Sec. 24.304  Withdrawal, default and disqualification penalties.

    (a) When the Commission conducts a simultaneous multiple round 
auction pursuant to Sec. 24.302(a)(3), 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exceeds the withdrawn bid.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.
    (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.
    (b) When the Commission conducts single round sealed bid auctions or 
sequential oral auctions, the Commission may modify the penalties to be 
paid in the event of bid withdrawal, default or disqualification; 
provided, however, that such penalties shall not exceed the penalties 
specified above.
    (c) In the case of single round bidding for narrowband PCS 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    (1) If a bid is withdrawn before the Commission releases the initial 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    (2) If a bid is withdrawn after the Commission releases the initial 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

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releases the initial public notice announcing the winning bidders.
    (d) In the case of oral sequential bidding for narrowband PCS 
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) and paragraphs (a) (1) and (2) of this section will 
apply.