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Appendix H

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DRAFT NOTICE

THE WIRELESS TELEGRAPHY (BROADBAND FIXED WIRELESS ACCESS LICENCES) NOTICE 2001

The Secretary of State in exercise of the powers conferred by section 1D(3) of the Wireless Telegraphy Act 1949(a) and regulation 4 of the Wireless Telegraphy (Broadband Fixed Wireless Access Licences) Regulations 2001(b) hereby issues a Notice to provide a procedure for the grant of specified wireless telegraphy licences by auction.

Date of issue of this Notice: .............................................................................. 2001

Hazel Canter,

Department of Trade & Industry

(a) 1949 c.54. (b) S.I. 2001/

PART 1 - INTRODUCTION

Commencement

1.1.1

This Notice shall come into effect on the date of issue.

Purpose of Notice

1.1.2

The purpose of this Notice is to specify the procedure to be followed in granting the Licences by means of an auction.

Stages of the Procedure

1.1.3

This Notice provides for a five stage procedure-

  1. an Application Stage as specified in Part 2;
    2.
  2. a Pre-Qualification Stage as specified in Part 3;
    3.
  3. a Primary Bid Stage Procedure as specified in Part 4;
    4.
  4. a Multiple-round Auction Stage as specified in Part 5; and Grant Stage as specified in Part 6.
    5.

Definitions

1.1.4

In this Notice, unless the contrary intention appears:

"Activity Rules" means the obligations imposed on Bidders as set out in Part 6;

"Alternative Auction Location" means a location notified in accordance with paragraph 5.4.2(a)(dd);

"Application" means an application submitted by a Bidder in accordance with section 1 of Part 2 or re-submitted in accordance with section 2 of Part 3;

"Application Date" shall be determined in accordance with paragraph 2.1.6;

"Application Form" means the form specified in Appendix 1;

"Application Stage" means the stage specified in Part 2;

"Association" shall have the meaning given in paragraph 1.1.6;

"Associated Bidder" means a Bidder falling within the definition in paragraph 3.6.8;

"Associated Bidder Notice" the notice specified in paragraph 3.6.7;

"Auction" means the procedures specified in Parts 4 and 5;

"Auction Location" means Room 8Y, Eighth Floor, Wyndham House, 189 Marsh Wall, London E14 9SX;

"Auction Website" shall have the same meaning as the Radiocommunications Agency's Internet website as defined in the Wireless Telegraphy Regulations;

"Authorised Officers" means two or more directors or one or more directors and the company secretary of a Bidder, two of whom have authority to bind the Bidder for all purposes connected with the procedure specified in the Notice;

"Authorised Persons" means the persons notified from time to time to the Secretary of State in accordance with paragraph 5.2.3 and paragraph 8.1.8;

"Backstop Date" means the date calculated in accordance with section 5 of Part 6;

"Backstop Date Extension Notice" means the notice specified in paragraph 6.5.2;

"Bidder" means a body corporate who has made an Application and has not been notified of his exclusion from the procedures specified in this Notice ;

"Bidder Association Certificate" means the certificate specified in Appendix 3;

"Bidder Compliance Certificate" means the certificate specified in Appendix 2;

"Bidder Notice" means the notice issued to Bidders by the Secretary of State in accordance with paragraph 3.4.1;

"Bidder Participation Notice" means the notice specified in paragraph 5.2.2;

"Broadband Fixed Wireless Access" shall have the meaning given in the Wireless Telegraphy Regulations;

"Business Day" means a day other than -

  1. a Saturday or Sunday;
  2. a Bank Holiday within the meaning of the Banking and Financial Dealings Act 1971 other than a day which is a bank holiday only in Scotland or Northern Ireland;

"Candidate" in relation to a Bidder or an Existing Licensee means a person (other than the Bidder or the Existing Licensee) who is a member of the Candidate Group in relation to the Bidder or the Existing Licensee;

"Candidate Group" in relation to a Bidder or an Existing Licensee means the Bidder or the Existing Licensee and any person who is a Connected Person in relation to that Bidder or that Existing Licensee;

"CHAPS" means Clearing House Automated Payment System;

"Confidential Information" shall have the meaning given in paragraph 7.5.4;

"Connected Person" means a person who -

  1. controls a Bidder or an Existing Licensee;
    2.
  2. is a Participant in a Bidder and is concerned with that Bidder's application or a Licence;
    3.
  3. is a Participant in an Existing Licensee and was concerned with that Existing Licensee's application for an Existing Licence;
    4.
  4. has an Economic Interest of more than 10% in a Bidder and is concerned with that Bidder's application for a Licence;
    5.
  5. has an Economic Interest of more than 10% in an Existing Licensee and was concerned with that Existing Licensee's application for an Existing Licence;
    6.
  6. controls, or is controlled by, a person falling within (a), (b), (c), (d) or (e) above;
    7.
  7. is controlled by a person who controls a person falling within (a), (b), (c), (d) or (e); or
    8.
  8. is controlled by a Bidder or an Existing Licensee;
    9.

