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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules
94. The Commission has recognized that bid withdrawals may be a helpful tool for bidders seeking to efficiently aggregate licenses or implement backup strategies in certain auctions. The Commission has also acknowledged that allowing bid withdrawals may encourage insincere bidding or increase opportunities for undesirable strategic bidding in certain circumstances.
95. Applying this reasoning to Auction 108, each bidder would be allowed to withdraw provisionally winning bids in no more than two rounds during the course of the auction.
To permit a bidder to withdraw bids in more than two rounds may encourage insincere bidding or the use of withdrawals for undesirable strategic bidding purposes. The two rounds in which a bidder may withdraw provisionally winning bids would be at the bidders discretion, and there would be no limit on the number of provisionally winning bids that a bidder may withdraw in either of the rounds in which it withdraws bids. Withdrawals must be in accordance with the Commissions rules, including the bid withdrawal payment provisions specified in 47 CFR 1.2104g.
96. A bidder that withdraws its provisionally winning bids, if permitted, is subject to the bid withdrawal payment provisions of the Commissions rules. The Commission proposes the interim bid withdrawal payment be set at 15% of the withdrawn bid for the purposes of an SMR auction.
A bidder that withdraws a bid during an auction is subject to a withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the winning bid in the same or a subsequent auction. The withdrawal payment amount is deducted from any upfront payments or down payments that the withdrawing bidder has deposited with the Commission. No withdrawal payment is assessed for a withdrawn bid if either the subsequent winning bid or any of the intervening subsequent withdrawn bids equals or exceeds that withdrawn bid. However, if a license for which a bid had been withdrawn does not receive a subsequent higher bid or winning bid in the same auction, the FCC cannot calculate the final withdrawal payment until that license receives a higher bid or winning bid in a subsequent auction. In such cases, when that final withdrawal payment cannot yet be calculated, the FCC
imposes on the bidder responsible for the withdrawn bid an interim bid withdrawal payment, which will be applied toward any final bid withdrawal payment that is ultimately assessed.

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97. The amount of the interim bid withdrawal payment is established in advance of bidding in each auction and may range from 3% to 20% of the withdrawn bid amount. The Commission has determined that the level of the interim withdrawal payment in a particular auction will be based on the nature of the service and the inventory of the licenses being offered.
The Commission noted specifically that a higher interim withdrawal payment percentage is warranted to deter the anti-competitive use of withdrawals when, for example, bidders will not need to aggregate the licenses being offered in the auction or when there are few synergies to be captured by combining licenses. With respect to the flexible-use 2.5 GHz band licenses being offered in Auction 108, the service rules permit a variety of advanced spectrumbased services, some of which may best be offered by combining licenses on adjacent frequencies or in adjacent areas. Balancing the potential need for bidders to use withdrawals to avoid winning incomplete combinations of licenses with the Commissions interest in deterring undesirable strategic use of withdrawals, the Commission proposes to establish an interim bid withdrawal payment of 15% of the withdrawn bid for Auction 108, should it adopt an SMR
auction format.
98. The Commission seeks comment on allowing bid withdrawals and an interim bid withdrawal payment of 15%
of the withdrawn bid under a potential SMR auction design. If commenters disagree, then the Commission asks them to support their arguments by taking into account the licenses available, the impact on auction dynamics and the pricing mechanism, and the effects on the bidding strategies of other bidders.
V. Tutorials and Additional Information for Applicants 99. The Commission intends to provide additional information on the bidding system and to offer demonstrations and other educational opportunities for applicants in Auction 108 to familiarize themselves with the FCC auction application system and the auction bidding system.
100. In addition, OEA and WTB will make available an interactive mapping tool to identify and assess potential encumbrances in the band, including as a result of pending Rural Tribal Priority Window applications. Potential applicants are again reminded, however, that this tool will not represent complete licensing information; all information should be confirmed in ULS for any specific license or area.

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VI. Procedural Matters A. Supplemental Initial Regulatory Flexibility Analysis 101. As required by the Regulatory Flexibility Act of 1980, as amended RFA, the Commission has prepared this Supplemental Initial Regulatory Flexibility Analysis Supplemental IRFA of the possible significant economic impact on small entities of the policies and rules addressed in the Auction 108 Comment Public Notice to supplement the Commissions Initial and Final Regulatory Flexibility Analyses completed in the 2.5 GHz Notice of Proposed Rulemaking NPRM, 83 FR 26396, June 7, 2018, and 2.5 GHz Report and Order, and other Commission orders pursuant to which Auction 108 will be conducted. Written public comments are requested on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the same deadline for comments specified on the first page of the Auction 108 Comment Public Notice. The Commission will send a copy of the Auction 108 Comment Public Notice, including this Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration SBA.
In addition, the Auction 108 Comment Public Notice and Supplemental IRFA
or summaries thereof will be published in the Federal Register.
102. Need for, and Objectives of, the Proposed Rules. The Auction 108
Comment Public Notice sets forth the proposed auction procedures for those entities that seek to bid to acquire licenses in Auction 108. The Auction 108 Comment Public Notice seeks comment on proposed procedural rules to govern Auction 108, which will auction geographic overlay licenses of unlicensed spectrum in the 2.5 GHz band 24962690 MHz. The specific overlay licenses available in Auction 108 will be determined by the results of the Rural Tribal Priority Window, which gave federally recognized Tribes the opportunity to submit applications to acquire new 2.5 GHz band overlay licenses to provide broadband service on rural Tribal lands before the remaining unassigned spectrum is made generally available to all entities through competitive bidding. The Rural Tribal Priority Window closed on September 2, 2020. Based on review of applications received in the Rural Tribal Priority Window, OEA, in conjunction with WTB, will release a public notice announcing the final inventory of 2.5
GHz band overlay licenses to be offered in Auction 108. This public notice will be released in advance of the deadline
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