 FCC Rcd
12554, 12555-56, para. 9 (ALJ decision 1995). In the 2015 Part 1 Report and Order, the Commission also modified
section 1.9020 of its rules so as to apply the same de facto control standard to designated entity spectrum manager
lessors that is applied to non-designated entity spectrum manager lessors. 2015 Part 1 Report and Order, 30 FCC
Rcd at 7510-11, paras. 35-39; see 47 CFR § 1.9020.
203

See 47 CFR § 1.2110(c)(2)(ii)(J); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7512-16, paras. 42-53.

204

47 CFR § 1.2110(c)(2)(ii)(J).

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seeking a bidding credit for licenses won in Auction 103 will be subject to this attribution rule and must
make the requisite disclosures set forth above.205
87.
The Commission also determined that certain disclosable interest holders may be
excluded from this attribution rule. Specifically, an applicant claiming the rural service provider bidding
credit may have spectrum license use agreements with a disclosable interest holder, without having to
attribute the disclosable interest holder’s subscribers, so long as the disclosable interest holder is
independently eligible for a rural service provider credit and the use agreement is otherwise permissible
under the Commission’s existing rules.206 If applicable, the applicant must attach to its FCC Form 175
any additional information as may be required to indicate any license (or license area) that may be subject
to this attribution rule or to demonstrate its eligibility for the exception from this attribution rule.207
Consistent with the Commission’s limited information procedures, the Commission intends to withhold
from public disclosure all information contained in any such attachments until after the close of Auction
103.
c.

Exceptions from Attribution Rules for Small Businesses and Rural
Service Providers

88.
Applicants claiming designated entity benefits may be eligible for certain exceptions
from the Commission’s attribution rules.208 For example, in calculating an applicant’s gross revenues
under the controlling interest standard, it will not attribute to the applicant the personal net worth,
including personal income, of its officers and directors.209 The Commission has also exempted from
attribution to the applicant the gross revenues of the affiliates of a rural telephone cooperative’s officers
and directors, if certain conditions specified in section 1.2110(b)(4)(iii) of the Commission’s rules are
met.210 An applicant claiming this exemption must provide, in an attachment, an affirmative statement
that the applicant, affiliate and/or controlling interest is an eligible rural telephone cooperative within the
meaning of section 1.2110(b)(4)(iii), and the applicant must supply any additional information as may be
required to demonstrate eligibility for the exemption from the attribution rule.211
89.
An applicant claiming a rural service provider bidding credit may be eligible for an
exception from the Commission’s attribution rules as an existing rural partnership. To qualify for this
exception, an applicant must be a rural partnership providing service as of July 16, 2015, and each
member of the rural partnership must individually have fewer than 250,000 combined wireless, wireline,
broadband, and cable subscribers.212 Because each member of the rural partnership must individually
205

See supra Sections II.H.1 (Small Business Bidding Credit), II.H.2 (Rural Service Provider Bidding Credit).

206

47 CFR § 1.2110(c)(2)(ii)(J); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7513, para. 46.

207

To the extent an Auction 103 applicant is required to submit any such additional information, the applicant must
not disclose details of its submission to others as it would reveal information regarding its PEA selection(s).
208

See, e.g., 47 CFR § 1.2110(b)(4).

209

See id. § 1.2110(c)(2)(ii)(F); see also Part 1 Third R&O Second Recon/Part 1 Fifth R&O Recon, 18 FCC Rcd at
10185-86, paras. 8-9. However, to the extent that the officers and directors of the applicant are controlling interest
holders of other entities, the gross revenues of those entities will be attributed to the applicant. Moreover, if an
officer or director operates a separate business, the gross revenues derived from that separate business would be
attributed to the applicant, although any personal income from such separate business would not be attributed. See
Part 1 Third R&O Second Recon/Part 1 Fifth R&O Recon, 18 FCC Rcd at 10186, para. 9.
210

See Part 1 Third R&O Second Recon/Part 1 Fifth R&O Recon, 18 FCC Rcd at 10186-94, paras. 10-18; Part 1
Fifth R&O Second Recon, 20 FCC Rcd at 1945-50, paras. 9-18.
211

47 CFR § 1.2110(b)(4)(iii); see also Part 1 Third R&O Second Recon/Part 1 Fifth R&O Recon, 18 FCC Rcd at
10186-95, paras. 10-20; Part 1 Fifth R&O Second Recon, 20 FCC Rcd at 1945-50, paras. 9-18.
212

See 47 CFR § 1.2110(f)(4)(i)(C)(2); 2015 Part 1 Report and Order, 30 FCC Rcd at 7536, para. 102. Thus, the
(continued….)

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qualify for the bidding credit, by definition, a partnership that includes a nationwide provider as a member
will not be eligible for the benefit.213
90.
Finally, a consortium of small businesses or rural service providers may seek an
exception from the Commission’s attribution rules. Under the Commission’s rules, a consortium of small
businesses or rural service providers is a conglomerate organization composed of two or more entities,
each of which individually satisfies the definition of small business or rural service provider.214 As set
forth above, a consortium must provide additional information for each member demonstrating each
member’s eligibility for the claimed bidding credit in order to show that the applicant satisfies the
eligibility criteria for the bidding credit.215 The gross revenue or subscriber information of each
consortium member will not be aggregated for purposes of determining the consortium’s eligibility for the
claimed bidding credit. However, this information must be provided to ensure that each consortium
member qualifies for the bidding credit sought by the consortium.
I.

Provisions Regarding Former and Current Defaulters

91.
Pursuant to the rules governing competitive bidding, each applicant must make
certifications regarding whether it is a current or former defaulter or delinquent. A current defaulter or
delinquent is not eligible to participate in Auction 103,216 but a former defaulter or delinquent may
participate so long as it is otherwise qualified and, as discussed below,217 makes an upfront payment that
is 50% more than would otherwise be necessary.218 Accordingly, each applicant must certify under
penalty of perjury on its FCC Form 175 that it, its affiliates, its controlling interests, and the affiliates of
its controlling interests are not in default on any payment for a Commission construction permit or license
(including down payments) and that it is not delinquent on any non-tax debt owed to any Federal
agency.219 Additionally, an applicant must certify under penalty of perjury whether it (along with its
controlling interests) has ever been in default on any payment for a Commission construction permit or
license (including down payments) or has ever been delinquent on any non-tax debt owed to any Federal
(Continued from previous page)
Commission will evaluate eligibility for an existing rural wireless partnership on the same basis as it would for an
applicant applying for a bidding credit as a consortium of rural service providers. See 2015 Part 1 Report and
Order, 30 FCC Rcd at 7536, para. 102 n.336.
213

2015 Part 1 Report and Order, 30 FCC Rcd at 7536, para. 103. We also note that members of such partnerships
that fall under this exception may also apply as individual applicants or members of a consortium (to the extent that
it is otherwise permissible to do so under the Commission’s rules) and seek eligibility for a rural service provider
bidding credit. Id. at 7536, 7582, paras. 102-03, 210.
214

47 CFR § 1.2110(c)(6).

215

See supra paragraphs 88 (for small businesses) and 89 (for rural service providers).

216

An applicant is considered a “current defaulter” or a “current delinquent” when it, any of its affiliates, any of its
controlling interests, or any of the affiliates of its controlling interests, is in default on any payment for any
Commission construction permit or license (including a down payment) or is delinquent on any non-tax debt owed
to any Federal agency as of the filing deadline for auction applications. See Part 1 Fifth Report and Order, 15 FCC
Rcd at 15317, para. 42 & n.142; Wireless Telecommunications Bureau Reminds Prospective Broadband PCS
Spectrum Auction Applicants of Default and Delinquency Disclosure Requirements, Public Notice, 19 FCC Rcd
21920 (2004) (Auction Default Disclosure Public Notice). This public notice may be found at
www.fcc.gov/auction/58.
217

See infra Section III.F (Upfront Payments).

218

47 CFR §§ 1.2105(a)(2)(xi), (xii), (b)(1), 1.2106(a). For purposes of evaluating the certifications under section
1.2105(a)(2)(xi) and (xii), we clarify that “non-tax debt owed to any Federal agency” includes, within the meaning
of the rule, all amounts owed under Federal programs, including contributions to the Universal Service Fund,
Telecommunications Relay Services Fund, and the North American Numbering Plan Administration,
notwithstanding that the administrator of any such fund may not be considered a Federal “agency” under the Debt
Collection Improvement Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321 (1996) (codified in relevant parts at 31
(continued….)

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agency, subject to the exclusions described below.220 For purposes of making these certifications, the
term “controlling interest” is defined in section 1.2105(a)(4)(i) of the Commission rules.221
92.
Under the Commission’s rule regarding applications by former defaulters, an applicant is
considered a “former defaulter” or a “former delinquent” when, as of the FCC Form 175 deadline, the
applicant or any of its controlling interests has defaulted on any Commission construction permit or
license or has been delinquent on any non-tax debt owed to any Federal agency, but has since remedied
all such defaults and cured all of the outstanding non-tax delinquencies.222 For purposes of the
certification under section 1.2105(a)(2)(xii), the applicant may exclude from consideration any cured
default on a Commission construction permit or license or cured delinquency on a non-tax debt owed to a
Federal agency for which any of the following criteria are met: (1) the notice of the final payment
deadline or delinquency was received more than seven years before the FCC Form 175 filing deadline,
(2) the default or delinquency amounted to less than $100,000, (3) the default or delinquency was paid
within two quarters (i.e., six months) after receiving the notice of the final payment deadline or
delinquency, or (4) the default or delinquency was the subject of a legal or arbitration proceeding and was
cured upon resolution of the proceeding.223 With respect to the first exclusion, notice to a debtor may
include notice of a final payment deadline or notice of delinquency and may be express or implied
depending on the origin of any Federal non-tax debt giving rise to a default or delinquency.224
Additionally, for the third exclusion, the date of receipt of the notice of a final default deadline or
delinquency by the intended party or debtor will be used for purposes of verifying receipt of notice.225
93.
In addition to this Public Notice, applicants are encouraged to review previous guidance
on default and delinquency disclosure requirements in the context of the auction short-form application
process.226 Parties are also encouraged to consult with Auctions Division staff if they have any questions
about default and delinquency disclosure requirements.
(Continued from previous page)
U.S.C. §§ 3716 (administrative offset), 3717 (interest and penalty on claims)); see also 47 CFR §§ 1.1901, 1.1911,
1.1912, 1.1940. For example, an applicant with a past due USF contribution as of the auction application filing
deadline would be disqualified from participating in Auction 103 under the Commission’s rules. 47 CFR
§ 1.2105(a)(2)(xi), (b)(1). If, however, the applicant cures the overdue debt prior to the auction application filing
deadline (and such debt does not fall within one of the exclusions described in paragraph 92 of this Public Notice), it
may be eligible to participate in Auction 103 as a former defaulter under the Commission’s rules. See id.
§§ 1.2105(a)(2)(xii), 1.2106(a)
219 47

CFR § 1.2105(a)(2)(x); see also Part 1 Fifth Report and Order, 15 FCC Rcd at 15317, para. 42 n.142 (“If any
one of an applicant’s controlling interests or their affiliates . . . is in default on any Commission licenses or is
delinquent on any non-tax debt owed to any Federal agency at the time the applicant files it[s] FCC Form 175, the
applicant will not be able to make the certification required by Section 1.2105(a)(2)(x) . . . and will not be eligible to
participate in Commission auctions.”).
220

47 CFR § 1.2105(a)(2)(xii).

221

Id. § 1.2105(a)(4)(i).

222

In 2015, the Commission narrowed the scope of the individuals and entities to be considered for purposes of the
former defaulter rule. 2015 Part 1 Report and Order, 30 FCC Rcd at 7568, para. 175; see 47 CFR §
1.2105(a)(2)(xii), (a)(4).
223

47 CFR § 1.2105(a)(2)(xii), (a)(4); see also 2015 Part 1 Report and Order, 30 FCC Rcd at 7566-68, paras. 17375. Additionally, for purposes of the certification required on an FCC Form 175, a debt will not be deemed to be in
default or delinquent until after the expiration of a final payment deadline. See, e.g., Letter to Cheryl A. Tritt, Esq.,
from Margaret W. Wiener, Chief, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau,
FCC, 19 FCC Rcd 22907 (2004). Thus, to the extent that the rules providing for payment of a specific federal debt
permit payment after an original payment deadline accompanied by late fee(s), such debts would not be in default or
delinquent for purposes of applying the former defaulter rules until after the late payment deadline. In addition, we
provide the following clarification with regard to defaults on Commission licenses. Any winning bidder that fails to
timely pay its post-auction down payment or the balance of its final winning bid amount(s) or is disqualified for any
(continued….)

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94.
We consider outstanding debts owed to the United States Government, in any amount, to
be a serious matter. The Commission adopted rules, including a provision referred to as the “red light
rule” that implement its obligations under the Debt Collection Improvement Act of 1996, which governs
the collection of debts owed to the United States.227 Under the red light rule, applications and other
requests for benefits filed by parties that have outstanding debts owed to the Commission will not be
processed. When adopting that rule, the Commission explicitly declared, however, that its competitive
bidding rules “are not affected” by the red light rule.228 As a consequence, the Commission’s adoption of
the red light rule does not alter the applicability of any of its competitive bidding rules, including the
provisions and certifications of sections 1.2105 and 1.2106, with regard to current and former defaults or
delinquencies.
95.
We remind each applicant, however, that its Red Light Display System, which provides
information regarding debts currently owed to the Commission, may not be determinative of an auction
applicant’s ability to comply with the default and delinquency disclosure requirements of section
1.2105.229 Thus, while the red light rule ultimately may prevent the processing of long-form applications
by auction winners, an auction applicant’s lack of current “red light” status is not necessarily
determinative of its eligibility to participate in an auction (or whether it may be subject to an increased
upfront payment obligation). Moreover, a prospective applicant in Auction 103 should note that any
long-form applications filed after the close of bidding will be reviewed for compliance with the
Commission’s red light rule,230 and such review may result in the dismissal of a winning bidder’s longform application.231 We encourage each applicant to carefully review all records and other available
Federal agency databases and information sources to determine whether the applicant, or any of its
affiliates, or any of its controlling interests, or any of the affiliates of its controlling interests, owes or was
ever delinquent in the payment of non-tax debt owed to any Federal agency.

(Continued from previous page)
reason after the close of an auction will be in default and subject to a default payment. 47 CFR § 1.2109(c).
Commission staff provide individual notice of the amount of such a default payment as well as procedures and
information required by the Debt Collection Improvement Act of 1996, including the payment due date and any
charges, interest, and/or penalties that accrue in the event of delinquency. See, e.g., 31 U.S.C. §§ 3716, 3717; 47
CFR §§ 1.1911, 1.1912, 1.1940. For purposes of the certifications required on an FCC Form 175, such notice
provided by Commission staff assessing a default payment arising out of a default on a winning bid constitutes
notice of the final payment deadline with respect to a default on a Commission license.
224

2015 Part 1 Report and Order, 30 FCC Rcd at 7566, para. 173 n.556.

225

See id. at 7567, para. 173 n.559.

226

Auction Default Disclosure Public Notice, 19 FCC Rcd at 21920.

227

Amendment of Parts 0 and 1 of the Commission's Rules; Implementation of the Debt Collection Improvement Act
of 1996 and Adoption of Rules Governing Applications or Requests for Benefits by Delinquent Debtors, Report and
Order, 19 FCC Rcd 6540 (2004) (Debt Collection Report and Order).
228

Id. at 6541, para. 3 n.11 (specifically noting the current defaulter and former defaulter certifications of 47 CFR §
1.2105(a)(2)(x) and (xi) and stating that “[t]hese rules are not affected by the red light rule”).
229

Auction Default Disclosure Public Notice, 19 FCC Rcd at 21920 (addressing relationship between Commission’s
Red Light Display System and short-form application default and delinquency disclosure requirements for auction
applicants). To access the Commission’s Red Light Display System, go to: https://apps.fcc.gov/redlight/login.cfm.
230

Debt Collection Report and Order, 19 FCC Rcd at 6540-42, paras. 1, 3-5; see also 47 CFR § 1.1114.

231

Applicants that have their long-form applications dismissed will be deemed to have defaulted and will be subject
to default payments under 47 CFR §§ 1.2104(g) and 1.2109(c).

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Optional Applicant Status Identification

96.
Applicants owned by members of minority groups and/or women, as defined in section
1.2110(c)(3),232 and rural telephone companies, as defined in section 1.2110(c)(4),233 may identify
themselves regarding this status in filling out their FCC Form 175 applications. This applicant status
information is collected for statistical purposes only and assists the Commission in monitoring the
participation of various groups in its auctions.234
K.

Modifications to FCC Form 175
1.

Only Minor Modifications Allowed

97.
After the initial FCC Form 175 filing deadline, an Auction 103 applicant will be
permitted to make only minor changes to its application consistent with the Commission’s rules.235
Examples of minor changes include the deletion or addition of authorized bidders (to a maximum of
three); the revision of addresses and telephone numbers of the applicant, its responsible party, and its
contact person; and change in the applicant’s selected bidding option (electronic or telephonic). Major
modification to an FCC Form 175 (e.g., change of PEA selection, certain changes in ownership that
would constitute an assignment or transfer of control of the applicant, change in the required
certifications, change in applicant’s legal classification that results in a change in control, or change in
claimed eligibility for a higher percentage of bidding credit) will not be permitted after the initial FCC
Form 175 filing deadline.236 If an amendment reporting changes is a “major amendment,” as described in
section 1.2105(b)(2), the major amendment will not be accepted and may result in the dismissal of the
application.237
2.

Duty to Maintain Accuracy and Completeness of FCC Form 175

98.
Pursuant to section 1.65 of the Commission’s rules, each applicant has a continuing
obligation to maintain the accuracy and completeness of information furnished in a pending application,
including a pending application to participate in Auction 103.238 Consistent with the requirements for our
232

47 CFR § 1.2110(c)(3).

233

Id. § 1.2110(c)(4).

234

For instance, designated entities are defined as small businesses (including businesses owned by members of
minority groups and/or women), rural telephone companies, and rural service providers. Id. § 1.2110(a).
235

See id. § 1.2105(b)(2). Minor amendments include any changes that are not major, such as correcting
typographical errors and supplying or correcting information as requested to support the certifications made in the
application. Id.
236

See id.; see also Two Way Radio of Carolina, Inc., Memorandum Opinion and Order, 14 FCC Rcd 12035 (1999)
(Two Way Radio) (holding that auction applicant was not allowed to change its designated entity status after
application filing deadline).
237

See 47 CFR § 1.2105(b)(2). Any change in control of an applicant—resulting from a merger, for example—will
be considered a major modification, and the application will consequently be dismissed. The Commission reiterates
that, even if an applicant’s FCC Form 175 is dismissed, the applicant would remain subject to the communication
prohibitions of 47 CFR § 1.2105(c) until the down payment deadline for Auction 103.
238

See id. §§ 1.65; 1.2105(b)(4). For purposes of sections 1.65 and 1.2105(b)(4), an applicant’s FCC Form 175 and
associated attachments will remain pending until the release of a public notice announcing the close of the auction.
However, we remind Auction 103 applicants that they remain subject to the section 1.2105(c) prohibition of certain
communications until the post-auction deadline for making down payments on winning bids. See supra Section
II.G.2 (Prohibition Applies Until Down Payment Deadline). An applicant’s post-auction application (FCC Form
601) is considered pending from the time it is accepted for filing by the Commission until a Commission grant or
denial of the application is no longer subject to reconsideration by the Commission or to review by any court. 47
CFR § 1.65.