"Connection" shall have the meaning given in paragraph 1.1.6;

"Current Price" shall have the meaning given in paragraph 5.3.18;

"Current Price Bidder" shall have the meaning given in paragraph 5.3.19;

"Deferred Licence Fee" means the fee calculated in accordance with Part 2 of Schedule 2;

"Deposit" shall have the meaning given in paragraph 2.2.1;

"Deposit Bank" means HM Paymaster General;

"Deposit Interest" means interest earned in respect of a Bidder's Deposit in accordance with paragraphs 2.2.9 to 2.2.13;

"Deposit Period" means a period not exceeding 31 calendar days as determined by the Secretary of State in accordance with paragraph 2.2.6 or 2.2.7;

"Deposit Rate" means the rate of interest as determined in accordance with paragraph 2.2.17;

"Economic Interest" means, in relation to a specified percentage, an indirect interest held by a person ("the first person"), through one or more bodies corporate, in the share capital of another body corporate ("the second person"), such that the percentage interest attributable to the first person in the share capital of the second person exceeds the specified percentage; and for this purpose, the first person, and every body corporate controlled by the first person, shall be treated as one person;

"Electronic Bidding Method" means the method of participating in the Auction using paper-based fax;

"Equity Share Capital" has the same meaning as in the Companies Act 1985;

"Existing Licence" means a licence granted in either the First BFWA Auction or previously awarded in accordance with the provisions of this Notice;

"Existing Licensee" means a person who holds an Existing Licence;

"Final Round" in relation to a Multiple-round Auction, means the final Round of that Auction as referred to in paragraph 5.3.9;

"First Round" in relation to a Multiple-round Auction, means the first Round of that Auction;

"First BFWA Auction" means the auction for Broadband Fixed Wireless Access licences at 28GHz held between 10 and 20 November 2000 pursuant to the Wireless Telegraphy (Broadband Fixed Wireless Access Licences) Regulations 2000;

"Grant Stage" means the stage specified in Part 6;

"Guarantee" means the guarantee specified in Schedule 3 and which is to be provided to the Secretary of State on payment of the Initial Licence Fee in accordance with section 2 of Part 6;

"HMG Account" means Account: Secretary of State for Trade and Industry; Sort Code: 16-53-60; Account number: 00004732;

"Initial Deposit" means the sum calculated in accordance with paragraph 2.2.3;

"Initial Grant Date" means either -

  1. if one or more Bidders notifies the Secretary of State in accordance with paragraph 6.1.2 that he is not subject to a Pre-Condition, the last date on which a Licence is granted to such a Bidder; or
    2.
  2. if either -
  1. all Bidders notify the Secretary of State in accordance with paragraph 6.1.2 that they are subject to Pre-Conditions; or
  2. all of the Bidders who have notified that they are not subject to Pre-Conditions in accordance with (a) above are excluded from the Auction before grant, 7 Business Days after the issue of the Provisional Award Notices;
    3.

"Initial Licence Fee" means 50% of the Licence Fee;

"Insider" means any undertaking to whom Confidential Information is disclosed by a Candidate Group other than as a result of a breach by any Bidder or Candidate of the Activity Rules;

"Licence" means a licence to establish or use in any Region any station for wireless telegraphy or install or use in any Region any apparatus for Wireless Telegraphy at the frequencies specified in the Schedule to the Wireless Telegraphy Regulations and to be granted subject to the terms, provisions and limitations specified in Schedule 2 to this Notice;

"Licence Fee" means the sum payable in respect of each Licence as determined in accordance with paragraph 2.1.3(d) or, in the case of a Multiple-round Auction, by the final bid for that Licence in accordance with Part 5;

"Message" means anything falling within paragraphs (a) to (d) of section 4(1) of the Telecommunications Act 1984;

"Multiple-round Auction" means an auction as specified in Part 5;

"Multiple-round Auction Date" means, in relation to a Multiple-round Auction, either the date notified to Bidders in accordance with paragraph 5.2.1 or re-notified in accordance with paragraph 5.2.4;

"Multiple-round Auction Stage" means, in relation to a Multiple-round Auction, the stage specified in Part 5;

"Multiple-round Auction Stage Completion Date" means, in relation to a Multiple-round Auction, the date on which the Final Round of that Multiple-round Auction Stage is completed;

"Participant" means a person who, in relation to a body corporate, holds or is beneficially entitled to shares in that body corporate, has a right to acquire or subscribe for shares in that body corporate, or possesses voting power in that body corporate, other than a person who:

  1. does not hold and is not beneficially entitled to more than 10% of any class of shares in the body corporate which are listed or traded on a Recognised Stock Exchange;
    2.
  2. does not have a right to acquire or subscribe for such shares which, together with any such shares which he holds or to which he is beneficially entitled, represent or would represent more than 10% of such class of shares; and
  3. does not possess voting power in respect of more than 10% of any such class of shares;

"Penalty" means a sum representing the whole or part of a Bidder's Deposit which has been deducted by the Secretary of State from that Deposit under any provision of this Notice;

"Pre-Condition" means, in relation to a Bidder, that the Bidder is -

  1. an Associated Bidder; and/or
    2.
  2. requires Prior Regulatory Approval;
    3.

