PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 1919 M STREET NW WASHINGTON DC 20554 ---------------------------------------------------------------------------------------------------------------------- News media information (202) 418-0500. Recorded listing of releases and texts (202) 418-2222. December 21, 1995 FCC ANNOUNCES AUCTION OF DIRECT BROADCAST SATELLITE SERVICE AUCTION NOTICE AND FILING REQUIREMENTS FOR 2 DBS CONSTRUCTION PERMITS SCHEDULED FOR JANUARY 24, 1996 Report No. AUC-95-08, Auction No. 8 Auction Date: 9:00 a.m., Eastern Time, Wednesday, January 24, 1996. The precise schedule for bidding will be announced by Public Notice prior to the start of the auction. Auction Methodology: Sequential multiple round electronic auction. Bidding will be permitted only at the FCC auction site, 2 Massachusetts Avenue, N.E., Washington, D.C. (adjacent to Union Station; entrance on North Capitol Street). Telephonic bids and electronic bids from remote locations will not be accepted. Construction Permits to be Auctioned: Two conditional DBS construction permits. The first permit to be auctioned will be for a block of 28 channels (channels 1-23, 25-27, 29, and 31) at the 110ø W.L. orbital location ("110ø permit"). The second permit to be auctioned will be for a block of 24 channels (channels 1-17, 19, 21, 23, 25, 27, 29, and 31) at the 148ø W.L. orbital location ("148ø permit"). Pre-Auction Deadlines: Short-form Application 5:30 p.m., ET, Fri., Jan. 19, 1996 Upfront Payments (by Wire Transfer) 3:00 p.m., ET, Fri., Jan. 19, 1996 Auction Registration 12:00 p.m.-5:00 p.m., ET, Tues., Jan. 23, 1996 Telephone Contacts: Auction Hotline (202) 418-1400 Auction Filing Technical Support (202) 414-1250 Wireless Bureau - Auctions Division - Jay Markley (202) 418-0600 - Diane Conley (202) 418-0660 International Bureau - Bill Wiltshire (202) 418-0420 I. INTRODUCTION Those wishing to participate in the DBS auction must submit a "short-form" application on FCC Form 175 in accordance with the Commission's Rules and the instructions in this Public Notice. The FCC will not issue a Bidder Information Package for this auction. All information necessary to participate in this auction will be available through this Public Notice, subsequent Public Notices, or the Commission's Rules. See 47 C.F.R.  1.2101-1.2109 and 100.71-100.80; Revision of Rules and Policies for the Direct Broadcast Satellite Service, Report and Order, FCC 95-507 (released December 15, 1995), Appendix C. The FCC Form 175 must be received no later than 5:30 p.m. Eastern Time on January 19, 1996. Applicants for the DBS auction may file their FCC Form 175s either electronically or manually pursuant to the instructions set forth in this Public Notice. Applicants are strongly encouraged to file their applications electronically. Applicants should note that the previous version of the FCC Form 175 is no longer valid. A new FCC Form 175 (marked "October 1995" in the bottom right-hand corner) is included in this Public Notice. Furthermore, the FCC Form 175-M which was used in the MDS auction will not be accepted for the DBS auction. Applicants will be required to submit an upfront payment (in U.S. dollars) to be eligible to participate in the auction. The upfront payment shall be made by wire transfer and must be received by 3:00 p.m. Eastern Time on January 19, 1996, at the Mellon Bank in Pittsburgh, Pennsylvania. Prospective bidders must familiarize themselves thoroughly with the procedures, terms and conditions contained in this Public Notice. The rules contained in the Report and Order in IB Docket No. 95-168 and PP Docket No. 93-253, FCC 95-507 (released December 15, 1995), this Public Notice, and subsequent Public Notices are not negotiable. Prospective bidders should review these auction documents thoroughly prior to the auction to make certain that they understand all of the provisions and are willing to be bound by all of the terms before participating in the auction. The information contained in this Public Notice may be subsequently amended or supplemented by the FCC or the Wireless Telecommunications Bureau at any time. The Wireless Telecommunications Bureau will issue Public Notices to convey new or supplemental information to prospective bidders. It is the responsibility of all prospective bidders to remain fully informed regarding all FCC rules and Public Notices pertaining to this auction. FCC Public Notices and other FCC documents may be obtained for a fee by calling the FCC duplication contractor, International Transcription Services, Inc., at (202) 857-3800. Additionally, prospective bidders may retrieve some of these documents from the FCC Internet site using ftp to connect as anonymous@ftp.fcc.gov. The precise schedule for bidding will be announced by Public Notice prior to the start of the auction. Bidding for the 110ø permit will be conducted first. Bidding for the 148ø permit will immediately follow the conclusion of bidding for the 110ø permit. II. Bidder Eligibility In order to be eligible to bid in the DBS auction, bidders must: (1) satisfy the Commission's eligibility requirements, (2) submit a short-form application on FCC Form 175, and (3) remit an upfront payment in compliance with applicable FCC rules and regulations. A. Eligibility Requirements Pursuant to 47 C.F.R.  100.11, no DBS construction permit will be granted to: (a) any alien or the representative of any alien; (b) any foreign government or the representative thereof; (c) any corporation organized under the laws of any foreign government; (d) any corporation of which any of the officers or directors is an alien; (e) any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country; (f) any corporation directly or indirectly controlled by any other corporation of which any officer or more than one-fourth of the directors are aliens, if the Commission finds that the public interest will be served by the refusal of such permit; or (g) any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representatives thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal of such permit. In addition, no person with an attributable interest in channels at the 101ø or 119ø orbital location may acquire an attributable interest in the 110ø permit without divesting its existing interest in channels at 101ø and 119ø within twelve months of such acquisition. The attribution rules applicable to