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spectrum auctions, an applicant for Auction 103 must furnish additional or corrected information to the
Commission within five business days after a significant occurrence, or amend its FCC Form 175 no
more than five business days after the applicant becomes aware of the need for the amendment.239 An
applicant is obligated to amend its pending application(s) even if a reported change may result in the
dismissal of the application because it is subsequently determined to be a major modification.
3.

Modifying an FCC Form 175

99.
As noted above, a party seeking to participate in Auction 103 must file an FCC Form 175
electronically via the FCC’s Auction Application System. During the initial filing window, an applicant
will be able to make any necessary modifications to its FCC Form 175 in the Auction Application
System. An applicant that has certified and submitted its FCC Form 175 before the close of the initial
filing window may continue to make modifications as often as necessary until the close of that window;
however, the applicant must re-certify and re-submit its FCC Form 175 before the close of the initial
filing window to confirm and effect its latest application changes. After each submission, a confirmation
page will be displayed stating the submission time and submission date.240
100. An applicant will also be allowed to modify its FCC Form 175 in the Auction
Application System, except for certain fields,241 during the resubmission filing window and after the
release of the public notice announcing the qualified bidders for an auction. During these times, if an
applicant needs to make permissible minor changes to its FCC Form 175 or must make changes in order
to maintain the accuracy and completeness of its application pursuant to sections 1.65 and 1.2105(b)(4),
it must make the change(s) in the Auction Application System and then re-certify and re-submit its
application to confirm and effect the change(s).
101. An applicant’s ability to modify its FCC Form 175 in the Auction Application System
will be limited between the closing of the initial filing window and the opening of the application
resubmission filing window, and between the closing of the resubmission filing window and the release
of the public notice announcing the qualified bidders for an auction. During these periods, an applicant
will be able to view its submitted application, but it will be permitted to modify only the applicant’s
address, responsible party address, contact information (e.g., name, address, telephone number, etc.), and
bidding preference (telephonic or electronic) in the Auction Application System. An applicant will not
be able to modify any other pages of the FCC Form 175 in the Auction Application System during these
periods. If, during these periods, an applicant needs to make other permissible minor changes to its FCC
Form 175, or changes to maintain the accuracy and completeness of its application pursuant to sections
1.65 and 1.2105(b)(4), the applicant must submit a letter briefly summarizing the changes to its FCC
Form 175 via email to auction103@fcc.gov. The email summarizing the changes must include a subject
line referring to Auction 103 and the name of the applicant, for example, “Re: Changes to Auction 103
Auction Application of XYZ Corp.” Any attachments to the email must be formatted as Adobe®
Acrobat® (PDF) or Microsoft® Word documents. An applicant that submits its changes in this manner
must subsequently modify, certify, and submit its FCC Form 175 application(s) electronically in the
Auction Application System once it is again open and available to applicants.
102. Applicants should also note that even at times when the Auction Application System is
open and available to applicants, the system will not allow an applicant to make certain other permissible

239

See 47 CFR §§ 1.65; 1.2105(b)(4). We remind each applicant of its duty to continuously maintain the accuracy
of information submitted in its auction application. See, e.g., Vermont Telephone Company, Inc., Notice of
Apparent Liability for Forfeiture, 26 FCC Rcd 14130, 14134, para. 11 (EB 2011).
240

We advise applicants to retain a copy of this confirmation page.

241

Specifically, an applicant will not be allowed to modify electronically in the Auction Application System the
applicant’s legal classification, the applicant’s name, or the certifying official.

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changes itself (e.g., correcting a misstatement of the applicant’s legal classification).242 If an applicant
needs to make a permissible minor change of this nature, it must submit a written request by email to
auction103@fcc.gov requesting that the Commission manually make the change on the applicant’s
behalf. Once Commission staff has informed the applicant that the change has been made in the Auction
Application System, the applicant must then re-certify and re-submit its FCC Form 175 in the Auction
Application System to confirm and effect the change(s).
103. As with filing the FCC Form 175, any amendment(s) to the application and related
statements of fact must be certified by an authorized representative of the applicant with authority to
bind the applicant. Applicants should note that submission of any such amendment or related statement
of fact constitutes a representation by the person certifying that he or she is an authorized representative
with such authority and that the contents of the amendment or statement of fact are true and correct.
104.
Applicants must not submit application-specific material through the Commission’s
Electronic Comment Filing System. Further, as discussed above, parties submitting information related
to their applications should use caution to ensure that their submissions do not contain confidential
information or communicate information that would violate section 1.2105(c) or the limited information
procedures adopted for Auction 103. An applicant seeking to submit, outside of the Auction Application
System, information that might reflect non-public information, such as an applicant’s PEA selection(s),
upfront payment amount, or bidding eligibility, should consider including in its email a request that the
filing or portions of the filing be withheld from public inspection until the end of the prohibition of
certain communications pursuant to section 1.2105(c).
105. Questions about FCC Form 175 amendments should be directed to the Auctions Division
at (202) 418-0660.
III.

PREPARING FOR BIDDING IN AUCTION 103
A.

Due Diligence

106.
We remind each potential bidder that it is solely responsible for investigating and
evaluating all technical and marketplace factors that may have a bearing on the value of the licenses that it
is seeking in Auction 103. The Commission makes no representations or warranties about the use of
this spectrum or these licenses 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. This includes the established authority of the Commission to alter the
terms of existing licenses by rulemaking, which is equally applicable to licenses awarded by
auction.243 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.
107.
An applicant should perform its due diligence research and analysis before proceeding, as
it would with any new business venture. In particular, we encourage each potential bidder to perform
technical analyses and/or refresh its previous analyses to assure itself that, should it become a winning
bidder for any Auction 103 license, it will be able to build and operate facilities that will fully comply
with all applicable technical and legal requirements. We urge each applicant to inspect any prospective
sites for communications facilities located in, or near, the geographic area for which it plans to bid,
confirm the availability of such sites, and to familiarize itself with the Commission’s rules regarding the

242

This is the case because certain fields on the FCC Form 175 will no longer be changeable by the applicant after
the initial filing window closes.
243

See, e.g., Cellco P’ship v. FCC, 700 F.3d 534, 542 (D.C. Cir. 2012); Celtronix Telemetry, Inc. v. FCC, 272 F.3d
585, 589 (D.C. Cir. 2001) (citing 47 U.S.C. § 309(j)(6)(D)).

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National Environmental Policy Act.244
108.
We also encourage each applicant in Auction 103 to continue to conduct its own research
throughout the auction in order to determine the existence of pending or future administrative or judicial
proceedings that might affect its decision on continued participation in the auction. Each applicant is
responsible for assessing the likelihood of the various possible outcomes and for considering the potential
impact on licenses available in an 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
Auction 103. 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.
109.
Applicants are solely responsible for identifying associated risks and for
investigating and evaluating the degree to which such matters may affect their ability to bid on,
otherwise acquire, or make use of the licenses available in Auction 103. Each potential bidder is
responsible for undertaking research to ensure that any licenses won in the auction will be suitable for its
business plans and needs. Each potential bidder must undertake its own assessment of the relevance and
importance of information gathered as part of its due diligence efforts.
110.
The Commission makes no representations or guarantees regarding the accuracy or
completeness of information in its databases or any third-party databases, including, for example, court
docketing systems. To the extent the Commission’s databases may not include all information deemed
necessary or desirable by an applicant, it must obtain or verify such information from independent sources
or assume the risk of any incompleteness or inaccuracy in said databases. Furthermore, the Commission
makes no representations or guarantees regarding the accuracy or completeness of information that has
been provided by incumbent licensees and incorporated into its databases.
B.

Licensing Considerations
1.

Incumbency and Sharing Issues

111.
Potential applicants in Auction 103 should consider carefully the operations of incumbent
licensees currently in the 39 GHz band when developing business plans, assessing market conditions, and
evaluating the availability of equipment for mmW services. Each applicant should follow closely releases
from the Commission concerning these issues245 and consider carefully the technical and economic
implications for commercial use of the UMFUS bands.
112.
In addition to incumbent licensees, potential applicants in Auction 103 should consider
carefully the implications of the Commission’s sharing schemes for the Upper 37 GHz band. This
includes satellite/terrestrial sharing in the Upper 37 GHz, 39 GHz, and 47 GHz bands.246 Further,
licensees operating in the Upper 37 GHz band near specific Federal sites must coordinate with those

244

47 CFR Part 1, Subpart I.

245

For example, the Updated Reconfiguration Procedures Public Notice describes the transition process for existing
39 GHz licensees. See Updated Reconfiguration Procedures Public Notice at 16-17, paras. 47-51.
246

2016 Spectrum Frontiers Order, 31 FCC Rcd at 8031-42, 8048-52, paras. 43-69, 88-93 (describing sharing
between non-Federal FSS and UMFUS operations in the 28 GHz, 37 GHz and 39 GHz bands); Use of Spectrum
Bands Above 24 GHz for Mobile Radio Services, et al., Second Report and Order, Second Further Notice of
Proposed Rulemaking, Order on Reconsideration, and Memorandum Opinion and Order, 32 FCC Rcd 10988,
11004-06, 11025-36, paras. 51-56, 114-144 (2017) (2017 Spectrum Frontiers Order) (describing sharing between
non-Federal FSS and UMFUS operations in the 47 GHz band and reconsideration of previous order). This sharing
scheme also applies to the 24 GHz band. See Use of Spectrum Bands Above 24 GHz for Mobile Radio Services, et
al., Third Report and Order, Memorandum Opinion and Order, and Third Further Notice of Proposed Rulemaking,
33 FCC Rcd 5576, 5582-86, paras. 16-25 (2018) (2018 Spectrum Frontiers Order) (describing sharing between nonFederal FSS and UMFUS operations in the 24 GHz band).

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Federal operations.247 Recently, in the Spectrum Frontiers Fifth R&O, the Commission established a
coordination process to accommodate the military’s potential need for additional sites in the Upper 37
GHz band, while protecting the interests of non-Federal licensees.248
2.

International Coordination

113.
Potential bidders seeking licenses for geographic areas adjacent to the Canadian and
Mexican border should be aware that the use of some or all of the upper microwave frequencies they
acquire in Auction 103 are subject to international agreements with Canada and Mexico.249 The
Commission routinely works with the United States Department of State and Canadian and Mexican
government officials to ensure the efficient use of the spectrum as well as interference-free operations in
the border areas near Canada and Mexico. Until such time as any adjusted agreements, as needed,
between the United States, Mexico, and/or Canada can be agreed to, operations in the upper microwave
bands must not cause harmful interference across the border, consistent with the terms of the agreements
currently in force.250
3.

Environmental Review Requirements

114.
Licensees must comply with the Commission’s rules for environmental review under the
National Environmental Policy Act (NEPA),251 the National Historic Preservation Act (NHPA),252 and
other environmental statutes.253 Licensees and other applicants that propose to build certain types of
communications facilities for licensed service must follow Commission procedures implementing
obligations under NEPA and NHPA prior to constructing the facilities.254 Under the NEPA, a licensee or
applicant must assess if certain environmentally sensitive conditions specified in the Commission’s rules
are relevant to the proposed facilities, and prepare an environmental assessment (EA) when applicable.255
If an EA is required, facilities may not be constructed until environmental processing is completed.
Under the NHPA, a licensee or applicant must follow the procedures in section 1.1320 of the
Commission’s rules,256 the Nationwide Programmatic Agreement Regarding the Section 106 National
247

See 47 CFR § 30.205.

248

See Use of Spectrum Bands Above 24 GHz for Mobile Radio Services, Fifth Report and Order, FCC 19-30 at 7,
para. 16 (Apr. 15, 2019) (Spectrum Frontiers Fifth R&O). Through this process, the Department of Defense could
request access to the Upper 37 GHz band only for operations that could not be accommodated in the Lower 37 GHz
band. The Commission would review such requests and coordinate directly with the Department of Defense and the
National Telecommunications and Information Administration (NTIA) and determine whether these requests could
be accommodated without creating a significant risk of harmful interference to current or planned deployments by
potentially affected non-Federal licensees. Id.
249

See 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8125, paras. 315-16; 47 CFR § 30.206.

250

2016 Spectrum Frontiers Order, 31 FCC Rcd at 8125, paras. 315-16.

251

42 U.S.C. § 4321 et seq.

252

54 U.S.C. § 300101 et seq.

253

47 CFR Chapter 1, Part 1, Subpart I.

254

See Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment, Second
Report and Order, FCC 18-30 (Mar. 30, 2018) (amending the Commission’s rules concerning the types of
deployments that are subject to review pursuant to the National Historic Preservation Act and the National
Environmental Policy Act).
255

47 CFR § 1.1307. This assessment may require consultation with expert agencies having environmental
responsibilities, such as the U.S. Fish and Wildlife Service, the U.S. Army Corps of Engineers, and the Federal
Emergency Management Agency, among others.
256

47 CFR § 1.1320.

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Historic Preservation Act Review Process, and the Nationwide Programmatic Agreement for the
Collocation of Wireless Antennas.257 Compliance with section 106 of the NHPA requires tribal
consultation, and if construction of the communications facilities would have adverse effects on historic
or tribally significant properties, an EA must be prepared.258
4.

Mobile Spectrum Holdings Policies

115.
We remind bidders of the Commission’s mobile spectrum holding policies applicable to
the mmW bands. Specifically, for purposes of reviewing proposed secondary market transactions, the
Commission adopted a threshold of 1850 megahertz of combined mmW spectrum in the 24 GHz, 28
GHz, 37 GHz, 39 GHz, and 47 GHz bands.259 Further, the Commission will conduct an ex post case-bycase review of the acquisition through auction of spectrum in the UMFUS bands. In particular, the
Commission found that it is in the public interest to review applications for initial licenses filed postauction on a case-by-case basis using the same 1850 megahertz threshold it uses for reviewing
applications for secondary market transactions.260
C.

Bidder Education

116.
Before the opening of the short-form filing window for Auction 103 on August 26, 2019,
detailed educational information will be provided in various formats to would-be participants on the
Auction 103 web page. Specifically, we direct the Office to provide various materials on the pre-bidding
processes in advance of the opening of the short-form application window, beginning with the release of
step-by-step instructions for completing the FCC Form 175. In addition, the Office will provide an online
application procedures tutorial for the auction covering information on pre-bidding preparation,
completing short-form applications, and the application review process.
117.
In advance of the start of the mock auction, the Office will provide educational materials
on the bidding processes for Auction 103, beginning with release of a user guide for the bidding system
and bidding system file formats, followed by an online bidding procedures tutorial.261 We recognize the
importance of these materials to applicants’ and bidders’ comprehension of the bidding procedures we
adopt herein. Accordingly, the educational materials shall be released as soon as reasonably possible to
provide potential applicants and bidders with time to understand them and ask any questions before
having to make material decisions about their participation in the auction. However, we cannot announce
the release dates at this juncture, and the file formats (and other materials) might not be released prior to
the short-form application deadline, as T-Mobile and Verizon request,262 or at least 30 days prior to the
start of bidding, as AT&T requests.263
118.
We believe that parties interested in participating in Auction 103 will find the interactive,
online tutorials an efficient and effective way to further their understanding of the application and bidding
processes. The online tutorials will allow viewers to navigate the presentation outline, review written
notes, listen to audio of the notes, and search for topics using a text search function. Additional features
257

47 CFR Part 1, App. B and C.

258

47 CFR § 1.1307.

259

2017 Spectrum Frontiers Order, 32 FCC Rcd at 11011, para. 74.

260

2018 Spectrum Frontiers Order, 33 FCC Rcd at 5590, para. 34. The Commission previously eliminated the preauction limit of 1250 megahertz that had been adopted for the 28 GHz, 37 GHz, and 39 GHz bands, consistent with
the Commission’s conclusion not to adopt a pre-auction limit for the 24 GHz and 47 GHz bands. Id. at 5589-90,
paras. 32-33.
261

As in Auction 102, there may be separate materials prepared for the clock and assignment phases of Auction 103.

262

See T-Mobile Comments at 3-5; Verizon Reply at 6.

263

See AT&T Reply at 2-3.

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of this web-based tool include links to auction-specific Commission releases, email links for contacting
Commission staff, and screen shots of the online application and bidding systems. The online tutorials
will be accessible in the Education section of the Auction 103 website at www.fcc.gov/auction/103. Once
posted, the tutorials will be accessible anytime.
D.

Short-Form Applications: Due Before 6:00 p.m. ET on September 9, 2019

119.
In order to be eligible to bid in Auction 103, an applicant must first follow the procedures
to submit a short-form application (FCC Form 175) electronically via the Auction Application System,
following the instructions set forth in the FCC Form 175 Instructions. The short-form application will
become available with the opening of the initial filing window and must be submitted prior to 6:00 p.m.
ET on September 9, 2019. Late applications will not be accepted. No application fee is required.
120.
Applications may be filed at any time beginning at noon ET on August 26, 2019, until the
filing window closes at 6:00 p.m. ET on September 9, 2019. Applicants are strongly encouraged to file
early and are responsible for allowing adequate time for filing their applications. There are no limits or
restrictions on the number of times an application can be updated or amended until the initial filing
deadline on September 9, 2019.
121.
An applicant must always click on the CERTIFY & SUBMIT button on the “Certify &
Submit” screen to successfully submit its FCC Form 175 and any modifications; otherwise, the
application or changes to the application will not be received or reviewed by Commission staff.
Additional information about accessing, completing, and viewing the FCC Form 175 is provided in the
FCC Form 175 Instructions. Applicants requiring technical assistance should contact FCC Auctions
Technical Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-1255 (text telephone
(TTY)); hours of service are Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET.264 In order to
provide better service to the public, all calls to Technical Support are recorded.
E.

Application Processing and Minor Modifications
1.

Public Notice of Applicant’s Initial Application Status and Opportunity for
Minor Modifications

122.
After the deadline for filing auction applications, the Commission will process all timely
submitted applications to determine whether each applicant has complied with the application
requirements and provided all information concerning its qualifications for bidding. The Office will issue
a public notice with applicants’ initial application status identifying (1) those that are complete and (2)
those that are incomplete or deficient because of defects that may be corrected. The public notice will
include the deadline for resubmitting corrected applications and a paper copy will be sent to the contact
address listed in the FCC Form 175 for each applicant by overnight delivery. In addition, each applicant
with an incomplete application will be sent information on the nature of the deficiencies in its application,
along with the name and phone number of a Commission staff member who can answer questions specific
to the application.
123.
After the initial application filing deadline on September 9, 2019, applicants can make
only minor modifications to their applications.265 Major modifications (e.g., change of license or PEA
selection, certain changes in ownership that would constitute an assignment or transfer of control of the
applicant, change in the required certifications, change in applicant’s legal classification that results in a
change in control, or change in claimed eligibility for a higher percentage of bidding credit) will not be
264

We caution applicants that the Commission periodically performs scheduled maintenance of its IT systems.
During scheduled maintenance activities, which typically occur over the weekends, every effort is made to minimize
any downtime to auction-related systems, including the auction application system. However, there are occasions
when auction-related systems may be temporarily unavailable.
265

See supra Section II.K (Modifications to FCC Form 175).