"Pre-Qualification Stage" means the stage specified in Part 3;

"Primary Bid Stage Procedure" means the procedure specified in Part 4;

"Prior Regulatory Approval" means any shareholder or competition law authorisation which is required before a Licence is granted to a Bidder;

"Provisional Award Notice" means a notice issued to a Bidder under paragraph 4.3.2 or 5.6.1, as the case may be;

"Qualified Bidder" means a Bidder determined as such in accordance with section 3 of Part 3;

"Qualifying Bank" means a bank whose long term debt rating is, or is higher than, -

  1. one or more of the following -
  1. Moody's A2;
    2.
  2. Standard & Poor's A;
    3.
  3. Fitch - IBCA's A;
    4.
or -
  1. a rating of a body other than a body listed in (a) above which, in the opinion of the Secretary of State, is equivalent to one or more of the ratings listed in that paragraph;
    2.

"Recognised Stock Exchange" means The London Stock Exchange, the Alternative Investment Market or any other recognised investment exchange under the Financial Services Act 1986 or any successor thereto in the UK or any other investment exchange or securities market outside the UK which the Secretary of State considers, in her absolute discretion, to be a recognised exchange or securities market;

"Region" means a region of the United Kingdom as more particularly described in the Schedule to the Wireless Telegraphy Regulations;

"Relevant Group" means, in relation to an undertaking -

  1. any parent undertaking of the undertaking;
    2.
  2. any subsidiary undertaking of the undertaking;
    3.
  3. any subsidiary undertaking of any parent referred to in (a) above;
    4.
  4. a shareholder or partner in the undertaking which beneficially owns (directly or indirectly) shares in the undertaking in circumstances where there is one other shareholder or partner in the undertaking which beneficially owns (directly or indirectly) the remaining shares in circumstances where neither shareholder nor partner has control;
    5.
  5. any other undertaking of which the undertaking beneficially owns (directly or indirectly) shares in circumstances where there is one other shareholder or partner in that undertaking which beneficially owns (directly or indirectly) the remaining shares in circumstances where neither shareholder nor partner has control;
    6.
  6. any other undertaking in circumstances where two or more of its shareholders or partners which acting in concert together beneficially own (directly or indirectly) more than 50% of the shares or voting rights in that undertaking, acting in concert together beneficially own (directly or indirectly) more than 50% of the shares or voting rights of the undertaking; and
    7.
  7. any other undertaking of which the undertaking beneficially owns (directly or indirectly) together with one or more undertakings acting in concert more than 50% of the shares or voting rights of that undertaking;
    8.

"Relevant Member" means a member of a Candidate Group other than a member who -

  1. has no interest, whether direct or indirect, in the share capital of the Bidder;
  2. possesses no voting power in the Bidder; and
    3.
  3. possesses no Confidential Information relating to the Bidder;
    4.

"Reserve Price" means the prices specified in relation to each of the Licences in Schedule 1 hereto;

"Round" in relation to a Multiple-round Auction, means a round of that Auction as referred to in paragraph 5.3.3;

"RTTE Directive" means Directive 1999/5/EC of the European Parliament and of the Council of 9th March 1999 on radio equipment and telecommunications terminal Equipment and the mutual recognition of their conformity;

"Telecommunications Act Licence" means a licence granted under section 7 of the Telecommunications Act 1984;

"Tie Bid" shall have the meaning given in paragraph 5.3.22;

"Wireless Telegraphy" has the same meaning as in the Wireless Telegraphy Act 1949; and

"Wireless Telegraphy Regulations" means the Wireless Telegraphy (Broadband Fixed Wireless Access Licences) Regulations 2001 S.I. No.

1.1.5

In this Notice -

  1. any reference to a Participant with more than a specific percentage interest in a body corporate shall be construed as a reference to a person who -
  1. holds or is beneficially entitled to more than the specified percentage of the shares in that body;
  2. has a right to acquire or subscribe for shares which represent or would represent, together with any shares which he holds or to which he is beneficially entitled, more than the specified percentage of the shares in that body; or
  3. possesses more than the specified percentage of the voting power in that body,
    4.

and for this purpose a person and every body corporate controlled by him shall be treated as one person;

  1. subject to paragraph (c) below, any reference to a person -
    2.
  1. holding or being beneficially entitled to, or having the right to acquire or subscribe for, shares or any amount of the shares or Equity Share Capital,in a body corporate; or
    2.
  2. possessing voting power, or any amount of the voting power, in a body corporate,
    3.

shall be construed as a reference to his doing so, or being so entitled, whether alone or jointly with one or more other persons and whether directly or through one or more nominees;

  1. a reference to a person's holding of shares, or possession of voting power, in a body corporate shall be construed so as to disregard such holding or possession if or to the extent that -
  1. he holds the shares concerned -
    2.