this spectrum limitation are discussed in the Report and Order in IB Docket No. 95-168 and PP Docket No. 93-253, FCC 95-507 (released December 15, 1995). B. Short-Form Application (FCC Form 175 ) In order to be eligible to bid, applicants must submit an FCC Form 175 application to the Commission. A copy of this form and directions for completion are included in this Public Notice. This application must be received by the FCC no later than 5:30 p.m. Eastern Time on January 19, 1996. Late applications will not be accepted. Applications may be submitted electronically, by hand delivery, by certified U.S. mail, or by private courier. Applicants are strongly encouraged to submit FCC Form 175 electronically. Applicants should carefully review 47 C.F.R.  1.2101-1.2109 and 100.71-100.80 of the Commission's Rules before submitting the short-form application. In completing FCC Form 175, applicants should note the following: 1. Completion of Form 175 a. For "Auction Number" applicants should enter "8." b. In Item 7, applicants are required to create a ten-digit FCC Account Number, which the Commission will use to identify and track applications. Each applicant must create this FCC account number by using its taxpayer identification number (TIN), if it has one, with a prefix of '0", i.e., 0123456789. If an applicant does not have a taxpayer identification number, the applicant should use its ten-digit area code and telephone number (i.e., 5552345678). Each applicant must include its FCC Account Number when submitting any amendments, additional information or other correspondence regarding its application, and must include this number on each FCC Form 159 (FCC Remittance Advice) accompanying required auction deposits or payments submitted to the Commission. This number also must be used whenever an applicant writes, calls, or otherwise inquires about its application. Applicants will also need this number to register and bid in the auction. c. Item 9 should be left blank because it is not applicable to this auction. Item 10 is for statistical purposes only. d. Item 11 identifies the DBS construction permits on which the applicant wishes to bid. To bid on the 110ø permit, applicants must enter "D110" under Market No. To bid on the 148ø permit, applicants must enter "D148" under Market No. To bid on both permits, applicants should check the "All" box under Market No. Applicants should ignore the box titled Frequency Block/Channel No. Applicants should apply for each DBS construction permit on which they want to be eligible to bid in the auction. Bids will not be accepted on construction permits for which an applicant has not applied on its FCC Form 175. e. Applicants must list the name(s) of the person(s) (up to a maximum of three) authorized to represent them at the auction. Only those individuals listed on the FCC Form 175 will be authorized to place or withdraw bids for the applicant during the auction. f. Applicants should read the "Certifications" listed on the FCC Form 175 carefully before submitting their application. Applicants who file their FCC Form 175 applications electronically will not be required to transmit an original or electronic signature. However, as with a manually filed FCC Form 175, upon submission, the certifying official has made the representation that he/she is an authorized representative of the applicant for the construction permit(s) selected, and that he/she has read the instructions and the certifications and that all matters and things stated in the application and attachments, including exhibits, are true and correct. These certifications help to ensure a fair and competitive auction and require, among other things, that the applicant is the real party in interest in this application and that the applicant disclose to the Commission certain information on applicant ownership and agreements or arrangements concerning the auction. Submission of 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. g. If the Commission wishes to communicate with the applicant by telephone or fax, communications will be directed to the contact person identified on the FCC Form 175. A space is provided for both a telephone number and a fax number. All written communications will be directed to the applicant's contact person at the address specified on the FCC Form 175. (Applicants must provide a street address; no P.O. box addresses may be used.) h. Applicants must also attach as Exhibit A the information, certified as truthful, that is required pursuant to 47 C.F.R.  100.79(a). This information should identify all parties with whom the applicant has entered into consortium arrangements, joint ventures, partnerships or other agreements, arrangements or understandings which relate in any way to the competitive bidding process of Auction Number 8. Applicants should check the box in Item 11 indicating an exhibit has been attached. 2. FCC Form 175 Filing Options Auction applicants will have the opportunity to file their applications either electronically or manually (via hard copy paper application). Applicants are strongly encouraged to file their FCC Form 175 electronically. Electronic filing will enable the applicant to: 1) receive interactive feedback while completing the application, and 2) receive immediate acknowledgement that the FCC Form 175 has been submitted for filing. The following is a description of each filing method: a. Electronic Filing of FCC Form 175 The Commission has implemented a remote access system to allow applicants to submit their FCC Form 175 applications electronically. The remote access system for initial filing of FCC Form 175 applications generally will be available 24 hours per day beginning approximately January 4, 1996. FCC Form 175 applications that are filed electronically using this remote access system must be submitted and confirmed by 5:30 p.m. Eastern Time on Friday, January 19, 1996. Late applications or unconfirmed submissions of electronic data will not be accepted. The remote FCC Form 175 submission software will prompt the applicant for an FCC Account Number. The FCC Account Number that is required to log into the software is the same as what is required in Item 7 of the FCC Form 175 application, as discussed under Section B (1) (Completion of Form 175) above. In addition, the applicant will be required to enter a self-assigned password. This password must be entered