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FCC 19-63

permitted.266 After the deadline for resubmitting corrected applications, an applicant will have no further
opportunity to cure any deficiencies in its application or provide any additional information that may
affect Commission staff’s ultimate determination of whether and to what extent the applicant is qualified
to participate in Auction 103.
124.
Commission staff will communicate only with an applicant’s contact person or certifying
official, as designated on the applicant’s FCC Form 175, unless the applicant’s certifying official or
contact person notifies Commission staff in writing that another representative is authorized to speak on
the applicant’s behalf.267 Authorizations may be sent by email to auction103@fcc.gov.
2.

Public Notice of Applicant’s Final Application Status After Upfront
Payment Deadline

125.
After Commission staff review resubmitted applications, the Office will release a public
notice identifying applicants that have become qualified bidders for that auction. A Qualified Bidders
Public Notice will be issued before bidding in the auction begins. Qualified bidders are those applicants
with submitted FCC Form 175 applications that are deemed timely filed and complete.
F.

Upfront Payments

126.
In order to be eligible to bid in Auction 103, a sufficient upfront payment and a complete
and accurate FCC Remittance Advice Form (FCC Form 159, Revised 2/03) must be submitted before
6:00 p.m. ET on October 22, 2019. After completing its short-form application, an applicant will have
access to an electronic pre-filled version of the FCC Form 159. An accurate and complete FCC Form 159
must accompany each payment. Proper completion of this form is critical to ensuring correct crediting of
upfront payments. Payers using the pre-filled FCC Form 159 are responsible for ensuring that all the
information on the form, including payment amounts, is accurate. Detailed instructions for completing
FCC Form 159 for Auction 103 will be released by the Office concurrently with the release of this Public
Notice.
1.

Making Upfront Payments by Wire Transfer for Auction 103

127.
Congress recently passed legislation amending the Communications Act to provide that
upfront auction payments for future auctions are to be deposited in the U.S. Treasury.268 Accordingly,
upfront payments for Auction 103 must be wired to, and will be deposited in, the U.S. Treasury.269
128.
Wire transfer payments for Auction 103 must be received before 6:00 p.m. ET on
October 22, 2019.270 No other payment method is acceptable.271 To avoid untimely payments, applicants
should discuss arrangements (including bank closing schedules and other specific bank wire transfer
requirements, such as an in-person written request before a specified time of day) with their bankers
several days before they plan to make the wire transfer, and must allow sufficient time for the transfer to
be initiated and completed before the deadline. The following information will be needed:
266

47 CFR § 1.2105(b); see also Two Way Radio, 14 FCC Rcd at 12039, para. 8.

267

In no event, however, will the Commission send auction registration materials to anyone other than the contact
person listed on the applicant’s FCC Form 175 or respond to a request for replacement registration materials from
anyone other than the authorized bidder, contact person, or certifying official listed on the applicant’s FCC Form
175. See infra Section III.G (Auction Registration).
268

See Consolidated Appropriations Act, 2018, Pub. L. No. 115-141, Division P, Title I, 132 Stat. 348, 1080 (2018).

269

See infra Section III.F.3 (Upfront Payments and Bidding Eligibility).

270

An applicant must initiate the wire transfer through its bank, authorizing the bank to wire funds from the
applicant’s account to the proper account at the U.S. Treasury.
271

The Commission will not accept checks, credit cards, or automated clearing house (ACH) payments.

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ABA Routing Number: 021030004
Receiving Bank: TREAS NYC
33 Liberty Street
New York, NY 10045
BENEFICIARY: FCC
445 12th Street, SW
Washington, DC 20554
ACCOUNT NUMBER: 827000001001
Originating Bank Information (OBI Field): (Skip one space between each information item)
“AUCTIONPAY”
APPLICANT FCC REGISTRATION NUMBER (FRN): (same as FCC Form 159, block 21)
PAYMENT TYPE CODE: (same as FCC Form 159, block 24A: “U103”)
NOTE: The beneficiary account number (BNF Account Number) is specific to the upfront payments for
Auction 103. Do not use a BNF Account Number from a previous auction.
129.
At least one hour before placing the order for the wire transfer (but on the same business
day), applicants must print and fax a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 4182843. Alternatively, the completed form can be scanned and sent as an attachment to an email to
RROGWireFaxes@fcc.gov. On the fax cover sheet or in the email subject header, write “Wire Transfer –
Auction Payment for Auction 103”. To meet the upfront payment deadline, an applicant’s payment must
be credited to the Commission’s account for Auction 103 before the deadline.272
130.
Each applicant is responsible for ensuring timely submission of its upfront payment and
for timely filing of an accurate and complete FCC Form 159. An applicant should coordinate with its
financial institution well ahead of the due date regarding its wire transfer and allow sufficient time for the
transfer to be initiated and completed prior to the deadline. The Commission repeatedly has cautioned
auction participants about the importance of planning ahead to prepare for unforeseen last-minute
difficulties in making payments by wire transfer.273 Each applicant also is responsible for obtaining
confirmation from its financial institution that its wire transfer to the U.S. Treasury was successful
and from Commission staff that its upfront payment was timely received and that it was deposited
into the proper account. To receive confirmation from Commission staff, contact Scott Radcliffe of the
Office of Managing Director’s Revenue & Receivables Operations Group/Auctions at (202) 418-7518,
Theresa Meeks at (202) 418-2945, or Gail Glasser at (202) 418-0578.
131.

Please note the following information regarding upfront payments:



All payments must be made in U.S. dollars.



All payments must be made by wire transfer.



Upfront payments for Auction 103 go to an account number different from the accounts used
in previous FCC auctions.

132.
Failure to deliver a sufficient upfront payment as instructed herein by the upfront
payment deadline will result in dismissal of the short-form application and disqualification from
participation in the auction.

272 See,

e.g., Four Corners Broadcasting, LLC – Request for Waiver of Section 1.2106(a), Closed Broadcast Auction
88, Letter Order, 25 FCC Rcd 9046 (WTB 2010).
273

See, e.g., Spectrum Acquisitions, Inc. Application to Participate in Auction 73 – Request for Waiver of Upfront
Payment Deadline, Letter Order, 23 FCC Rcd 4765 (WTB 2008).

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2.

FCC 19-63

Completing and Submitting FCC Form 159

133.
The following information supplements the standard instructions for FCC Form 159
(Revised 2/03) and is provided to help ensure correct completion of FCC Form 159 for upfront payments
for Auction 103. Applicants need to complete FCC Form 159 carefully, because:


Mistakes may affect bidding eligibility; and



Lack of consistency between information provided in FCC Form 159 (Revised 2/03),
FCC Form 175, long-form application, and correspondence about an application may
cause processing delays.

134.
Therefore, appropriate cross-references between the FCC Form 159 Remittance Advice
and the short-form application (FCC Form 175) are described below.
Block
Number

Required Information

1

LOCKBOX # - Leave Blank

2

Payer Name - Enter the name of the person or company making the payment. If the
applicant itself is the payer, this entry would be the same name as in FCC Form 175.

3

Total Amount Paid - Enter the amount of the upfront payment associated with the FCC
Form 159 (Revised 2/03).

4-8

Street Address, City, State, ZIP Code - Enter the street mailing address (not Post Office box
number) where mail should be sent to the payer. If the applicant is the payer, these entries
would be the same as FCC Form 175 from the Applicant Information section.

9

Daytime Telephone Number - Enter the telephone number of a person knowledgeable about
this upfront payment.

10

Country Code - For addresses outside the United States, enter the appropriate postal
country code (available from the Mailing Requirements Department of the U.S. Postal
Service).

11

Payer FRN - Enter the payer’s 10-digit FCC Registration Number (FRN) registered in the
Commission Registration System (CORES).

21

Applicant FRN (Complete only if applicant is different than payer) – Enter the applicant’s
10-digit FRN registered in CORES.

24A

Payment Type Code - Enter “U103”.

25A

Quantity - Enter the number “1”.

26A

Fee Due - Amount of Upfront Payment

27A

Total Fee - Will be the same amount as 26A.

28A

FCC Code 1 - Enter the number “103” (indicating Auction 103).


NOTES:


Do not use Remittance Advice (Continuation Sheet), FCC Form 159-C, for upfront
payments.



If applicant is different from the payer, complete blocks 13 through 21 for the
applicant, using the same information shown on FCC Form 175. Otherwise leave
them blank.
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

FCC 19-63

Since credit card payments will not be accepted for upfront payments for an auction,
leave Section E blank.
3.

Upfront Payments and Bidding Eligibility

135.
The Commission has authority to determine appropriate upfront payments for each
license being auctioned, taking into account such factors as the efficiency of the auction process and the
potential value of similar licenses.274 An upfront payment is a refundable deposit made by each applicant
seeking to participate in bidding to establish its eligibility to bid on licenses. Upfront payments that are
related to the inventory of 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
bidding.275
136.
Applicants that are former defaulters, as described above, must pay upfront payments
50% greater than non-former defaulters.276 For purposes of this classification as a former defaulter or a
former delinquent, defaults and delinquencies of the applicant itself and its controlling interests are
included.277
137.
An applicant must make an upfront payment sufficient to obtain bidding eligibility on the
generic blocks on which it will bid. We adopt our proposal that we will set upfront payments based on
MHz-pops, and that the amount of the upfront payment submitted by an applicant will determine its initial
bidding eligibility, the maximum number of bidding units on which a bidder may place bids in any single
round.278 In order to bid for a block, qualified bidders must have a current eligibility level that meets or
exceeds the number of bidding units assigned to that generic block in a PEA. At a minimum, therefore,
an applicant’s total upfront payment must be enough to establish eligibility to bid on at least one
block in one of the PEAs selected on its FCC Form 175 for Auction 103, or else the applicant will
not be eligible to participate in the auction. The total upfront payment does not affect the total dollar
amount the bidder may bid.
138.
In the Auction 103 Comment Public Notice, we proposed upfront payments for a generic
block in a PEA based on $0.001 per weighted MHz-pop for PEAs 1–50, $0.0002 per weighted MHz-pop
for PEAs 51–100, and $0.0001 per weighted MHz-pop in other PEAs and sought comment on this
proposal.279 We received comments arguing that the proposed upfront payments should be reduced.280
Verizon also argues that the upfront payment amounts should be calculated based on MHz-pops and not
weighted MHz-pops.281 We adopt Verizon’s proposal, in part, to reduce upfront payments to one-fourth
274

See Auction Procedures Consolidation Order, 12 FCC Rcd at 5697-98, para. 16; see also Part 1 Third Report
and Order, 13 FCC Rcd at 425, para. 86; Competitive Bidding Second Report and Order, 9 FCC Rcd at 2377-79,
paras. 169-75.
275

See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2377-79, paras. 169-76.

276

See Part 1 Fifth Report and Order, 15 FCC Rcd at 15316-18, paras. 40-43; 47 CFR § 1.2106(a); supra Section
II.I (Provisions Regarding Former and Current Defaulters).
277

For this purpose, the term “controlling interest” is defined in 47 CFR § 1.2105(a)(4)(i).

278

See Auction 103 Comment Public Notice at 14, para. 53.

279

Id.

280

In particular, Verizon argues that the proposed upfront payment amounts are relatively high and should be
lowered to one-fourth of the proposed amounts—or, in the alternative, reduced for 39 GHz incumbent licensees.
See Verizon Comments at 2-5; Verizon Reply at 7. T-Mobile favors reducing upfront payment amounts for the 47
GHz band but asserts that they do not need to be reduced for the 37 GHz and 39 GHz bands. See T-Mobile
Comments at 2, 8-10; T-Mobile Reply at 3-5; cf. AT&T Reply at 3-4 (arguing that upfront payments for 47 GHz
band should be reduced).
281

See Verizon Comments at 3.

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FCC 19-63

of the proposed amounts, and we do so for all three bands. This may, as Verizon alleges, encourage more
bidders to participate in the auction.282 We decline, however, to calculate upfront payment amounts based
on MHz-pops instead of weighted MHz-pops, and we adopt our proposal to use weighted MHz-pops.
Bidding units, which are used for the eligibility and activity rules explained below, are tied to upfront
payments, which are based on weighted MHz-pops, and therefore reflect the relative prices of PEAs in
recent auctions.283
139.
Accordingly, we adopt upfront payments for a generic block in a PEA based on $0.00025
per weighted MHz-pop for PEAs 1–50, $0.00005 per weighted MHz-pop for PEAs 51–100, and
$0.000025 per weighted MHz-pop in other PEAs, with a minimum upfront payment amount of $250 per
generic block in a PEA.284 The upfront payment amount per block in each PEA is set forth in Attachment
A of this Public Notice. The upfront payment amounts are approximately one-fourth the minimum
opening bid amounts, described in Section IV.B.3.a, below.
140.
In the Auction 103 Comment Public Notice, we proposed to assign each generic block in
a PEA a specific number of bidding units, equal to one bidding unit per $10 of the upfront payment.285
We adopt our proposal. The number of bidding units for a given license or generic block in a PEA is
fixed and does not change during an auction as prices change. Thus, in calculating its upfront payment
amount, an applicant should determine the maximum number of bidding units on which it may wish to
bid in any single round, and submit an upfront payment amount for the auction covering that number of
bidding units.286 In order to make this calculation, an applicant should add together the bidding units for
the number of blocks in PEAs on which it seeks to be active in any given round. Applicants should
check their calculations carefully, as there is no provision for increasing a bidder’s eligibility after
the upfront payment deadline.

282

See id. at 2.

283

See Updated Reconfiguration Procedures Public Notice at 6-8, paras. 11-16.

284

The results of these calculations will be rounded using the Commission’s standard rounding procedures for
auctions: results above $10,000 are rounded to the nearest $1,000; results below $10,000 but above $1,000 are
rounded to the nearest $100; and results below $1,000 are rounded to the nearest $10. Additionally, the upfront
payment amount for Gulf of Mexico blocks is $250.
285

See Auction 103 Comment Public Notice at 13, para. 52.

286

In some cases, a qualified bidder’s maximum eligibility may be less than the amount of its upfront payment
because the qualified bidder has either previously been in default on a Commission construction permit or license or
delinquent on non-tax debt owed to a Federal agency, see 47 CFR § 1.2106(a), or has submitted an upfront payment
that exceeds the total amount of bidding units associated with the licenses or license areas it selected on its FCC
Form 175.

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Table 1: Upfront Payments, Bidding Eligibility, and Bidding Flexibility Example
PEA
Wilmington, NC

Bidding Units
130

Upfront Payment
$1,300

Myrtle Beach, SC
77
$770
If a bidder wishes to bid on one block in both of the above PEAs in a round, it must have
selected both PEAs on its FCC Form 175 and purchased at least 207 bidding units (130 +
77) of bidding eligibility. If a bidder only wishes to bid on a block in one, but not both,
purchasing 130 bidding units would meet the eligibility requirement for a block in either
PEA. The bidder would be able to bid on a block in either PEA, but not both at the same
time. If the bidder purchased only 77 bidding units, the bidder would have enough
eligibility to bid for a block in Myrtle Beach but not for one in Wilmington.
141.
If an applicant is a former defaulter, it must calculate its upfront payment for all of its
selected generic blocks in PEAs by multiplying the number of bidding units on which it wishes to be
active by 1.5.287 In order to calculate the number of bidding units to assign to former defaulters, the
Commission will divide the upfront payment received by 1.5 and round the result up to the nearest
bidding unit.288
G.

Auction Registration

142.
All qualified bidders for Auction 103 are automatically registered for the auction.
Registration materials will be distributed prior to the auction by overnight delivery. The mailing will be
sent only to the contact person at the contact address listed in the FCC Form 175 and will include the
SecurID® tokens that will be required to place bids and the Auction Bidder Line phone number.
143.
Qualified bidders that do not receive this registration mailing will not be able to submit
bids. Therefore, any qualified bidder for Auction 103 that has not received this mailing by noon on
November 27, 2019, should call the Auctions Hotline at (717) 338-2868. Receipt of this registration
mailing is critical to participating in the auction, and each applicant is responsible for ensuring it has
received all the registration materials.
144.
In the event that SecurID® tokens are lost or damaged, only a person who has been
designated as an authorized bidder, the contact person, or the certifying official on the applicant’s shortform application may request replacements. To request replacement of these items, call the Auction
Bidder Line at the telephone number provided in the registration materials or the Auction Hotline at (717)
338-2868.
H.

Remote Electronic Bidding via the FCC Auction Bidding System

145.
Bidders will be able to participate in Auction 103 over the Internet using the FCC
Auction Bidding System (bidding system). Only qualified bidders are permitted to bid. Each authorized
bidder must have his or her own SecurID® token, which the Commission will provide at no charge. Each
287

Id.

288

If a former defaulter fails to submit a sufficient upfront payment to establish eligibility to bid on at least one
generic block in a PEA, the applicant will not be eligible to participate in Auction 103. Implementation of Section
309(j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television
Fixed Service Licenses et al., 13 FCC Rcd 15920, 15979-80, para. 153 (1998). The applicant, however, will retain
its status as an applicant in Auction 103 and will remain subject to 47 CFR § 1.2105(c). See Star Wireless, LLC,
Forfeiture Order, 19 FCC Rcd 18626, 18628, para. 4 & n.19 (EB 2004), granted in part sub nom. Star Wireless,
LLC and Northeast Communications of Wisconsin, Inc., Order on Review, 22 FCC Rcd 8943 (2007), petition for
review denied, Star Wireless, LLC v. FCC, 522 F.3d 469 (D.C. Cir. 2008).

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FCC 19-63

applicant with one authorized bidder will be issued two SecurID® tokens, while applicants with two or
three authorized bidders will be issued three tokens. A bidder cannot bid without his or her SecurID
tokens. For security purposes, the SecurID® tokens and a telephone number for bidding questions
are only mailed to the contact person at the contact address listed on the FCC Form 175. Each
SecurID® token is tailored to a specific auction. SecurID® tokens issued for other auctions or obtained
from a source other than the FCC will not work for Auction 103. Please note that the SecurID® tokens
can be recycled, and the Commission encourages bidders to return the tokens to the FCC. Pre-addressed
envelopes will be provided to return the tokens once the auction has ended.
146.
The Commission makes no warranties whatsoever, and shall not be deemed to have
made any warranties, with respect to the bidding system, including any implied warranties of
merchantability or fitness for a particular purpose. In no event shall the Commission, or any of its
officers, employees, or agents, be liable for any damages whatsoever (including, but not limited to,
loss of business profits, business interruption, loss of use, revenue, or business information, or any
other direct, indirect, or consequential damages) arising out of or relating to the existence,
furnishing, functioning, or use of the bidding system. Moreover, no obligation or liability will arise
out of the Commission’s technical, programming, or other advice or service provided in connection
with the bidding system.
147.
To the extent an issue arises with the bidding system itself, the Commission will take all
appropriate measures to resolve such issues quickly and equitably. Should an issue arise that is outside
the bidding system or attributable to a bidder, including, but not limited to, a bidder’s hardware, software,
or Internet access problem that prevents the bidder from submitting a bid prior to the end of a round, the
Commission shall have no obligation to resolve or remediate such an issue on behalf of the bidder.
Similarly, if an issue arises due to bidder error using the bidding system, the Commission shall have no
obligation to resolve or remediate such an issue on behalf of the bidder. Accordingly, after the close of a
bidding round, the results of bid processing will not be altered absent evidence of any failure in the
bidding system.
I.