(aa) as a nominee;

(bb) as a custodian (whether under a trust or by a contract); or

(cc) under an arrangement pursuant to which he has issued, or is to issue, depository receipts, as defined in section 220(1) of the Companies Act 1985, in respect of the shares concerned, and

  1. he is not entitled to exercise or control the exercise of voting rights in respect of the shares concerned;
  1. for the purposes of sub-paragraph (c)(ii) above -
  1. a person is not entitled to exercise or control the exercise of voting rights in respect of shares if he is bound (whether by contract or otherwise) not to exercise the voting rights, or not to exercise them otherwise than in accordance with the instructions of another; and
    2.
  2. voting rights which a person is entitled to exercise or of which he is entitled to control the exercise only in certain circumstances shall be taken into account only when those circumstances have arisen and for so long as they continue to obtain;
  1. a person shall be deemed to control a body corporate if -
  1. he has a controlling interest in it;
  2. he has a controlling interest in a body corporate which has a controlling interest in the body corporate; or
    3.
  3. although he does not have such an interest in the body corporate, or in any body corporate with a controlling interest in the body corporate, it is reasonable, having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body corporate are conducted in accordance with his wishes;

and for this purpose a person has a controlling interest in a body if he holds, or is beneficially entitled to, 50% or more of the Equity Share Capital in the body corporate, or possesses 50% or more of the voting power in it and a person shall be deemed to control a body corporate where that person controls another person which controls that body corporate;

  1. for the purpose of the definition of "Connected Person" a person is "concerned" with a Bidder's application for a Licence if he -
  1. is in possession of Confidential Information relating to the Bidder; or
    2.
  2. has entered into any agreement or understanding with the Bidder, or any other member of the Candidate Group in relation to the Bidder, to finance the Bidder, or assist the Bidder in any other way, in connection with bidding for a Licence;
  1. for the purpose of the definition of "Economic Interest" in paragraph 1.1.4 above, the percentage interest attributable to the first person in the share capital of the second person shall be calculated by multiplying together the respective percentage interests of the first person, and of each body corporate in the chain of ownership which gives the first person an Economic Interest in the share capital of the second person, in the shares of the second person or of another body corporate in such chain of ownership (as the case may be). Such percentage interests shall in each case be calculated in the same manner as is prescribed for calculating the percentage interest of a Participant in the shares of a body corporate, save that a percentage interest of 50% or more shall for this purpose be treated as a percentage interest of 100%;
  1. for the purpose of the definition of "Relevant Group" in paragraph 1.1.4 above -
  1. "parent undertaking" and "subsidiary undertaking" shall have the meanings given to them in section 258 of the Companies Act 1985;
    2.
  2. "undertaking" and "shares" shall have the meaning given to them in section 259 of the Companies Act 1985;
    3.
  3. "acting in concert" means acting in co-operation with another shareholder or partner to obtain or consolidate control of an undertaking; and
    4.
  4. "control" shall have the meaning given in sub-paragraph (e) above;
  1. For the purpose of the definitions of "Economic Interest", "Participant", "Relevant Group", "Relevant Member" and "control" in this Notice:
    2.
  1. a beneficial entitlement to shares, interest in shares or right to acquire or subscribe for shares or right to any voting power shall be taken into account whether or not it is a conditional entitlement, interest or right, except that any such entitlement, interest or right resulting from a transaction constituting or forming part of merger or acquisition activity in the circumstances described in (a) or (b) below shall be deemed not to arise until:
  1. (where the transaction is conditional on a merger or acquisition proposal or transaction which is expressed to be subject to a condition that clearance, with or without conditions, is received from the Secretary of State or the European Commission and (b) below does not apply) that condition of the transaction has been satisfied or waived;
    2.
  2. (where the transaction is, or forms part of a merger or acquisition proposal or transaction which is, opposed by the directors of any relevant party) the transaction becomes unconditional in all respects or (if earlier) takes place; and
  1. notwithstanding (i) above, no account shall be taken of an interest to the extent that (if it were an interest in shares) it would be an exempt security interest for the purposes of section 209 of the Companies Act 1985;
  1. any reference in this Notice to a period to be determined in terms of a number of Business Days shall be calculated from midnight on the Business Day of notification or expiry of another time period (as the case may be), and expire at midnight on the last of the relevant number of Business Days; and
  1. any reference to "midnight" in relation to a particular day shall be read as 11.59 p.m. on that day.
    2.

