Telecom/1996-04-telecom-walnutcreek.iso/legal-fcc/auction.notice.for.ivds

Text File | 1994-06-08 | 22KB | 439 lines

Subject: Auction for IVDS Licenses From FCC

A second legal notice from the Federal Communications Commission
submitted to Digest readers FYI.

PAT

  Date: Tue, 24 May 1994 17:03:59 -0400 (EDT)
  From: Bob Keller <[e-mail]>
  Subject: Auction Notice and Filing Requirements for IVDS

                    PRIVATE RADIO BUREAU INFORMATION

        NOTICE AND FILING REQUIREMENTS FOR THE FIRST AUCTION OF
                 INTERACTIVE VIDEO DATA SERVICE LICENSES

    Report No. ABC-94-02, Auction No. 2           May 23, 1994

    The Federal Communications Commission ("FCC") plans to hold a
series of oral and sealed bid auctions for approximately 1400
Interactive Video Data Service (IVDS) licenses.  The first auction,
which will be an oral auction, will be for 297 IVDS markets.  The
auction will begin promptly at 9:00 AM each day on July 28-29, 1994,
and will be held in the Regency Ballroom at the Omni Shoreham Hotel at
2500 Calvert Street, N.W. in Washington, D.C.  As explained in more
detail below, those wishing to participate in the first auction must
submit an application in accordance with the Commission's rules and
the instructions in this Public Notice on or before Monday, June 27,
1994, and must bring to the auction a cashier's check payable to "FCC"
or "Federal Communications Commission" in the amount of $2500 for each
five licenses that they expect to win in order to be eligible to bid.

Summary of Licenses to be Auctioned

    The first auction will cover 297 IVDS markets: markets 5 and
11-306.  Two licenses are available in each market, license A and
license B.  Bidders may only hold one IVDS license in each market.
The Commission will not auction the licenses strictly by largest to
smallest IVDS market.  Rather, the licenses will first be grouped to
conform as closely as possible with Areas of Dominant Influence
(ADIs).  The IVDS license group associated with the largest ADIs will
be auctioned first.  Within ADIs, the largest IVDS markets will be
auctioned first, with smaller markets following.  The exact order in
which the markets are to be auctioned is listed as an Appendix to this
Public Notice.

     During the auction, both license A and license B will be
auctioned at the same time, with the two highest bidders generally
awarded a license.  The highest bidder will receive first choice
between the two licenses at its bid price and the next highest bidder
will receive the other license at its bid price.

Procedures, Terms and Conditions

     The auction will be conducted by Tradewinds International, Inc.
and Larry Latham Auctioneers, Inc.  Prospective bidders are urged to
thoroughly familiarize themselves with the Procedures, Terms and
Conditions in the Bidder's Package (collectively, "Terms"), the Second
Report and Order in FCC Docket No. 93-253, FCC 94-61, released April
20, 1994, and the Fourth Report and Order in Docket No. 93-253, FCC
94-99, released May 10, 1994.  Copies of the Second Report and Order
are available for a fee from International Transcription Services,
Inc. at [phone].  The Terms and the auction documents in the
Bidder's Information Package ("Bidder's Package") discussed below are
not negotiable.  Prospective bidders are urged to read, review and
analyze the auction documents prior to bidding at the auction, to make
certain that they completely understand the provisions therein, and
are willing to be bound by all of the Terms before making any bid.

                     1.  BIDDER'S INFORMATION PACKAGE

     The Bidder's Package (as amended and supplemented from time to
time) may be obtained by a prospective bidder by contacting the
Commission's contractor, Tradewinds International, Inc. at General
Aviation Terminal, Suite 200, No. 7 Thomas Avenue, Washington National
Airport, Washington, D.C. 20001, telephone (202) 637-FCC1 (3221) and
(202) 637- FCC2 (3222).

     The Bidder's Package will contain the following information:

     (1) List of licenses to be offered in the sequence they will be
     offered;

     (2) Procedures, Terms and Conditions of the auction;

     (3) Application form to participate in an FCC auction ("FCC Form 175"
         (and 175-S) or "Short Form") including instructions on filling
         out the form and a sample form 175 correctly filled out;

     (4) High Bid Acknowledgment Form;

     (5) Wire transfer instructions for winning bidders wishing to use
         wire transfer of funds;

     (6) Application form for an IVDS license ("FCC Form 574 or "Long
         Form") to be submitted by winning bidders only;

     (7) Copies of the FCC decision on auction rules for IVDS (the Fourth
         Report and Order) and of the general auction rules established in
         the Second Report and Order; and

     (8) Other general auction information.