Mock Auction

148.
All qualified bidders will be eligible to participate in a mock auction for the clock phase,
which will begin during the week of December 2, 2019.289 The mock auction will enable qualified
bidders to become familiar with the bidding system and to practice submitting bids prior to the auction.
We recommend that all qualified bidders, including all their authorized bidders, participate to assure that
they can log in to the bidding system and gain experience with the bidding procedures. Participating in
the mock auction may reduce the likelihood of a bidder making a mistake during the auction. Details
regarding the mock auction will be announced in the Qualified Bidders Public Notice for Auction 103.
149.
After the clock phase of the auction concludes, a separate mock auction for the
assignment phase will be held for those qualified bidders that won generic blocks in the clock phase.
J.

Fraud Alert

150.
As is the case with many business investment opportunities, some unscrupulous
entrepreneurs may attempt to use Auction 103 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.

289

Only those bidders that are qualified to participate in Auction 103 will be eligible to participate in the mock
auction.

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

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 investment is less than $25,000.



The sales representative makes verbal representations that (a) the Internal Revenue Service,
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.

151.
Information about deceptive telemarketing investment schemes is available from the FCC
as well as the FTC and SEC. Additional sources of information for potential bidders and investors may
be obtained from the following sources:


the FCC’s Consumer Call Center at (888) 225-5322 or by visiting
www.fcc.gov/general/frauds-scams-and-alerts-guides



the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting
www.consumer.ftc.gov/articles/0238-investment-risks



the SEC at (202) 942-7040 or by visiting https://www.sec.gov/investor

152.
Complaints about specific deceptive telemarketing investment schemes should be
directed to the FTC, the SEC, or the National Fraud Information Center at (202) 835-0618.
IV.

BIDDING IN AUCTION 103
A.

Auction Structure
1.

Clock and Assignment Phases

153.
We will conduct Auction 103 using an ascending clock auction design with two
In the first phase of the auction—the clock phase—bidders will indicate their demands for a
number of generic license blocks in specific categories and geographic areas (i.e., PEAs). In the second
phase—the assignment phase—winning clock-phase bidders will have the opportunity to bid for their
preferred combinations of frequency-specific licenses, consistent with their clock-phase winnings, in a
series of single sealed-bid rounds conducted by PEA or, in some cases, PEA group.
phases.290

154.
We direct the Office, in conjunction with the Bureau, to prepare and release, concurrent
with this Public Notice, updated technical guides that provide the mathematical details of the adopted
auction design and algorithms for the clock and assignment phases of Auction 103. The information in
the updated technical guides, which are available in the Education section of the Auction 103 website
(www.fcc.gov/auction/103), supplements our decisions in this Public Notice.291

290

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12184, para. 52.

291

The Auction 103 Clock Phase Technical Guide details the adopted procedures for the clock phase of Auction
103. The Auction 103 Assignment Phase Technical Guide details the adopted procedures for the assignment phase.

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2.

FCC 19-63

Generic Blocks and Bidding Categories

155.
As proposed, in the clock phase, we will conduct bidding for two categories of generic
blocks in all PEAs.292 The first category will consist of the available blocks in 37.6–40 GHz. This
category, designated Category M/N,293 will comprise a total of 24 blocks: 10 in the Upper 37 GHz band
(Blocks M1–M10) and 14 in the 39 GHz band (Blocks N1–N14). Fewer generic blocks may be available
in Category M/N in some PEAs depending on whether incumbents submit Initial Commitment(s) to
accept modified licenses for full or partial PEAs (Option 1 or Option 2).294 A second category, Category
P, will consist of the 10 blocks in 47.2–48.2 GHz (Blocks P1–P10). The final auction inventory will be
announced on August 23, 2019, after the deadline for submitting Initial Commitments.295 Bidding in the
auction will determine a single final clock phase price for the generic blocks in each category in each
PEA.296
156.
In their comments, PVT and WISPA argue that we should treat Category M (Upper 37
GHz) and Category N (39 GHz) blocks as separate bidding products instead of the single Category
M/N.297 They assert these bands are not fungible due to “encumbrance and incumbency issues that may
lead bidders to value these bands very differently,” given the requirement in the Upper 37 GHz band to
coordinate with Federal operations, with no analogous requirement in the 39 GHz band.298 WISPA
further argues that the Upper 37 GHz band should be treated as a separate category because there is the
possibility that the Department of Defense may seek to coordinate use for additional sites in the future.299
PVT also argues the federal allocation at 39.5-40 GHz makes that portion of the 39 GHz band
undesirable.300 In contrast, Verizon, AT&T, and T-Mobile all oppose treating the M and N blocks as two
separate bidding categories.301
157.
The Commission determined in the Spectrum Frontiers Fourth R&O that it would
auction generic blocks in the Upper 37 GHz band together with the 39 GHz band as a single bidding
category because these two bands are adjacent and subject to the same service rules and operability

292

See Auction 103 Comment Public Notice at 10, para. 34.

293

Verizon requests that we change the proposed designation “M/N” for this category to a single letter in order to
avoid complications in applicants’ existing software. See Verizon Comments at 6. AT&T asserts that it is less
concerned about a single letter designation but notes that the slash character “/” may cause problems in certain
software. See AT&T Reply at 4. We acknowledge that the “/” character may complicate certain computer programs
and files. Accordingly, the bidding software and related files will refer to the M/N category as “MN”, without the
“/”. To clarify, our releases generally will continue to use M/N except for system user guides, file formats
documentation, and any other materials that refer specifically to the bidding system. We decline to adopt a single
letter designation because the category name indicates that two different bands are included. We note that other
recent clock auctions have included generic bidding categories with a two-character designation (e.g., UI in Auction
102, C1 and C2 in Auction 1002). Therefore, bidders that also participated in at least one of those auctions should
have no difficulty conforming any existing systems to Auction 103 specifications.
294

See Updated Reconfiguration Procedures Public Notice at 11-12, para. 29. We will withhold a full 100megahertz block from the bidding inventory in the event that an incumbent accepts a reconfigured partial license.
As a result, no blocks of less than 100 megahertz will be available for bidding in Auction 103. See supra paragraph
8.
295

See Reconfigured Holdings Public Notice at 6, para. 17.

296

See Auction 103 Comment Public Notice at 10, para. 35.

297

See PVT Reply at 2; WISPA Comments at 6.

298

See PVT Reply at 2; WISPA Comments at 6. The Commission previously adopted rules applicable to the Upper
37 GHz millimeter wave band that establish coordination zones surrounding 14 Federal sites operated by the
Department of Defense and 3 Federal Space Research Service sites. See 47 CFR § 30.205. In the Spectrum
Frontiers Fifth R&O, we amended the Table Coordination Areas for Federal Terrestrial Systems found in section
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requirement, and therefore should be considered interchangeable.302 Further, as discussed in the Auction
103 Comment Public Notice, the 24 blocks in Category M/N represent a continuous swath of spectrum,
and including them in a single bidding category should speed up the auction and give bidders greater
flexibility to aggregate multiple contiguous spectrum blocks.303
158.
We note that coordination zones such as those applicable to the 37 GHz band are not
exclusion zones and do not create “encumbered areas” in the same way that exclusive licensed areas do in
other bands.304 Unlike exclusion zones, licensees are not prohibited from operating in these coordination
zones, but they must first coordinate their operations with the Federal users. Further, with respect to the
possibility of additional Federal operations in the Upper 37 GHz band, we adopted a process in the
Spectrum Frontiers Fifth R&O to address the need for greater certainty for bidders.305 Finally, with
respect to PVT’s argument regarding Federal allocations in 39.5-40 GHz, the Commission concluded in
the 2016 Spectrum Frontiers Order that it is possible for Federal operations to share the band with nonFederal fixed and mobile terrestrial operations without the need for coordination zones,306 and we see no
reason to treat the 39.5-40 GHz band differently from the remainder of the 39 GHz band.
159.
To the extent a bidder prefers specific frequency licenses, the bidder may bid for its
preferred blocks in the assignment phase, although a bidder for a generic block cannot be assured that it
will be assigned any frequency block. PVT argues that it lacks the resources “to submit large clock and
assignment phase bids just to preserve its rights to remain in the 39 GHz [band].”307 While we recognize
that incumbents relinquishing licenses would need to submit an assignment phase bid if they prefer a
specific frequency, we remind incumbents that if they relinquish holdings equivalent to a full block in
specific PEAs, they will be credited with an incentive payment that covers the final clock phase price of a
full block in the same PEA and thus can continue to bid in the clock phase without concern over needing
to submit a “large” clock phase price.308

(Continued from previous page)
30.205 to add a small coordination zone around one additional site, Edwards Air Force Base to the south of Federal
facilities in China Lake, California, and converted into a single area the four overlapping coordination zones
currently listed in the Table under the China Lake site. Spectrum Frontiers Fifth R&O at 6, para. 13.
299

WISPA Comments at 6.

300

See PVT Comments at 5.

301

Verizon Reply at 2-4; AT&T Reply at 4; T-Mobile Reply at 2. Specifically, AT&T argues that artificial
competition could arise between bidders seeking large swaths of spectrum creating a difference in prices between
the bands that did not reflect differences in value. AT&T Reply at 4-5. Further, creating separate categories would
interfere with the auction’s ability to assign contiguous licenses to winners of multiple blocks in the 37.6-40 GHz
range. Id.
302

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12185, para. 54.

303

See Auction 103 Comment Public Notice at 11, para. 34.

304

For example, the Commission created a separate category (UI) in Auction 102 to auction the remaining 75
megahertz of a 100-megahertz license block out of which an incumbent retained a license for a 25 megahertz
portion. See Wireless Telecommunications Bureau Releases Updated List of Licenses to Be Offered in Auction 102
(24 GHz); Announces Adjustment to the Categories and Number of Generic License Blocks, Public Notice, 33 FCC
Rcd 8091 (WTB 2018).
305

See Spectrum Frontiers Fifth R&O at 7-8, paras. 16-17; see also T-Mobile Reply at 2.

306

See 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8067, para.137.

307

PVT Comments at 5.

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160.
Some commenters suggest that under certain circumstances existing incumbents in the 39
GHz band will automatically be assigned spectrum in the 39 GHz band only.309 Consistent with our
earlier determination to treat the Upper 37 and 39 GHz bands as a single category, we note that frequency
block assignments for any licensee—whether an incumbent electing to receive modified licenses or an
incumbent relinquishing licenses and participating in this auction—will be made in the assignment phase
using the entire 37.6–40 GHz band as a single contiguous swath of spectrum.310
161.
Incumbents that do not bid in the auction and instead receive modified licenses may,
under certain circumstances, be assigned frequencies not subject to site-specific Federal coordination,
however. For incumbents choosing to receive modified licenses instead of bidding in Auction 103, their
existing licenses will be modified in accordance with our Section 316 authority.311 In its comments, PVT
raises concerns about the potential effects on its existing operations if it is reassigned frequencies in the
Upper 37 GHz band instead of its existing 39 GHz licenses in PEAs in which there are established
Federal coordination zones.312 PVT asserts there are the “additional cost and uncertainty of Upper 37
GHz band coordination procedures and [the] possibility of spectrum use limitations.”313
162.
We cannot, however, evaluate those claims absent detailed information about
individualized circumstances, and we conclude that such claims are better handled in the course of a caseby-case review. To the extent that PVT—or a similarly situated incumbent—can demonstrate that the
assignment of frequencies where Federal coordination is required pursuant to the specific coordination
sites listed under section 30.205 of the Commission’s rules314 would fundamentally change the nature of
operations authorized under its license, it may be eligible for a waiver seeking assurance that its modified
licenses will be assigned to frequencies not subject to Federal coordination.315 We anticipate that granting
relief will only be necessary in those circumstances in which the petitioner can provide a specific
explanation of why Federal coordination in a particular geographic area would hamper its existing
operations in such a way as to effect a fundamental change in the incumbent’s spectrum usage rights.316
(Continued from previous page)
308 See Verizon Reply at 3 (arguing that auctions should not accommodate a single potential participant in a single
market, and that alternative means to avoid a 37 GHz placement include relinquishing spectrum entirely for payment
or participating in the assignment phase); see also T-Mobile Reply at 2-3 (acknowledging that licensees concerned
about retaining their particular spectrum at 39 GHz or desiring not to be in spectrum designated for future federal
use or near protected federal locations may bid on specific channels in the assignment phase).
309

See PVT Comments at 5 (“Faced with [the] situation [of Upper 37 GHz and 39 GHz spectrum being offered as a
single category], PVT understands it could choose not to participate in the incentive auction, and to instead accept
modified licenses based on a reconfiguration of its holdings proposed by the Commission.”); WISPA Comments at 6
(“Incumbent 39 GHz licensees who participate in the auction are also likely to place far greater value on obtaining
contiguous blocks in the 39 GHz band to extend their holdings than on non-contiguous blocks in the Upper 37 GHz
band.” (emphasis added)); T-Mobile Reply at 3 (“[T]he Commission could clarify pre-auction where in the band
(e.g., the upper end of the 39 GHz band) it intends to relocate incumbent 39 GHz licensees that accept modified
licenses.”).
310

See Verizon Reply at 3 (explaining that WISPA’s claim “ignores the Commission’s reconfiguration procedures
for the 39 GHz band,” which do not permit incumbents bidding in the auction to retain their existing 39 GHz
holdings and acquire additional [contiguous 39 GHz] spectrum at auction; instead, Verizon explains, incumbents
“can get the contiguous spectrum they desire throughout the entire [Upper] 37/39 GHz band if the Commission
proceeds with its plan to have a single category”).
311

47 U.S.C. § 316; see Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12171-72, para. 9.

312

PVT Comments at 2-4, 5; see 47 CFR § 30.205. Although PVT makes these arguments in conjunction with its
request for two bidding categories, we infer that PVT would have the same concerns about being assigned these
frequencies for modified licenses.
313

PVT Comments at 4.

314

Pursuant to section 30.205 of the Commission’s rules, licensees operating in 37–38.6 GHz located within
specified zones defined by the coordinates provided must coordinate their operations with the Department of
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Conclusory assertions that an incumbent will be harmed by frequency assignments in the PEAs in which
coordination zones exist will not be sufficient.
163.
We direct the Bureau to address any such waiver petitions expediently to ensure the
auction process can move forward.317 To facilitate expedient action by the Bureau, incumbents seeking
this type of waiver must file a request no later than 11:59 pm ET on August 16, 2019, the day after the
Initial Commitment deadline, by submitting the request—along with a request for confidential
treatment318—via email to 39ghzreconfiguration@fcc.gov.
3.

Incentive Payments

164.
The final clock phase price for a generic license block in Category M/N in a given PEA
will determine the incentive payment associated with 100 megahertz of relinquished spectrum rights in
that PEA, as determined in the Spectrum Frontiers Fourth R&O.319 Further, an incumbent that
relinquishes a partial license will be entitled to an incentive payment equal to the final clock phase price
for a Category M/N block times the fraction of its relinquished rights, measured in weighted MHz-pops,
relative to the full number of weighted MHz-pops in the PEA.
165.
An incumbent that both relinquishes holdings equivalent to a full block of spectrum
rights in Category M/N in a PEA and wins a generic block in the category in the same PEA will, in effect,
receive an incentive payment credit equal to the final clock phase price and incur an obligation in the
same amount, for a net clock phase payment of zero. If an incumbent chooses to bid for specific
frequencies in the assignment phase, the incumbent will be obligated for any additional payment.
166.
As determined in the Spectrum Frontiers Fourth R&O, an incumbent that is eligible for
bidding credits and that both relinquishes spectrum and bids for new licenses will receive a bidding credit

(Continued from previous page)
Defense via the NTIA. In contrast, licensees operating only in 37–38.0 GHz must coordinate their operations with
Federal Space Research Service (space to Earth) users of the band via the NTIA. See 47 CFR § 30.205.
315

See 47 CFR §§ 1.3, 1.925. We expect to give favorable consideration to waiver requests only to incumbents
electing to receive modified licenses in lieu of relinquishing licenses and bidding in the auction. Incumbents
relinquishing licenses and bidding on new licenses in the auction are in a different position, as they are participating
voluntarily in an auction process subject to the procedures described herein, which among other things allow them to
express their preferences for particular frequencies by bidding in the assignment phase. See Spectrum Frontiers
Fourth R&O, 33 FCC Rcd at 12185, para. 58.
316

Generally, the Commission may waive its rules for good cause shown. See 47 CFR § 1.3. The Commission may
exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the public
interest. See Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular).
In addition, the Commission may take into account considerations of hardship, equity, or more effective
implementation of overall policy on an individual basis. See WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir.
1969); Northeast Cellular, 897 F.2d at 1166. Waiver of the Commission’s rules is therefore appropriate only if
special circumstances warrant a deviation from the general rule, and such deviation will serve the public interest.
317

This could include, for example, resolving these waiver petitions in advance of the auction, and informing in
advance of the upfront payment deadline any applicant that selected a PEA affected by a waiver about the number of
blocks in specific frequency ranges in the specific PEA that are not available for assignment in the assignment
phase.
318

See 47 CFR § 0.459(b). Any incumbent 39 GHz licensee listed in an FCC Form 175-A will be considered an
applicant in Auction 103 for purposes of the prohibited communications rule. See Initial Reconfiguration
Procedures Public Notice, 34 FCC Rcd at 1402-04, paras. 53-57. An incumbent’s waiver request—which we
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discount only on its net cash payment for new licenses.320
4.

Net Revenue Requirement

167.
To determine whether the net revenue requirement required by the Spectrum Frontiers
Fourth R&O has been met at the end of a round of bidding, we adopt our proposal to consider bids on
licenses in the Upper 37 GHz, 39 GHz, and 47 GHz bands in determining whether net revenues are
sufficient to cover incentive payments to incumbents.321 Also as proposed, we will consider only clock
phase bids, net of an estimate of bidding credit discounts, in determining whether the requirement is
met.322 We will make available to bidders an estimate of the current shortfall for meeting the net revenue
requirement, updated after each round of bidding, until the requirement is met. We will indicate whether
the requirement has been met on the Public Reporting System (PRS).
168.
Verizon and T-Mobile urge us also to consider assignment phase revenues in order to
increase the likelihood net revenue is sufficient to cover incentive payments to incumbents.323 We
maintain our proposed approach, however, for the reasons stated in the Auction 103 Comment Public
Notice.324 Proceeds in the assignment phase are expected to be a small fraction of overall proceeds, so it
is unlikely that they will make the difference between meeting the requirement and not meeting it. In
Auctions 1002 and 102, assignment phase gross proceeds comprised only 0.69% and 1.75%, respectively,
of total gross proceeds.325 Further, the time required to conduct assignment phase bidding for all 416
PEAs is significant,326 even if, as commenters point out, it is less than the time that would be spent on a
subsequent proceeding.327 Moreover, bidders will be advised during the clock phase of the amount of any
shortfall and will be able to take that information into account in their bidding in order to ensure that the
auction meets the requirement. In the assignment phase, however, bidders have less ability to affect
auction revenues because assignment phase payments are calculated using a second-price rule.328
169.
As proposed, the revenue estimate that the bidding system considers and the shortfall
figure we make available before the net revenue requirement has been met will be conservative
(Continued from previous page)
expect will communicate that the incumbent made an Initial Commitment to receive modified licenses—would
potentially violate the rule unless it is accompanied by a request for confidential treatment.
319

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12179, para. 35.

