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Federal Communications Commission
Washington, D.C. 20554
In re Application of )
) File No. EB-02-IH-0768
STAR WIRELESS, LLC ) NAL/Acct. No.
) FCC Account ID No.
For C Block Facilities in the ) FRN No.
710-716 and 740-746 MHz Bands )
Adopted: September 21, 2004 Released: September 22,
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order, issued pursuant to section
503 of the Communications Act of 1934, as amended (the ``Act''),
and section 1.80 of the Commission's rules,1 we find that Star
Wireless, LLC (``Star'') engaged in collusive conduct during a
Commission-conducted auction in 2002, in willful and repeated
violation of section 1.2105(c) of the Commission's rules.2 Based
on the information before us, we conclude that Star is liable for
a forfeiture in the amount of One Hundred Thousand Dollars
2. This matter arises from misconduct by two auction
applicants, Star and Northeast Communications of Wisconsin
(``Northeast''), during the Commission's August 27-September 18,
2002, auction of 740 Lower 700 MHz Band C and D block geographic
area licenses (``Auction No. 44''). On August 27, 2003,
following a comprehensive investigation of possible collusive
activities between Star and Northeast, the Chief, Enforcement
Bureau (``Bureau''), issued a Notice of Apparent Liability for
Forfeiture (``NAL''), proposing a forfeiture in the amount of
$100,000 against Star.3 The facts that formed the basis for the
proposed forfeiture are set forth at considerable length in the
NAL and are specifically incorporated by reference herein. The
NAL found that Star and Northeast were both applicants for 734 of
the same geographic license areas in Auction No. 44 and that,
during the course of that auction, a representative of Star
apparently engaged in prohibited communications with his
counterpart at Northeast about bidding strategy in that auction,
in apparent willful and repeated violation of section 1.2105(c)
of the Commission's Rules. Specifically, the NAL found that Star
had apparently violated section 1.2105(c) on August 28, 2002,
when David G. Behenna, Star's authorized bidder and the President
of PCSGP, Inc.,4 Star's Operating Manager, telephoned Patrick
Riordan, a shareholder, officer, director of and authorized
bidder for Northeast,5 to solicit information concerning any
auction-related markets in which Northeast, which had not made
the necessary upfront payment and, accordingly, could not bid,
might have a business interest. The NAL also found that Star
apparently violated section 1.2105(c) on August 29, 2002, when
Mr. Riordan returned Mr. Behenna's telephone call and he and Mr.
Behenna discussed Northeast's interest in five Wisconsin markets
identified by Mr. Riordan.
3. On September 26, 2003, Star filed its response to the
NAL, requesting rescission or reduction of the proposed
forfeiture.6 In support of its position that the proposed
forfeiture should be rescinded, Star argues that it did not
violate section 1.2105(c) because: Northeast was not an applicant
in Auction No. 44 when the communications in question took
place;7 section 1.2105(c) has never been applied to the specific
facts of this case;8 Star and Northeast never reached any
agreement as a result of their communications;9 the
communications at issue are beyond the scope of section 1.2105(c)
because they were so vague that they could not have compromised
the auction process;10 section 1.2105(c) was never intended to
prohibit communications between two entities, only one of which
is a qualified bidder;11 the proposed forfeiture is inconsistent
with past applications of section 1.2105(c) and disproportionate
to other similarly-situated cases;12 and assessment of a
forfeiture in this instance will have a chilling effect on
voluntary disclosure of potential violations in the future.13
Star also argues in the alternative that, if it did violate
section 1.2105(c), the proposed forfeiture should be
substantially reduced because the communications in question
resulted in only one violation, not two.14
4. In order to enhance and ensure the competitiveness of
markets for communications services, the Commission adopted rules
designed to prevent collusive conduct during auctions, facilitate
the detection of such misconduct, and maintain public confidence
in the integrity of the auction process. 15 If collusive conduct
were permitted during the auction process, the result could be
the elimination of potential participants in auctions and
competitors in the marketplace.16 Consequently, the Commission
adopted section 1.2105(c), frequently referred to as the ``anti-
collusion rule.'' Section 1.2105(c)(1) states, in pertinent
[A]fter the [FCC Form 175] short-form application
filing deadline, all applicants for licenses in any of
the same geographic license areas are prohibited from
cooperating or collaborating with respect to,
discussing with each other, or disclosing to each other
in any manner the substance of their own, or each
other's, or any other competing applicant's bids or
bidding strategies, or discussing or negotiating
settlement agreements, until after the down payment
deadline, unless such applicants are members of a
bidding consortium or other joint bidding arrangement
identified on the bidder's short-form application
pursuant to § 1.2105(a)(2)(viii).17
Thus, the prohibition against collusive communications set forth
in section 1.2105(c) takes effect on the pre-auction short-form
application deadline and remains in place until the down payment
deadline, after the close of the auction.18 By its very
language, the prohibition contained in section 1.2105(c) applies
to all applicants for licenses in a Commission auction.