1.1.6

Notwithstanding any other provision of this Notice, where the Secretary of State determines that, in relation to circumstances which cause or would cause -

  1. a Bidder to be a Candidate in relation to another Bidder, or a person who is a Relevant Member of a Bidder's Candidate Group to be a Relevant Member in relation to the Candidate Group of another Bidder (the "Connection"); or
    2.
  2. a Bidder to be an Associated Bidder in relation to another Bidder (the "Association");
    3.

all of the following conditions are satisfied:

  1. the Connection or Association arises or would arise as a result of a transaction or series of transactions (constituting or forming part of merger and acquisition activity) which have taken place no earlier than [17 August 2001], or which have not taken place;
    2.
  2. the Connection or Association is, or would be, of a temporary nature;
    3.
  3. the purpose or principal purpose of the transaction or series of transactions is not to bring about the Connection or Association; and
    4.
  4. arrangements satisfactory to the Secretary of State have been made or will be made such that
    5.

(aa) neither of the Bidders referred to in sub-paragraph (i) or in sub-paragraph (ii) of this paragraph 1.1.6 ("Bidder A" and "Bidder B" respectively) is or will in practice be able to achieve the result that the affairs of one such Bidder are conducted in accordance with the other's wishes;

(bb) no person who is a Connected Person in relation to either or both of Bidder A and Bidder B, is or will in practice be able to achieve the result that the affairs of both Bidder A and Bidder B are conducted in accordance with his wishes;

(cc) there is no appreciable risk that Confidential Information relating to Bidder A has been obtained or will be obtained by Bidder B, or vice versa; and

(dd) there is no appreciable risk that both Confidential Information relating to Bidder A and Confidential Information relating to Bidder B has been obtained or will be obtained by any person who is a Connected Person in relation to either or both of Bidder A and Bidder B;

then the Secretary of State may at any time, if she thinks fit, determine that the Connection or Association shall be disregarded for all purposes, or for such purposes as she may determine, under this Notice.

1.1.7

A determination by the Secretary of State under paragraph 1.1.6 may be revoked by her at any time in the event of any change of circumstances which she considers to be material to such determination and any Bidder to which such a determination relates shall inform the Secretary of State immediately after he becomes aware of any change in the circumstances to which the determination relates (without prejudice to the generality of paragraph 7.3.6).

1.1.8

Notice of any determination by the Secretary of State under paragraph 1.1.6 and any revocation of such a determination under paragraph 1.1.7 shall be given to all Bidders.

1.1.9

References to this Notice shall include references to the Schedules and Appendices.

1.1.10

Subject to section 3 of the Summer Time Act 1972, wherever an expression of time occurs in this Notice the time specified shall be held to be Greenwich mean time.

PART 2 - APPLICATION STAGE

Section 1 - Invitation to Apply

2.1.1

Any body corporate may make an Application in accordance with this Part.

2.1.2

An Application shall be completed in the English language and consist of the following -

  1. an Application Form in the form specified in Appendix 1, together with any documents required as part of the Application;
    2.
  2. a Bidder Compliance Certificate in the form specified in Appendix 2; and
  3. an Initial Deposit as specified in section 2 of this Part.
    4.

Manner of Application

2.1.3

An Application must -

  1. be addressed to the Secretary of State;
  2. be delivered to the Auction Location;
    3.
  3. be made for no more than one Licence in a particular Region, and shall specify the Licence in question by reference to the list of Licences in the Schedule to Wireless Telegraphy Regulations, but separate Applications may be made for Licences in other Regions; and
    4.
  4. confirm that the Application constitutes an irrevocable bid to pay the Reserve Price for the Licence in the Region to which the Application relates.
    5.

Date for receipt of Applications

2.1.4

Subject to paragraphs 2.1.6 and 2.1.7 below, Applications may be submitted to the Secretary of State at the Auction Location at any time from [ October 2001] up to and including [ October 2002] Provided That where an Application for a Licence in a Region has been received by the Secretary of State any other Applications in respect of that Region must be received by her at the Auction Location by the Application Date calculated in accordance with paragraph 2.1.6(a) below.

2.1.5

The following parts of each Application shall be published by the Secretary of State on the Auction website -

  1. the name of the Applicant; and
    2.
  2. the Region, and the Licence within that Region, to which the Application relates.
    3.

Application Date

2.1.6

Subject to paragraph 2.1.7 below, in respect of each Region the Application Date shall be -

  1. where an Application has been received by the Secretary of State for a Licence in that Region, the date falling 20 Business Days after the date on which the Secretary of State publishes details of the first such Application on the Auction website;
  2. where no Application has been made for a Licence in that Region, [ October 2002]; or
    3.
  3. in the case of sub-paragraph (a) or (b) above, such later date as the Secretary of State may notify on the Auction website, provided that such notification shall not be made later than two Business Days before the date specified in sub-paragraph (a) or (b) above, as the case may be.
    4.

2.1.7

For the avoidance of doubt, where in any Region any Licence remains to be awarded at any time up to and including [ October 2002], or such later date as the Secretary of State may specify under sub-paragraph 2.1.6(c) above, Applications may still be made in respect of such Licence by that date notwithstanding the completion of a previous Grant Stage in respect of another Licence or other Licences in that Region Provided That where a 20 Business Day period as specified in paragraph 2.1.6(a) above in respect of a Licence in a particular Region has expired no further Applications may be submitted in respect of any Licence in that Region that may remain to be awarded until such date as the Secretary of State notifies on the Auction website as being the date from which such further Applications may be made. In these circumstances the procedures described in this Notice shall be repeated until either all Licences in that Region have been awarded, or until the Application Date (determined in accordance with sub-paragraph 2.1.6 (b) or (c) above), whichever shall first occur.