in both the password and the verify password fields. The applicant should be careful when entering the passwords since the data entry is case sensitive. The applicant will need to remember the exact spelling of the password and keep it secure. In the event that an applicant loses its password to the remote electronic filing system, the applicant must notify the FCC Technical Support Hotline at (202) 414-1250 and will be required to obtain a replacement code in person at the auction headquarters located at 2 Massachusetts Avenue, N.E. in Washington, DC. Only the certifying official or one of the applicant's authorized representatives identified on the electronic submission of the FCC Form 175 application will be able to obtain a replacement password, and two forms of identification will be required (at least one must be a photo identification). To ensure the security of the filed applications, replacement passwords will not be provided over the telephone. Further, if an applicant exits the FCC Form 175 without ever submitting the application, the password associated with that FCC Account Number and any data entered will not be saved. The FCC Form 175 submission software contains six main screens. The first screen is the "Profile" screen which is used to capture the general FCC Form 175 information. The second screen is the "Licenses" screen which is used to select the construction permits for which the applicant wishes to apply. The third screen provides the "Required Certifications" as listed on the FCC Form 175. Applicants should read the "Required Certifications" prior to submitting an application. The fourth screen is used to submit the required FCC Form 175 exhibit. Applicants must provide their exhibit in an ASCII Text (.TXT) file format. The fifth screen allows the applicant to enter a free-form waiver request. The last screen provides the instructions for filing the FCC Form 175 application. The electronic filing method will capture all of the information required on the FCC Form 175 and will electronically submit the application to the FCC when the Form 175 has been properly completed and the applicant presses the submit button. The system will provide interactive error messages to help ensure the application contains the required information. Applicants who file FCC Form 175 applications electronically through the FCC remote access system will be able to print their application. At any time during the initial filing period, but prior to the deadline, electronic filing applicants may make modifications to their FCC Form 175 application on-line. The Commission will prohibit submission of FCC Form 175 applications after the deadline and encourages applicants to file their applications early in order to ensure that their applications are submitted and confirmed. After the FCC Form 175 has been successfully submitted, the option to generate and complete the FCC Form 159 (FCC Remittance Advice Form) will be offered. Applicants may complete the FCC Form 159 at any time after the FCC Form 175 has been successfully submitted. However, the FCC Form 159 and upfront payment must be received by 3:00 p.m. ET, January 19, 1996. See Section III of this Public Notice for terms relating to the upfront payment submission. The FCC Form 159 screen allows the applicant to complete and print its FCC Form 159 which must accompany its upfront payment to participate in the auction. Certain information will appear automatically on the screen based on the information entered on the applicant's FCC Form 175 application (i.e., the name and address of the applicant, the payment type code, the FCC Code 1 (auction number), etc.). The FCC Form 159 should be completed and printed. The printed copy must be faxed to Mellon Bank at (412) 236-5702 to submit an upfront payment by wire transfer. After the submission period deadline, the Commission will issue a Public Notice which will identify qualified and non-qualified applicants and the construction permits for which each qualified applicant has applied. All applications are still subject to FCC approval. Applicants who submit an FCC Form 175 electronically will need to check the Public Notices to verify acceptance of their application. The FCC Form 175 review software may be used to review and print other applicants' FCC Form 175 applications. It also provides the ability to download other applicants' FCC Form 175s once the FCC has released the qualified applicant Public Notice. Parties interested in reviewing, printing, or downloading other applicants' FCC Form 175 applications should be aware that this feature will be provided via a 900 number telephone service at a cost of $2.30 per minute. If your telephone system blocks access to 900 numbers, you will be unable to properly connect to the FCC Network. Please see your telephone administrator for assistance. Once the Commission releases the Public Notice that identifies the qualified and non-qualified applicants, the remote access system will generally be available on a 24-hour basis for the public to access FCC Form 175 filings. During certain FCC required time frames the system may not be available due to internal maintenance and processing requirements or other unforeseen technical difficulties. A message will be provided when access is denied. Those applicants who wish to file their FCC Form 175 electronically or review other FCC Form 175 applications online will need to carefully review all subsequent Public Notices. Applicants should note that previous versions of the remote FCC Form 175 software will not work. Applicants must download the version specific to this auction (file name: F175v6.exe). The hardware and software requirements and instructions for installing electronic filing software are attached to this Public Notice. b. Manual Filing of FCC Form 175 Auction applicants will be permitted to file their FCC Form 175 applications in hard copy. A copy of the FCC Form 175, with instructions, is attached to this Public Notice. For those applicants who file manually, whether mailed, hand delivered or sent by private courier, applications must be sent to: Office of the Secretary Attn: Auction 8 Short-Form Processing Federal Communications Commission 1919 M. Street, N.W., Room 222 Washington, D.C. 20554 Failure to sign a manually filed FCC Form 175 will result in dismissal of the application and inability to participate in the