Moreover, the Commission and the staff have repeatedly made clear
that the prohibition against collusive contacts and
communications contained in section 1.2105(c) applies to all
entities that file short-form applications, regardless of whether
they are qualified to bid.19
5. Turning to the instant case, we reject Star's
contention that it did not violate section 1.2105(c) because when
it discussed its bidding strategy with Northeast, Northeast was
not an ``applicant for licenses.''20 In support, Star relies on
a May 24, 2002, Public Notice issued by the Wireless
Telecommunications Bureau (``WTB'') relating to the status of
applications filed in Auction No. 44.21 Therein, WTB stated,
``Applicants that have filed applications deemed to be
incomplete, as noted in this public notice, must submit timely
and sufficient upfront payments by the May 30, 2002 deadline . .
. If no upfront payment is made or the application remains
incomplete following its resubmission, the application will be
dismissed.''22 Star maintains that, on the basis of this
language, it was ``reasonable to conclude'' that Northeast ceased
being an applicant for licenses, subject to section 1.2105(c),
when it failed to make its upfront payment by the May 30, 2002,
deadline.23 Although Northeast's failure to timely make its
upfront payment did disqualify it from bidding in Auction No. 44
and suggested that WTB would in due course dismiss its
application, the fact remains that, as of August 28 and 29, WTB
had not dismissed Northeast's application and it thus remained
pending under the rules.
6. Both before and after commencement of the auction, WTB
issued multiple public notices warning auction applicants that
they were required to comply with section 1.2105(c).24 Two of
those public notices, released shortly before Mr. Behenna
telephoned Mr. Riordan, contained a specific reminder that all
parties that had submitted a short-form application to
participate in Auction No. 44 -- even those that were
disqualified from bidding -- remained subject to the anti-
collusion rule until the October 4, 2002, post-auction down
payment deadline,25 consistent with the definition of
``applicant'' contained in the anti-collusion rule.26 Thus,
Northeast was beyond question an ``applicant for licenses'' for
the purposes of section 1.2105(c) when the two companies engaged
in their discussion - a communication plainly prohibited by
7. There also is no merit to Star's claim that section
1.2105(c) has never been applied to the precise facts presented
here.28 It is axiomatic that the facts and circumstances of two
cases will never be identical. Star attempts, for example, to
distinguish from the instant case the Reardon and Grady cases29
by pointing out insignificant factual differences between them
and the instant facts. However, the legal principles discussed
in that precedent are unquestionably on point. Collectively,
these cases demonstrate that section 1.2105(c), by its plain
language and as consistently interpreted by the Commission and
its staff, applies to all entities that file short-form
applications, regardless of whether they are ultimately
disqualified from bidding in a particular auction, a fact of
which Star and other Auction No. 44 applicants were repeatedly
reminded by WTB in the auction public notices.