2.1.8

If, in exceptional circumstances which are beyond the control of the body corporate which proposes to make an Application, it is not physically possible to deliver the Application in accordance with paragraphs 2.1.4 and 2.1.6 above, the Secretary of State may, in her absolute discretion, agree to any or a combination of the following -

  1. receipt of the Application at a location other than the Auction Location, the address of which she shall notify on the Auction website; and
    2.
  2. receipt of the Application on a date later than the Application Date which she shall notify on the Auction website;

2.1.9

If an Application is received in accordance with paragraph 2.1.8 it shall, without prejudice to any provision of this Notice regarding the veracity of the information contained in the Application, be deemed for all other purposes of this Notice to have been received on the Application Date.

Additional information

2.1.10

Any person who is considering submitting an Application in accordance with the requirements of this Part may, before the Application Date, submit to the Secretary of State one or more questions in writing relating to the submission of an Application.

2.1.11

If the Secretary of State responds to a question submitted under paragraph 2.1.10 above the Secretary of State may place a copy of the question and of any response, in whole or in part, on the Auction website but, in doing so, shall not without the consent of that person identify the person who has submitted the question.

Section 2 - Deposits

References to Deposit

2.2.1

Any reference in this Notice to the Deposit shall, unless otherwise indicated, be construed as referring to-

  1. the Initial Deposit which may have been paid by a Bidder; and
    2.
  2. any Deposit Interest which has been credited to a Bidder in accordance with paragraphs 2.2.9 to 2.2.13 below.
    3.

2.2.2

Any reference in this Notice to the Deposit shall not be construed so as to include any sum which has been deducted as a Penalty.

Initial Deposit

2.2.3

The Initial Deposit shall be an amount equal to 10% of the Reserve Price of a Licence in the Region in respect of which the Application is made and shall be payable to the Secretary of State in accordance with paragraph 2.2.5 below.

2.2.4

If funds representing the Initial Deposit are not cleared by 3 p.m. on the day on which the Secretary of State receives the Application she may notify the Bidder that his Application is invalid.

Method of payment of Deposit

2.2.5

The Deposit shall be payable to the Secretary of State by CHAPS payment of funds to the HMG Account at the Deposit Bank and shall be accompanied by an identifier for the Bidder which shall consist of the registered name of the Bidder.

Deposit Period

2.2.6

On transfer of an Initial Deposit to the Secretary of State in accordance with paragraph 2.2.5 the Secretary of State shall, in accordance with paragraph 2.2.17, determine a Deposit Period which shall apply from that date for the calculation of Deposit Interest.

2.2.7

On the expiry of a Deposit Period the Secretary of State shall, in accordance with paragraph 2.2.17, determine a further Deposit Period for the calculation of Deposit Interest unless either -

  1. the Deposit, or the remainder of the Deposit, as the case may be, is returned to the Bidder; or
    2.
  2. the Deposit, or the remainder of the Deposit, as the case may be, is to be retained permanently by the Secretary of State in accordance with any provision of this Notice.
    3.

2.2.8

If a Bidder is notified by the Secretary of State that his Deposit, or part of his Deposit, is to be returned to him under any provision of this Notice, the Deposit, or part of the Deposit, as the case may be, shall be repaid at the end of the then current Deposit Period.

Deposit Interest

2.2.9

A Bidder's Deposit shall earn interest at the appropriate Deposit Rate for each Deposit Period as determined in accordance with paragraph 2.2.17.

2.2.10

For the purposes of paragraph 2.2.9, a Bidder's Deposit shall include any Deposit Interest earned in all previous Deposit Periods.

2.2.11

Subject to paragraphs 2.2.12 and 2.2.13, where a Deposit, or part of a Deposit, is returned to a Bidder under any provision of this Notice, the Deposit, or part of a Deposit, which is returned shall include such Deposit Interest as has been earned in respect of that Deposit, or part of that Deposit, from the date on which it was received by the Secretary of State.

2.2.12

No Deposit Interest shall be returned to a Bidder issued with a Provisional Award Notice in accordance with Part 4 or Part 5 of this Notice and which has been earned in respect of the Deposit, or part of the Deposit, from the Initial Grant Date.

2.2.13

Where all or the remaining part of the Deposit is forfeit under any provision of this Notice, all Deposit Interest which has been earned in respect of the Deposit shall form part of the total amount which is forfeit.

Penalties

2.2.14

If a Bidder is notified under any provision of this Notice that all or part of his Deposit is forfeit as a Penalty, the deduction from that Bidder's Deposit shall be deemed to have occurred at the time of such notification by the Secretary of State notwithstanding that the sums identified in the notification, and any interest earned or to be earned thereon, remain for a further period of time in the HMG Account.

