NEWSReport No. WT 98-35  WIRELESS TELECOMMUNICATIONS ACTIONSeptember 28, 1998
                                    
                                    
         WIRELESS BUREAU BEGINS PROCESS OF DESIGNING A COMBINATORIAL 
                 BIDDING SYSTEM FOR FUTURE COMMISSION AUCTIONS


      Today, Daniel Phythyon, Chief of the Wireless Telecommunications Bureau announced that
the Bureau has begun the process of developing both the auction design and a prototype system to
test the potential of combinatorial bidding in spectrum auctions.  By taking this step, the Bureau is
fulfilling a commitment to Congress to determine if combinatorial bidding should be deployed in
future Commission auctions.  Combinatorial bidding allows bidders to place bids on packages of
items instead of bidding on each item separately.  This type of bidding may assist companies in
taking full advantage of the synergies that often exist among spectrum licenses.  

     The Commission was directed by Congress in the 1997 Balanced Budget Act to develop a
combinatorial biding system.  Specifically, the Budget Act requires the Commission to 
" ... directly or by contract, provide for the design and conduct (for purposes of testing) of
competitive bidding using a contingent combinatorial bidding system that permits prospective bidders
to bid on combinations or groups of licenses in a single bid and to enter multiple alternative bids
within a single bidding round."

      "The auction program has always been extremely innovative and we want to continue to
build on its successes," said Phythyon. "We look forward to testing this new auction methodology
that could further increase the efficiency of the auction program." 

     A contract has been awarded to develop the design and prototype phase of a combinatorial
bidding system.  The contract allows 180 days for findings to be reported to the Bureau.  During that
same time another contractor will begin testing the system on its own and in comparison with the
Commission's current automated auction system, which uses a simultaneous multiple round auction
methodology.   At the end of both phases, the Bureau will determine if combinatorial bidding is a
viable tool to use in future auctions. 
     

  -FCC-

     News media contact:  Meribeth McCarrick at (202) 418-0654.
     Wireless Telecommunications Bureau contact: Brett Tarnutzer or (202) 418-0660