Sec. 24.704  Withdrawal, default and disqualification penalties.

    (a) When the Commission conducts a simultaneous multiple round 
auction pursuant to Sec. 24.702(a)(1), the Commission will impose 
penalties on bidders who withdraw high bids during the course of an 
auction, 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exceeds the withdrawn bid.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 was 
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 (a)(1) 
of this section plus an additional penalty equal to three (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.
    (3) Erroneous Bids. If at any point during an auction an erroneous 
bid is withdrawn in the same round in which it was submitted, the bid 
withdrawal payment will be the greater of
    (i) The minimum bid increment for that license and round; and
    (ii) The standard bid withdrawal payment, as defined in paragraph 
(a)(1) of this section, calculated as if the bidder had made the minimum 
accepted bid. If an erroneous bid is withdrawn in the round immediately 
following the round in which it was submitted, and the auction is in 
Stage I or Stage II, the withdrawal payment will be the greater of
    (A) Two times the minimum bid increment during the round in which 
the erroneous bid was submitted, and
    (B) The standard withdrawal payment, as defined in paragraph (a)(1) 
of this section, calculated as if the bidder had made a bid one bid 
increment above the minimum accepted bid. If an erroneous bid is 
withdrawn two or more rounds following the round in

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which it was submitted, the bidder will not be eligible for any 
reduction in the bid withdrawal payment as defined in paragraph (a)(1) 
of this section. During Stage III of an auction, if an erroneous bid is 
not withdrawn during the round in which it was submitted, the bidder 
will not be eligible for any reduction in the bid withdrawal payment as 
defined in paragraph (a)(1) of this section.
    (b) When the Commission conducts sequential oral auctions pursuant 
to Sec. 24.702(a)(2), the Commission may modify the penalties set forth 
in subsection (a) above to be paid in the event of bid withdrawal, 
default or disqualification; provided, however, that such penalties 
shall not exceed the penalties specified above.
    (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 penalty specified in 
paragraph (a)(2) of this section will apply.
[ 59 FR 37604 , July 22, 1994, as amended at  61 FR 33868 , July 1, 1996]