2.2.15

In the event that a sum which has been deducted as a Penalty is re-instated as all or part of the Bidder's Deposit the sum shall be deemed to be so re-instated from the time of notification of its re-instatement to the Bidder and all interest which has been earned in respect of that sum from the date on which it was originally notified as a Penalty shall also be deemed to be re-instated as part of the Deposit from that date.

2.2.16

Where the imposition of a Penalty would result in the amount of a Bidder's Deposit being reduced below the amount of Initial Deposit required from that Bidder in accordance with paragraph 2.2.3, the Secretary of State may notify that Bidder that the deduction of the Penalty from that Bidder's Deposit will be deferred for a period, not exceeding two Business Days, within which the Bidder shall pay into the HMG Account an amount equal to the amount of that Penalty. Notwithstanding any such deferral, any interest earned or to be earned on the amount of that Penalty pending such deduction shall accrue to the Secretary of State from the date of notification of the imposition of the Penalty.

Deposit Rate

2.2.17

The Secretary of State shall set the Deposit Rate and Deposit Period by reference to the highest rate of interest for the relevant Deposit Period which, in the opinion of the Secretary of State, may be attained by investing the Deposit in Treasury Bills or Treasury Ways and Means having regard to the Secretary of State's ability to repay the Deposit to the Bidder in accordance with any provision of this Notice.

PART 3 - PRE-QUALIFICATION STAGE

Section 1 - Preliminary

Period of Pre-Qualification

3.1.1

Where, in respect of any Region, the Secretary of State receives an Application for a Licence in that Region the period of pre-qualification shall start at the Application Date calculated in accordance with paragraph 2.1.6(a) above and shall end on the date on which the Secretary of State notifies the Bidders of a Multiple-round Auction in respect of Licences in that Region or, if there is to be no Multiple-round Auction in respect of a Licence or Licences in that Region, the date on which the Secretary of State issues one or more Provisional Award Notices in respect of a Licence or Licences in that Region.

Section 2 - Initial Assessment

3.2.1

Within 2 Business Days following the Application Date calculated in accordance with paragraph 2.1. 6(a) above in respect of a Region the Secretary of State shall notify all Bidders who have submitted Applications for a Licence in that Region of -

  1. the names of all other Bidders for a Licence in that Region; and
    2.
  2. the composition of the Candidate Groups of all such other Bidders, as notified to her by the respective Bidders in their Applications.
    3.

3.2.2

Within five Business Days of the Secretary of State's notification made in accordance with paragraph 3.2.1 a Bidder may, subject to paragraph 3.2.3, re-submit his Application indicating the changes which he has made.

3.2.3

In re-submitting an Application in accordance with paragraph 3.2.2 a Bidder may only amend his original Application in one or both of the following cases -

  1. where he knows the Application to be incorrect as a result of the notification made to him under paragraph 3.2.1 and the error relates to the composition of his Candidate Group; and
    2.
  2. where the Application has become incorrect as a result of the withdrawal of one or more Candidates from his Candidate Group.
    3.

3.2.4

Following the expiry of the period of time specified in paragraph 3.2.2 the Secretary of State shall notify all Bidders of any changes to Candidate Groups which have been notified to her in any re-submitted Application.

Section 3 - Determination as a Qualified Bidder

3.3.1

In accordance with paragraph 3.3.2, the Secretary of State shall determine whether a Bidder is a Qualified Bidder.

3.3.2

Subject to paragraph 3.3.3, the Secretary of State shall determine that a Bidder is a Qualified Bidder if in her opinion -

  1. such Bidder has submitted an Application, or re-submitted an Application in accordance with section 2 of this Part, which complies with all of the requirements of paragraph 2.1.2 of section 1 of Part 2;
    2.
  2. such Bidder is not a Candidate in relation to another Bidder for a Licence, or an Existing Licensee, in the same Region; and
    3.
  3. such Bidder has no person who is a Relevant Member of his Candidate Group who is also a Relevant Member in relation to the Candidate Group of another Bidder for a Licence, or an Existing Licensee, in the same Region.

3.3.3

The Secretary of State may in her discretion determine that a Bidder is not a Qualified Bidder if in her opinion -

  1. the grant of a Licence to that Bidder would be prejudicial to the interests of national security; or
    2.
  2. the Bidder would not be a fit and proper person to hold a Licence.
    3.

3.3.4

In considering for the purposes of paragraph 3.3.3(b) above whether a Bidder is a fit and proper person to hold a Licence, the Secretary of State may take into account such factors as she considers to be relevant, including but not limited to the financial or personal probity of any member of the Bidder's Candidate Group or any director of any member of the Bidder's Candidate Group.