8. Contrary to Star's claim, it is of no consequence in
determining that there has been a violation of section 1.2105(c)
whether the parties who engaged in a prohibited dialogue
ultimately reach an accord.30 As stated in the NAL, a violation
of section 1.2105(c) results from the mere communication between
auction applicants of prohibited information.31 Similarly, we
reject Star's claim that the communications at issue are beyond
the scope of section 1.2105(c) because they were so vague that
they did not compromise the auction process.32 While we agree
that the underlying purpose of section 1.2105(c) is to prevent
auction abuses, it is the substance and timing of specific
communications that are key in determining whether there has been
a violation of section 1.2105(c), not the impact or claimed lack
thereof on a particular auction. Thus, although we find on the
basis of the information before us that Star indeed altered its
bidding behavior as a result of its communication with
Northeast,33 a fact that is probative of Star's noncompliance, we
need not rely on that determination to conclude that Star
violated section 1.2105(c). Star's further claim that section
1.2105(c) was intended to apply only to auction bidders rather
than auction applicants34 is flatly belied by the plain language
of the rule section and the numerous Auction No. 44 releases
issued by WTB. As noted supra, both before and after
commencement of the auction, WTB issued multiple public notices
warning auction applicants that they were required to comply with
section 1.2105(c). Further, Star argues that the Commission
should not enforce the anti-collusion rule because it was
arbitrary for the Commission to adopt a rule that applies to an
auction applicant that is not qualified to bid, but does not
apply to an entity that never filed an auction application.35 We
reject this argument as an untimely request for reconsideration
of the 1994 rulemaking order which adopted the anti-collusion
9. Star's contention that its conduct in this case is
substantially more benign than other cases that drew lesser or no
sanctions also lacks merit.37 Star's reliance upon Mercury PCS
II, LLC38 is particularly misplaced. The Commission found in
Mercury that a bidder had placed trailing numbers at the end of
its bids in an effort to surreptitiously communicate its bidding
strategy to other participants. Although the Commission
concluded that the bidder's conduct violated the anti-collusion
rule, it declined to impose a sanction in that instance because
the activity in question presented a case of first impression,
and there was no prior notice that such specific conduct was
proscribed.39 In contrast, as discussed herein and in the NAL,
the Commission repeatedly provided Star and other auction
applicants with express notice that the conduct in which it
engaged would violate the anti-collusion rule and was strictly
prohibited.40 Star's reliance on the Commercial Realty St.
Pete41 and U.S. West Communications, Inc.42 cases also lacks
merit. Star relies on these cases in support of its claim that
``[w]here the Commission has imposed substantial forfeitures, it
was for conduct significantly more egregious than that of Star
and Northeast.''43 We disagree. Because collusive activities of
any nature may adversely affect the fundamental integrity of the
Commission's auctions processes, we find no public interest
justification for minimizing Star's violation of section
1.2105(c). Furthermore, as discussed more fully below, the
Commission considers a number of factors in determining the
amount of a forfeiture to ensure, among other things, that the
sanction is commensurate with the nature of the violation and
consistent with that in other similarly-situated cases. In the
instant case, Star's misconduct was willful, repeated, and
serious. The sanction that we impose herein is, on balance and
relative to the cases upon which Star relies (which imposed
significantly higher forfeitures), entirely appropriate.
Consequently, we conclude that Star's complaint of disparate
treatment is without merit.