             2.  SHORT FORM (FCC FORM 175) LICENSE APPLICATION

     Bidding at the oral IVDS auction is open only to bidders who
submit an application on FCC Form 175 to participate in an FCC auction
that complies with FCC rules that is received by Tradewinds no later
than 5:30 P.M. EDT Monday, June 27, 1994.  If you have not submitted a
Form 175 by that time, you cannot bid.  Instructions for filling out
the Form 175 are on the back of that form; please read them before
completing the Form.  We call special attention to several items on
the Form 175.

     1.  In item 6 of Form 175, Auction No., applicants should enter "2".

     2.  Item 7 requires you to make up a ten digit FCC Account
Number, a personal identification number that we will use to identify
and track your application.  You have two options to create this FCC
Account Number.  Option 1- you may use your taxpayer identification
number (TIN) with a prefix of "0", i.e., 0123456789.  Option 2-you may
use your ten digit telephone number (i.e. 5552345678).  You should use
this same number when submitting additional information/material
regarding this application, including any required fees submitted to
the Commission on FCC 159, FCC Remittance Advice, (i.e. use the same
number for the Form 175 and the FCC Account Number on FCC 159).
Please use this number whenever you write, call, or otherwise inquire
about your application.  You will need that number to register for the
auction on auction day.

     3.  Items 9 and 10 ask whether the applicant is claiming a
preference in the bidding process.  As discussed more fully below,
certain preferential measures are available to entities listed in item
9.  Please ensure that you qualify for a preference before checking
"yes" in item 10; the Commission has specific rules defining a
"minority" and "small business."

     4.  For item 11, Market No., the Market No. for each IVDS license
to be auctioned is listed in the second column of the Appendix to this
Public Notice under the heading "MSA"; please list the markets you are
interested in bidding on in the first column under item 11 labeled
"Market No."  If you want to bid on more than five markets, you must
continue on Form 175-S.  For the Frequency Block No. in item 11,
applicants should check Block No. 1 if they wish to bid on license A
(218-218.5 MHz) and Block No.  2 if they wish to bid on license B
(218.5-219 MHz).  Applicants who wish to hold either license in a
particular market should check both Block No.  1 and Block No. 2.
Leave the other Frequency Block Nos. blank.

     5.  In item 12, applicants should list the name(s) of a person(s)
they want to represent them at the auction.  Only one of the
individual(s) listed in item 12 will be permitted to display the
bidding card.

     6.  Please read the "Certifications" carefully before signing.
These certifications help to ensure a fair and open auction and
require, among other things, the disclosure to the Commission of
certain information on applicant ownership and agreements or
arrangements concerning the licenses.  Submission of a false
certification to the Commission is a serious matter that may result in
severe penalties, including monetary forfeitures, license
revocation(s), being barred from future auctions, and/or criminal
prosecution.

     A sample Form 175, properly completed, will be provided as part
of the Bidder's Package.

     No microfiche copies of the Form 175 or 175-S are required.

Where to Send the Form 175

     Each individual application (Form 175 and attachments, including
Form 175-S, if needed), whether mailed or hand delivered, must be in
an individual sealed envelope and properly addressed.  Multiple
applications, properly packaged, may be delivered in one larger,
properly addressed container.

     In order to be eligible to bid, Tradewinds must receive your Form
175 application by 5:30 P.M. EDT on Monday, June 27, 1994.  Late
applications will not be accepted.

     Whether mailed, hand delivered, or sent by private courier, they must
be addressed only to:

        Tradewinds International, Inc.
        General Aviation Terminal, Suite 200
        No. 7 Thomas Avenue
        Washington National Airport
        Washington, D.C. 20001
        Attention: IVDS Auction
        [phone]

in an envelope addressed as above and marked "IVDS Auction" on the
outside.  The business hours of Tradewinds International are between 9
A.M. and 6 P.M.  Applications taken or sent to any other location will
not be accepted.

     We strongly recommend that you use certified mail, return receipt
requested or a delivery service that obtains a receipt showing when,
where, and to whom the application was delivered.  Tradewinds
International will time stamp file copies of applications upon
request.

When to submit Form 175

     The completed Form 175, application to participate in an FCC
auction, can be submitted only to the address above anytime after
release of this Public Notice but must be received by 5:30 P.M. EDT on
Monday, June 27, 1994.  The Form 175 requires the bidder to supply
certain information which is explained more fully in the Instructions
accompanying that application.  Please read the instructions
thoroughly before attempting to complete the form.  Certain
information necessary to complete Form 175, such as the Auction No.,
and IVDS Market Nos., can be found either at the top of or in the
Appendix to this Public Notice.

