Sec. 21.959  Withdrawal, default and disqualification.

    (a) When the Commission conducts an MDS simultaneous multiple round 
auction, the Commission will impose additional payment requirements on 
bidders who withdraw high bids during the course of an auction, who 
default on down or full payments due after an auction closes, or who are 
disqualified. The withdrawal and default payments set forth below will 
be deducted from any upfront payments or down payments that the 
withdrawing, defaulting or disqualified bidder has deposited with the 
Commission.
    (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 payment 
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 payment will be assessed if the subsequent winning bid 
exceeds the withdrawn bid.
    (2) Default or disqualification after close of auction. If a winning 
bidder defaults or is disqualified after the close of such an auction, 
the defaulting bidder will be subject to the payment in paragraph (1) 
above, plus an additional payment equal to three (3) percent of the 
subsequent winning bid. If the subsequent winning bid exceeds the 
defaulting bidder's bid amount, the three percent payment will be 
calculated based on the defaulting bidder's bid amount.
    (b) If the Commission were to conduct a sequential oral (open 
outcry) auction or sealed bid auction for MDS, the Commission may modify 
the payments set forth in paragraph (a) of this section to be paid in 
the event of bid withdrawal, default or disqualification; provided, 
however, that such payments shall not exceed the payments specified in 
paragraph (a) of this section.
    (1) In the case of sealed bidding:
    (i) If a bid is withdrawn before the Commission releases the initial 
public notice announcing the winning bidder(s), no bid withdrawal 
payment will be assessed.
    (ii) If a bid is withdrawn after the Commission release the initial 
public notice announcing the winning bidder(s), the bid withdrawal 
payment will be equal to the difference between the high bid amount and 
the amount of the next highest bid. Losing bidders will only be subject 
to this bid withdrawal payment for a period of thirty (30) days after 
the Commission release the initial public notice announcing the winning 
bidders.
    (2) In the case of oral sequential (open outcry) bidding:
    (i) If a bid is withdrawn before the bidder has declared the bidding 
to be closed for the BTA service area bid on, no bid withdrawal payment 
will be assessed.
    (ii) If a bid is withdrawn after the Commission has declared the 
bidding to be closed for the BTA service area bid on, the bid withdrawal 
payment of paragraphs (a) (1) and (2) of this section will apply.
    (c) If a winning bidder withdraws it bid after the Commission has 
declared competitive bidding closed or fails to remit the required down 
payment within five (5) business days after the Commission has declared 
competitive bidding closed, the bidder will be deemed to have defaulted, 
its application will be dismissed, and it will be liable for the default 
payment specified in paragraph (a)(2) of this section. In such event, 
the Commission may either re-auction the BTA service area to existing or 
new applicants or offer it to the other highest bidders (in descending 
order) at their final bids.
    (d) A winning bidder who is found unqualified to be an MDS station 
licensee, fails to remit the balance of its winning bid in a timely 
manner, or defaults or is disqualified for any reason after having made 
the required down payment, will be deemed to have defaulted and will be 
liable for the payment set forth in paragraph (a)(2) of this section. In 
such event, the Commission will generally conduct another auction for 
the BTA service area, affording new parties an opportunity to file 
applications for such service area.
    (e) Bidders who are found to have violated the antitrust laws or the 
Commission's rules in connection with their participation in the MDS 
competitive bidding process may be subject, in addition to any other 
applicable sanctions, to loss of their upfront payment, down payment or 
full bid

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amount, and may be prohibited from participating in future auctions.
[ 60 FR 36560 , July 17, 1995]