Clearing Target of 84 Megahertz Set for Stage 4 of the Broadcast Television Spectrum Incentive Auction; Stage 4 Bidding in the Reverse Auction Will Start on December 13, 2016

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

The Incentive Auction Task Force and Wireless Telecommunications Bureau announce the spectrum clearing target of 84 megahertz and band plan for Stage 4 of the incentive auction, and that bidding in Stage 4 of the reverse auction is scheduled to begin on December 13, 2016. This document also announces details and dates regarding bidding and the availability of educational and informational materials for reverse and forward auction bidders eligible to participate in Stage 4; the availability of Stage 4 bidding and timing information in the Incentive Auction Public Reporting System; and the importance of bidder contingency plans. Finally, this document reminds each reverse and forward auction applicant of its continuing obligations under the FCC's rules.

FOR FURTHER INFORMATION CONTACT:

Wireless Telecommunications Bureau, Auctions and Spectrum Access Division: For general auction questions, contact Linda Sanderson at (717) 338-2868. For reverse auction or forward auction legal questions, refer to the contact information listed in the Incentive Auction Stage 4 Clearing Target Public Notice.

SUPPLEMENTARY INFORMATION:

This is a summary of the Incentive Auction Stage 4 Clearing Target Public Notice, GN Docket No. 12-268, AU Docket No. 14-252, WT Docket No. 12-269, DA 16-1354, released December 9, 2016. The complete text of the Incentive Auction Stage 4 Clearing Target Public Notice is available for public inspection and copying from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW., Room CY-A257, Washington, DC 20554. The complete text is also available on the Commission's Web site at http://wireless.fcc.gov,, the Auction 1000 Web site at http://www.fcc.gov/auctions/1000,, or by using the search function on the ECFS Web page at http://www.fcc.gov/cgb/ecfs/. Alternative formats are available to persons with disabilities by sending an email to FCC504@fcc.gov or by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

1. The Incentive Auction Task Force (Task Force) and the Wireless Telecommunications Bureau (Bureau) announce the 84 megahertz spectrum clearing target that has been set by the Auction System's optimization procedure for Stage 4 of the incentive auction, as well as the band plan associated with the 84 megahertz spectrum clearing target, which includes seven Category 1 generic license blocks with zero impairments for each of the 416 Partial Economic Areas (PEAs). The Task Force and Bureau also provide details and specific dates regarding bidding and the continuing availability of educational materials, and remind reverse and forward auction applicants of their continuing obligations.

I. Stage 4 Clearing Target and Band Plan

2. The Auction System's clearing target determination procedure has set a spectrum clearing target of 84 megahertz for Stage 4 of the incentive auction. Under the band plan associated with this spectrum clearing target, 70 megahertz, or seven paired blocks, of licensed spectrum will be offered in the forward auction on a nationwide basis.

3. The generic license blocks offered in Stage 4 of the forward auction under this band plan will consist of a total of 2,912 Category 1 blocks (zero percent impaired). There will be no Category 2 blocks offered under this band plan. In other words, seven 100% unimpaired blocks in all 416 PEAs for a total of 2,912 Category 1 blocks will be offered in Stage 4.

4. The clearing target for Stage 4 was determined by applying the procedure the Commission adopted in the Auction 1000 Bidding Procedures Public Notice, 80 FR 61917, October 14, 2015, using the same objectives as in the initial clearing target optimization and taking into account the additional channels in the TV band and any participating stations that have dropped out of the auction in the previous stage. Based on the new provisional television channel assignment plan, the nationwide impaired weighted-pops were calculated on a 2x2 cell level and the one-block-equivalent nationwide standard for impairments was applied.

II. Important Information Concerning the Reverse Auction (Auction 1001)

5. Educational Materials. The Task Force and Bureau remind all reverse auction bidders of the continuing availability of educational materials regarding bidding in the clock phase of the reverse auction on the Auction 1001 Web site under the Education section. Specifically, such bidders are encouraged to review the Reverse Auction Clock Phase Tutorial and the Reverse Auction New Stage Tutorial prior to the start of Stage 4 of the reverse auction.