10. We also find no basis for reducing the forfeiture
proposed in the NAL. Star claims that the assessment of a
$100,000 forfeiture in this instance will cause future auction
applicants to consider carefully whether to voluntarily report
potentially collusive conduct to the Commission.44 The reporting
of such information is not voluntary: section 1.2105(c)(6)
requires such disclosure ``immediately'' upon a communication of
bids or bidding strategies. Star's suggestion that the
Commission should refrain from enforcing its auction rules for
fear that such action might deter future compliance with this
disclosure requirement is meritless. Star's further claim that
it did not intend to violate section 1.2105(c) is irrelevant; the
violation was willful as is defined by the Act.45 Star's
representative did not accidentally telephone his counterpart at
Northeast to solicit a conversation relating to Auction No. 44
during the period of time when such communications were strictly
proscribed, nor was it an accident that they engaged in a
prohibited discussion the next day. While Star may not have set
out with the specific intention of violating the rule, its
actions were indisputably willful and patently inconsistent with
the plain language of section 1.2105(c). In this regard, section
312(f)(1) of the Act defines willful as ``the conscious and
deliberate commission or omission of [any] act, irrespective of
any intent to violate'' the law.46 The legislative history to
section 312(f)(1) of the Act clarifies that this definition of
willful applies to both sections 312 and 503(b) of the Act,47 and
the Commission has so interpreted the term in the section 503(b)
11. We also reject Star's contention that it did not
repeatedly violate section 1.2105(c). Star claims that, even if
it did violate section 1.2105(c) on August 29, 2002, the
voicemail message that its representative left on the telephone
answering machine of Northeast's representative the prior day did
not constitute a violation of the anti-collusion rule.49 We
disagree. As we observed in the NAL, it is clear from the
parties' subsequent communication that Star's Mr. Behenna
contacted Northeast's Mr. Riordan on August 28, 2002, in order to
initiate a discussion concerning bidding strategy. Nothing that
Star has presented in its Response leads us to any other
conclusion. Star concedes it placed the call to, and left a
message on the answering machine of, Northeast's auction
representative. The only logical conclusion that one can draw,
given the subsequent conversation between the two
representatives, is that the message involved a solicitation
about a prohibited subject: Star's auction bidding plans.50 In
any event, we conclude that even if the behavior constituted only
one violation on August 29, 2002, a $100,000 forfeiture is still
12. In light of the foregoing analysis, we find that Star
willfully and repeatedly engaged in violations of section
1.2105(c) of the Commission's Rules by discussing bidding
strategy with a competing applicant during Auction No. 44. The
first violation occurred on August 28, 2002, when Mr. Behenna
left a voicemail message for Mr. Riordan, a communication that
solicited Star's primary violation, which occurred on August 29,
2002, when the two individuals, on behalf of their respective
companies, engaged in Mr. Behenna's requested conversation about
bidding strategy. These telephone calls took place during the
period of time in which discussions about such subjects between
or among auction applicants in Auction No. 44 were strictly
13. The Commission's Forfeiture Policy Statement51
specifies that the Commission shall impose a forfeiture based
upon consideration of the factors enumerated in section
503(b)(2)(D) of the Act, 47 U.S.C. § 503(b)(2)(D), such as ``the
nature, circumstances, extent and gravity of the violation, and,
with respect to the violator, the degree of culpability, any
history of prior offenses, ability to pay, and such other matters
as justice may require.''52 In this case, taking all of these
factors into consideration, we find that Star is liable for a
forfeiture in the amount of $100,000.
14. We also reject Star's claim that the NAL did not
properly consider the factors set forth in section 503(b)(2)(D)
of the Act.53 We carefully considered each of the factors in the
NAL and have done so again here and find no basis for mitigating
the proposed forfeiture. Additionally, we base the forfeiture
amount in this case on the severity of the misconduct generally,
irrespective of the number of violations. Given the multiple
admonitions about collusion issued by WTB to auction applicants
in Auction No. 44, Star knew or should have known that the
communications that it solicited and in which it engaged were
proscribed. The violations committed by Star had the potential
to affect the fundamental integrity of Auction No. 44. With
respect to Star's request for mitigation because it voluntarily
disclosed the communications to the Commission,54 Star was
required by section 1.2105(c)(6) of the Commission's rules to do
so. Although Star suggests an inability to pay the forfeiture
proposed in the NAL,55 it has presented no documentation in
support of such a claim. We conclude, on balance, that the
forfeiture amount is justified by the severity of the violations.
IV. ORDERING CLAUSES
15. Accordingly, IT IS ORDERED THAT, pursuant to section
503(b) of the Act,56 and sections 0.111, 0.311 and 1.80(f)(4) of
the Commission's Rules,57 Star IS LIABLE FOR A MONETARY
FORFEITURE in the amount of One Hundred Thousand Dollars
($100,000) for willfully and repeatedly violating section
1.2105(c) of the Commission's rules.