Application Fee

     No application fee or fee form need accompany the Form 175 for
the IVDS auction, but you must bring an upfront payment with you to
the auction as described below in order to be able to bid.  As
discussed further below, winning bidders will have to submit an
application on FCC Form 574 to be an IVDS licensee.

Upfront Payment

     You must have at least one cashier's check in the amount of two
thousand five hundred dollars ($2,500.00) U.S. at the auction in order
to bid.  One cashier's check in the amount of $2,500 entitles you to
be the successful high bidder on up to five licenses.  If you intend
to win more than five licenses, you must bring additional $2,500.00
cashier's checks, each of which will cover up to five additional
licenses.  For example, if you wish to win seven IVDS licenses, bring
two $2,500.00 cashier's checks.  If you wish to win twelve IVDS
licenses, bring three $2,500.00 cashier's checks.  If you wish to win
thirty two IVDS licenses, bring seven $2,500.00 cashier's checks.

     The cashier's check(s) must be drawn on a bank insured by the
Federal Deposit Insurance Corporation (FDIC) and be made payable to
"FCC" or "Federal Communications Commission".  No cash will be
accepted.

     Please calculate carefully the number of IVDS licenses you expect
to bid on before the auction, as you will not be permitted to bid on
additional licenses if you do not have sufficient cashier's checks.
Also, if you plan to bid on more than five licenses, please do not
bring a single cashier's check in an amount that is a multiple of
$2,500.  Bring several cashier's checks, each in the amount of
$2,500.00.  The Commission cannot process upfront payments in amounts
other than $2,500.00 and you may not be able to bid on more than five
licenses without checks of $2,500.00.  Furthermore, the Commission
will not refund any monies if you bring cashier's checks in amounts
larger than $2,500.00.  Your upfront payment(s) will be credited
towards the balance due on the license(s) you win, but FCC cannot make
refunds on auction day if the amount of your check(s) exceeds the
value of the license(s).

     You will be required to show your cashier's check(s) on auction
day in order to receive the bidding card enabling you to bid.  If you
are the successful high bidder on a license, the auctioneer will take
your check from you although you will still be able to win up to four
more licenses without having to submit another cashier's check.  The
amount of your cashier's check(s) will be credited towards the balance
due the Commission on the license(s) you have won.

        3.  WHAT HAPPENS AFTER THE FORM 175 APPLICATIONS ARE FILED?

     After the period for filing applications has closed on Monday,
June 27, 1994 at 5:30 P.M. EDT, the Commission will process the
received applications and issue a Public Notice listing all accepted
and rejected applications and also listing those which have minor
defects that can be corrected.  The Public Notice will also announce
the time and manner for correcting these defects.  As described more
fully in the Commission's general auction rules, you may only make
minor changes to your application such as the correction of
typographical errors.  You may not make major modifications such as
changes in ownership to your application.  Failure to sign the Form
175 cannot be corrected and will cause the application to be dismissed
and the applicant ineligible to participate in the auction.  See
Section 1.2105 of the Commission's general auction rules.

     Later, the Commission will release another Public Notice
announcing the names of all applicants, including applicants who have
corrected their defective applications, whose applications have been
accepted for filing and who are therefore eligible to participate in
the auction.  Bidder numbers and cards will be assigned at
registration.  Further information, such as directions to the auction
location and auction registration procedures, will be provided in the
Bidder's Package.  All bidders will be required to bring two forms of
identification (one form of photo identification, e.g. a valid
driver's license or passport, and one additional form of
identification.)

     4.  AUCTION DAY AND POST-AUCTION PROCEDURES

Registration

     You must register at the auction site in order to bid either the
night before the first day of the auction or on the morning of both
auction days before 9:00 A.M.  Details of registration will be in the
Bidder's Package.  You may bid on both license A and license B in a
single IVDS market, but you may only win one license.  The FCC will
verify and inspect the number and validity of your cashier's check(s)
at registration.

Collection of high bid acknowledgment form and upfront payments

     At the end of each round of bidding, the two high bidders will be
required to sign a High Bid Acknowledgment Form.  The upfront payment
($2,500 cashier's check) will be collected from the successful bidder
immediately after the first license is won in each group of five
licenses.  No interest will be paid on any funds deposited with the
Commission.