6. Accessing the Auction System for Stage 4. Any bidder that had one or more stations with the status “Frozen—Provisionally Winning” at the end of the previous stage will be able to log in to the Reverse Auction Bidding System for Stage 4. Starting at 10:00 a.m. Eastern Time (ET) on December 9, 2016, such a bidder can log in and view the bidding status, and, where applicable, the following information for Round 1 of the new stage for each of the bidder's stations that qualified to participate in the clock rounds of the reverse auction: Initial bid option, available bid options, vacancy ranges, and clock price offers.

7. A bidder will need to use the RSA SecurID® tokens (RSA tokens) it used for placing bids in the previous stage to access the Reverse Auction Bidding System for Stage 4. RSA tokens with previously set personal identification numbers (PINs) may be used without setting a new PIN. Any authorized bidder that has not already set a PIN for his or her designated RSA token (e.g., an authorized bidder recently identified on FCC Form 177 or one using a replacement RSA token) must set a PIN as described in the materials sent with the Second Confidential Status Letter. Each bidder will be able to access the Reverse Auction Bidding System at the same web address used during the previous stage. In addition, the FCC Auction Bidder Line phone number for Stage 4 will be the same number used in previous stages. The Auction Bidder Line will be available from 9:00 a.m. to 5:30 p.m. ET starting on December 12, 2016.

8. Returning RSA Tokens. Each bidder that did not have any stations with the status “Frozen—Provisionally Winning” at the end of the previous stage will be sent a pre-addressed, stamped envelope to return its RSA tokens.

9. Clocks Rounds Start Date and Round Schedule. Bidding in the clock rounds of Stage 4 of Auction 1001 will begin on Tuesday, December 13, 2016. Bidders should note that the schedule for two-round days in Stage 4 is different from the schedule for previous two-round days in earlier stages. In Stage 4, bidding rounds will last one hour instead of two hours during the two-round schedule. From Tuesday, December 13, 2016, through Friday December 16, 2016, the schedule will be: Bidding Round (10:00 a.m.-11:00 a.m. ET) and Bidding Round (4:00 p.m.-5:00 p.m. ET). Starting on Monday, December 19, 2016, and continuing until further notice, the schedule will be: Bidding Round (10:00 a.m.-11:00 a.m. ET); Bidding Round (1:00 p.m.-2:00 p.m. ET) and Bidding Round (4:00 p.m.-5:00 p.m. ET). Bidding will be suspended after the second round (1:00 p.m.-2:00 p.m. ET) on Friday, December 23, 2016, and there will be no bidding from Monday, December 26, 2016, through Monday, January 2, 2017, in observance of the holiday period. Shortly before the holiday break, the Bureau will announce in the Reverse Auction Bidding System the bidding schedule that will be used when bidding resumes on Tuesday, January 3, 2017. During the holiday break, the Auction Bidder Line will not be available. The Bureau may adjust the number and length of bidding rounds based upon its monitoring of the bidding and assessment of the reverse auction's progress. The Bureau will provide notice of any adjustment by announcement in the Reverse Auction Bidding System during the course of the auction.

10. Reset Base Clock Price and Clock Decrement for Round 1 of Stage 4. The base clock price has been reset to $900 per unit of volume for Stage 4 of the reverse auction. The price decrement for Round 1 of Stage 4 of the reverse auction will be five percent of the reset base clock price.

III. Important Information Concerning the Forward Auction (Auction 1002)

11. Bidding in Stage 4. On the next business day after Stage 4 of the reverse auction concludes, the Task Force and Bureau will announce the initial bidding schedule for Stage 4 of the forward auction in the Forward Auction Bidding System and in the Incentive Auction Public Reporting System (PRS), including the date and time of the first round of bidding. Bidding in Stage 4 of the forward auction will begin no later than three business days after this announcement. Each bidder is strongly encouraged to regularly monitor the PRS for announcements and other important information related to bidding in Stage 4 of the forward auction. The PRS can be accessed directly at auctiondata.fcc.gov and from a link under the Results section of the Auction 1001 Web site ( www.fcc.gov/auctions/1001 ) and the Auction 1002 Web site ( www.fcc.gov/auctions/1002 ).