16. Payment of the forfeiture must be made by check or
similar instrument, payable to the order of the Federal
Communications Commission. The payment must include the
NAL/Acct. No. and FRN No. referenced above. Payment by check or
money order may be mailed to Forfeiture Collection Section,
Finance Branch, Federal Communications Commission, P.O. Box
73482, Chicago, Illinois 60673-7482. Payment by overnight mail
may be sent to Bank One/LB 73482, 525 West Monroe, 8th Floor
Mailroom, Chicago, IL 60661. Payment by wire transfer may be
made to ABA Number 071000013, receiving bank Bank One, and
account number 1165259.
17. IT IS FURTHER ORDERED that a copy of this Forfeiture
Order shall be sent by Certified Mail Return - Receipt Requested,
to: Star Wireless, LLC, 4000 Palos Verdes Dr. North, Suite 201,
Rollings Hills Est., California 90274; and to its counsel: Mark
J. Tauber, Esq., Piper Rudnick, 1200 Nineteenth Street, N.W.,
Washington, D.C. 20036-3900.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 U.S.C. § 503(b); 47 C.F.R. § 1.80.
2 47 C.F.R. § 1.2105(c).
3 In re Star Wireless, LLC, Notice of Apparent Liability for
Forfeiture, 18 FCC Rcd 17,648 (EB 2003) (``NAL'').
4 Mr. Behenna holds 100% of PCSGP's fully diluted shares of
common stock. He is PCSGP's President, Secretary, Treasurer and
sole Director. See Star FCC Form 175, Exhibit A.
5 Northeast is a closely-held telecommunications holding company
located in Green Bay, Wisconsin, owned and controlled by four
siblings, Patrick D. Riordan, Robert H. Riordan, Micki Harper and
Ray J. Riordan, who are each officers and directors and
collectively hold over 52 percent of its stock.
6 Letter from Paul W. Jamieson, counsel for Star, to Maureen F.
Del Duca, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, dated
September 26, 2003 (``Response'').
7 Id. at 2.
8 Id. at 3.
9 Id. at 3-5.
10 Id. at 5-6.
11 Id. at 6-7.
12 Id. at 7-9.
13 Id. at 9-10.
14 Id. at 10.
15 See Implementation of Section 309(j) of the Communications Act
-- Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348,
2386-88, ¶¶221-226 (1994) (``Competitive Bidding Second Report
and Order'') (``[W]e believe that the competitiveness of the
auction process and of post-auction market structure will be
enhanced by certain additional safeguards designed to reinforce
existing laws and facilitate detection of collusive conduct.'').
16 See Competitive Bidding Second Report and Order, 9 FCC Rcd
2348, 2387, ¶223; Implementation of Section 309(j) of the
Communications Act -- Competitive Bidding, Memorandum Opinion and
Order, 9 FCC Rcd 7684, 7687-7688, ¶10 (1994) (``Our anti-
collusion rules are intended to protect the integrity and
robustness of our competitive bidding process.'').
17 47 C.F.R. § 1.2105(c)(1). Section 1.2105(a) requires that
each auction applicant submit a short-form application (FCC Form
175) in order to participate in an auction. See 47 C.F.R.
18 47 C.F.R. § 1.2105(c)(1). See also Amendment of Part 1 of the
Commission's Rules- Competitive Bidding Procedures, Order on
Reconsideration of the Third Report and Order, Fifth Report and
Order, and Fourth Further Notice of Proposed Rulemaking, 15 FCC
Rcd 15923 (2000) at 15297-98, ¶¶ 7-8.