Payment of down payment and remaining balance due

     The winning bidder for each license must submit sufficient
additional funds (a "down payment") to bring the amount of money on
deposit with the government to 20% of their winning bid within five
(5) business days after the auction.  This down payment must be
deposited at the Commission's lockbox bank.  Winning bidders that are
qualified small businesses, however, need only submit an amount
sufficient to bring their monies on deposit with the government up to
10% of their winning bid within five (5) business days after close of
bidding, with the remaining 10% due within five (5) business days
after grant of the license.  Further details are in the Commission's
general auction rules and its IVDS specific auction rules and will be
supplied in the Bidder's Package.  Except for winners entitled to
installment financing, payment of the 80% remaining balance will be
due after the Commission processes the winning bidder's Form 574 (see
below) and grants its license.  No interest will be paid on any funds
deposited with the Commission.

Filing of FCC Form 574

     As detailed in the IVDS and general auction rules, winning
bidders must timely submit a properly completed FCC application for an
IVDS license (FCC Form 574) within ten business days after being
notified that they are the winning bidder(s).  Send the Form 574 to:

        Office of the Secretary
        Federal Communications Commission
        1919 M St., N.W., Room 222
        Washington, D.C. 20554
        Attention: Auction Application Processing Section

The Commission has decided to waive Section 1.1102(7)(a) of its rules
on its own motion so that winning bidders need not submit an
application fee or Form 159.

     After submission of the 574, the Commission will determine
whether there are any reasons why the license should not be granted;
if there are none, it will grant the license.  The continuing validity
of the license will be conditioned upon full payment of the remaining
balance of the winning bid within five business days after license
grant.

Default penalties

     Certain penalties apply if a bidder withdraws a high bid or
defaults (e.g. is unable to pay the balance due) after winning the
bidding.  These penalties are designed to ensure that only serious,
qualified bidders participate in the auction and are explained more
fully in the Commission's Fourth Report and Order and in its general
auction rules.

     5.  DESIGNATED ENTITIES

Benefits for Designated Entities

     The Commission has provided three basic benefits, described
below, for IVDS auction participants who are "minorities", "women" or
"small businesses" (collectively, the "Designated Entities").
Definitions of these entities are listed in Subpart Q of Part 1 of the
Commission's Rules and in the Bidder's Package.

     The first of these benefits is government sponsored installment
financing, which is available only to small businesses.  The FCC is
offering to finance up to 80 percent of a small business's winning bid
(high bid minus the monies on deposit with the FCC) over the 5 year
term of their IVDS license.  Interest will be charged at a fixed rate
equal to that in effect for 5 year treasury notes on the day the
license is issued.  Payments will be interest only for the first two
years, with principal amortized over the remaining three years of the
license term.  The FCC will provide coupon payment books.

     The second of these benefits is a bidding credit.  Businesses
owned by minorities or women are entitled to a 25% bidding credit to
win one of the two IVDS licenses in each market.  A bidding credit
allows the winning bidder to pay less than the amount of its bid.  For
example, if the winning bid is $1,000, a business owned by a minority
or a woman need actually pay only $750 for the license.  A bidding
credit is available for either license A or license B in each IVDS
market, but not both.  If the two high bidders for licenses A and B
are both designated entities using bidding credits, the highest bidder
will be offered the license of its choice and the second highest
bidder will be given the option of accepting the license without the
credit or declining the remaining license.  In the latter event, the
second license will be reauctioned, this time without the use of
bidding credits.

     If a bidder is both a small business and a minority/woman owned
business, it can obtain installment financing and use bidding credits.
Bidding credits will not be available on the second IVDS license in a
market if the other IVDS license was already won using a bidding
credit, however.

     The third benefit is the availability of tax certificates to
initial investors in minority and women-owned IVDS licensees upon
divestiture of their non-controlling investment interests in an IVDS
licensee.  Tax certificates are also available to IVDS licensees who
transfer or assign their licenses to minority or women-owned
businesses who are also designated entities.  Tax certificates enable
initial investors or the IVDS licensee to defer the taxable gain upon
sale of their interest or license.  More information on tax credits is
in the Fourth Report and Order.

Unjust Enrichment

     Certain penalties apply if a designated entity obtains an IVDS
license using the benefits available to designated entities and
subsequently transfers or sells its license prematurely.  These
penalties are explained more fully in the Commission's Fourth Report
and Order and in its general auction rules.

     For additional information on IVDS auctions, please call
Tradewinds International, Inc. at (202) 637-FCC1 (3221) or FCC2 (3222)
between 9 A.M.  and 6:00 P.M. EDT.  Messages can be left after
business hours.

                -FCC-

                      --------------------------
Bob Keller <KY3R>        Robert J. Keller, P.C.        Tel [phone]
[e-mail]    Federal Telecommunications Law    Fax [phone]
finger me for daily FCC info + see ftp.clark.net:/pub/rjk/ for other files