12. Accessing the Forward Auction Bidding System in Stage 4. Any bidder that is eligible to bid in Stage 4 of the forward auction will be able to access the Forward Auction Bidding System beginning at 10:00 a.m. ET on January 5, 2017. There will be zero impairments in the band plan for Stage 4. Therefore, unlike in previous stages, there is no need for bidders to access the Forward Auction Bidding System for purposes of downloading impairment data prior to the start of the reverse auction. Eligible bidders can log in to the Forward Auction Bidding System using the same RSA tokens, Web address, and instructions provided in the bidder registration materials they received prior to the start of Stage 4 when the system becomes available on January 5, 2017. All bidder-specific information, including stage transition files and bidding information from previous stages, is non-public and provided only to eligible bidders to help guide their bidding in Stage 4 of the forward auction. This information will not be disclosed publicly until after the auction concludes. Any bidder with zero eligibility by the end of Stage 3 will not be eligible to bid in Stage 4 of the forward auction.

13. Returning RSA Tokens. Each bidder that is no longer eligible to participate in the forward auction (i.e., any bidder that has zero eligibility by the end of Stage 3) will be sent a pre-addressed, stamped envelope to return its RSA tokens.

14. Activity Rule for Round 1 of Stage 4. Starting in the first round of Stage 4, each bidder must be active on at least 95 percent of its bidding eligibility to maintain its bidding eligibility for the next round. Any changes to the activity requirement in subsequent rounds will be announced via the Forward Auction Bidding System. Prior to the start of Stage 4 of the forward auction, a bidder may view its initial eligibility and required activity for Round 1 by downloading the My Bidder Status file under the Bid/Status tab of the Downloads screen.

15. Clock Increment for Round 1 of Stage 4. An increment of five percent will be used to set clock prices for products in Round 1 of Stage 4 of the forward auction. Prior to the announcement of the forward auction bidding schedule for Stage 4, a bidder may view the clock prices for Round 1 by downloading the Sample Bids file in the Forward Auction Bidding System.

16. Final Stage Rule Status. In Stage 4, the first component of the final stage rule is no longer based on auction proceeds but instead will be met when the average price per MHz-pop for Category 1 blocks in the high-demand PEAs is at least $1.25 per MHz-pop. Using the formula for calculating the average price and based on the bidding results from Stage 3 and the number of blocks available in Stage 4, the average price per MHz-pop for Category 1 blocks in the high-demand PEAs will be $1.21859 . . . at the start of Stage 4. This amount is approximately three cents short of the required $1.25 benchmark.

17. The second component of the final stage rule remains the same as in previous stages: The estimated auction net proceeds must be sufficient to cover winning bidder payments for broadcasters and other cost requirements.

IV. Public Reporting System

18. As was the case for previous stages of the incentive auction, publicly available bidding and timing information for Stage 4 of the reverse auction and the forward auction will be accessible through the PRS. The PRS will display the same types of bidding and other information for Stage 4 as was available for previous stages. For more information about the types of bidding and other information available in the PRS, please see the Public Reporting System Public Notice.

V. Bidding Contingency Plan

19. The Task Force and Bureau remind each bidder that it should maintain and continue to refine as necessary a comprehensive contingency plan that can be quickly implemented in case difficulties arise when participating in the incentive auction. While the Commission will correct any problems with Commission-controlled facilities, each bidder is solely responsible for anticipating and overcoming problems such as bidder computer failures or other technical issues, loss of or problems with data connections (including those used to access and place bids in the Reverse Auction Bidding System or the Forward Auction Bidding System), telephone service interruptions, adverse local weather conditions, unavailability of its authorized bidders, or the loss or breach of confidential security codes.

20. A bidder should ensure that each of its authorized bidders can access and place bids in the Reverse Auction Bidding System or Forward Auction Bidding System, and it should not rely upon the same computer or data connection to do so. Contingency plans should include arrangements for accessing and placing bids in the Reverse Auction Bidding System or the Forward Auction Bidding System from one or more alternative locations. A bidder's contingency plans might also include, among other arrangements, using the Auction Bidder Line as an alternative method of bidding in the incentive auction.

