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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules maximum percentage at 0.2 20%.
Hence, at these initial settings, the minimum acceptable bid for a license would be between 10% and 20% higher than the provisionally winning bid, depending upon the bidding activity for the license. Equations and examples are shown in Attachment B to the Auction 108 Comment Public Notice. The Commission seeks comment on whether to use this activity-based formula or a different approach for the SMR auction format. In particular, the Commission asks whether it should set the maximum percentage at a higher amount, for example 30% or more, in light of concerns over the large number of rounds that may be required for this auction.
86. Additional Bid Amounts. The FCC
auction bidding system would calculate any additional bid amounts using the minimum acceptable bid amount and an additional bid increment percentage.
The minimum acceptable bid amount would be multiplied by the additional bid increment percentage, and that result rounded would be the additional increment amount. The first additional acceptable bid amount would equal the minimum acceptable bid amount plus the additional increment amount. The second additional acceptable bid amount would equal the minimum acceptable bid amount plus two times the additional increment amount; the third additional acceptable bid amount would be the minimum acceptable bid amount plus three times the additional increment amount; etc.
The Commission would set the additional bid increment percentage at 5% initially. Hence, the calculation of the additional increment amount would be minimum acceptable bid amount
0.05, rounded. The Commission seeks comment on this approach.
87. Bid Amount Changes. Under this auction format, OEA would retain the discretion to change the minimum acceptable bid amounts, the additional bid amounts, the number of acceptable bid amounts, and the parameters of the formulas used to calculate minimum acceptable bid amounts and additional bid amounts if OEA determines that circumstances so dictate. Further, OEA
would retain the discretion to do so on a license-by-license basis. Commenters should address the size of changes in the bid amounts, in particular, the additional percentage. Should the Commission increase the size of the minimum acceptable bid amounts in order to manage expeditiously the pace of an SMR auction with approximately 8,300 licenses? At what size do changes in bid amounts make it too difficult for bidders to align their bid amounts with
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their budgets and willingness to pay?
OEA would also retain the discretion to limit a the amount by which a minimum acceptable bid for a license may increase compared with the corresponding provisionally winning bid, and b the amount by which an additional bid amount may increase compared with the immediately preceding acceptable bid amount. For example, OEA could set a limit on increases in minimum acceptable bid amounts over provisionally winning bids. Thus, if calculating a minimum acceptable bid using the activity-based formula results in a minimum acceptable bid amount that exceeds the provisionally winning bid on a license by more than the limit, the minimum acceptable bid amount would instead be capped at the provisionally winning bid plus the amount of the limit. The Commission seeks comment on the circumstances under which OEA should employ such a limit, factors OEA should consider when determining the dollar amount of the limit, and the tradeoffs in setting such a limit or changing other parameterssuch as the minimum and maximum percentages of the activitybased formula. If OEA were to exercise this discretion, it would alert bidders by announcement in the FCC auction bidding system. The Commission seeks comment on these procedures.
88. The Commission seeks comment on the above procedures for the SMR
auction format, including whether to use the activity-based formula to establish the additional percentage or a different approach. If commenters disagree with beginning the auction with nine acceptable bid amounts per license as described above, they should suggest an alternative number of acceptable bid amounts to use at the beginning of the auction and an alternative number to use later in the auction. Commenters may wish to address the role of the minimum acceptable bids and the number of acceptable bid amounts in managing the pace of the auction and the tradeoffs in managing auction pace by changing the bidding schedule, activity requirements, or bid amounts, or by using other means.
7. Provisionally Winning Bids 89. Under an SMR auction format, the FCC auction bidding system would determine provisionally winning bids consistent with practices in past auctions. At the end of each bidding round, the bidding system would determine a provisionally winning bid for each license based on the highest bid amount received for the license. A
provisionally winning bid would
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remain the provisionally winning bid until there is a higher bid on the same license at the close of a subsequent round. Provisionally winning bids at the end of the auction would become the winning bids.
90. If identical high bid amounts were submitted on a license in any given round i.e., tied bids, the FCC auction bidding system would use a pseudorandom number generator to select a single provisionally winning bid from among the tied bids. The auction bidding system would assign a pseudorandom number to each bid when the bid is entered. The tied bid with the highest pseudo-random number would become the provisionally winning bid.
The remaining bidders, as well as the provisionally winning bidder, would be permitted to submit higher bids in subsequent rounds. However, if the auction were to end with no other bids being placed, the winning bidder would be the one that placed the provisionally winning bid. If the license received any bids in a subsequent round, the provisionally winning bid again would be determined by the highest bid amount received for the license 91. A provisionally winning bid would be retained until there is a higher bid on the license at the close of a subsequent round, unless the provisionally winning bid is withdrawn if bid withdrawals are permitted in Auction 108. Under the SMR auction design, provisionally winning bids would count toward activity for purposes of the activity rule.
8. Bid Removal and Bid Withdrawal 92. The FCC auction bidding system would allow each bidder to remove any of the bids it placed in a round before the close of that round. By removing a bid placed within a round, a bidder would effectively unsubmit the bid.
In contrast to the bid withdrawal provisions described below, a bidder removing a bid placed in the same round would not be subject to a withdrawal payment. Once a round closes, a bidder would no longer be permitted to remove a bid.
93. The Commission seeks comment on whether bid withdrawals should be permitted should it adopt an SMR
auction format for Auction 108. When permitted in an auction, bid withdrawals provide a bidder with the option of withdrawing bids placed in prior rounds that have become provisionally winning bids. A bidder would be able to withdraw its provisionally winning bids using the withdraw function in the FCC auction bidding system.

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