320

Id. at 12181-82, para. 43. For details on how bidding credits are applied, see the Auction 103 Clock Phase
Technical Guide and the Auction 103 Assignment Phase Technical Guide.
321

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12183, para. 49. The specific calculation is described in
the Auction 103 Clock Phase Technical Guide.
322

See Auction 103 Comment Public Notice at 12, para. 44.

323

See Verizon Comments at 5-6; T-Mobile Reply at 6.

324

Auction 103 Comment Public Notice at 12, para. 46.

325

Auction results are available at the Commission’s website by going to www.fcc.gov/auctions/ and selecting the
Results section for the appropriate auction.
326

For example, the assignment phase in Auction 102 lasted 26 calendar days.

327

See Verizon Comments at 5; T-Mobile Reply at 7.

328

Verizon also suggests running the assignment phase even if the net revenue requirement has not been met and
using the results to “reconfigure the 39 GHz band.” See Verizon Comments at 5. Under this proposal, the
Commission would grant modified licenses to the incumbent licensees, whose incentive payments would cover their
clock phase obligations. No commenter supported this aspect of Verizon’s suggestion to run the assignment phase
even if the net revenue requirement was not met in the clock phase. We find this proposal to represent a significant
departure from the auction rules we proposed and on which we sought comment. Further, the proposal does not
comport with auction design and procedures and is inconsistent with the efficient redesign of the 37/39 GHz band.
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estimates.329 It will not be known whether the clock phase winners will be designated entities that can
claim a bidding credit until the clock phase bidding has ended. Consequently, the revenue estimate that is
used to calculate the shortfall for rounds before the net revenue requirement has been met will assume, for
a category in a PEA with excess demand, that blocks are won by the bidders with the highest bidding
credit percentages, to the extent that designated entities are among the bidders still demanding blocks in
the category in the PEA. This includes a check to consider bidding credit caps.330 In so doing, we avoid a
potential situation whereby the net revenue requirement appears to be met, but then actual net revenues
are insufficient to cover incentive payments when bidding credits are considered. If the net revenue
requirement has not been met after a round, the estimated shortfall will be calculated as the incentive
payments across all incumbents after the round minus the revenue estimate (described above) across all
categories and PEAs, rounded up to the nearest $1 million.
170.
If the net revenue requirement has been satisfied at the time that the clock phase bidding
stops for both categories of blocks, the bidding system will determine the winning bidders of generic
blocks, and the auction will proceed to the assignment phase. If the net revenue requirement has not been
satisfied at the time bidding stops in the clock phase, the auction will end, and no new licenses will be
assigned. Incumbents in the 39 GHz band will retain their original licenses pending further decisions by
the Commission.331
5.

FCC Auction Bidding System

171.
As is standard practice for FCC auctions, we will conduct Auction 103 over the Internet
using the bidding system.332 In addition, bidders will have the option of placing bids by telephone
through a dedicated auction bidder line. There will be no on-site bidding during Auction 103. Please
note that telephonic bid assistants are required to use a script when entering bids placed by telephone.
Telephonic bidders are therefore reminded to allow sufficient time to bid by placing their calls well in
advance of the close of a round. The length of a call to place a telephonic bid may vary; please allow a
minimum of ten minutes. The toll-free telephone number for the auction bidder line will be provided to
qualified bidders prior to the start of bidding in the auction.
172.
In order to access the bidding function of the bidding system, bidders must be logged in
during the bidding round using the passcode generated by the SecurID® token and a personal
identification number (PIN) created by the bidder. Bidders are strongly encouraged to print a bid
summary for each round after they have completed all their activity for that round.
173.
An Auction 103 bidder’s ability to bid on generic license blocks in specific PEAs is
determined by two factors: (1) the PEA(s) selected on the bidder’s FCC Form 175 and (2) the bidder’s
eligibility. The bid submission screens will allow bidders to submit bids only on blocks in the PEA(s) the
bidder selected on its FCC Form 175.333

(Continued from previous page)
In addition, such an approach could set up conflicting incentives in the clock phase, where incumbents may engage
in strategic demand reduction to avoid meeting the revenue requirement so that they can replace their licenses, but
other bidders will not be able to obtain new licenses.
329

Auction 103 Comment Public Notice at 12, para. 46.

330

The calculation of the estimated shortfall is set forth in detail in the Auction 103 Clock Phase Technical Guide.

331

See generally Updated Reconfiguration Procedures Public Notice at 16, para. 47.

332

See supra Section III.H (Remote Electronic Bidding via the FCC Auction Bidding System).

333

This is true regardless of whether the bidding entity relinquished an existing license in the PEA.

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174.
In the first round of the clock phase, an eligible bidder will indicate how many blocks in a
bidding category in a PEA it demands at the minimum opening bid price.334 The bidding system will not
accept bids lower than these amounts. In each subsequent round, an eligible bidder will be able to express
its demand for blocks in a category in a specific PEA at the clock price or at a price between the previous
round’s price and the new clock price.335 In addition to the bidding interface screens, the bidding system
also includes an upload function that allows bid files in the CSV format to be uploaded.
175.
During each round of the clock phase, a bidder may also remove bids placed in the
current bidding round. If a bidder modifies its bids for blocks in a category in a PEA in a round, the
system takes the last bid submission as that bidder’s bid (or bids, since a bidder may submit bids for the
same category in a PEA at multiple price points) for the round.
176.
After the clock phase concludes but before bidding begins in the assignment phase, the
bidding system will provide to each clock phase winner a menu of assignment phase bidding options
consisting of possible configurations of frequency-specific licenses on which it can bid in each category
in each PEA in which it holds winning clock phase bids. A bidder can assign a price using a sealed bid to
one or more possible frequency assignment options for which it wishes to express a preference, consistent
with its winning bids for generic blocks in the clock phase.336 Bidding in the assignment phase is
voluntary for clock phase winners. Incumbents that submit an Initial Commitment to accept modified
licenses (by selecting Options 1 or 2 in the Initial Commitment System) will have frequencies assigned in
the assignment phase but will not be eligible to bid for frequency assignment options.
6.

Stopping Rule

177.
As proposed, we adopt a simultaneous stopping rule for the clock phase of Auction 103,
under which all categories of blocks in all PEAs will remain available for bidding until the bidding stops
on every category in every PEA.337 Specifically, the clock phase of bidding will close for all categories of
blocks in all PEAs after the first round in which there is no excess demand in any category in any PEA.
Bidding will remain open on all categories of licenses in all PEAs until bidding stops on every
category.338 Consequently, it is not possible to determine in advance how long the bidding in Auction 103
will last.
178.
The assignment phase of Auction 103 will close after frequency-specific licenses in all
PEAs have been assigned.
7.

Availability of Bidding Information

179.
We will make public after each round of the clock phase of Auction 103, for each
category of blocks in each PEA: the supply; the aggregate demand; the posted price of the last completed

334

A bidder must have sufficient eligibility to place a bid on the particular license block(s). See supra Section
III.F.3 (Upfront Payments and Bidding Eligibility). Under our adopted auction procedures, bidders in Auction 103
may place bids only on individual license blocks in a category in a PEA—they will not be permitted to place any
package bids (i.e., bids for multiple blocks in a “package”).
335

See infra Section IV.B.3.c (Intra-Round Bids).

336

See infra Section IV.B.3 (Acceptable Bid Amounts).

337

See Auction 103 Comment Public Notice at 13, para. 49.

338

T-Mobile supports this stopping rule but urges us to take steps to accelerate the pace of the clock phase when
there is excess demand in only a handful of PEAs in a single category, by increasing the number of rounds,
increasing the increment percentage, or other means. See T-Mobile Comments at 11. Other commenters support
maintaining our proposed approach. See Verizon Reply at 4; AT&T Reply at 6.

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round;339 and the clock price for the next round. The identities of bidders demanding blocks in a specific
category or PEA will not be disclosed until after Auction 103 concludes (i.e., after the close of bidding in
the assignment phase).340
180.
Each bidder will have access to additional information related to its own bidding and bid
eligibility. Specifically, after the bids of a round have been processed, the bidding system will inform
each bidder of the number of blocks it holds after the round (its processed demand) for every category and
PEA, its eligibility for the next round, and the value of the potential incentive payment, if any. We agree
with commenters that providing information about an incumbent’s incentive payment as the auction
progresses will facilitate its bidding decisions.341
181.
Limiting the availability of bidding information during the auction balances our interest
in providing bidders with sufficient information about the status of their own bids and bidding across all
license categories to allow them to bid confidently and effectively, while restricting the availability of
information that may facilitate identification of bidders placing particular bids, which could potentially
lead to undesirable strategic bidding.
182.
After the clock phase concludes but before bidding begins in the assignment phase, the
bidding system will provide to each assignment phase bidder a menu of bidding options consisting of
possible configurations of frequency-specific licenses on which it can bid in each category in each PEA in
which it holds winning clock-phase bids.342 These bidding options will be consistent with the bidder’s
clock-phase winnings. The bidding system will also announce the order in which assignment rounds will
take place and indicate which PEAs will be grouped together for bidding. The bidding system will
provide clock phase winning bidders with this information as soon as possible and will announce a
schedule of assignment phase rounds that will commence no sooner than five business days later.
183.
After each assignment round, the bidding system will inform each bidder of its own
assignment and assignment payment for each PEA or PEA group assigned in the round. The bidding
system will also provide each bidder with its current total payment (gross and net) for the PEAs for which
an assignment round has already completed, as well as its corresponding capped and uncapped bidding
credit discounts. This information, together with the total of any incentive payments from the clock
phase, will provide the bidder a running estimate during the assignment rounds of the dollar amount it
will owe or receive as a net incentive payment at the end of the auction.
8.

Auction Delay, Suspension, or Cancellation

184.
At any time before or during the bidding process, the Office, in conjunction with the
Bureau, may delay, suspend, or cancel bidding in Auction 103 in the event of a natural disaster, technical
obstacle, network interruption, administrative or weather necessity, evidence of an auction security breach
or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of
competitive bidding.343 This approach has proven effective in resolving exigent circumstances in
previous auctions and we find no reasons to depart from it here. The Office will notify participants of any
such delay, suspension, or cancellation by public notice and/or through the bidding system’s
announcement function. If the bidding is delayed or suspended, the Office may, in its sole discretion,
339

The posted price of the previous round is, generally: the opening price if supply exceeds demand; the clock price
of the previous round if demand exceeds supply; or the price at which a reduction caused demand to equal supply.
See the Auction 103 Clock Phase Technical Guide, section 3.4 for more details.
340

See Auction 103 Comment Public Notice at 8, para. 19; see also supra Section II.F (Information Procedures
During the Auction Process).
341

See supra paragraph 38 & note 85.

342

See infra Section IV.C.2 (Acceptable Bids and Bid Processing).

343

See 47 CFR § 1.2104(i).

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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. We emphasize that the Office and Bureau will exercise this authority
at their discretion.
B.

Clock Phase Bid Collection and Bid Processing Procedures
1.

Round Structure

185.
As proposed, the clock phase of Auction 103 will consist of a series of rounds, with
bidding conducted simultaneously for all spectrum blocks available in the auction.344 During the clock
phase, the bidding system will announce clock prices for blocks in each category in each geographic area,
and qualified bidders will submit quantity bids for the number of blocks they seek. Bidding rounds will
be open for predetermined periods of time, during which bidders will indicate their demands for blocks at
the prices associated with the current round. The round’s clock price is the highest price associated with
the round. The lowest price associated with a round is the posted price of the previous round. As in SMR
auctions, bidders will be subject to activity and eligibility rules that govern the pace at which they
participate in the auction.
186.
Under our adopted approach, in each geographic area, the clock price for a category of
generic blocks will increase from round to round if bidders indicate aggregate demand that exceeds the
number of blocks available in the category.345 The clock rounds will continue until, for all categories of
blocks in all geographic areas, the number of blocks demanded does not exceed the supply of available
blocks. At that point, those bidders indicating demand in a category in a PEA at the final clock phase
price will be deemed winning bidders.
187.
The initial bidding schedule will be announced in a public notice to be released at least
one week before the start of bidding.346 We also adopt the proposal that the bidding schedule may be
changed in order to foster an auction pace that reasonably balances speed with the bidders’ need to study
round results and adjust their bidding strategies.347 Such changes may include 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.348 As we typically do, we will announce any such changes to the
bidding schedule several rounds before the change occurs.
2.

Eligibility and Activity Rule

188.
We adopt the proposal that bidders be required to maintain a minimum, high level of
activity in each clock round in order to maintain bidding eligibility, which will help ensure that the
auction moves quickly and promote a sound price discovery process.349 We will set the activity
requirement between 90% and 100% of a bidder’s bidding eligibility in all clock rounds, as proposed.350
344

See Auction 103 Comment Public Notice at 10, para. 29.

345

Id. at 10, para. 30.

346

Id. at 11, para. 41.

347

Id. at 11, para. 43. WISPA requests that we primarily use schedule changes, rather than increases in the clock
price increment percentage, to manage the pace of the auction. See WISPA Comments at 7. We recognize that
increasing the number of rounds per day is a useful tool for accelerating the auction, but we will consider the
specific circumstances of the bidding when determining whether to increase the increment percentage, accelerate the
round schedule, or both. During the auction, bidders are welcome to submit feedback to Commission staff regarding
the auction pace through the bidding system.
348

Auction 103 Comment Public Notice at 11, para. 43.

349

Id. at 15, para. 58.

350

Id.

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Further, we will set the initial activity requirement at 95%.351 Failure to maintain the requisite activity
level will result in a reduction in the bidder’s eligibility, possibly curtailing or eliminating the bidder’s
ability to place additional bids in the auction.
189.
We will use upfront payments to determine initial (maximum) eligibility in terms of
bidding units.352 Each spectrum block in a PEA will be assigned a specific number of bidding units based
on the number of weighted MHz-pops in the PEA. To facilitate bidding across license categories, each
block available in a PEA will have the same number of bidding units.353 Therefore, a bidder’s upfront
payment will determine the maximum number of blocks as measured by their associated bidding units
that a bidder can demand at the start of the auction.
190.
The activity rule will be satisfied when a bidder has bidding activity on blocks with
bidding units that total at least the activity requirement (set between 90 and 100%) of its eligibility in the
round. If the activity rule is met, then the bidder’s eligibility will not change in the next round. Bidding
eligibility will be reduced as the auction progresses if a bidder does not meet the activity requirement.
191.
For this clock auction, a bidder’s activity in a round for purposes of the activity rule will
be the sum of the bidding units associated with the bidder’s processed demands, which may not be equal
to its submitted demands. For instance, if a bidder requests a reduction in the quantity of blocks it
demands in a category, but the bidding system does not accept the request because demand for the
category would fall below the available supply, the bidder’s activity will reflect its unreduced demand.354
192.
In this clock auction, bidders are required to indicate their demands in every round, even
if their demands at the new round’s prices are unchanged from the previous round. Missing bids—bids
that are not reconfirmed—are treated by the bidding system as requests to reduce to a quantity of zero
blocks for the category. If these requests are applied, or applied partially, a bidder’s bidding activity, and
hence its bidding eligibility for the next round, will be reduced.
193.
T-Mobile urges us “to treat missing bids as bids for the previous round’s processed
demand at the new round’s clock price rather than reduce the bidder’s demand to zero.”355 AT&T and
Verizon object to this proposal.356 We agree with AT&T and Verizon, and do not accept T-Mobile’s
suggestion. Having the bidding system automatically submit bids on behalf of a bidder at the new
round’s clock price could result in the bidder winning licenses at prices above those it indicated it would
accept and is willing to pay, which is inconsistent with basic clock auction principles.
194.
The Office will retain the discretion to change the activity requirement before and/or
during the auction within the 90-100% range, as circumstances warrant. Any changes to the activity
351

Id.

352

See supra Section III.F.3 (Upfront Payments and Bidding Eligibility).

353

T-Mobile requests that the Commission consider reducing the number of bidding units for blocks in the 47 GHz
band relative to blocks in the 37/39 GHz band, asserting that the blocks in the two bands are not fungible in terms of
“global harmonization, standardization and equipment availability.” T- Mobile Reply at 4. We do not accept TMobile’s suggestion. For this auction, bidding units are based on weighted MHz-pops, which are calculated on a
PEA basis using price data from certain past auctions. Establishing different bidding units for the two bands would
require us to make a judgment about the relative values of the two bands. Even if we were inclined to do so, we
have no relevant auction data on which to base such a decision.
354

See infra Section IV.B.4 (Changing Demands, Bid Types, and Bid Processing).

355

T-Mobile Comments at 12.

356

See AT&T Comments at 6 (“[T]he proposal goes against the basic notion that some active acceptance of a new
price is necessary to have a meeting of the minds between buyer and seller.”); Verizon Reply at 5. AT&T further
describes the “relatively simple mechanisms for a bidder to hold its current position” that the Commission provides.
AT&T Reply at 7.

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requirement will be announced in advance via the bidding system, giving bidders sufficient notice to
adjust their bidding strategies if needed.
195.
We will not provide for activity rule waivers to preserve a bidder’s eligibility in the event
that its bidding activity does not meet the activity requirement in a round. We disagree with T-Mobile
that we should provide bidders with activity rule waivers “to allow them the flexibility to maintain their
biding [sic] eligibility in the event of an unintentional error.”357 We do not permit waivers in this clock
auction since bid processing relies on receiving correct demand information for all bidders. If such
information is not accurate because a bidder used a waiver, other bidders’ eligibility and activity may be
affected adversely. Moreover, as AT&T and Verizon point out,358 good price discovery and overall
auction dynamics rely on current and consistent demand information.359
3.

Acceptable Bid Amounts
a.

Reserve Price or Minimum Opening Bids

196.
We adopt the proposal to establish minimum opening bid amounts for Auction 103.360 In
Round 1 of the clock phase, a bidder will indicate how many blocks in a bidding category in a PEA it
demands at the minimum opening bid price. The bidding system will not accept bids lower than these
amounts.
197.
T-Mobile advocates reducing the minimum opening bid amounts for the 47 GHz band,
arguing that the band has a lower value than the Upper 37 GHz and 39 GHz bands.361 We are not
persuaded to set different minimum opening bid amounts for the 47 GHz band. Minimum opening bid
amounts are not meant to predict the value of the spectrum, but instead are generally used to accelerate
the competitive bidding process. We recognize, however, that if other potential bidders share T-Mobile’s
concerns regarding minimum opening bid amounts, then lowering them may encourage participation in
the auction and result in increased competition. We adopt minimum opening bid amounts for all three
bands that are approximately one-half of the amounts proposed in the Auction 103 Comment Public
Notice.362 We will calculate minimum opening bid amounts using a formula based on 100 megahertz of
bandwidth and license area population, weighted using an index of relative prices from past auctions.363
For PEAs 1–50, minimum opening bid amounts are based on $0.001 per MHz-pop; for PEAs 51–100,
minimum opening bid amounts are based on $0.0002 per MHz-pop; and for all other PEAs, minimum
opening bid amounts are based on $0.0001 per MHz-pop, with a minimum of $1,000.364 As with upfront
payments, we conclude that calculating minimum opening bid amounts using these tiers and per MHzpop dollar amounts is consistent with our experience in past auctions that the top PEAs by population are
generally subject to the greatest level of demand and account for a substantial fraction of total auction

357

T-Mobile Comments at 12-13.

358

See AT&T Reply at 7 (opposing T-Mobile’s proposal); Verizon Reply at 5 (same).