21. Each reverse auction bidder is further reminded that a failure to submit a bid for a station with the status “Bidding” is considered to be a missing bid and will be interpreted as a bid to drop out of the auction. The Reverse Auction Bidding System will automatically submit a bid to drop out of the auction for all stations with missing bids. The status of a station that bids to drop out of the auction will be “Exited—Voluntarily” once bid processing is complete for the round (unless the station first becomes frozen). Once a station has the status “Exited,” a bidder cannot bid for the station in any subsequent round or stage.

22. The Task Force and Bureau remind each forward auction bidder that its failure to submit a bid during a clock round will be considered a “missing” bid and will be treated as a bid for zero blocks, at the lowest price in the price range for the round, for any products in which the bidder had processed demand from the previous round. If there is insufficient excess demand, the “missing” bid may be partially applied or not applied at all and the bidder will continue to have processed demand for the product in the next round. If the “missing” bid is partially or fully applied, that bidder's eligibility may be irrevocably reduced in the next round.

VI. Continuing Obligations

23. Due Diligence. The Task Force and Bureau remind each reverse and forward auction bidder that it is solely responsible throughout the auction for investigating and evaluating all legal, technical, and marketplace factors and risks that may have a bearing on the bid(s) it submits in the incentive auction. For more information, each bidder should review the Auction 1000 Application Procedures Public Notice, 80 FR 66429, October 29, 2015.

24. Prohibited Communications Reminder. The Task Force and Bureau remind all full power and Class A broadcast television licensees, as well as forward auction applicants, that they remain subject to the Commission's rules prohibiting certain communications in connection with Commission auctions. For communications among broadcasters, and between broadcasters and forward auction applicants, the prohibited communication period ends when the results of the incentive auction are announced by public notice. For communications among forward auction applicants, the period ends on the deadline for making down payments on winning bids. A party that is subject to the prohibition remains subject to the prohibition regardless of developments during the auction process.

25. The Task Force and Bureau further remind each full power and Class A broadcast television licensee that even though communicating whether or not a party filed an application to participate in the reverse auction does not violate the rules prohibiting certain communications, communicating that a party “is not bidding” in or has “exited” the reverse auction could constitute an apparent violation that needs to be reported. All forward auction applicants, including those that did not qualify to bid and those that have since lost eligibility to bid in the forward auction, are also reminded that they remain subject to the rules prohibiting certain communications until the deadline for making down payments on winning bids.

26. The Commission's rules require covered parties to report violations of the prohibition of certain communications to Margaret W. Wiener, Chief of the Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, by the most expeditious means available. Any such report should be submitted by email to Ms. Wiener at the following email address: auction1000@fcc.gov. Any report in hard copy must be delivered only to Margaret W. Wiener, Chief, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau, Federal Communications Commission, 445 12th Street SW., Washington, DC 20554. Failure to make a timely report under the rule constitutes a continuing violation of the rule, with attendant consequences.

27. For a thorough discussion of the prohibition of certain communications during the incentive auction, please refer to the Prohibited Communications Public Notice, 80 FR 63216, October 19, 2015.

28. Making Modifications to Applications. The Task Force and Bureau remind each reverse and forward auction applicant that the Commission's rules require an applicant to maintain the accuracy and completeness of information furnished in its application to participate in Auctions 1001 and 1002, respectively. Each applicant should amend its application to furnish additional or corrected information within five days of a significant occurrence, or no more than five days after the applicant becomes aware of the need for an amendment. Any applicant that needs to make changes must do so using the procedures described in the Auction 1000 Application Procedures Public Notice and the Auction 1002 Qualified Bidders Public Notice.

29. To make changes to its FCC Form 177 or FCC Form 175 while the Auction System is available, the applicant must make those changes electronically using the Auction System and submit a letter briefly summarizing the changes to its FCC Form 177 by email to auction1001@fcc.gov, or to its FCC Form 175 by email to auction1002@fcc.gov. To make changes at a time when the Auction System is unavailable, the applicant must make those changes using the procedures described in the Auction 1000 Application Procedures Public Notice. All changes are subject to review by Commission staff.