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e-CFR data is current as of September 24, 2020

Title 47Chapter ISubchapter APart 1Subpart Q → Subject Group


Title 47: Telecommunication
PART 1—PRACTICE AND PROCEDURE
Subpart Q—Competitive Bidding Proceedings


Broadcast Television Spectrum Reverse Auction

Source: 79 FR 48530, Aug. 15, 2014, unless otherwise noted.

§1.2200   Definitions.

For purposes of §§1.2200 through 1.2209:

(a) Broadcast television licensee. The term broadcast television licensee means the licensee of

(1) A full-power television station, or

(2) A low-power television station that has been accorded primary status as a Class A television licensee under §73.6001(a) of this chapter.

(b) Channel sharee. The term channel sharee means a broadcast television licensee that relinquishes all spectrum usage rights with respect to a particular television channel in order to share a television channel with another broadcast television licensee.

(c) Channel sharer. The term channel sharer means a broadcast television licensee that shares its television channel with a channel sharee.

(d) Channel sharing bid. The term channel sharing bid means a bid to relinquish all spectrum usage rights with respect to a particular television channel in order to share a television channel with another broadcast television licensee by an applicant that submits an executed channel sharing agreement with its application.

(e) Forward auction. The term forward auction means the portion of an incentive auction of broadcast television spectrum described in section 6403(c) of the Spectrum Act.

(f) High-VHF-to-low-VHF bid. The term high-VHF-to-low-VHF bid means a bid to relinquish all spectrum usage rights with respect to a high very high frequency (“VHF”) television channel (channels 7 through 13) in return for receiving spectrum usage rights with respect to a low VHF television channel (channels 2 through 6).

(g) License relinquishment bid. The term license relinquishment bid means a bid to relinquish all spectrum usage rights with respect to a particular television channel without receiving in return any spectrum usage rights with respect to another television channel.

(h) NCE station. The term NCE station means a noncommercial educational television broadcast station as defined in §73.621 of this chapter.

(i) Reverse auction. The term reverse auction means the portion of an incentive auction of broadcast television spectrum described in section 6403(a) of the Spectrum Act.

(j) Reverse auction bid. The term reverse auction bid includes a license relinquishment bid, a UHF-to-VHF bid, a high-VHF-to-low-VHF bid, a channel sharing bid, and any other reverse auction bids permitted.

(k) Spectrum Act. The term Spectrum Act means Title VI of the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96).

(l) UHF-to-VHF bid. The term UHF-to-VHF bid means a bid to relinquish all spectrum usage rights with respect to an ultra-high frequency (“UHF”) television channel in return for receiving spectrum usage rights with respect to a high VHF television channel or a low VHF television channel.

[79 FR 48530, Aug. 15, 2014, as amended at 80 FR 67342, Nov. 2, 2015]

§1.2201   Purpose.

The provisions of §§1.2200 through 1.2209 implement section 6403 of the Spectrum Act, which requires the Commission to conduct a reverse auction to determine the amount of compensation that each broadcast television licensee would accept in return for voluntarily relinquishing some or all of its broadcast television spectrum usage rights in order to make spectrum available for assignment through a system of competitive bidding under subparagraph (G) of section 309(j)(8) of the Communications Act of 1934, as added by section 6402 of the Spectrum Act.

§1.2202   Competitive bidding design options.

(a) Public notice of competitive bidding design options. Prior to conducting competitive bidding in the reverse auction, public notice shall be provided of the detailed procedures that may be used to implement auction design options.

(b) Competitive bidding design options. The public notice detailing competitive bidding procedures for the reverse auction may establish procedures for collecting bids, assigning winning bids, and determining payments, including without limitation:

(1) Procedures for collecting bids. (i) Procedures for collecting bids in a single round or in multiple rounds.

(ii) Procedures for collecting bids for multiple reverse auction bid options.

(iii) Procedures allowing for bids that specify a price for a reverse auction bid option, indicate demand at a specified price, or provide other information as specified by competitive bidding policies, rules, and procedures.

(iv) Procedures allowing for bids that are contingent on specified conditions, such as other bids being accepted.

