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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations that any third party it employs for advice pertaining to its bids or bidding strategies does not become a conduit for prohibited communications to other specified parties, as that would violate the rule. For example, an applicant might require a third party, such as a lender, to sign a non-disclosure agreement before the applicant communicates any information regarding bids or bidding strategy to the third party. Within third-party firms, separate individual employees, such as attorneys or auction consultants, may advise individual applicants on bids or bidding strategies, as long as such firms implement firewalls and other compliance procedures that prevent such individuals from communicating the bids or bidding strategies of one applicant to other individuals representing separate applicants.
Although firewalls and/or other procedures should be used, their existence is not an absolute defense to liability if a violation of the rule has occurred.
56. As the Commission has noted in other spectrum auctions, in the case of an individual, the objective precautionary measure of a firewall is not available. As a result, an individual that is privy to bids or bidding information of more than one applicant presents a greater risk of becoming a conduit for a prohibited communication. OEA and WTB will take the same approach to interpreting the prohibited communications rule in Auction 110. OEA and WTB emphasize that whether a prohibited communication has taken place in a given case will depend on all the facts pertaining to the case, including who possessed what information, what information was conveyed to whom, and the course of bidding in the auction.
57. OEA and WTB remind potential applicants that they may discuss the short-form application or bids for specific licenses or license areas with the counsel, consultant, or expert of their choice before the short-form application deadline. Furthermore, the same third-party individual could continue to give advice after the shortform deadline regarding the application, provided that no information pertaining to bids or bidding strategies, including PEAs selected on the short-form application, is conveyed to that individual.
58. Applicants also should use caution in their dealings with other parties, such as members of the press, financial analysts, or others who might become conduits for the communication of prohibited bidding information. For example, even though communicating
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that it has applied to participate in the auction will not violate the rule, an applicants statement to the press that it intends to stop bidding in an auction could give rise to a finding of a section 1.2105 violation. Similarly, an applicants public statement of intent not to place bids during bidding in Auction 110 could also violate the rule.
5. Section 1.2105c Certifications 59. By electronically submitting its FCC Form 175 auction application, each applicant for Auction 110 certifies its compliance with section 1.2105c of the rules. The mere filing of a certifying statement as part of an application, however, will not outweigh specific evidence that a prohibited communication has occurred, nor will it preclude the initiation of an investigation when warranted. Any applicant found to have violated these communication prohibitions may be subject to sanctions.
6. Duty To Report Prohibited Communications 60. Section 1.2105c4 requires that any applicant that makes or receives a communication that appears to violate section 1.2105c must report such communication in writing to the Commission immediately, and in no case later than five business days after the communication occurs. Each applicants obligation to report any such communication continues beyond the five-day period after the communication is made, even if the report is not made within the five-day period.
7. Procedures for Reporting Prohibited Communications 61. A party reporting any information or communication pursuant to sections 1.65, 1.2105a2, or 1.2105c4 must take care to ensure that any report of a prohibited communication does not itself give rise to a violation of section 1.2105c. For example, a partys report of a prohibited communication could violate the rule by communicating prohibited information to other parties specified under the rule through the use of Commission filing procedures that allow such materials to be made available for public inspection.
62. Parties must file only a single report concerning a prohibited communication and must file that report with the Commission personnel expressly charged with administering the Commissions auctions. This process differs from filing procedures used in connection with other Commission rules and processes, which may call for submission of filings to the Commissions Office of the Secretary or
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ECFS. Filing through the Office of Secretary or ECFS could allow the report to become publicly available and might result in the communication of prohibited information to other auction applicants. This rule is designed to minimize the risk of inadvertent dissemination of information in such reports. Any reports required by section 1.2105c must be filed consistent with the instructions set forth in the Auction 110 Procedures Public Notice. For Auction 110, such reports must be filed with the Chief of the Auctions Division, Office of Economics and Analytics, by the most expeditious means available.
Any such report should be submitted by email to the Auctions Division Chief and sent to auction110@fcc.gov. If you choose instead to submit a report in hard copy, contact Auctions Division staff at auction110@fcc.gov or 202
4180660 for guidance.
63. Given the potential competitive sensitivity of public disclosure of information in such a report, a party seeking to report such a prohibited communication should consider submitting its report with a request that the report or portions of the submission be withheld from public inspection by following the procedures specified in section 0.459 of the Commissions rules.
OEA and WTB encourage such parties to coordinate with the Auctions Division staff about the procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements 64. Each applicant that is a winning bidder will be required to provide as part of its long-form application any agreement or arrangement it has entered into and a summary of the specific terms, conditions, and parties involved in any agreement it has entered into.
This applies to any bidding consortia, joint venture, partnership, or agreement, understanding, or other arrangement entered into relating to the competitive bidding process, including any agreement relating to the post-auction market structure. Failure to comply with the Commissions rules can result in enforcement action.
9. Additional Information Concerning Prohibition on Certain Communications in Commission Auctions 65. A summary listing of documents issued by the Commission, OEA, and WTB addressing the application of section 1.2105c is available on the Commissions auction web page at www.fcc.gov/summary-listingdocuments-addressing-application-ruleprohibiting-certain-communications.

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