19 The public notice announcing how parties could apply to
participate in Auction No. 44 explicitly reminded potential
participants of the Commission's anti-collusion rule, that the
rule was applicable to all applicants, and that the rule would
apply from the deadline for filing short-form applications until
the post-auction down payment deadline. See Auction of Licenses
in the 698-746 MHz Band Scheduled for June 19, 2002, Public
Notice, DA 02-563 (WTB rel. March 20, 2002) (``Procedures PN'')
at 7 (``[T]he Commission's rules prohibit applicants for the same
geographic license area from communicating with each other during
the auction about bids, bidding strategies, or settlements. This
prohibition begins at the short-form application filing deadline
and ends at the down payment deadline after the auction.''). The
Procedures PN directed applicants to a list of precedents
applying the anti-collusion rule, several of which explicitly
applied the rule to applicants, such as Northeast here, that
subsequently did not bid in the auction. Id. at Attachment G
(citing, inter alia, Letter to Robert Pettit, Esquire, from
Margaret W. Wiener, Chief, Auctions and Industry Analysis
Division, Wireless Telecommunications Bureau, Federal
Communications Commission, 16 FCC Rcd 10080 (WTB 2000) (declining
to except an applicant's controlling interest from coverage by
the anti-collusion rule, even though the applicant never made an
upfront payment for the auction and was not listed as a qualified
bidder); Letter to Mark Grady, President, Communications Venture
PCS Limited Partnership, from Kathleen O'Brien Ham, Chief,
Auctions Division, Wireless Telecommunications Bureau, Federal
Communications Commission, 11 FCC Rcd 10895 (WTB 1996) (``Even
when an applicant has withdrawn its application during the course
of the auction, the applicant may not enter into a bidding
agreement with another applicant bidding on the geographic
license areas from which the first applicant withdrew.'')). See
also Implementation of Section 309(j) of the Communications Act -
Competitive Bidding, Fourth Memorandum Opinion and Order, 9 FCC
Rcd 6858, 6867 ¶ 50-51 (1994) (rejecting the argument that
communications prohibited by the anti-collusion rule should be
permitted during auctions between active and non-active bidders);
Letter to John Reardon, Secretary to the Board of Directors and
General Counsel, Mobex Communications, Inc., from Amy J. Zoslov,
Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 13
FCC Rcd 17877 (WTB 1998) (``When the short-form filing deadline
passes, the anti-collusion rule applies to all applicants with
submitted short-form applications . . . We . . . remind
applicants that submitted applications, once the short-form
deadline passes, trigger application of the anti-collusion rule
even if they are later withdrawn.'').
20 Response at 2.
21 See Auction of Licenses For 698-746 MHz Band; Status of FCC
Form 175 Applications to Participate in the Auction; Extension of
Upfront Payment Deadline, Public Notice, DA 02-1213 (WTB rel. May
24, 2002) (``Status PN'').
22 Status PN at 2.
23 Response at 2. See also, Auction No. 44, Lower 700 MHz
Auction Band Closes, Winning Bidders Announced, Public Notice, DA
02-2323 (WTB rel. September 20, 2002).
24 Procedures PN at 8; Status PN at 4-5; Auction of Licenses for
698-746 MHz Band; 128 Qualified Bidders, Public Notice, DA 02-
1346 (WTB rel. June 7, 2002) (``Qualified Bidders PN'') at 7;
Auction No.44, Revised Qualified Bidder Notification; 125
Qualified Bidders, Public Notice, DA 02-1933 (WTB rel. August 7,
2002) (``Revised Qualified Bidders PN'') at 7-8; Auction No. 44
Revised Schedule, License Inventory, and Procedures, Public
Notice, DA 02-1491 (WTB rel. June 26, 2002) (``Revised Schedule,
Inventory and Procedures PN'') at 2.
25 Revised Schedule, Inventory and Procedures PN at 2; Revised
Qualified Bidders PN at 7.
26 ``The term applicant shall include all controlling interests
in the entity submitting a short-form application to participate
in an action (FCC Form 175) . . . .'' 47 C.F.R. §
27 Star also maintains that ``[o]nce Northeast failed to perfect
its application by meeting the contingency of making an upfront
payment, its application was rendered void ab initio - as if it
were never filed.'' Response at 2, n. 4. This is not correct.
Rather, as noted above, the failure to perfect the application
rendered Northeast ineligible to bid and its application subject
to dismissal. Nevertheless, its application remained pending at
the time of the behavior here.