359

See infra Section IV.B.4 (Changing Demand, Bid Types, and Bid Processing).

360

See Auction 103 Comment Public Notice at 16, paras. 64-65.

361

T-Mobile Comments at 8-10.

362

See Auction 103 Comment Public Notice at 16, para. 66.

363

This is similar to our approach in many previous spectrum auctions. The index used for Auction 103 is based on
prices in Auctions 1002 and 102 and was adopted in the Updated Reconfiguration Procedures Public Notice. These
weights are the same as those used in the reconfiguration process and Round Zero to quantify the weighted MHzpops of an incumbent’s spectrum holdings.
364

See supra note Error! Bookmark not defined.84 (concerning rounding).

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revenues.365 Moreover, calculating minimum opening bids in this way is likely to promote a speedy
auction by starting the bidding in each market closer to the final price. Thus, we expect that this tiered
approach, which reduces minimum opening bid amounts for less densely-populated markets, will
encourage auction participation, particularly in rural areas, without unduly prolonging the competitive
bidding process. The minimum opening bid amount per block in each PEA is set forth in Attachment A
of this Public Notice.
b.

Clock Price Increments

198.
As proposed, after bidding in the first round and before each later round, the bidding
system will announce a clock price for the next round, which is the highest price to which bidders can
respond during the round.366 For each round, the bidding system will set the clock price for each category
in each PEA by adding a fixed percentage increment to the posted price for the previous round.367 As
long as aggregate demand for blocks in a category exceeds the supply of blocks, the percentage increment
will be added to the clock price from the prior round. If demand equaled supply at an intra-round bid
price in a previous round, then the clock price for the next round will be set by adding the percentage
increment to the intra-round bid price.
199.
We will set the initial increment at 10%, within the range of 5–20% that we proposed and
now adopt.368 The Office may adjust the increment as rounds continue, and if it does so, it will provide
advance notice to bidders. The 5–20% increment range will allow the Office to set a percentage that
manages the auction pace, taking into account bidders’ needs to evaluate their bidding strategies while
moving the auction along quickly.369 We do not adopt a set threshold at which we will vary the
increment, as WISPA recommends,370 but we will rely on our staff’s evaluation of various bidding
dynamics when determining if a change should be made. Nor do we accept AT&T’s suggestion that 10%
should be the upper limit on the increment,371 since we wish to maintain the flexibility to increase the
increment above that percentage should circumstances indicate that it would be useful in managing the
pace of the auction. Increments may be changed during the auction on a PEA-by-PEA or category-bycategory basis based on bidding activity to ensure that the system can offer appropriate price choices to
bidders.372

365

See Comment Sought on Competitive Bidding Procedures for Broadcast Incentive Auction 1000, Including
Auctions 1001 and 1002, Public Notice, 29 FCC Rcd 15750, 15770, para. 51 (2014).
366

See Auction 103 Comment Public Notice at 17, para. 69.

367

For example, if the posted price for the first round is $100, and the price increment is 10%, the clock price for the
second round will be $110. The result will be rounded up using the Commission’s standard rounding procedures for
auctions: results above $10,000 will be rounded up to the nearest $1,000; results below $10,000 but above $1,000
will be rounded up to the nearest $100; and results below $1,000 will be rounded up to the nearest $10.
368

See Auction 103 Comment Public Notice at 17, para. 70. T-Mobile urges us to set the initial increment at a “high
level” but does not suggest a specific percentage. T-Mobile Comments at 13. WISPA suggests setting the initial
increment at 5-10%. See WISPA Comments at 7.
369

See Auction 103 Comment Public Notice at 17, para. 70.

370

See WISPA Comments at 8. WISPA further requests that we rely primarily on changes to the round schedule to
accelerate the pace of the auction, rather than increases in the price increment, citing concerns among small bidders
for predictability. Id. at 7. However, we will retain the flexibility to use both tools in managing the pace of the
auction but reiterate that we will provide advance notice of any changes that we will make to the auction parameters
during the auction, which should mitigate concerns about predictability.
371

See AT&T Reply at 5.

372

See Auction 103 Comment Public Notice at 17, para. 70.

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c.

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Intra-Round Bids

200.
We adopt our proposal to permit a bidder to make intra-round bids by indicating a price
between the previous round’s posted price and the new clock price at which its demand for blocks in a
category in a PEA changes.373 In placing an intra-round bid, a bidder will indicate a specific price and a
quantity of blocks it demands if the price for blocks in the category in the PEA should increase beyond
that price.374
201.
Intra-round bids are optional; a bidder may choose to express its demands only at the
clock prices.375
202.
Intra-round bidding allows the bidding system to use relatively large clock increments,
thereby speeding the clock phase, without running the risk that a jump in the clock price will overshoot
the market clearing price—the point at which demand for blocks equals the available supply.376
203.
WISPA agrees that intra-round bids should be permitted but warns that “relying on intraround bids to express demand at a certain price will increase the complexity of the auction for bidders,
may disincentivize smaller bidders from participating, or may cause them to reduce demand
prematurely.”377 Our experience so far with intra-round bidding in clock auctions has been positive,
including with smaller bidders. We encourage any participants that are concerned about the complexity
of intra-round bids to take advantage of the various training opportunities we offer in order to become
more comfortable with these auction procedures.378
d.

Bid Removal and Bid Withdrawal

204.
In the Auction 103 Comment Public Notice, we addressed bid removal procedures in the
bidding system.379 The bidding system allows a bidder to remove any of the bids it placed in a round
before the close of that round. By removing a bid placed within a round, a bidder effectively “unsubmits”
the bid. A bidder removing a bid placed in the same round is not subject to withdrawal payments.
Removing a bid will affect a bidder’s activity because a removed bid no longer counts toward bidding
activity for the round. Once a round closes, a bidder may no longer remove a bid.
205.
Bid withdrawals, analogous to withdrawals of provisionally winning bids in an SMR
auction, are not available in Auction 103. However, below we set forth procedures such that bidders in
Auction 103 may request to reduce demand for generic blocks in a bidding category.380

373

Id. at 17, para. 71.

374

For example, consider a round where the clock price increases from $100 to $110. A bidder indicated in the
previous round that it demanded 3 blocks at $100, but its demand changes from 3 blocks to 2 blocks when the price
increases beyond $105 and up to $110. To indicate that preference, the bidder should submit an intra-round bid for
2 blocks at a price of $105.
375

See Auction 103 Comment Public Notice at 17, para. 72.

376

Id.

377

WISPA Comments at 8.

378

See, e.g., Auction 102 Clock Phase Tutorial,
http://wireless.fcc.gov/auctions/102/24_GHz_Clock_Phase_Tutorial/presentation.html.
379

See Auction 103 Comment Public Notice at 20, paras. 88-89.

380

See infra Section IV.B.4 (Changing Demand, Bid Types, and Bid Processing) (discussing how the system will
process requests to reduce demand).

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e.

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No Bidding Aggregation

206.
As proposed, we do not adopt any package bidding procedures for the clock phase of
Auction 103.381 A bidder may bid for multiple blocks in a bidding category in a PEA and may submit
bids for multiple PEAs. As set forth below, under the procedures we adopt for the assignment phase, the
assignment phase will assign contiguous blocks to winners of multiple blocks in a category in a PEA, and
give bidders an opportunity to express their preferences for specific frequency blocks, thereby facilitating
aggregations of licenses.
4.

Changing Demand, Bid Types, and Bid Processing

207.
Under the ascending clock procedures we adopt, for each category in each PEA, a bidder
can either bid to maintain its processed demand from the previous round at the current round’s clock price
or bid to change its demand at a price associated with the round.382 A bid to change demand can involve
either a decrease or an increase in the demanded quantity.
208.
Bids to maintain demand are always applied during bid processing. However, if a bidder
demands fewer blocks in a category than its processed demand from the previous round, the bidding
system will treat the bid as a request to reduce demand that will be implemented only if aggregate demand
would not fall below the available supply of blocks in the category. If a bidder demands more blocks in a
category than its processed demand from the previous round, the bidding system will treat the bid as a
request to increase demand that will be implemented only if that would not cause the bidder’s processed
activity to exceed its eligibility.
209.
The bidding system will process bids after a round ends in order of price point, where the
price point represents the percentage of the bidding interval for the round.383 Specifically, once a round
ends, the bidding system will process bids in ascending order of price point, first considering intra-round
bids in order of price point and then bids at the clock price. The system will consider bids at the lowest
price point for all categories in all PEAs, then look at bids at the next price point, and so on. In
processing the bids submitted in the round, the bidding system will determine the extent to which there is
excess demand for each category in each PEA in order to determine whether a bidder’s requested
reduction(s) in demand can be implemented. In processing the bids submitted in the round, the bidding
system will also determine the bidding units associated with a bidder’s most recent processed demand in
order to determine whether the bidder’s requested increase(s) in demand can be implemented.
210.
For a given category in a given PEA, the uniform price for all of the blocks in the
category will stop increasing when aggregate demand no longer exceeds the available supply of blocks in
the category. If no further bids are placed, the final clock phase price for the category will be the stopped
price.384
211.
In order to facilitate bidding for multiple blocks in a PEA, bidders will be permitted to
make two types of bids: simple bids and switch bids.385


A “simple” bid indicates a desired quantity of licenses in a category at a price (either the clock
price or an intra-round price). Simple bids may be applied partially. A simple bid that involves a

381

See Auction 103 Comment Public Notice at 19, para. 85.

382

Id. at 17-18, paras. 73-75.

383

For example, if the posted price for the previous round is $5,000 and the clock price of the current round is
$6,000, a price of $5,100 will correspond to the 10% price point, since it is 10% of the bidding interval between
$5,000 and $6,000.
384

This and other Auction 103 bid processing details are addressed in the Auction 103 Clock Phase Technical
Guide.
385

See Auction 103 Comment Public Notice at 18, para. 78.

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reduction from the bidder’s previous demands may be implemented partially if aggregate excess
demand is insufficient to support the entire reduction. A simple bid to increase a bidder’s
demand in a category may be applied partially if the total number of bidding units associated with
the bidder’s full increase in demand exceeds the bidder’s bidding eligibility for the round.


A “switch” bid allows the bidder to request to move its demand for a quantity of licenses from the
M/N category to the P category, or vice versa, within the same PEA. A switch bid may be
applied partially, but the increase in demand in the “to” category will always match in quantity
the reduction in the “from” category.

212.
These bid types will allow bidders to express their demand for blocks in the next clock
round without running the risk that they will be forced to purchase more spectrum at a higher price than
they wish. When a bid to reduce demand can be applied only partially, the uniform price for the category
will stop increasing at that point, since the partial application of the bid results in demand falling to equal
supply. Hence, a bidder that makes a simple bid or a switch bid that cannot be applied fully will not face
a price that is higher than its bid price for the remaining demand.
213.
Because bids are processed in order of price point, and aggregate demand for a category
in a PEA can change from price point to price point, the price point at which a bid is considered by the
bidding system can affect whether the bid is accepted. However, bids not accepted because of insufficient
aggregate demand or insufficient eligibility at a given price point will be held in a queue and considered,
again in order, if there should be excess demand or sufficient eligibility later in the processing after other
bids are processed.
214.
More specifically, under the procedures we adopt, once a round closes, the bidding
system will process the bids by first considering the bid submitted at the lowest price point and determine
whether it can be accepted given aggregate demand as determined most recently and the bidder’s current
eligibility. If the bid can be accepted, or partially accepted, the number of licenses the bidder demands
will be adjusted, and aggregate demand will be recalculated accordingly. If the bid cannot be accepted in
part or in full, the unfulfilled bid, or portion thereof, will be held in a queue to be considered later during
bid processing for that round. The bidding system will then consider the bid submitted at the next highest
price point, accepting it in full, in part, or not at all, given recalculated aggregate demand and given the
bidder’s eligibility. Any unfulfilled requests will again be held in a queue, and aggregate demand will
again be recalculated. Every time a bid or part of a bid is accepted and aggregate demand has been
recalculated, the unfulfilled bids held in queue will be reconsidered, in the order of their original price
points (and by pseudo-random number, in the case of tied price points). The bidding system will not
carry over unfulfilled bid requests to the next round, however. The bidding system will inform bidders of
the status of their bids when round results are released.
215.
After the bids are processed in each round, the bidding system will announce, for each
bidding category in each PEA: the aggregate demand; the posted price; and the clock price for the next
round, to indicate a range of acceptable bids for the next round. If demand fell to equal supply during the
round, the posted price will be equal to the intra-round price at which that occurred.386 Each bidder will
also be informed of its own processed demand for every category and PEA and of its own eligibility for
the next round.
5.

Winning Bids in the Clock Phase

216.
Bidders that hold processed demand in a category in a PEA at the time the stopping rule
is met will, provided that the net revenue requirement is satisfied, become winning bidders and will be
386

As discussed above, if there is excess demand, a fixed percentage increment will be added to the clock price for
the previous round, and this percentage increment will be the same for all categories in all PEAs. However, if in the
round, an intra-round bid brings demand down to the point at which it is equal to supply, the increment will be
added to that intra-round price. See supra Section IV.B.3.c (Intra-Round Bids).

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assigned frequency-specific licenses in the assignment phase.
217.
The final clock phase price is the posted price of the final round. This will be the price at
which a reduction caused demand for the blocks to equal the supply of blocks in the category in the PEA.
For categories in PEAs where supply exceeds demand, the final clock phase price will be the opening
price.
C.

Assignment Phase Bid Collection and Bid Processing Procedures

218.
The assignment phase will determine which frequency-specific licenses will be won by
the winning bidders of generic blocks during the clock phase.387 In the assignment phase, winning
bidders will have the opportunity to bid for preferred combinations of frequency-specific licenses. A
bidder can assign a price using a sealed bid to one or more possible frequency assignments for which it
wishes to express a preference, consistent with its winning bids for generic blocks in the clock phase.388
The bid prices will represent the maximum payment that the bidder is willing to pay for the frequencyspecific license assignment, in addition to the final price established in the clock phase for the generic
blocks. The procedures we adopt will determine the optimal assignment of licenses within each category
in each PEA based on bid amounts in the assignment phase.
219.
Participation in the assignment phase is voluntary; a winning bidder in the clock phase of
Auction 103 need not bid in order to be assigned a number of licenses corresponding to the outcome of
the clock phase. Moreover, a bidder that wins multiple blocks in a category in a PEA will be assigned
contiguous blocks of licenses, even without bidding in the assignment phase.
220.
As determined in the Spectrum Frontiers Fourth R&O, each incumbent that submits an
Initial Commitment to accept modified licenses (Options 1 or 2 in the Initial Commitment System) will
be assigned specific frequencies in the assignment phase, but only clock phase winners will be able to bid
for their frequency preferences.389 Subject to the waiver process described above, incumbents accepting
modified licenses as well as clock phase winners may be assigned frequency-specific licenses anywhere
in the Upper 37 GHz/39 GHz band, depending upon bidding in each assignment round.
1.

Round Structure: Sequencing and Grouping of Rounds

221.
Sequencing of rounds. We adopt the proposal to conduct assignment rounds for the
largest markets first.390 This sequencing will enable bidders to establish a “footprint,” making it easier for
a bidder to incorporate frequency assignments from previously assigned areas into its bid preferences for
other areas, and recognizes that a bidder winning blocks in multiple PEAs may prefer contiguous blocks
across adjacent PEAs.
222.
Specifically, we will conduct a separate assignment round for each of the top 20 PEAs
sequentially, beginning with the largest PEAs. Once the top 20 PEAs have been assigned, we will
conduct, for each Regional Economic Area Grouping (REAG), a series of assignment rounds for the

387

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12185, para. 58.

388

For instance, if a bidder won two Category M/N blocks and one Category P block in the clock phase, then it will
only be offered the option of bidding for frequency assignments with exactly two Category M/N licenses and for
frequency assignments with exactly one Category P license. See supra Section IV.A.2 (Generic Blocks and Bidding
Categories).
389

See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12185, para. 58; see also Reconfigured Holdings Public
Notice at 3-4, paras. 8-9.
390

See Auction 103 Comment Public Notice at 20, paras. 90-91.

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remaining PEAs within that region.391 We will sequence the assignment rounds within a REAG in
descending order of population for a PEA group or individual PEA.
223.
Grouping of PEAs. To reduce the total amount of time required to complete the
assignment phase, we will group into a single market for assignment any non-top 20 PEAs within a
region in which the same entities (winning bidders and incumbents keeping modified licenses392) must be
assigned the same number of blocks in each category, and all are subject to the small markets bidding cap
or all are not subject to the cap, which will also help maximize contiguity across PEAs. Accordingly, in
markets where these criteria are met, a bidder will submit a single set of bids for assignment options that
will apply to all the PEAs in the group and will be assigned the same frequency-specific licenses in each
PEA.
224.
In addition, we will conduct the bidding for the different REAGs in parallel. That is,
bidding for assignments in multiple PEAs or PEA groups will take place during the same timed bidding
round. This will also help reduce the length of the assignment phase.
2.

Acceptable Bids and Bid Processing

225.
Under the procedures we adopt, prior to the start of the assignment phase, the bidding
system will provide each clock phase winner with bidding options for all possible contiguous frequency
assignments for each category in each PEA in which the bidder won blocks in the clock phase. In each
assignment round, a bidder will be asked to assign a price to one or more of the bidding options for which
it wishes to express a preference, consistent with its winning bid(s) for generic blocks in the clock
phase.393 The price will represent the maximum payment that the bidder is willing to pay, in addition to
the base price established in the clock phase for the generic blocks, for the frequency-specific license or
licenses in its bid.
226.
Although AT&T and others, citing “unnecessary burdens,” request that we provide for
bidding only on those assignment options that are feasible given contiguity constraints on the assignments
of other clock phase winners,394 we choose instead to adopt our proposed approach, consistent with other
limited information procedures that aim to deter undesirable strategic bidding behavior. Providing only
feasible assignment bidding options makes it easier to infer the winnings and identities of other bidders.
227.
A bidder will submit separate preferences for blocks it won in the Upper 37 and 39 GHz
bands and blocks it won in the 47 GHz band, rather than submitting bids for preferences that include
blocks in both categories. That is, if a bidder won one block in Category M/N and two blocks in
Category P, it would not be able to submit a single bid amount for an assignment that included all three
blocks. Instead, it would bid separately for assignments in Category M/N and assignments in Category P.
We sought comment on allowing bidders to submit a single bid for assignments that include frequencies
in both categories, in cases where the bidder won blocks in both Category M/N and Category P. TMobile agrees with our proposed procedures, which we adopt.395

391

Top 20 PEAs are PEAs 1–20. T-Mobile supports our proposal to conduct separate assignment rounds for the top
20 PEAs. See T-Mobile Comments at 15. However, T-Mobile also asserts that bidders may have less interest in
coordinating their frequencies across different PEAs than they do for low-band spectrum and that, therefore, there is
less benefit from conducting separate assignment rounds for the top PEAs than there is in auctions of low-band
spectrum licenses. See id. at 15-16.
392

Further, in a grouping, for an incumbent keeping modified licenses, the number of blocks that it cannot be
assigned due to a waiver must be the same for every PEA in the group.
393

The Auction 103 Assignment Phase Technical Guide provides mathematical details of this proposal.

394

AT&T Comments at 2-3; see AT&T Reply at 2; T-Mobile Reply at 6; Verizon Reply at 6.

395

See T-Mobile Comments at 16.