(v) Procedures to collect bids in one or more stages, including procedures for transitions between stages.

(vi) Procedures for whether, when, and how bids may be modified during the auction.

(2) Procedures for assigning winning bids. (i) Procedures that take into account one or more factors in addition to bid amount, such as population coverage or geographic contour, or other relevant measurable factors.

(ii) Procedures to evaluate the technical feasibility of assigning a winning bid.

(A) Procedures that utilize mathematical computer optimization software, such as integer programming, to evaluate bids and technical feasibility, or that utilize other decision routines, such as sequentially evaluating bids using a ranking based on specified factors.

(B) Procedures that combine computer optimization algorithms with other decision routines.

(iii) Procedures to incorporate public interest considerations into the process for assigning winning bids.

(3) Procedures for determining payments. (i) Procedures to determine the amount of any incentive payments made to winning bidders consistent with other auction design choices.

(ii) The amount of proceeds shared with a broadcast television licensee will not be less than the amount of the licensee's winning bid in the reverse auction.

§1.2203   Competitive bidding mechanisms.

(a) Public notice of competitive bidding procedures. Detailed competitive bidding procedures shall be established by public notice prior to the commencement of the reverse auction, including without limitation:

(1) Sequencing. The sequencing with which the reverse auction and the related forward auction assigning new spectrum licenses will occur.

(2) Reserve price. Reserve prices, either disclosed or undisclosed, so that higher bids for various reverse auction bid options would not win in the reverse auction. Reserve prices may apply individually, in combination, or in the aggregate.

(3) Opening bids and bid increments. Maximum or minimum opening bids, and by announcement before or during the reverse auction, maximum or minimum bid increments in dollar or percentage terms.

(4) Activity rules. Activity rules that require a minimum amount of bidding activity.

(b) Binding obligation. A bid is an unconditional, irrevocable offer by the bidder to fulfill the terms of the bid. The Commission accepts the offer by identifying the bid as winning. A bidder has a binding obligation to fulfill the terms of a winning bid. A winning bidder will relinquish spectrum usage rights pursuant to the terms of any winning bid by the deadline set forth in §73.3700(b)(4) of this chapter.

(c) Stopping procedures. Before or during the reverse auction, procedures may be established regarding when bidding will stop for a round, a stage, or an entire auction, in order to terminate the auction within a reasonable time and in accordance with public interest considerations and the goals, statutory requirements, rules, and procedures for the auction, including any reserve price or prices.

(d) Auction delay, suspension, or cancellation. By public notice or by announcement during the reverse auction, the auction may be delayed, suspended, or cancelled in the event of a natural disaster, technical obstacle, network disruption, evidence of an auction security breach or unlawful bidding activity, administrative or weather necessity, or for any other reason that affects the fair and efficient conduct of the competitive bidding. The Commission has the authority, at its sole discretion, to resume the competitive bidding starting from the beginning of the current or some previous round or cancel the competitive bidding in its entirety.

§1.2204   Applications to participate in competitive bidding.

(a) Public notice of the application process. All applications to participate must be filed electronically. The dates and procedures for submitting applications to participate in the reverse auction shall be announced by public notice.

(b) Applicant. The applicant identified on the application to participate must be the broadcast television licensee that would relinquish spectrum usage rights if it becomes a winning bidder. In the case of a channel sharing bid, the applicant will be the proposed channel sharee.

(c) Information and certifications provided in the application to participate. An applicant may be required to provide the following information in its application to participate in the reverse auction:

(1) The following identifying information:

(i) If the applicant is an individual, the applicant's name and address. If the applicant is a corporation, the name and address of the corporate office and the name and title of an officer or director. If the applicant is a partnership, the name, citizenship, and address of all general partners, and, if a general partner is not a natural person, then the name and title of a responsible person for that partner, as well. If the applicant is a trust, the name and address of the trustee. If the applicant is none of the above, it must identify and describe itself and its principals or other responsible persons;

(ii) Applicant ownership and other information as set forth in §1.2112(a); and

(iii) List, in the case of a non-profit entity, the name, address, and citizenship of each member of the governing board and of any educational institution or governmental entity with a controlling interest in the applicant, if applicable.