auction. Only original signatures will be accepted for manually filed applications. For all submissions in excess of five pages, a 3.5" diskette must be submitted which contains ASCII text (.TXT) files of all exhibits attached to the FCC Form 175. C. Application Fee There is no application fee required when filing FCC Form 175. However, to be eligible to bid, an applicant must submit an upfront payment. See Section III below. III. Upfront Payments In order to be eligible to bid at the auction, applicants must submit an upfront payment together with an FCC Remittance Advice Form (FCC Form 159) to Mellon Bank. All payments must be made in U.S. dollars and shall be in the form of a wire transfer. Payments must be received by 3:00 p.m. Eastern Time, January 19, 1996. Failure to deliver the upfront payment in a timely manner will result in dismissal of the application and inability to participate in the auction. A. Amount of Upfront Payments The upfront payment required to participate in the auction for the 110ø permit is $10 million. The upfront payment required to participate in the auction for the 148ø permit is $2 million. See Revision of Rules and Policies for the Direct Broadcast Satellite Service, Report and Order, FCC 95-507,  196-197. To bid on both permits, an applicant must submit an upfront payment of $12 million. B. Making Auction Payments by Wire Transfer To make an auction payment by wire transfer, an applicant must fax a completed FCC Remittance Advice Form (FCC Form 159) to Mellon Bank at (412) 236-5702 at least one hour prior to placing the order for the wire transfer (but on the same business day). On the cover sheet of the fax, the applicant should write "Wire Transfer - Auction Payment for Auction Event #8". To submit funds by wire transfer, you will need the following information: ABA Routing Number: 043000261 Receiving Bank: Mellon Pittsburgh BNF: FCC/AC--9116106 OBI Field: (Skip one space between each information item) "AUCTIONPAY" FCC ACCOUNT NO. (SAME AS FCC FORM 159, BLOCK 1) PAYMENT TYPE CODE (SAME AS FCC FORM 159, BLOCK 14) FCC CODE (SAME AS FCC FORM 159, BLOCK 17) PAYOR NAME (SAME AS FCC FORM 159, BLOCK 3) LOCKBOX NO. 358850 Given the abbreviated time period in which the Wireless Telecommunications Bureau must confirm receipt of upfront payments, the Bureau will require applicants to bring to registration a wire transfer confirmation receipt from their bank certifying that the upfront payment funds have been transferred to the FCC account. This confirmation will serve as a reserve method to confirm that the required funds have been transferred to the FCC if there is any delay in obtaining electronic confirmation. Failure to deliver the upfront payment in a timely manner will result in dismissal of the application and disqualification from participation in the auction. Detailed directions for completing the FCC Form 159 and a sample form are attached to this Public Notice. IV. Registration for the Auction Only qualified applicants who have submitted timely upfront payments will be permitted to register for the auction. Registration will occur on Tuesday, January 23, 1996, from 12:00 p.m. ET to 5:00 p.m. ET at the FCC auction site. At least one authorized representative as stated on the applicant's FCC Form 175 must register. This representative must have two forms of identification, one of which must be photo identification. At the end of the registration process, bidders will be in possession of the following information: þ FCC Account Number (self-assigned on the FCC Form 175) þ Bidder identification number þ Login name þ Login password All applicants will be pre-registered prior to the auction event. Qualified bidders must be aware that lost login codes, passwords or bidder identification numbers can be replaced and/or distributed only at the FCC auction site located at 2 Massachusetts Avenue, NE, Washington, DC 20002. Additionally, an authorized representative or certifying official, as designated on an applicant's FCC Form 175, must appear in person with two forms of identification (one of which must be a photo identification) in order to receive replacement codes. The FCC will allow qualified bidders to practice using the bidding software during registration on January 23, 1995. Specific instructions for this practice will be provided at registration. V. Auction Event and Bidding Rounds The DBS auction for the 110ø permit will begin at 9:00 a.m. Eastern Time on Wednesday, January 24, 1996. Initially, bidding rounds are expected to last thirty minutes to allow bidders to become familiar with the bid submission process. We expect the length of the bidding rounds to decrease as the auction progresses. The Commission will adjust the pace of the auction based on its monitoring of the bidding and assessment of auction progress. The precise schedule for bidding will be announced by Public Notice prior to the auction. The bidding for the 148ø permit will begin immediately following the conclusion of bidding for the 110ø permit. VI. Auction Procedures The two DBS construction permits will be awarded separately, with the 110ø permit being auctioned first. The high bid amount will be posted after the end of the bid submission period in each round of bidding. Information regarding all valid bids submitted in each round also will be posted. A. Bid Submission and Withdrawal Procedures 1. Bid Submission Bidders must place their bids electronically at the FCC auction site. Each bidder may submit a bid once in each round. Each bidder will be required to log in to the FCC auction computer system, using a log-in name and log-in password unique to that bidder, and in addition must provide its bidder identification number and FCC account number in order to place or withdraw a bid. All accepted bids and the minimum valid bid amount for the next round will be announced after the conclusion of the bid submission period in each round. Bidders may receive a hard copy bid confirmation after they have submitted their bids by pressing the Print button on the Bid Submission screen. Only persons authorized on the applicant's FCC Form 175 to make or withdraw a bid will be allowed to enter the bidding booth. Each authorized representative will be required to show photo identification to enter the bidding booth. 