TR Daily FCC Inadvertently Releases Auction 103 License-Area Selections
Monday, October 21, 2019

FCC Inadvertently Releases Auction 103 License-Area Selections

The FCC’s Office of Economics and Analytics, in conjunction with the Wireless Telecommunications Bureau, disclosed today that the agency inadvertently briefly made public the license-area selections of applicants for Auction 103, a sale of upper 37 gigahertz, 39 GHz, and 47 GHz band spectrum that is scheduled to start on Dec. 10. As a result of the unprecedented information disclosure, impacted prospective bidders will be permitted to modify their license selections.

OEA and WTB said in a public notice that the information was available for less than three hours on Oct. 7, the day they announced that of the 39 short-form applications submitted, 29 were complete and 10 were incomplete (TR Daily, Oct. 7). Upfront payments are due tomorrow at 6 p.m.

Today’s public notice said that “the license area selections of a small number of applicants were viewed during that period.”

“Consistent with our anonymous bidding procedures, we intended to make available each applicant’s entire FCC Form 175 except for the Partial Economic Areas (PEAs) selected. The information on PEAs selected was inadvertently made accessible to the public for a short period, however. When we became aware that the license area selections were publicly viewable, we immediately suppressed this information from public search to prevent any further access to that information.

“Our internal investigation found that the license area selections of only a small minority of applicants were accessed during this period, and those selections were accessed only a small number of times,” the public notice added. “We have notified the affected applicants that their license area selections were accessed. As a threshold matter, we do not foresee any adverse impact on competition in Auction 103 as a result of the brief availability of this information. Each PEA whose selection was inadvertently revealed was selected by a minimum of 18 applicants. In addition, there are 34 blocks available in each license area, and the selection by an applicant of any particular PEA does not necessarily convey an intention to place bids on that PEA, nor does it provide any information about the number of blocks being targeted by the applicant.

“Consequently, it would not be possible to discern with any certainty the particular bidders placing bids on any specific license area. These circumstances together with the very limited scope of the disclosure as determined by our investigation convince us that knowledge of the license selections of the applicants[] whose license area selections were viewed will not provide a material—if any—competitive advantage during the bidding,” according to the public notice.

“Nonetheless, we are cognizant of the perceived possible impact of this inadvertent disclosure on those applicants. Accordingly, we are providing certain affected applicants with additional flexibility with respect to their license area selections. On our own motion, for those affected applicants that selected fewer than all 416 PEAs, we waive section 1.2105(b)(2) of the Commission’s rules, which generally prohibits changes to an auction applicant’s license area selection after the short-form application deadline,” OEA and WTB added. “This will allow those affected applicants that did not select all PEAs to change their license area selections during the limited period described below.”

The public notice observed that “Section 1.925 of the Commission’s rules permit a waiver when: (1) the underlying purpose of the rule would not be served or would be frustrated by application to the instant case, and that a grant of the waiver would be in the public interest, or (2) in view of the unique or unusual factual circumstances of the instant case, application of the rule would be inequitable, unduly burdensome or contrary to the public interest, or there is no reasonable alternative. Our sua sponte waiver addresses an unusual event, which has not previously occurred in any FCC spectrum auction. Preventing applicants that did not select all PEAs and whose license area selections were viewed from adjusting those selections would be both inequitable and contrary to the public interest. Allowing these affected applicants the opportunity to modify their license area selections, whether they choose to do so or not, mitigates any perceived informational advantage. Furthermore, under these unique circumstances, fairness dictates that those applicants that selected fewer than all PEAs and whose license area selections were accessed be granted additional flexibility to select different license areas. This will allow them to implement new bidding strategies and backup bidding strategies.

“To change its license area selection(s), an applicant must have been advised by Commission staff that it is eligible for this opportunity, and it must submit a written request by email to [email protected] requesting that the Commission manually make the change to the application on the applicant’s behalf,” according to the public notice. “This request must be received by no later than 6:00 PM ET on October 23, 2019. We recognize that this due date is subsequent to the 6:00 PM ET deadline on October 22, 2019, for all applicants to submit an upfront payment. We are not extending the upfront payment deadline for any applicant. As such, each affected applicant should exercise appropriate diligence and carefully calculate the amount of its upfront payment to ensure that the payment provides sufficient bidding eligibility for the applicant for any planned changes to its license area selections and/or bidding strategy. Applicants are encouraged to contact Commission staff listed below should they have any questions about making their upfront payments.

“Once Commission staff has informed the applicant that the change to the selected license areas has been made in the Auction Application System, the applicant must then re-certify and re-submit its FCC Form 175 in the Auction Application System to confirm and effect the change(s),” the public notice added. “Any such applicant must perform these steps by no later than 6:00 PM ET on October 29, 2019, or its changes will not be effective. Finally, the limited information procedures in effect for Auction 103 (sometimes also referred to as anonymous bidding) are in no way changed by the limited availability of applicants’ license area selections on October 7. Accordingly, communication with other applicants or public disclosure of non-public information, including an applicant’s initial or modified license area selection(s), may violate the Commission’s rule prohibiting certain communications, section 1.2105(c) of the Commission’s rules.” —Paul Kirby, [email protected]

MainStory: FCC FederalNews SpectrumAllocation

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