(2) The identity of the person(s) authorized to take binding action in the bidding on behalf of the applicant.

(3) For each broadcast television license for which the applicant intends to submit reverse auction bids:

(i) The identity of the station and its television channel;

(ii) Whether it is a full-power or Class A television station;

(iii) If the license is for a Class A television station, certification under penalty of perjury that it is and will remain in compliance with the ongoing statutory eligibility requirements to remain a Class A station;

(iv) Whether it is an NCE station and, if so, whether it operates on a reserved or non-reserved channel;

(v) The types of reverse auction bids that the applicant may submit;

(vi) Whether the license for the station is subject to a non-final revocation order, has expired and is subject to a non-final cancellation order, or if for a Class A station is subject to a non-final downgrade order and, if the license is subject to such a proceeding or order, then an acknowledgement that the Commission will place all of its auction proceeds into escrow pending the final outcome of the proceeding or order; and

(vii) Any additional information required to assess the spectrum usage rights offered.

(4) For each broadcast television license for which the applicant intends to submit a license relinquishment bid:

(i) Whether it intends to enter into a channel sharing agreement if it becomes a winning bidder;

(ii) Whether it will control another broadcast station if it becomes a winning bidder and terminates operations; and

(iii) If it will control another broadcast station, an acknowledgement that it will remain subject to any pending license renewal, as well as any enforcement action, against the station offered; or

(iv) If it will not control another broadcast station, an acknowledgement that the Commission will place a share of its auction proceeds into escrow to cover any potential forfeiture costs associated with any pending license renewal or any pending enforcement action against the station offered.

(5) For each broadcast television license for which the applicant intends to submit a channel sharing bid:

(i) The identity of the channel sharer and the television channel the applicant has agreed to share;

(ii) Any required information regarding the channel sharing agreement, including a copy of the executed channel sharing agreement;

(iii) Certification under penalty of perjury that the channel sharing agreement is consistent with all Commission rules and policies, and that the applicant accepts any risk that the implementation of the channel sharing agreement may not be feasible for any reason, including any conflict with requirements for operation on the shared channel;

(iv) Certification under penalty of perjury that its operation from the shared channel facilities will not result in a change to its Designated Market Area;

(v) Certification under penalty of perjury that it can meet the community of license coverage requirement set forth in §73.625(a) of this chapter from the shared channel facilities or, if not, that the new community of license for its shared channel facilities either meets the same or a higher allotment priority as its current community; or, if no community meets the same or higher allotment priority, provides the next highest priority;

(vi) Certification under penalty of perjury that the proposed channel sharing arrangement will not violate the multiple ownership rules, set forth in §73.3555 of this chapter, based on facts at the time the application is submitted; and

(vii) Certification by the channel sharer under penalty of perjury with respect to the certifications described in paragraphs (c)(3)(iii), (c)(5)(iii), and (c)(5)(vi) of this section.

(6) Certification under penalty of perjury that the applicant and all of the person(s) disclosed under paragraph (c)(1) of this section are not person(s) who have been, for reasons of national security, barred by any agency of the Federal Government from bidding on a contract, participating in an auction, or receiving a grant. For the purposes of this certification, the term “person” means an individual, partnership, association, joint-stock company, trust, or corporation, and the term “reasons of national security” means matters relating to the national defense and foreign relations of the United States.

(7) Certification that the applicant agrees that it has sole responsibility for investigating and evaluating all technical and marketplace factors that may have a bearing on the bids it submits in the reverse auction.

(8) Certification that the applicant agrees that the bids it submits in the reverse auction are irrevocable, binding offers by the applicant.

(9) Certification that the individual submitting the application to participate and providing the certifications is authorized to do so on behalf of the applicant, and if such individual is not an officer, director, board member, or controlling interest holder of the applicant, evidence that such individual has the authority to bind the applicant.

(10) Certification that the applicant is in compliance with all statutory and regulatory requirements for participation in the reverse auction, including any requirements with respect to the license(s) identified in the application to participate.

(11) Such additional information as may be required.