2. Bid Withdrawals A high bidder who withdraws its high bid will be subject to a bid withdrawal payment. Pursuant to these rules, any bidder who withdraws a high bid before the Commission declares bidding closed will be required to reimburse the Commission in the amount of the difference between its high bid and the amount of the winning bid the next time the construction permit is offered by the Commission, if this subsequent winning bid is lower than the withdrawn bid. No withdrawal payment will be assessed if the subsequent winning bid exceeds the withdrawn bid. To prevent multiple withdrawals by the same party in the same auction, the Commission will bar a bidder who withdraws a bid from continued participation in that auction. Because each auction will be for a single construction permit, we will allow withdrawals only after a round in which there have been no new bids or proactive waivers. After a round with no new bids or proactive waivers, the Commission will specify a bid withdrawal period. If the high bid is not withdrawn, the auction closes. If the high bid is withdrawn, the Commission will reoffer the permit in the next round. The offer price will be the highest price at or above which bids were made in previous rounds by three or more bidders. The Commission may at its discretion reduce this price in subsequent rounds if it receives no bids at this price. Prior to restarting the auction, the Commission will also restore the eligibility of all bidders who have not withdrawn. If no eligibility were restored, it is possible, given the activity rules, that no bidders would be eligible to bid when a permit is reoffered after a bid withdrawal. Restoring eligibility of all but those who withdrew will ensure the maximum number of sincere bidders for the permit when the auction is restarted. After a withdrawal the Commission will also issue each eligible bidder one activity rule waiver in addition to any remaining waivers to provide additional time for bid preparation and to avoid accidental disqualification. B. Minimum Opening Bid, Minimum and Maximum Bid Increments, and Tie Bids 1. Minimum Opening Bid We believe that it is useful to have a minimum opening bid for the 110ø permit to help move the auction along. Therefore, the Wireless Telecommunications Bureau and the International Bureau will establish a minimum opening bid of $125 million for this permit. Based on our observations of the market, we believe this minimum opening bid is high enough to move the auction along at a rapid pace, but significantly below the expected final bid for the spectrum. See Revision of Rules and Policies for the Direct Broadcast Satellite Service, Report and Order, FCC 95-507,  186. There is no minimum opening bid for the 148ø permit. See Revision of Rules and Policies for the Direct Broadcast Satellite Service, Report and Order, FCC 95-507,  186. 2. Minimum and Maximum Bid Increments The minimum bid increment is the amount or percentage by which a bid must be raised above the previous high bid in order to be accepted as a valid bid in the current round. The amount of the minimum valid bid for each construction permit (the sum of the minimum bid increment and the high bid from the previous round) will be announced at the beginning of each round. Once a bid has been received for a construction permit, the minimum bid increment will be ten (10) percent of the previous high bid. The Commission retains the discretion to establish, raise and lower minimum bid increments in the course of the auction. This discretion is necessary to ensure that the Commission can efficiently control the pace of the auction. The Commission also retains the discretion to establish and change maximum bid increments in the course of the auction, in the event it wishes to limit jump bidding. 3. Tie Bids Each bid will be date and time stamped when it is entered into the computer system. In the event of tie bids, the Wireless Telecommunications Bureau will identify the high bidder on the basis of the order in which bids are received, starting with the earliest bid. C. Activity Rules In order to ensure that the auction closes within a reasonable period of time, the Commission will impose an activity rule to discourage bidders from waiting until the end of the auction before participating. 1. Activity Requirements Bidders must be active in each round of the auction or use an activity rule waiver, as defined below. To be active in the current round, a bidder must submit a valid bid in the current round or have the high bid from the previous round. A bidder who is not active in a round and has no remaining activity rule waivers will no longer be eligible to bid on the construction permit being auctioned. However, as discussed above, in the event of a bid withdrawal, the eligibility of all bidders who have not withdrawn will be restored. 2. Activity Rule Waivers Bidders will be provided five activity rule waivers for each construction permit that may be used in any round during the course of the auction. A waiver will preserve eligibility in the next round. Waivers may be applied automatically by the Commission or invoked proactively by bidders. If a bidder is not active in a round, a waiver will be applied automatically if any waivers remain. An automatic waiver applied in a round in which there are no new valid bids will not keep the auction open. A proactive activity rule waiver is a waiver invoked by a bidder during the bid submission period. If a bidder submits a proactive waiver in a round in which no other bidding activity occurs, the auction will remain open. Therefore, if a bidder does not intend to bid but wants to ensure that the auction does not close, it should enter a proactive waiver in place of a bid. The Commission retains the discretion to issue additional waivers during the course of the auction for circumstances beyond a bidder's control or in the event of a bid withdrawal, as discussed above. 