YOU ARE AT:Archived ArticlesPLAYERS DEBATE PAYMENT FOR HIGH BIDDING ERRORS

PLAYERS DEBATE PAYMENT FOR HIGH BIDDING ERRORS

WASHINGTON-Comments are split regarding whether C-block broadband personal communications services and 900 MHz specialized mobile radio auction bidders who submit flawed bids should be fined to the letter of the Federal Communications Commission law.

MAP Wireless L.L.C., PCS 2000 L.P. and Atlanta Trucking Associates said they made clerical errors during early bidding rounds and were forced to withdraw their bids. Each is liable for a penalty equaling the difference of their withdrawn bid and the actual end purchase price of a license, if the final bid is lower than that which was withdrawn. All have submitted waiver requests for a reduction or cancellation of any penalty caused by human error.

The commission has not granted any waivers to errant bidders in any service auction.

Auction participant PCS One Inc. “strongly urges the commission to adhere to established FCC rules regarding bid withdrawals in order to prevent other bidders from not so inadvertently making an `erroneous’ bid and then seeking to withdraw that bid, without any penalty.” The group pointed to the many failsafe measures built into the FCC’s bidding software, and that of some 11,500 bids submitted during several auctions, there have been “only three reported mishaps.”

On the other hand, Antigone Communications L.P., which itself has a waiver request on file due to a $4 million erred bid it submitted in Round 21 for Gainesville, Fla., told the commission “the first question is whether or not the bid was intentionally submitted or whether it was accidentally or mistakenly submitted*…*This is a fact question, and once the commission finds as a fact that the bid was a clerical error, waiver of the bid-withdrawal penalty is not only appropriate but also required under the case law.”

Antigone pointed out that the possibility of forfeiting all upfront payments could make it “difficult or impossible” to pay for any licenses a bidder might win. One default could cause a chain reaction of others. In addition, to charge a full penalty for a discounted license, assuming the offender was eligible for bidding discounts, also is a mistake. “The FCC would have to adjust the penalty amount in the installment-payment context to reflect that only 10 percent on the dollar is collected post-auction when the license is granted,” Antigone wrote.

If the commission insists on punishing for bidding errors, Antigone suggested that, instead of monetary forfeitures, the FCC could charge the miscreant one activity waiver or it could reduce the bidder’s eligibility by a certain percentage. “Imposing one or the other penalty will harm the applicant and deter mistakes, without causing the type of draconian and calamitous harm that a monetary penalty would create,” Antigone concluded.

A decision on this matter is not expected until after these auctions end.

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