(d) Application processing. (1) Any timely submitted application to participate will be reviewed for completeness and compliance with the Commission's rules. No untimely applications to participate shall be reviewed or considered.

(2) Any application to participate that does not contain all of the certifications required pursuant to this section is unacceptable for filing, cannot be corrected subsequent to the application filing deadline, and will be dismissed with prejudice.

(3) Applicants will be provided a limited opportunity to cure specified defects and to resubmit a corrected application to participate. During the resubmission period for curing defects, an application to participate may be amended or modified to cure identified defects or to make minor amendments or modifications. After the resubmission period has ended, an application to participate may be amended or modified to make minor changes or correct minor errors in the application to participate. Minor amendments may be subject to a deadline specified by public notice. Major amendments cannot be made to an application to participate after the initial filing deadline. Major amendments include, but are not limited to, changes in ownership of the applicant that would constitute an assignment or transfer of control, changes to any of the required certifications, and the addition or removal of licenses identified on the application to participate for which the applicant intends to submit reverse auction bids. 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.

(4) Applicants that fail to correct defects in their applications to participate in a timely manner as specified by public notice will have their applications to participate dismissed with no opportunity for resubmission.

(5) Applicants shall have a continuing obligation to make any amendments or modifications that are necessary to maintain the accuracy and completeness of information furnished in pending applications to participate. Such amendments or modifications shall be made as promptly as possible, and in no case more than five business days after applicants become aware of the need to make any amendment or modification, or five business days after the reportable event occurs, whichever is later. An applicant's obligation to make such amendments or modifications to a pending application to participate continues until they are made.

(e) Notice to qualified and non-qualified applicants. Each applicant will be notified as to whether it is qualified or not qualified to participate in the reverse auction.

[79 FR 48530, Aug. 15, 2014, as amended at 80 FR 67342, Nov. 2, 2015]

§1.2205   Prohibition of certain communications.

(a) Definitions. (1) For the purposes of this section, a full power broadcast television licensee, or a Class A broadcast television licensee, shall include all controlling interests in the licensee, and all officers, directors, and governing board members of the licensee.

(2) For the purposes of this section, the term forward auction applicant is defined the same as the term applicant is defined in §1.2105(c)(5).

(b) Certain communications prohibited. (1) Except as provided in paragraph (b)(2) of this section, in the broadcast television spectrum incentive auction conducted under section 6403 of the Spectrum Act, beginning on the deadline for submitting applications to participate in the reverse auction and until the results of the incentive auction are announced by public notice, all full power and Class A broadcast television licensees are prohibited from communicating directly or indirectly any incentive auction applicant's bids or bidding strategies to any other full power or Class A broadcast television licensee or to any forward auction applicant.

(2) The prohibition described in paragraph (b)(1) of this section does not apply to the following:

(i) Communications between full power or Class A broadcast television licensees if they share a common controlling interest, director, officer, or governing board member as of the deadline for submitting applications to participate in the reverse auction;

(ii) Communications between a forward auction applicant and a full power or Class A broadcast television licensee if a controlling interest, director, officer, or holder of any 10 percent or greater ownership interest in the forward auction applicant, as of the deadline for submitting short-form applications to participate in the forward auction, is also a controlling interest, director, officer, or governing board member of the full power or Class A broadcast television licensee, as of the deadline for submitting applications to participate in the reverse auction; and

(iii) Communications regarding reverse auction applicants' (but not forward auction applicants') bids and bidding strategies between parties to a channel sharing agreement executed prior to the deadline for submitting applications to participate in the reverse auction and disclosed on a reverse auction application.

(c) Duty to report potentially prohibited communications. A party that makes or receives a communication prohibited under paragraph (b) of this section shall report such communication in writing immediately, and in any case no later than five business days after the communication occurs. A party's obligation to make such a report continues until the report has been made.

(d) Procedures for reporting potentially prohibited communications. Reports under paragraph (c) of this section shall be filed as directed in public notices detailing procedures for bidding in the incentive auction. If no public notice provides direction, the party making the report shall do so in writing to the Chief of the Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, by the most expeditious means available, including electronic transmission such as email.