3. Stopping Rules A stopping rule specifies when an auction is over. The auction for each construction permit will close after one round passes in which no new valid bids or proactive waivers are submitted, subject to the following two qualifications. First, if the high bidder withdraws its bid during the bid withdrawal period the Commission will reoffer the construction permit in the next round as specified in Section A (2) above. Second, the Commission retains the discretion to keep an auction open even if no new valid bids and no proactive waivers are submitted. In the event that the Commission exercises this discretion, the effect will be the same as if a bidder had submitted a proactive waiver. VII. Delay, Suspension or Cancellation of the Auction The Commission may, by Public Notice or by announcement during the auction, delay, suspend or cancel the auction in the event of natural disaster, technical obstacle, evidence of auction security breach, unlawful bidding activity, administrative necessity, or for any other reason that affects the fair and competitive conduct of competitive bidding. In such cases, the Commission may, in its sole discretion, resume the auction starting from the beginning of the current or some previous round or cancel the auction in its entirety. VIII. Default and Disqualification Payments A default payment will be assessed if a winning bidder fails to pay the full amount of its 20 percent down payment or the balance of its winning bid in a timely manner, or is disqualified after the close of an auction. The amount of this default payment will be equal to the difference between the defaulting auction winner's "winning" bid and the amount of the winning bid the next time the construction permit is offered for auction by the Commission, if the latter bid is lower. In addition, the defaulting auction winner will be required to submit a payment of three percent of the subsequent winning bid or three percent of its own "winning" bid, whichever is less. If withdrawal, default or disqualification involves gross misconduct, misrepresentation or bad faith by an applicant, the Commission retains the option to declare the applicant and its principals ineligible to bid in future auctions, or take any other actions the Commission deems necessary, including institution of proceedings to revoke any existing licenses held by the applicant. See Implementation of Section 309(j) of the Communications Act - Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348, 2383 (1994). IX. Releasing Bidder Identities Bidders' identities and FCC account numbers will be disclosed prior to the auction. Thus, bidders will know in advance of the auction the identities of the bidders against whom they are bidding. X. Collusion To prevent collusion, the Commission's rules generally prohibit communications, after FCC Form 175 applications are filed and before down payments are submitted, among applicants eligible to bid for the same construction permits or construction permits that may be used to serve the same or overlapping geographic areas when such communications concern bids, bidding strategies or settlements. See 47 C.F.R.  100.79. XI. Post-Auction Procedures A. Down Payment The winning bidder for each construction permit must submit sufficient additional funds (a "down payment") to bring the amount of money on deposit with the government to 20 percent of its winning bid within ten (10) business days after the high bidder is announced. Specific information regarding the submission of down payments will be included in the Public Notice announcing the winning bidders. B. Submission of Long-Form Application and Award of Construction Permits The winning bidder for each construction permit also will be required to file information in conformance with Part 100 of the Commission's Rules. This procedure will constitute the "long-form application" process referred to in our general auction rules. Winning bidders must file this information with the Commission within 30 days of the announcement of winning bidders. Winning bidders must submit, as part of this post-auction application process, a signed statement describing their efforts to date and future plans to come into compliance with any applicable spectrum limitations, if they are not already in compliance. After reviewing a winning bidder's information supplied in conformance with Part 100 and determining that the bidder is qualified to be a permittee, and after verifying receipt of the bidder's 20 percent down payment, the Commission will announce the application's acceptance for filing, thus triggering the filing window for petitions to deny. If, pursuant to Section 309(d) of the Communications Act, the Commission dismisses or denies any and all petitions to deny, the Commission will issue an announcement to this effect, and the winning bidder will then have five business days to submit the balance of its winning bid. If the bidder does so, the permit will be granted subject to a condition, if necessary, that the permittee come into compliance with any applicable spectrum limitations within 12 months of the final grant. The permittee may come into compliance with this spectrum cap by either surrendering to the Commission its excess channels or filing an application that would result in divestiture of the excess channels. If the bidder fails to submit the balance of the winning bid or the permit is otherwise denied, we will assess a default payment as set forth above and re-auction the permit. C. Refund of Upfront Money All applicants who submitted upfront payments, yet were not winning bidders, may be entitled to a refund of their upfront payments after the conclusion of the auction. Any refund will be conditioned upon the existence of excess funds on deposit after any applicable bid withdrawal payments have been deducted. A refund package will be available to all applicants at the auction registration. The package will include a cover letter which outlines the procedures for processing a refund, and an FCC Form SF-3881 (ACH Vendor/Miscellaneous Payment Enrollment Form). Applicants are expected to complete their section of the SF-3881 and forward the form to their financial institution for final completion. Once the SF-3881 has been properly completed, it must be transmitted by facsimile to the Billings and Collections Branch, Federal Communications Commission, ATTN: William Koch. The fax number is (202) 418-2843. The original SF-3881 must also be mailed to the following address: Federal Communications Commission ATTN: William Koch 1919 M Street, N.W., Room 452 Washington, DC 20554 Refund processing takes approximately three days if the FCC Form SF-3881 is used. Refund processing takes approximately ten days if the FCC Form SF-3881 is not used and refunds are sent via U.S. mail. Bidders with questions regarding the refund process or completion of the SF-3881 should contact either Regina Dorsey or William