Sec. 26.204  Withdrawal, default and disqualification penalties.

    (a) When the Commission conducts a simultaneous multiple round 
auction pursuant to Sec. 26.202(a)(1), 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exceeds the withdrawn bid.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. The withdrawal penalty for a nationwide 
bidder for each aggregation is limited to 5 percent of the aggregate 
withdrawn bids. The withdrawal penalty for a nationwide bidder is 
calculated between the sum of the withdrawn bids and the sum of the 
subsequent high bids on the withdrawn licenses.
    (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 (a)(1) 
of this section plus an additional penalty equal to three (3) percent of 
the subsequent winning bid. If 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.
    (b) When the Commission conducts sequential oral auctions, the 
Commission may modify the penalties to be paid in the event of bid 
withdrawal, default disqualification; provided, however, that such 
penalties shall not exceed the penalties specified above.
    (c) In the case of single round bidding for GWCS licenses:
    (1) If a bid is withdrawn before the Commission releases the initial 
Public Notice announcing the winning bidder(s), no bid withdrawal 
penalty will be assessed.
    (2) If a bid is withdrawn after the Commission releases the initial 
Public Notice announcing the winning bidder(s), the bid withdrawal 
penalty will be equal to the difference between the high bid amount and 
the amount of the next highest valid bid. A bid will be considered valid 
for this purpose if the bidder has not already been designated the 
winning bidder on more licenses than it is permitted to be awarded. 
Losing bidders will only be subject to this bid withdrawal penalty for a 
period of 30 days after the Commission releases the initial Public 
Notice announcing the winning bidders.
    (d) In the case of oral sequential bidding for GWCS licenses:
    (1) If a bid is withdrawn before the Commission has declared the 
bidding to be closed for the license bid on, no bid withdrawal penalty 
will be assessed.
    (2) If a bid is withdrawn after the Commission has declared the 
bidding to be closed for the license bid on, the bid withdrawal penalty 
of Sec. 1.2104(g) of this chapter and paragraphs (a)(1) and (a)(2) of 
this section will apply.