(e) Violations. A party who is found to have violated the antitrust laws or the Commission's rules in connection with its participation in the competitive bidding process, in addition to any other applicable sanctions, may be subject to forfeiture of its winning bid incentive payment and revocation of its licenses, where applicable, and may be prohibited from participating in future auctions.

Note 1 to §1.2205: References to “full power broadcast television licensees” and “Class A broadcast television licensees” are intended to include all broadcast television licensees that are or could become eligible to participate in the reverse auction, including broadcast television licensees that may be parties to a channel sharing agreement.

Note 2 to §1.2205: For the purposes of this section, “controlling interests” include individuals or entities with positive or negative de jure or de facto control of the licensee. De jure control includes holding 50 percent or more of the voting stock of a corporation or holding a general partnership interest in a partnership. Ownership interests that are held indirectly by any party through one or more intervening corporations may be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain and application of the relevant attribution benchmark to the resulting product, except that if the ownership percentage for an interest in any link in the chain meets or exceeds 50 percent or represents actual control, it may be treated as if it were a 100 percent interest. De facto control is determined on a case-by-case basis. Examples of de facto control include constituting or appointing 50 percent or more of the board of directors or management committee; having authority to appoint, promote, demote, and fire senior executives that control the day-to-day activities of the licensee; or playing an integral role in management decisions.

Note 3 to §1.2205: The prohibition described in §1.2205(b)(1) applies to controlling interests, officers, directors, and governing board members of a full power or Class A broadcast television licensee as of the deadline for submitting applications to participate in the reverse auction, and any additional such parties at any subsequent point prior to the announcement by public notice of the results of the incentive auction. Thus, if, for example, a full power or Class A broadcast television licensee appoints a new officer after the application deadline, that new officer would be subject to the prohibition in §1.2205(b)(1), but would not be included within the exceptions described in §§1.2205(b)(2)(i) and (ii).

[79 FR 48530, Aug. 15, 2014, as amended at 80 FR 56816, Sept. 18, 2015]

§1.2206   Confidentiality of Commission-held data.

(a) The Commission will take all reasonable steps necessary to protect all Confidential Broadcaster Information for all reverse auction applicants from the time the broadcast television licensee applies to participate in the reverse auction until the reassignments and reallocations under section 6403(b)(1)(B) of the Spectrum Act become effective or until two years after public notice that the reverse auction is complete and that no such reassignments and reallocations shall become effective.

(b) In addition, if reassignments and reallocations under section 6403(b)(1)(B) of the Spectrum Act become effective, the Commission will continue to take all reasonable steps necessary to protect Confidential Broadcaster Information pertaining to any unsuccessful reverse auction bid and pertaining to any unsuccessful application to participate in the reverse auction until two years after the effective date.

(c) Notwithstanding paragraphs (a) and (b) of this section, the Commission may disclose Confidential Broadcaster Information if required to do so by law, such as by court order.

(d) Confidential Broadcaster Information includes the following Commission-held data of a broadcast television licensee participating in the reverse auction:

(1) The name of the applicant licensee;

(2) The licensee's channel number, call sign, facility identification number, and network affiliation; and

(3) Any other information that may reasonably be withheld to protect the identity of the licensee, as determined by the Commission.

§1.2207   Two competing participants required.

The Commission may not enter into an agreement for a licensee to relinquish spectrum usage rights in exchange for a share of the proceeds from the related forward auction assigning new spectrum licenses unless at least two competing licensees participate in the reverse auction.

§1.2208   Public notice of auction completion and auction results.

Public notice shall be provided when the reverse auction is complete and when the forward auction is complete. With respect to the broadcast television spectrum incentive auction conducted under section 6403 of the Spectrum Act, public notice shall be provided of the results of the reverse auction, forward auction, and repacking, and shall indicate that the reassignments of television channels and reallocations of broadcast television spectrum are effective.

§1.2209   Disbursement of incentive payments.

A winning bidder shall submit the necessary financial information to facilitate the disbursement of the winning bidder's incentive payment. Specific procedures for submitting financial information, including applicable deadlines, will be set out by public notice.

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