Koch at (202) 418-1995. D. Construction Requirements Any person receiving a new or additional DBS construction permit through auction will be required to comply with the service's due diligence requirements. Thus, the permits will be issued subject to the condition that the permittee meet the following performance objectives. First, the permittee must either begin satellite construction or complete contracting for such construction within one year of receiving its construction permit. Second, the permittee must complete construction of the first satellite in its DBS system within four years of receiving its construction permit. Third, the permittee must launch and begin operation of all satellites in its DBS system within six years of receiving its construction permit. See 47 C.F.R.  100.19. Any person receiving a new or additional DBS construction permit through auction will also be required to comply with certain geographic service requirements. Specifically, since DBS service to both Alaska and Hawaii has been shown to be technically feasible from both the 110ø and the 148ø orbital location, any person who acquires a permit to construct satellites for use at those locations will be required to provide service to Alaska and Hawaii from those locations. See 47 C.F.R.  100.53. XII. Bidder Alert The terms contained in the Commission's Report and Orders and Public Notices are not negotiable. Prospective bidders should review these auction documents thoroughly prior to the auction to make certain that they understand all of the provisions and are willing to be bound by all of the terms before making any bid. All applicants must certify under penalty of perjury on their FCC Form 175 applications that they are legally, technically, financially and otherwise qualified to hold a construction permit. Prospective bidders are reminded that submission of a false certification to the Commission is a serious matter that may result in severe penalties including monetary forfeitures, license revocations, being barred from participating in future auctions, and/or criminal prosecution. - FCC - FEDERAL COMMUNICATIONS COMMISSION DBS CONSTRUCTION PERMITS AUCTION Auction Specific Instructions FCC Remittance Advice, FCC FORM 159 UPFRONT PAYMENTS The following instructions are specifically written for the auction of DBS construction permits. These instructions are intended as a supplement to the standard instructions issued by the FCC's Billings and Collections Branch, at telephone (202) 418-1995. Bidders should ensure that they complete the FCC Form 159 accurately, since mistakes may affect their bidding eligibility. Please note that it is vital that all forms, applications, correspondence, etc. submitted to the Commission by an applicant contain identical information necessary for verification purposes. To this end, appropriate references between the FCC Form 159 Remittance Advice and the FCC Form 175 Short-Form Application have been provided below: Block Number Required Information 1 FCC Account Num ber - Same as FCC Form 175, block "7". This is a s elf-assigned ten-digit personal identificati on number. If you have a taxpayer identification number (TIN), you must add a zero (0) prefix and place the number here (i.e.,"0"123456789). If you do not have a TIN you may use your current ten-digit telephone number (including area code -i.e., 214 335 3456). 2 Total Amount Paid - Enter the total remittance based on the payment amount. To participate in the bidding for the 110ø permit, the upfront payment amount is $10,000,000. To participate in the bidding for the 148ø permit, the upfront payment is $2,000,000. To bid on both permits, the upfront payment is $12,000,000. 3 Payor Name - Same as FCC Form 175, block "1". Enter the full name of the person or company (i.e., maker of the check) responsible for payment. 4 Street Address (Line 1) - Same as FCC Form 175, block "2". The street address to which correspondence should be sent. 5 Street Address (Line 2) - Same as FCC Form 175, block "2". This line may be used if further identification of the address is required. 6 City - Same as FCC Form 175, block "3". The name of the city associated with the street address given in block (4) of the FCC Form 159 7 State - Same as FCC Form 175, block "4". Enter the appropriate two- character abbreviation here. 8 Zip Code - Same as FCC Form 175, block "5". Enter the appropriate five-digit or nine-digit code here. 9 Daytime Telephone Number - Same as FCC Form 175, lower right hand corner of the page. Enter the "payor's" ten-digit telephone number here. 10 Country Code - Used for payors who have addresses outside the U.S. Proper codes may be obtained from the Mailing Requirements Dept. of the U.S. Postal Service. NOTE - IF APPLICANT, LICENSEE, REGULATEE OR DEBTOR IS THE SAME AS THE PAYOR, DO NOT COMPLETE BLOCKS 11, 13, 18, 19, 20, & 21. THIS AUCTION DOES NOT INVOLVE MULTIPLE APPLICATIONS OR FILINGS, SO WE ARE CONCERNED ONLY WITH THE REMAINING BLOCKS 12A, 14A, 15A, 16A & 17A. ITEM # "1" INFORMATION 12A FCC Call Sign/Other Identifier - Leave blank. 14A Payment Type Code - Enter " A I D U ". 15A Quantity - Enter the number "1". 16A Amount Due - Enter total upfront payment indicated in block (2). 17A FCC Code 1 - Enter the number "8". NOTE - IN THE UPPER LEFT HAND CORNER OF THE FCC FORM 159 IS A RECTANGLE WITH THE WORD "(RESERVED)" TYPED IN THE MIDDLE OF IT. PLEASE ENTER THE NUMBER "358850" SOMEWHERE IN THIS RECTANGLE. FEDERAL COMMUNICATIONS COMMISSION DBS CONSTRUCTION PERMITS AUCTION Hardware and Software Requirements and Instructions for Installing Electronic Filing Software Recommended Hardware and Software Requirements You will need at minimum the following hardware:  CPU: Intel 80386 or above (80486 or faster recommended)  RAM: 8MB RAM (more recommended if you have multiple applications open)  Hard Disk: 10MB available disk space  1.44MB 3.5" Floppy Drive (to install the FCC Form 175)  Four (4) blank MS-DOS formatted 1.44MB floppy disks  Modem: v.32bis 14.4kbps Hayes compatible modem  Monitor: VGA or above  Mouse or other pointing device  Microsoft Windows 3.1 or Microsoft Windows for WorkGroups v3.11* *The Electronic Filing Software has not been completely tested on a Macintosh, OS/2, or Windows95 environment. Therefore, the FCC will not support operating systems other than Microsoft Windows 3.1 or Windows for Workgroups v3.11 in an enhanced mode. This