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228.
We will use an optimization approach to determine the winning frequency assignment for
each category in each PEA or PEA group. We adopt procedures such that the bidding system will select
the assignment that maximizes the sum of bid amounts among all assignments where every bidder and
every incumbent that accepts modified licenses under Initial Commitment Options 1 or 2 is assigned
contiguous spectrum.396 The bidding system will consider all assignment options of incumbents
accepting modified licenses as though the incumbent had submitted bids of $0.397
229.
Further, the additional price a bidder will pay for a specific frequency assignment (above
the final clock phase price) will be calculated consistent with a generalized “second price” approach—that
is, the winner will pay a price that would be just sufficient to result in the bidder receiving that same
winning frequency assignment while ensuring that no group of bidders is willing to pay more for an
alternative assignment in which every bidder is assigned contiguous spectrum.398 This price will be less
than or equal to the price the bidder indicated it was willing to pay for the assignment. Determining
prices in this way encourages bidders to bid their full value for the assignment, knowing that if the
assignment is selected, they will pay no more than would be necessary to ensure that the outcome is
competitive.399
3.

Assignment Phase Payment Calculations

230.
When all assignment rounds have been completed, a bidder’s final net total payment
takes into account the sum of final clock phase prices across all licenses that it won, its assignment
payments across all assignment phase markets, any incentive payments accruing to the bidder, and any
claimed bidding credits.400 Specifically, if a bidder is not claiming a bidding credit, its final net total
payment is determined by summing the final clock phase prices across all licenses that it won and its
assignment payments across all assignment phase markets and subtracting its total incentive payments
across all licenses from the total.
231.
If a bidder claims a bidding credit, a bidding credit discount is calculated by applying the
bidder’s bidding credit percentage to the total net payment obligations as set forth above, capping the
bidding credit discount if it exceeds the applicable caps for small businesses, rural service providers, and
small markets. The resulting bidding credit discount is subtracted from the bidder’s total net payment
obligations to determine the final net total payment for a bidder with a bidding credit.
D.

Calculating Individual License Prices

232.
While final auction payments for winning bidders will be calculated with bidding credit
caps and assignment payments applied on an aggregate basis, rather than to individual licenses, the
bidding system will also calculate a per-license price for each license.401 Such individual prices may be
needed if a licensee later incurs license-specific obligations, such as unjust enrichment payments.
233.
After the assignment phase, the bidding system will determine a net and gross price for
each license that was won by a bidder by apportioning assignment payments and any bidding credit
discount (which was calculated based on total net payment obligations taking account of any caps) across
396

Furthermore, if there are multiple blocks in a category that remain unsold, the unsold licenses will be contiguous
to each other and adjacent to a license for a partial PEA, if there is a single partial PEA license to be assigned.
397

If the incumbent is subject to a waiver in a PEA, the bidding system also will preclude assigning the incumbent
licenses in the blocks in that PEA specified in the waiver.
398

See the Auction 103 Assignment Phase Technical Guide for mathematical details.

399

The pricing approach is a version of a Vickrey-Clarke-Groves mechanism. It is described in the Auction 103
Assignment Phase Technical Guide.
400

See the Auction 103 Assignment Phase Technical Guide for mathematical details.

401

See the Auction 103 Assignment Phase Technical Guide for details.

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all the licenses that the bidder won. To calculate the gross per-license price, the bidding system will
apportion the assignment payment to licenses in proportion to the final clock phase prices of the licenses
that the bidder is assigned in that category and market. To calculate the net price, the bidding system will
first apportion any applicable bidding credit discounts to each category and assignment phase market in
proportion to the gross payment for that category and that market. Then, for each assignment phase
market, the bidding system will apportion the assignment payment and the discount to licenses in
proportion to the final clock phase price of the licenses that the bidder is assigned in that category for that
market.
E.

Auction Results

234.
The bidding system will determine winning bidders and their assigned licenses as
described in Sections IV.B.5 (Winning Bids in the Clock Phase) and IV.C (Assignment Phase Bid
Collection and Bid Processing Procedures), above. After the Office announces the auction results, it will
provide a means for the public to view and download bidding and results data.
F.

Auction Announcements

235.
The Commission and/or Office will use auction announcements to report necessary
information to bidders, such as schedule changes. All auction announcements will be available by
clicking a link in the bidding system.
V.

POST-AUCTION PROCEDURES

236.
Shortly after bidding has ended in Auction 103, a public notice will be released declaring
that the auction closed and establishing the deadlines for submitting down payments, final payments, and
the long-form applications (FCC Form 601) for the auction.402
A.

Down Payments

237.
Within 10 business days after release of the auction closing public notice for Auction
103, each winning bidder must submit sufficient funds (in addition to its upfront payment) to bring its
total amount of money on deposit with the Commission to 20% of the net amount of its winning bids
(gross winning bids less any incentive payment, then less any bidding credits, if applicable).403
B.

Final Payments

238.
Each winning bidder will be required to submit the balance of the net amount for each of
its winning bids within 10 business days after the deadline for submitting down payments.404
C.

Long-Form Application (FCC Form 601)

239.
The Commission’s rules provide that, within 10 business days after release of the auction
closing public notice, winning bidders must electronically submit a properly completed post-auction
application (FCC Form 601) for the license(s) they won through the auction.405
240.
A winning bidder claiming eligibility for a small business bidding credit or a rural service
provider bidding credit must demonstrate its eligibility in its FCC Form 601 post-auction application for

402

The Updated Reconfiguration Procedures Public Notice details additional post-auction transition procedures that
apply to incumbents. Updated Reconfiguration Procedures Public Notice at 16-17, paras. 47-51.
403

47 CFR § 1.2107(b). The Updated Reconfiguration Procedures Public Notice describes how an incumbent’s
incentive payment will be calculated. Updated Reconfiguration Procedures Public Notice at 17, para. 52.
404

47 CFR § 1.2109(a); see CSEA/Part 1 Report and Order, 21 FCC Rcd at 907-09, paras. 43-46.

405

47 CFR § 1.2107(c).

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the bidding credit sought.406 Further instructions on these and other filing requirements will be provided
to winning bidders in the auction closing public notice for Auction 103.
241.
Winning bidders organized as bidding consortia must comply with the FCC Form 601
post-auction application procedures set forth in section 1.2107(g) of the Commission’s rules.407
Specifically, license(s) won by a consortium must be applied for as follows: (a) an individual member of
the consortium or a new legal entity comprising two or more individual consortium members must file for
licenses covered by the winning bids; (b) each member or group of members of a winning consortium
seeking separate licenses will be required to file a separate FCC Form 601 for its/their respective
license(s) in their legal business name; (c) in the case of a license to be partitioned or disaggregated, the
member or group filing the applicable FCC Form 601 shall include the parties’ partitioning or
disaggregation agreement with the FCC Form 601; and (d) if a DE credit is sought (either small business
or rural service provider), the applicant must meet the applicable eligibility requirements in the
Commission’s rules for the credit.408
D.

Ownership Disclosure Information Report (FCC Form 602)

242.
Within 10 business days after release of the auction closing public notice for Auction
103, each winning bidder must also comply with the ownership reporting requirements in sections 1.913,
1.919, and 1.2112 of the Commission’s rules by submitting an ownership disclosure information report
for wireless telecommunications services (FCC Form 602) with its FCC Form 601 post-auction
application.409
243.
If a winning bidder already has a complete and accurate FCC Form 602 on file in the
FCC’s Universal Licensing System (ULS), it is not necessary to file a new report, but the winning bidder
must certify in its FCC Form 601 application that the information on file with the Commission is
complete and accurate. If the winning bidder does not have an FCC Form 602 on file, or if it is not
complete and accurate, it must submit one.
244.
When a winning bidder submits an FCC Form 175, ULS automatically creates an
ownership record. This record is not an FCC Form 602, but it may be used to pre-fill the FCC Form
602 with the ownership information submitted on the winning bidder’s FCC Form 175 application.
A winning bidder must review the pre-filled information and confirm that it is complete and accurate as
of the filing date of the FCC Form 601 post-auction application before certifying and submitting the FCC
Form 602. Further instructions will be provided to winning bidders in the auction closing public notice.
E.

Tribal Lands Bidding Credit

245.
A winning bidder that intends to use its license(s) to deploy facilities and provide services
to federally recognized tribal lands that are unserved by any telecommunications carrier or that have a
wireline penetration rate equal to or below 85% is eligible to receive a tribal lands bidding credit as set
forth in sections 1.2107 and 1.2110(f) of the Commission’s rules.410 A tribal lands bidding credit is in
addition to, and separate from, any other bidding credit for which a winning bidder may qualify.
246.
Unlike other bidding credits that are requested prior to the auction, a winning bidder
applies for the tribal lands bidding credit after the auction when it files its FCC Form 601 post-auction
406

Id. § 1.2112(b).

407

Id. § 1.2107(g); see also CSEA/Part 1 Report and Order, 21 FCC Rcd at 911-12, paras. 51-52; 2015 Part 1
Report and Order, 30 FCC Rcd at 7535, para. 101.
408

47 CFR § 1.2107(g); see also id. § 1.2110 (b)(4)(i), (c)(6); 2015 Part 1 Report and Order, 30 FCC Rcd at 753536, 7574, 7583-86, paras. 101-03, 190, 214-26.
409

47 CFR §§ 1.913, 1.919, 1.2107(f), 1.2112.

410

Id. §§ 1.2107, 1.2110(f); 2016 Spectrum Frontiers Order, 31 FCC Rcd at 8101, para. 253.

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application. When initially filing the post-auction application, the winning bidder will be required to
inform the Commission whether it intends to seek a tribal lands bidding credit, for each license won in the
auction, by checking the designated box(es). After stating its intent to seek a tribal lands bidding credit,
the winning bidder will have 180 days from the close of the post-auction application filing window to
amend its application to select the specific tribal lands to be served and provide the required tribal
government certifications. Licensees receiving a tribal lands bidding credit are subject to performance
criteria as set forth in section 1.2110(f)(3)(vii).411 For additional information on the tribal lands bidding
credit, including how the amount of the credit is calculated, applicants should review the Commission’s
rulemaking proceeding regarding tribal lands bidding credits and related public notices.412
F.

Default and Disqualification

247.
Any winning bidder that defaults or is disqualified after the close of an auction (i.e., fails
to remit the required down payment by the specified deadline, fails to submit a timely long-form
application, fails to make a full and timely final payment, or is otherwise disqualified) is liable for default
payments as described in section 1.2104(g)(2).413 This payment consists of a deficiency payment, equal
to the difference between the amount of the 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.
248.
The percentage of the applicable bid to be assessed as an additional payment for defaults
in a particular auction is established in advance of the auction. We adopt our proposal to set the
additional default payment for Auction 103 at 15% of the applicable bid.414
249.
In case they are needed for post-auction administrative purposes, the bidding system will
calculate individual per-license prices that are separate from final auction payments, which are calculated
on an aggregate basis. The bidding system will apportion to individual licenses any assignment phase
payments and any capped bidding credit discounts,415 since in both cases, a single amount may apply to
multiple licenses.
250.
Finally, in the event of a default, the Commission has the discretion to re-auction the
license or offer it to the next highest bidder (in descending order) at its final bid amount.416 In addition, if
a default or disqualification involves gross misconduct, misrepresentation, or bad faith by an applicant,
the Commission may declare the applicant and its principals ineligible to bid in future auctions and may
411

See 47 CFR § 1.2110(f)(3)(ii)-(vii).

412

See generally Extending Wireless Telecommunications Services to Tribal Lands, Report and Order and Further
Notice of Proposed Rule Making, 15 FCC Rcd 11794 (2000); Second Report and Order and Second Further Notice
of Proposed Rulemaking, 18 FCC Rcd 4775, 4778-79, para. 10 (2003); Third Report and Order, 19 FCC Rcd 17652
(2004); see also Wireless Telecommunications Bureau Announces Enhancements to the Universal Licensing System
to Help Winning Bidders of FCC Auctions File for Tribal Land Bidding Credits, Public Notice, 16 FCC Rcd 5355
(2001); Wireless Telecommunications Bureau Releases Additional Information Regarding the Procedures for
Obtaining a Tribal Lands Bidding Credit and List of Tribal Lands, Public Notice, 15 FCC Rcd 24838 (2000);
Wireless Telecommunications Bureau Announces Availability of Bidding Credits for Providing Wireless Services to
Qualifying Tribal Lands: Tribal Lands Bidding Credits to Be Available Beginning in Auction No. 36 (800 MHz
Specialized Mobile Radio (SMR) Lower 80 Channels) and in Future Auctions, Public Notice, 15 FCC Rcd 18351
(2000). Relevant documents can be viewed on the Commission’s website by going to www.fcc.gov/auctions/ and
clicking on the Tribal Lands Credits link.
413

47 CFR § 1.2104(g)(2).

414

See Auction 103 Comment Public Notice at 22, para. 98.

415

See supra Section II.H.3 (Caps on Bidding Credits).

416

47 CFR § 1.2109(b)-(c).

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take any other action that it deems necessary, including institution of proceedings to revoke any existing
authorizations held by the applicant.417
G.

Refund of Remaining Upfront Payment Balance

251.
All refunds of upfront payment balances will be returned to the payer of record as
identified on the FCC Form 159 unless the payer submits written authorization instructing otherwise.
Bidders are encouraged to use the Refund Information icon found on the Auction Application Manager
page or the Refund Form link available on the Auction Application Submit Confirmation page in the
FCC Auction Application System to access the form. After the required information is completed on the
blank form, the form should be printed, signed, and submitted to the Commission by mail, fax, or email as
instructed below.
252.
If you have elected not to access the Refund Form through the Auction Application
Manager page, the Commission is requesting that all information listed below be supplied in writing.
Name, address, contact and phone number of Bank
ABA Number
Account Number to Credit
Name of Account Holder
FCC Registration Number (FRN)
The refund request must be submitted by fax to the Revenue & Receivables Operations Group/Auctions
at (202) 418-2843, by email to RROGWIREFAXES@fcc.gov, or by mail to:
Federal Communications Commission
Financial Operations
Revenue & Receivables Operations Group/Auctions
Scott Radcliffe
445 12th Street, SW, Room 1-C848
Washington, DC 20554
NOTE: Refund processing generally takes up to two weeks to complete. Bidders with questions about
refunds should contact Scott Radcliffe at (202) 418-7518, Theresa Meeks at (202) 418-2945, or Gail
Glasser at (202) 418-0578.
VI.

PROCEDURAL MATTERS

253.
Supplemental Final Regulatory Flexibility Analysis. As required by the Regulatory
Flexibility Act of 1980, as amended (RFA),418 a Supplemental Initial Regulatory Flexibility Analysis
(Supplemental IRFA) was incorporated in the Auction 103 Comment Public Notice released in April
2019. The Commission sought public comment on the proposals in the Auction 103 Comment Public
Notice, including comments on the Supplemental IRFA. No comments were filed addressing the
Supplemental IRFA. This Public Notice establishes the procedures to be used for Auction 103 and
supplements the Initial and Final Regulatory Flexibility Analyses completed by the Commission in the
Spectrum Frontiers Fourth R&O, 2017 Spectrum Frontiers Order, 2016 Spectrum Frontiers Order, and
other Commission orders pursuant to which Auction 103 will be conducted.419 This present Supplemental
Final Regulatory Flexibility Analysis (Supplemental FRFA) conforms to the RFA.420
254.

417

Need for, and Objectives of, the Rules. This Public Notice implements auction

Id. § 1.2109(d).

5 U.S.C. § 603. The RFA, see id. §§ 601-612, has been amended by the Small Business Regulatory Enforcement
Fairness Act of 1996, Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
418

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procedures for those entities that seek to bid to acquire licenses in Auction 103. Auction 103 will be our
third auction of high-band spectrum in furtherance of the deployment of fifth-generation (5G) wireless,
the Internet of things (IoT), and other advanced spectrum-based services. The Public Notice adopts
procedural rules and terms and conditions governing Auction 103, the post-auction application and
payment processes, as well as setting the minimum opening bid amounts for Upper Microwave Flexible
Use Service (UMFUS) licenses in the Upper 37 GHz (37.6–38.6 GHz), 39 GHz (38.6–40 GHz), and 47
GHz (47.2–48.2 GHz) bands that will be offered in Auction 103.
255.
To promote the efficient and fair administration of the competitive bidding process for all
Auction 103 participants, we adopt the following procedures proposed in the Auction 103 Comment
Public Notice:


establishment of bidding credit caps for eligible small businesses and rural service providers in
Auction 103;



use of a clock auction format for Auction 103 under which each qualified bidder will indicate in
successive clock bidding rounds its demands for categories of generic blocks in specific
geographic areas;



a specific minimum opening bid amount for generic blocks in each PEA available in Auction
103;



a specific upfront payment amount for generic blocks in each PEA available in Auction 103;



establishment of a bidder’s initial bidding eligibility in bidding units based on that bidder’s
upfront payment;



use of an activity rule that would require bidders to bid actively during the auction rather than
waiting until late in the auction before participating;



a requirement that bidders be active on between 90% and 100% of their bidding eligibility in all
regular clock rounds;



establishment of acceptable bid amounts, including clock price increments and intra-round bids,
along with a proposed methodology for calculating such amounts;



a proposed methodology for processing bids and requests to reduce demand;



a procedure for breaking ties if identical high bid amounts are submitted on a license in a given
round;



establishment of an assignment phase that will determine which frequency-specific licenses will
be won by the winning bidders of generic blocks during the clock phase;



establishment of an additional default payment of 15% under section 1.2104(g)(2) of the rules in
the event that a winning bidder defaults or is disqualified after the auction.

256.
The procedures for the conduct of Auction 103 constitute the more specific
implementation of the competitive bidding rules contemplated by Parts 1 and 30 of the Commission’s
rules and the underlying rulemaking orders, including the Spectrum Frontiers Fourth R&O, 2017
Spectrum Frontiers Order, 2016 Spectrum Frontiers Order, and relevant competitive bidding orders, and
are fully consistent therewith.421
(Continued from previous page)
419 See Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12192-200, App. B; 2016 Spectrum Frontiers Order, 31
FCC Rcd at 8234-42, 8262-69, Apps. E, H; 2017 Spectrum Frontiers Order, 32 FCC Rcd at 11087-96, 11107-11,
Apps. C, D, F.
420

See 5 U.S.C. § 604.

