Sec. 1.2104  Competitive bidding mechanisms.

    (a) Sequencing. The Commission will establish the sequence in which 
multiple licenses will be auctioned.
    (b) Grouping. In the event the Commission uses either a simultaneous 
multiple round competitive bidding design or combinatorial bidding, the 
Commission will determine which licenses will be auctioned 
simultaneously or in combination.
    (c) Reservation Price. The Commission may establish a reservation 
price, either disclosed or undisclosed, below which a license subject to 
auction will not be awarded.
    (d) Minimum Bid Increments. The Commission may, by announcement 
before or during an auction, require minimum bid increments in dollar or 
percentage terms. The Commission may also establish suggested minimum 
opening bids on a service-specific basis.
    (e) Stopping Rules. The Commission may establish stopping rules 
before or during multiple round auctions in order to terminate the 
auctions within a reasonable time.
    (f) Activity Rules. The Commission may establish activity rules 
which require a minimum amount of bidding activity.
    (g) Withdrawal, Default and Disqualification Penalties. As specified 
below, when the Commission conducts a simultaneous multiple round 
auction pursuant to Sec. 1.2103, the Commission will impose penalties on 
bidders who withdraw high bids during the course of an auction, or who 
default on payments due after an auction closes or who are disqualified.
    (1) Bid withdrawal prior to close of auction. A bidder who withdraws 
a high bid during the course of an auction will be subject to a penalty 
equal to the difference between the amount bid and the amount of the 
winning bid the next time the license is offered by the Commission. No 
withdrawal penalty would be assessed if the subsequent winning bid 
exceeds the withdrawn bid. This penalty amount will be deducted from any 
upfront payments or down payments that the withdrawing bidder has 
deposited with the Commission.
    (2) Default or disqualification after close of auction. If a high 
bidder defaults or is disqualified after the close of such an auction, 
the defaulting bidder will be subject to the penalty in paragraph (g)(1) 
plus an additional penalty equal to 3 percent of the subsequent winning 
bid. If the subsequent winning bid exceeds the defaulting bidder's bid 
amount, the 3 percent penalty will be calculated based on the defaulting 
bidder's bid amount. These amounts will be deducted from any upfront 
payments or down payments that the defaulting or disqualified bidder has 
deposited with the Commission. When the Commission conducts single round 
sealed bid auctions or sequential oral auctions, the Commission may 
modify the penalties to be paid in the event of bid withdrawal, default 
or disqualification; provided, however, that such penalties shall not 
exceed the penalties specified above.
    (h) The Commission will generally release information concerning the 
identities of bidders before each auction but may choose, on an auction-
by-auction basis, to withhold the identity of the bidders associated 
with bidder identification numbers.
    (i) The Commission may delay, suspend, or cancel an auction in the 
event of a natural disaster, technical obstacle, evidence of security 
breach, unlawful bidding activity, administrative necessity, or for any 
other reason that affects the fair and efficient conduct of the 
competitive bidding. The Commission also has the authority, at its sole 
discretion, to resume the competitive bidding starting from the 
beginning of

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the current or some previous round or cancel the competitive bidding in 
its entirety.