28 Response at 3.
29 See Letter to John Reardon, Secretary to the Board of
Directors and General Counsel, Mobex Communications, Inc., from
Amy J. Zoslov, Chief, Auctions and Industry Analysis Division,
Wireless Telecommunications Bureau, Federal Communications
Commission, 13 FCC Rcd 17877 (WTB 1998) (``When the short-form
filing deadline passes, the anti-collusion rule applies to all
applicants with submitted short-form applications. . . We . . .
remind applicants that submitted applications, once the short-
form deadline passes, trigger application of the anti-collusion
rule even if they are later withdrawn.''); Letter to Mark Grady,
President, Communications Venture PCS Limited Partnership, from
Kathleen O'Brien Ham, Chief, Auctions Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 11
FCC Rcd 10895 (WTB 1996) (``Even when an applicant has withdrawn
its application during the course of the auction, the applicant
may not enter into a bidding agreement with another applicant
bidding on the geographic license areas from which the first
30 Response at 3-5.
31 NAL, para. 19.
32 Response at 6-7. In fact, as concluded in the NAL, the
parties did compromise the auction by providing Star with
information to which other bidders lacked access. NAL, para. 20.
33 The Commission's bidding records reveal that, after the August
29, 2002, conversation between Star's Behenna and Northeast's
Riordan, Star began to bid actively and aggressively for
Wisconsin and Iowa markets -- areas for which Star had shown no
interest in its earlier bidding and in which Star, unlike
Northeast, had no operations. Thus, the parties' denials
notwithstanding, the evidence shows that the subject
communication significantly impacted Star's auction bidding
strategy. See NAL, paras. 14, 15, 19, note 60.
34 Response at 4-5.
35 Response at 6.
36 Competitive Bidding Second Report and Order, 9 FCC Rcd at
2,386 - 88 ¶¶ 221 - 226.
37 Response at 7-9.
38 See In re Mercury PCS II, LLC, 13 FCC Rcd. 23,755 (1998)
39 Id. at 23,759.
40 See supra, note 24.
41 See In the Matter of Commercial Realty St. Pete, 11 FCC Rcd
15,374 (1996) (``Commercial Realty''). In that case, the
Commission found that Commercial Realty had violated the
Commission's anti-collusion rule by attempting to discourage
other bidders from making down payments; that it had abused the
Commission's processes by improperly claiming bidding credits as
a woman-owned business, and that it willfully misrepresented that
it was qualified to incur financial obligations exceeding
$40,000,000. As a result of its misconduct, the Commission
imposed a $390,000 forfeiture against Commercial Realty.
42 See In re U.S. West Communications, Inc., 13 FCC Rcd 8286
(1998) (``US West''). In that case, US West, an auction
participant, disclosed and discussed its bidding strategy to, and
cooperated with, a competing auction participant during the
auction, and failed to timely notify the Commission of the
prohibited disclosure, discussion and arrangement. As a
consequence, the Commission imposed a $1,200,000 forfeiture
against US West for its violations of sections 1.2105(c) and 1.65
of the Commission's rules.
43 Response at 7.
44 Response at 9-10.
45 Id. at 8.
46 47 U.S.C. § 312(f)(1).
47 H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
48 See, e.g., Application for Review of Southern California
Broadcasting Co., Memorandum Opinion and Order, 6 FCC Rcd 4387,
49 Id. at 10.
50 As described in the NAL, from the auction-related
communications that occurred between Mr. Behenna and Mr. Riordan,
Star learned of Northeast's interest in certain markets and thus
knew about potential post-auction demand for the licenses in
certain markets in Auction No. 44, and Northeast had an
opportunity to influence Star's auction plan and strategy for its
own purposes. NAL, 18 FCC Rcd at 17,657. See Amendment of Part 1
of the Commission's Rules - Competitive Bidding Procedures, WT
Docket No. 97-82, Third Report and Order and Second Further
Notice of Proposed Rule Making, 13 FCC Rcd 374, 468 (1997)
("[A]uction applicants should avoid all discussions with each
other that will likely affect bids or bidding strategy . . . .").
51 The Commission's Forfeiture Policy Statement and Amendment of
section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, 12 FCC Rcd 17087, 17113 (1997), recon. denied 15 FCC
Rcd 303 (1999) (``Forfeiture Policy Statement''); 47 C.F.R. §
52 Forfeiture Policy Statement, 12 FCC Rcd at 17100-01, ¶ 27.
53 Response at 8-9.
54 Id. at 8.
55 Id. at 9.
56 47 U.S.C. § 503(b).
57 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).