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Federal Register / Vol. 86, No. 228 / Wednesday, December 1, 2021 / Proposed Rules
of facility offered, market size, population covered by the proposed broadcast facility and any other relevant factors. Commenters also may wish to address the general role of minimum opening bids in managing the pace of the auction. For example, commenters could compare using minimum opening bidse.g., by setting higher minimum opening bids to reduce the number of rounds it takes for construction permits to reach their final pricesto other means of controlling auction pace, such as changes to bidding schedules, percentage increments, or activity requirements.

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E. Auction Delay, Suspension, or Cancellation 17. For Auction 112, OEA and MB
propose that at any time before or during the bidding process OEA, in conjunction with MB, may delay, suspend, or cancel bidding in the auction in the event of a natural disaster, technical obstacle, network interruption, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. In such a case, OEA would notify participants of any such delay, suspension, or cancellation by public notice or through the FCC
auction bidding systems messages function. OEA and MB propose that, if bidding is delayed or suspended, OEA
may, in its sole discretion, elect to resume the auction starting from the beginning of the current round or from some previous round, or cancel the auction in its entirety. OEA and MB
propose to exercise this authority solely at their discretion, and not as a substitute for situations in which bidders may wish to apply activity rule waivers. OEA and MB seek comment on these proposals.
F. Interim Withdrawal Payment Percentage 18. As discussed below, OEA and MB
propose not to allow bid withdrawals in Auction 112. In the event bid withdrawals are permitted in Auction 112, however, OEA and MB propose the interim bid withdrawal payment be 20% of the withdrawn bid. A bidder that withdraws a provisionally winning bid during an auction is subject to a withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the winning bid in the same or a subsequent auction. However, if a construction permit for which a bid has been withdrawn does not receive a subsequent higher bid or winning bid in
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the same auction, the Commission cannot calculate the final withdrawal payment until that construction permit receives a higher bid or winning bid in a subsequent auction. In such cases, when that final withdrawal payment cannot yet be calculated, the Commission 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.
19. The percentage 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 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. In light of these considerations with respect to the construction permits being offered in this auction, OEA and MB propose to use the maximum interim bid withdrawal payment percentage permitted by 47 CFR 1.2104g1 in the event bid withdrawals are allowed in this auction. OEA and MB request comment on using 20% for calculating an interim bid withdrawal payment amount in Auction 112 in the event that bidders would be permitted to withdraw bids. Commenters advocating the use of bid withdrawals should also address the percentage of the interim bid withdrawal payment.

percentage of the defaulters bid or of the subsequent winning bid, whichever is less.
21. The Commissions rules provide that, in advance of each auction, it will establish a percentage between 3% and 20% of the applicable winning bid to be assessed as an additional default payment. As the Commission has indicated, the level of this additional payment in each auction will be based on the nature of the service and the construction permits being offered.
22. For Auction 112, OEA and MB
propose to establish an additional default payment of 20%, which is consistent with the percentage in prior auctions of broadcast construction permits. As the Commission has noted, defaults weaken the integrity of the auction process and may impede the deployment of service to the public, and an additional 20% default payment will be more effective in deterring defaults than the 3% used in some earlier auctions. In light of these considerations, OEA and MB propose for Auction 112 an additional default payment of 20% of the relevant bid.
OEA and MB seek comment on this proposal.

G. Deficiency Payments and Additional Default Payment Percentage 20. Any winning bidder that defaults or is disqualified after the close of an auction i.e., fails to remit the required down payment by the specified deadline, fails to make full and timely final payment, fails to submit a timely long-form application, or whose longform application is not granted for any reason, or is otherwise disqualified is liable for a default payment under 47
CFR 1.2104g2. This payment consists of a deficiency payment, equal to the difference between the amount of the Auction 112 bidders winning bid and the amount of the winning bid the next time a construction permit covering the same spectrum is won in an auction, plus an additional payment equal to a
B. Bidding Rounds 24. The Commission will conduct Auction 112 over the internet using the FCC auction bidding system. A bidder will also have the option of placing bids by telephone through a dedicated auction bidder line.
25. Under this proposal, Auction 112
would consist of sequential bidding rounds, each followed by the release of round results. The initial bidding schedule will be announced in a public notice to be released at least one week before the start of bidding. Details on viewing round results, including the location and format of downloadable round results files, will be included in the same public notice.
26. OEA and MB propose that the initial bidding schedule may be
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IV. Proposed Bidding Procedures A. Simultaneous Multiple-Round Auction Design 23. OEA and MB propose to use the Commissions simultaneous multipleround auction format for Auction 112.
As described further below, this type of auction offers every construction permit for bid at the same time and consists of successive bidding rounds in which qualified bidders may place bids on individual construction permits.
Typically, bidding remains open on all construction permits until bidding stops on every construction permit. OEA and MB seek comment on this proposal.

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