includes any other emulated Windows environment. If your Windows is in a networked environment, you should check with your local network administrator for any potential conflicts with the PPP (Point-to-Point Protocol) Dialer you will use to connect to the FCC Network. This usually includes any TCP/IP installed network protocol. The PPP Dialer, when configured with the appropriate parameters, will establish a direct (Point-to-Point) connection from your PC to the FCC Network. This direct connection is not routed through the Internet. For assistance in downloading, extracting, installing or using FCC application software contact the FCC Technical Support Hotline at (202) 414-1250. Where to get Form 175 Application Software The FCC Form 175 application software must first be downloaded from the Internet or the FCC Bulletin Board System. Detailed Internet Instruction To access the FCC ftp server, you will need to have access to the Internet and ftp client software. Graphical ftp interfaces may differ; please check with your local computer specialist. FTP: The following instructions are for the command line version of ftp. 1. Connect to the FCC ftp server by typing ftp ftp.fcc.gov 2. At the user name prompt, type anonymous [Enter] 3. At the password prompt, type your Internet e-mail address [Enter] 4. To allow the file to be downloaded type: binary [Enter] 5. Change your current directory by typing: cd /pub/Auctions/DBS/Programs [Enter] 6. Use the get command to download files from the FCC ftp server by typing: get F175V6.EXE [Enter] 7. If you wish to exit, type: bye [Enter] Gopher: gopher.fcc.gov or use any gopher to get to "all the gophers in the world" then 'U.S.' then 'DC' then 'FCC'. World Wide Web: ftp://ftp.fcc.gov Detailed BBS Instructions The FCC Auction Bulletin Board System (BBS) provides dial-in access for the FCC-provided application software. In order to access the FCC Auction BBS, use a communications package that can handle at least xmodem protocol (e.g., pcAnyWhere, Telix, Procomm) to dial in to (202) 682-5851. Use the settings of 8 data bits, no parity and 1 stop bit (8,N,1). For new users follow steps 1-6, otherwise go to step 7: 1. Type New, [Enter]. If the word ANSI is blinking, type Y for yes. If the word ANSI is not blinking, type N for No 2. Type in your first and last name and press [Enter]. This will be your login name 3. Type in your Telephone number and press [Enter] 4. Type in your Fax number and press [Enter] 5. Type in what you want your password to be and press [Enter] 6. Retype the password for verification and press [Enter] Once the account is generated: 7. Type D for DBS and press [Enter] 8. Type P for Programs and Applications and press [Enter] 9. Move the cursor to the file named F175V6.EXE and type [Control]-D (hold the Ctrl key down and press the D key) for Download and press [Enter] 10. Type the letter representing the transfer protocol desired and press [Enter]. How the file is downloaded and where it gets downloaded depends on the transfer protocol package used. 11. To download additional files move the cursor to the filename desired, type [Control]-D (hold the Ctrl key down and press the D key) for Download, press [Enter], and repeat step 10. To Exit the screen, press X and [Enter]. To Exit: 12. Type X to Exit and press [Enter] and repeat those keystrokes until asked if you want to Exit the BBS. Press Y for Yes when asked to verify that you want to exit. Creating Installation Disks from Downloaded Files The FCC-provided application software available through the Internet and the FCC Auction BBS will be in a self-extracting compressed file format. Once the compressed file has been downloaded, you will need to generate the installation disks. You will need to have four (4) blank MS-DOS formatted 3.5" 1.44MB disks. To generate the installation disks, go to the MS-DOS prompt, change to the directory in which the downloaded file is located, type F175V6.EXE /! and press [Enter]. Installing FCC Form 175 Disks To properly install the Remote FCC Form 175 Software, ALL components must be installed. After you have created the installation disks, restart Windows, place Disk 1 in the floppy drive and run SETUP.EXE from installation Disk 1 and follow the instructions on the screen. Enter the destination directory (you may want to use a directory that does not currently exist). Press the Install button and, if using a directory that does not exist, click on 'Yes' when the message box appears asking whether to create the directory. Respond 'Yes' to all message boxes that ask whether to overwrite an existing file. You MUST update all the existing files. If you should receive a message stating the commdlg.dll file or the ddeml.dll file is being used by Windows, press the Ignore button. You must start the PPP Dialer and be connected to the FCC Network before you start any of the programs. For technical assistance in downloading, extracting, installing or using the FCC application software contact the FCC Technical Support Hotline at (202) 414-1250. The FCC Technical Support Hotline generally will be available Monday through Friday from 9 a.m. to 6 p.m. ET. Running FCC Form 175 After the FCC Form 175 installation is complete, you will have a new Program Manager group with five icons: Remote FCC Form 175 Submit, Remote FCC Form 175 Review, PPP Dialer, Configure PPP, and Ping. You must start the PPP Dialer and be connected before you start either program. To start up either the Remote FCC Form 175 Submit or Remote FCC Form 175 Review, double click the respective icon. When you are finished with either program, be sure to disconnect from the FCC Network via your PPP Dialer. Please note, the FCC Form 175 Review program requires the use of a 900 number telephone service. If your telephone system blocks access to 900 numbers, you will be unable to properly connect to the FCC Network. Please see your telephone administrator for assistance. DETAILED INSTRUCTIONS FOR USING ALL FCC REMOTE ELECTRONIC SOFTWARE CAN BE FOUND IN THE README FILE AS WELL AS IN THE CONTEXT SENSITIVE HELP FUNCTION ASSOCIATED WITH EACH MODULE. The FCC recently issued a Report and Order (WT Docket No. 95-69) establishing fair and reasonable fees on-line access to the Commission's wide area network. The Report and Order established the following schedule of fees: ACCESS PER MINUTE Form 175 Filing $0.00 Form 175 Review $2.30