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257.
Summary of Significant Issues Raised by Public Comments in Response to the IRFA.
There were no comments filed that specifically address the procedures and policies proposed in the
Supplemental IFRA.
258.
Response to Comments by the Chief Counsel for Advocacy of the Small Business
Administration. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the
Commission is required to respond to any comment filed by the Chief Counsel for Advocacy of the Small
Business Administration (SBA) and to provide a detailed statement of any change made to the proposed
procedures as a result of those comments.422 The Chief Counsel did not file any comments in response to
the procedures that were proposed in the Auction 103 Comment Public Notice.
259.
Description and Estimate of the Number of Small Entities to Which the Rules Will Apply.
The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of
small entities that may be affected by the rules and policies adopted herein.423 The RFA generally defines
the term “small entity” as having the same meaning as the terms “small business,” “small organization,”
and “small governmental jurisdiction.”424 In addition, the term “small business” has the same meaning as
the term “small business concern” under the Small Business Act.425 A “small business concern” is one
which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA.426
260.
As noted above, Regulatory Flexibility Analyses were incorporated into the Spectrum
Frontiers Fourth R&O, 2017 Spectrum Frontiers Order, and 2016 Spectrum Frontiers Order. These
orders provide the underlying authority for the procedures proposed in the Auction 103 Comment Public
Notice and adopted herein for Auction 103. In those analyses, we described in detail the small entities
that might be significantly affected. In this Public Notice, we hereby incorporate by reference the
descriptions and estimates of the number of small entities from the previous Regulatory Flexibility
Analyses in the Spectrum Frontiers Fourth R&O, 2017 Spectrum Frontiers Order, and 2016 Spectrum
Frontiers Order.427
261.
Based on the information available in the Commission’s public Universal Licensing
System (ULS), we estimate there are currently 16 incumbent 39 GHz licensees.428 Of these incumbent 39
GHz licensees, we estimate that up to 8 could be considered a “small entity” under the RFA.
(Continued from previous page)
421 See generally Competitive Bidding Second Report and Order, 9 FCC Rcd at 2360-75, paras. 68-159.
422

5 U.S.C. § 604(a)(3).

423 Id.
424

Id. § 601(6).

Id. § 601(3) (incorporating by reference the definition of “small business concern” in the Small Business Act, 15
U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency,
after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register.”
425

426

15 U.S.C. § 632.

Spectrum Frontiers Fourth R&O, 33 FCC Rcd at 12192-200, App. B; 2016 Spectrum Frontiers Order, 31 FCC
Rcd at 8234-42, App. E; 2017 Spectrum Frontiers Order, 32 FCC Rcd at 11087-96, Apps. C, D.
427

In Auction 30, the Commission offered 2,450 licenses in the 39 GHz band. Auction 30 closed on May 8, 2000
with 29 winning bidders winning a total of 2,173 licenses. See 39 GHz Band Auction Closes, Public Notice, 15 FCC
Rcd 13648 (2000). 18 of these winning bidders (winning a total of 849 licenses) claimed eligibility for a small
business bidding credit. Id. We note that, as a general matter, the number of winning bidders that are eligible for a
small business bidding credit at the close of an auction does not necessarily represent the number of small
businesses currently in a service. Also, we do not generally track subsequent business size unless, in the context of
assignments or transfers, unjust enrichment issues are implicated.
428

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262.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements for Small Entities. The Commission designed the auction application process itself to
minimize reporting and compliance requirements for applicants, including small business applicants. In
the first part of the Commission’s two-phased auction application process, parties desiring to participate
in an auction file streamlined, short-form applications in which they certify under penalty of perjury as to
their qualifications.429 Eligibility to participate in bidding is based on an applicant’s short-form
application and certifications, as well as its upfront payment. In the second phase of the process, winning
bidders file a more comprehensive long-form application. Thus, an applicant which fails to become a
winning bidder does not need to file a long-form application and provide the additional showings and
more detailed demonstrations required of a winning bidder.
263.
We do not expect the processes and procedures adopted in this Public Notice will require
small entities to hire attorneys, engineers, consultants, or other professionals to participate in Auction 103
and comply with the procedures we ultimately adopt because of the information, resources, and guidance
we make available to potential and actual participants. We cannot quantify the cost of compliance with
the procedures; however, we do not believe that the costs of compliance will unduly burden small entities
that choose to participate in the auction. We note the processes and procedures are consistent with
existing Commission policies and procedures used in prior auctions. Thus, some small entities may
already be familiar with such procedures and have the processes and procedures in place to facilitate
compliance resulting in minimal incremental costs to comply. For those small entities that may be new to
the Commission’s auction process, the various resources that will be made available, including, but not
limited to, the mock auction, remote electronic or telephonic bidding, and access to hotlines for both
technical and auction assistance, should help facilitate participation without the need to hire professionals.
For example, we intend to release an online tutorial that will help applicants understand the procedures
for filing the auction short-form applications (FCC Form 175). We also intend to offer other educational
opportunities for applicants in Auction 103 to familiarize themselves with the FCC auction application
system and the bidding system. By providing these resources as well as the resources discussed below,
we expect small business entities that utilize the available resources to experience lower participation and
compliance costs.
264.
Steps Taken to Minimize the Significant Economic Impact on Small Entities, and
Significant Alternatives Considered. The RFA requires an agency to describe any significant, specifically
small business, alternatives that it has considered in reaching its approach, which may include the
following four alternatives (among others): “(1) the establishment of differing compliance or reporting
requirements or timetables that take into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and reporting requirements under the rule for
such small entities; (3) the use of performance rather than design standards; and (4) an exemption from
coverage of the rule, or any part thereof, for such small entities.”430
265.
We have taken steps to minimize any economic impact of our auction procedures on
small businesses through among other things, the many free resources we provide potential auction
participants. Consistent with the past practices in prior auctions, small entities that are potential
participants will have access to detailed educational information and Commission personnel to help guide
their participation in Auction 103, which should alleviate any need to hire professionals. More
specifically, small entities and other auction participants may seek clarification of or guidance on
complying with competitive bidding rules and procedures, reporting requirements, and using the bidding
system. Additionally, an FCC Auctions Hotline will provide small entities one-on-one access to
Commission staff for information about the auction process and procedures. Further, the FCC Auctions
Technical Support Hotline is another resource which provides technical assistance to applicants, including
429

See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2376-77, paras. 163-66.

430

5 U.S.C. § 603(c)(1)-(4).

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small business entities, on issues such as access to or navigation within the electronic FCC Form 175 and
use of the bidding system. Small entities and other would-be participants will also be provided various
materials on the pre-bidding process in advance of the short-form application filing window, which
includes step-by-step instructions on how to complete FCC Form 175. In addition, small entities will
have access to the web-based, interactive online tutorial produced by Commission staff to familiarize
themselves with auction procedures, filing requirements, bidding procedures, and other matters related to
an auction.
266.
We also make various databases and other sources of information, including the Auctions
program websites and copies of Commission decisions, available to the public without charge, providing
a low-cost mechanism for small businesses to conduct research prior to and throughout the auction. Prior
to and at the close of Auction 103, we will post public notices on the Auctions website, which articulate
the procedures and deadlines for the auction. We make this information easily accessible and without
charge to benefit all Auction 103 applicants, including small businesses, thereby lowering their
administrative costs to comply with the Commission’s competitive bidding rules.
267.
Prior to the start of bidding, eligible bidders will be given an opportunity to become
familiar with auction procedures and the bidding system by participating in a mock auction. Eligible
bidders will have access to a user guide for the bidding system, bidding file formats, and an online
bidding procedures tutorial in advance of the mock auction. Further, we intend to conduct Auction 103
electronically over the Internet using a web-based auction system that eliminates the need for small
entities and other bidders to be physically present in a specific location. Qualified bidders will also have
the option to place bids by telephone. These mechanisms are made available to facilitate participation in
Auction 103 by all eligible bidders and may result in significant cost savings for small business entities
that use these alternatives. Moreover, the adoption of bidding procedures in advance of the auction,
consistent with statutory directive, is designed to ensure that the auction will be administered predictably
and fairly for all participants, including small businesses.
268.
Another step taken to minimize the economic impact for small entities participating in
Auction 103 is the Commission’s adoption of bidding credits for small businesses. In accordance with
the service rules applicable to the UMFUS licenses to be offered in Auction 103, bidding credit discounts
will be available to eligible small businesses and small business consortiums on the following basis: (1)
A bidder with attributed average annual gross revenues that do not exceed $55 million for the preceding
three years is eligible to receive a 15% discount on its winning bid, or (2) a bidder with attributed average
annual gross revenues that do not exceed $20 million for the preceding three years is eligible to receive a
25% discount on its winning bid. Eligible applicants can receive only one of the available bidding
credits—not both. With regard to the alternative proposal by WISPA for a third-tier with a higher bidding
credit, this two-tier approach has proven successful for small businesses in past auctions, and as discussed
above, we cannot reconsider the Commission’s decision to adopt a two-tiered approach in this Public
Notice.
269.
The total amount of bidding credit discounts that may be awarded to an eligible small
business is capped at $25 million, and there is a $10 million cap on the total amount of bidding credit
discounts that may be awarded to a rural service provider. In addition, we adopt a $10 million cap on the
overall amount of bidding credits that any winning small business bidder may apply to winning licenses
in markets with a population of 500,000 or less. Based on the technical characteristics of the UMFUS
bands and our analysis of past auction data, we anticipate that our caps will allow the majority of small
businesses to take full advantage of the bidding credit program, thereby lowering the relative costs of
participation for small businesses. Furthermore, we have adopted upfront payment amounts that are onefourth of the amounts proposed in the Auction 103 Comment Public Notice for both categories offered in
the auction, which will minimize the economic impact on small entities.
270.
These procedures for the conduct of Auction 103 constitute the more specific
implementation of the competitive bidding rules contemplated by Parts 1 and 30 of the Commission’s
rules and the underlying rulemaking orders, including the Spectrum Frontiers Fourth R&O, 2017
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Spectrum Frontiers Order, 2016 Spectrum Frontiers Order, and relevant competitive bidding orders, and
are fully consistent therewith.431
271.
Report to Congress. The Commission will send a copy of the Auction 103 Procedures
Public Notice, including the Supplemental FRFA, in a report to Congress pursuant to the Congressional
Review Act.432 In addition, the Commission will send a copy of the Auction 103 Procedures Public
Notice, including the Supplemental FRFA to the Chief Counsel for Advocacy of the SBA. A copy of the
Auction 103 Procedures Public Notice, and Supplemental FRFA (or summaries thereof), will also be
published in the Federal Register.433
272.
Contact Information. For further information concerning this proceeding, contact the
offices listed below:
Broadband Division, Wireless Telecommunications Bureau
Upper Microwave Flexible Use Service (UMFUS) questions:

Simon Banyai at (202) 418-2487

Auctions Division, Office of Economics and Analytics
Auction legal questions:
General auction questions:

Mark Montano or Erik Beith at (202) 418-0660
Auctions Hotline at (717) 338-2868

Office of Communications Business Opportunities
For questions concerning small business inquiries:

(202) 418-0990

273.
Action by the Commission, July 10, 2019: Chairman Pai and Commissioner O’Rielly
issuing separate statements; Commissioner Rosenworcel approving in part, dissenting in part and issuing
a statement.

431

See generally Competitive Bidding Second Report and Order, 9 FCC Rcd at 2360-75, paras. 68-159.

432

See 5 U.S.C. § 801(a)(1)(A).

433

See id. § 604(b).

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APPENDIX
Commenter Short Names
Short Name
AT&T
GeoLinks
Hughes
PVT
RWA
T-Mobile
Verizon
WISPA

Name of Filer
AT&T Inc.
California Internet, L.P. DBA GeoLinks
Hughes Network Systems, LLC
PVT Networks, Inc.
Rural Wireless Association, Inc.
T-Mobile USA, Inc.
Verizon
Wireless Internet Service Providers Association

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STATEMENT OF
CHAIRMAN AJIT PAI
Re:

Incentive Auction of Upper Microwave Flexible Use Service Licenses in the Upper 37 GHz, 39
GHz, and 47 GHz Bands for Next-Generation Wireless Services, AU Docket No. 19-59; GN
Docket No. 14-177.

December 10 is a great day for many reasons. In addition to being just fifteen days from
Christmas, it’s the birthday of mathematician and computer pioneer Ada Lovelace, the publication date of
The Adventures of Huckleberry Finn, and National Lager Day. And for my friends in Argentina, where I
had the pleasure of visiting last week, December 10, 1983 transformed their country from dictatorship to
democracy, with the inauguration of the “father of modern democracy in Argentina,” President Raúl
Alfonsín.
Here in the United States, December 10, 2019 will mark another breakthrough in U.S. leadership
on 5G. Three months ago, I joined the President at the White House to announce that, on that date, the
Commission will begin an auction of the upper 37 GHz, 39 GHz, and 47 GHz bands, making available
more spectrum for 5G. Auction 103 will be the third auction of spectrum for 5G this year and the largest
in American history, releasing 3,400 megahertz of spectrum into the commercial marketplace for 5G
deployment.
In my view, 5G could be one of the great moonshots of this generation. Think about a world in
which speed, capacity, and lag times are effectively no longer constraints on wireless innovation. 5G
could enable new services and applications that could revolutionize healthcare, transportation, agriculture,
education, and many other parts of our economy and society. And it will open the door to so many other
possibilities. How fast these possibilities are realized, or if they are realized at all, will depend in part on
whether we enable them to happen.
The FCC is doing its part to promote U.S leadership in 5G wireless communications. In total, our
auctions this year will free up for the commercial marketplace almost five gigahertz of spectrum for
flexible use. That’s more spectrum than is currently used for mobile broadband by all mobile broadband
providers in the United States combined.
And with today’s 2.5 GHz item, the FCC will also make valuable mid-band spectrum available
soon for 5G. Speaking of, it is equal parts ironic and amusing that some continue to claim that we’re
doing too little to free up mid-band spectrum, but then oppose every single initiative we’ve undertaken to
do just that. You can’t demand action on mid-band spectrum and then oppose rules that make it possible
to deploy 5G in the 3.5 GHz band. You can’t demand action on mid-band spectrum and then take the
position that we must wait for Congress to act before we move forward on the C-band. And you can’t
demand action on mid-band spectrum and then vote against an auction next year that would make 2.5
GHz spectrum available for commercial use. Or rather, you can do all of these things—but then the
inescapable inference is that your real commitment is to political gamesmanship, not actual progress on
mid-band spectrum.
Thank you to the dedicated staff of the Office of Economics and Analytics, Wireless
Telecommunications Bureau, and the Office of General Counsel who have worked tirelessly to chart a
course for American leadership in 5G. From the Office of Economics and Analytics, Margaret Wiener,
Erik Salovaara, Mark Montano, Martha Stancill, Erik Beith, William Huber, Craig Bomberger, Linda
Sanderson, Jill Goldberger, Shabnam Javid, Giulia McHenry, Patrick DeGraba, Debbie Smith, and Sue
Sterner; from the Wireless Telecommunications Bureau, Donald Stockdale, Dana Shaffer, Joel
Taubenblatt, Blaise Scinto, Simon Banyai, Jennifer Tomchin, Stephen Buenzow, Erin Fitzgerald,
Jonathan Campbell, and Cecilia Sulhoff; and from the Office of General Counsel, Douglas Klein, David
Horowitz, and William Richardson.

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STATEMENT OF
COMMISSIONER MICHAEL O’RIELLY
Re:

Incentive Auction of Upper Microwave Flexible Use Service Licenses in the Upper 37 GHz, 39
GHz, and 47 GHz Bands for Next-Generation Wireless Services, AU Docket No. 19-59, GN
Docket No. 14-177

This item is fairly straightforward in setting the parameters for the 37/39/47 GHz auction to be
held later this year. Holding this auction is very good news and sound policy, as releasing more spectrum
into the marketplace allows innovators and technologists to utilize it to provide wanted consumer services
and products. Of the millimeter wave bands, these have been of particular interest, and perhaps more so
than the 24 or 28 GHz bands for various reasons, including the amount of spectrum available, various
incumbency issues, and equipment readiness. Having talked about the 37/39 GHz bands for over four and
a half years and 47 GHz for three years, count me among those that are excited to get this auction up and
running as soon as possible.
On a side note, having been a champion of reallocating and releasing mid-band spectrum into the
marketplace, I am at a loss when some offer vague conjecture that we should just conduct a mid-band
spectrum auction without providing any specifics. Are they thinking of 2.5 GHz, 3.5 GHz, C-Band, 4.9
GHz, maybe 3.1-3.55 GHz, which is still held by DOD, or something else? I have logged countless hours
to repurpose 3.5 GHz and C-band for 5G wireless services, but the former requires updated auction
software – which is being worked on – and the latter needs to go to order. As I have often said, I stand
ready to work with anyone on substantive and constructive ideas. Moreover, I want a mid-band spectrum
auction as much as anyone here, but I am not willing to needlessly delay a millimeter wave auction that is
ready to go under the guise of taking unspecified action on mid-band frequencies.

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STATEMENT OF
COMMISSIONER JESSICA ROSENWORCEL
APPROVING IN PART, DISSENTING IN PART
Re:

Incentive Auction of Upper Microwave Flexible Use Service Licenses in the Upper 37 GHz, 39
GHz, and 47 GHz Bands for Next-Generation Wireless Services, AU Docket No. 19-59, GN
Docket No. 14-177

Sixteen countries have already auctioned spectrum specifically for the provision of 5G wireless
services. They include Australia, Finland, Germany, Italy, Ireland, Japan, Kuwait, Latvia, Mexico,
Oman, Qatar, Saudi Arabia, South Korea, Spain, the United Arab Emirates, and the United Kingdom. In
addition, China allocated spectrum for 5G use last year.
If you comb through these efforts, one detail stands out. Every country on this list has made midband spectrum available for their early 5G deployments. Every single one.
But in the United States we have yet to auction a single swath of mid-band spectrum. We have
brought exactly zero megahertz of mid-band airwaves to auction in the 5G age. Instead, we have focused
all our early efforts on high-band spectrum. In fact, this agency auctioned two millimeter wave bands
earlier this year and courtesy of today’s action, plans to auction another three millimeter wave bands later
this year—a total of five different bands newly available for 5G service. But when it comes to the midband spectrum the rest of the world has used for early 5G efforts? We’ve auctioned nil.
It is increasingly apparent that the United States is alone in its mission to make millimeter wave
the core of its domestic 5G approach. If we continue on this path—prioritizing high-band airwaves—we
are going to have a serious problem. We will find ourselves on the sidelines as mid-band spectrum
becomes the core of worldwide 5G service. This means less scale, higher costs, interoperability
challenges, and less security as other nations’ technologies proliferate. Moreover, recent commercial
launches of 5G service in the United States are confirming what we already know—that commercializing
the millimeter wave will not be easy, given its propagation challenges. The network densification these
airwaves require is costly. If we want to serve everywhere in the country—and not create communities of
5G haves and have-nots—we need a healthy mix of airwaves that provide both coverage and capacity,
and we require them now. That means we need mid-band spectrum. It’s especially important for rural
America, where the challenging economics of service presently do not support the high cost of high-band
infrastructure.
The fact is we have ceded international leadership when it comes to 5G because of this dearth of
mid-band spectrum. A recent report issued by the Defense Innovation Board, the United States military’s
premier advisory group of academic researchers and private sector technology companies, surveyed the
state of the 5G landscape and warned that the country that leads in 5G is “not likely to be the United
States.”
That does not sound good. Our back of the pack approach to mid-band spectrum is leading us
down the wrong road in the race to 5G. We need to change course stat.
We need a mid-band auction now. I am hardly alone in making this call. You can find it in every
report issued about our 5G progress, in comments filed in every spectrum proceeding at this agency, and
in countless inquiries from Capitol Hill. So it begs the question—why is this agency doubling down
today on yet another high-band auction? The truth is we could schedule a mid-band auction of the 3.5
GHz band right here and right now—and we should.
So while I support today’s decision to put on the calendar an auction of the 37, 39, and 47 GHz
bands, I think holding this auction before bringing mid-band spectrum to market is misguided. So I will
approve in part and dissent in part.

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I sincerely hope that this agency can flip its priorities and refocus on mid-band airwaves. The rest
of the world is leaving us behind. It’s time to reclaim the leadership we have lost and make real progress
with the deployment of 5G service to every community, everywhere across the country.

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