Section 4 - Notification of status as a Qualified Bidder

3.4.1

The Secretary of State shall, after making her final determination under section 3 above, issue to each of the Bidders for a Licence in a Region a Bidder Notice which shall -

  1. state whether that Bidder has been determined to be a Qualified Bidder and, if the Bidder has been so determined -
  1. the identity of all other Qualified Bidders for a Licence in that Region; and
    2.
  2. the composition of the Candidate Groups as notified to the Secretary of State of all such other Qualified Bidders;
  1. notify a period of time, being not less than two Business Days and not greater than seven Business Days from receipt of a Bidder Notice, during which a notification must be made for the purposes of paragraph 3.6.1.

3.4.2

On the issue of a Bidder Notice to a Bidder who has not been determined to be a Qualified Bidder that Bidder shall immediately cease to be a Bidder for the purposes of the Auction and the Secretary of State shall at the end of the Deposit Period in which such notification is given by the Secretary of State, send to that Bidder either -

  1. the Deposit submitted by that Bidder with his Application; or
    2.
  2. such Deposit less any Penalties which may have been deducted by the Secretary of State in accordance with the provisions of this Notice.
    3.

Section 5 - Numbers of Qualified Bidders

3.5.1

If in respect of any Region -

  1. the Secretary of State, in making the determination referred to in section 3 of this Part, is satisfied that the number of Qualified Bidders is less than or equal to the number of Licences available and that no two or more Qualified Bidders have submitted Applications in respect of the same Licence she shall notify all those Qualified Bidders that the Licence or Licences will be awarded in accordance with the Primary Bid Stage Procedure in Part 4 hereof;
  2. the Secretary of State, in making the determination referred to in section 3 of this Part, is satisfied that the number of Qualified Bidders in respect of the Licence or Licences in that Region is more than the number of Licences available or that two or more Qualified Bidders have submitted Applications in respect of the same Licence she shall notify all those Qualified Bidders that all the Licences in that Region which at that time remain to be awarded will be awarded by means of a Multiple-round Auction in accordance with Part 5 hereof.
    3.

Section 6 - Associated Bidders

Notification of status

3.6.1

Before expiry of the period of time notified in accordance with paragraph 3.4.1(b), each Qualified Bidder shall notify the Secretary of State whether or not he is an Associated Bidder in relation to one or more of the Bidders identified as Qualified Bidders in the Bidder Notice or in relation to one or more Existing Licensees in relation to the Region in respect of which that Qualified Bidder is bidding for a Licence.

3.6.2

A Bidder who notifies the Secretary of State in accordance with paragraph 3.6.1 above that he is not an Associated Bidder in relation to any other such Qualified Bidder or Existing Licensee shall at the same time submit the Bidder Association Certificate specified in Appendix 3.

3.6.3

A Bidder who notifies the Secretary of State in accordance with paragraph 3.6.1 above that he is an Associated Bidder in relation to such one or more Qualified Bidders or Existing Licensees shall at the same time provide the Secretary of State with the identities of the Qualified Bidders or Existing Licensees with whom he is associated and full details of how such association arises.

3.6.4

Without prejudice to paragraph 3.6.5, a Bidder who fails to notify the Secretary of State in accordance with paragraph 3.6.1, shall be subject to a daily Penalty of £10,000.

3.6.5

A Bidder who fails to notify the Secretary of State in accordance with paragraph 3.6.1 within three Business Days of expiry of the period of time notified in accordance with paragraph 3.4.1(b) shall not be entitled to participate in the Primary Bid Stage Procedure or the Multiple-round Auction, if applicable, in respect of Licences in the Region to which his Application relates and all or part of that Bidder's Deposit may be forfeit as a Penalty.

Consequence of associations

3.6.6

  1. If in respect of any Region the Secretary of State determines that two or more Qualified Bidders are Associated Bidders, she shall allow those Bidders a further period of two days within which to notify the Secretary of State which one of them, but not more than one, is to participate in the Primary Bid Stage Procedure or the Multiple-round Auction, whichever is applicable. If the Associated Bidders fail to notify the Secretary of State in accordance with this paragraph within the period specified none of those Bidders shall be entitled to participate in that Procedure or that Multiple-round Auction.
    2.
  2. If in respect of any Region the Secretary of State determines that any Qualified Bidder is an Associated Bidder in relation to an Existing Licensee she shall allow that Bidder a further period of two Business Days within which to satisfy the Secretary of State that he is no longer an Associated Bidder in relation to that Existing Licensee. If that Qualified Bidder fails to satisfy the Secretary of State within the period specified that Bidder shall not be entitled to participate in the Primary Bid Stage Procedure or the Multiple-round Auction, whichever is applicable.
    3.

Associated Bidder Notice

3.6.7

Following notification by Qualified Bidders in accordance with paragraph 3.6.1 above, the Secretary of State shall issue all Qualified Bidders in respect of a Licence or Licences in a particular Region with an Associated Bidder Notice which shall either -

  1. if no Qualified Bidder has notified the Secretary of State that he is an Associated Bidder, notify all Qualified Bidders of this fact; or
    2.
  2. if the Secretary of State determines that two or more Qualified Bidders are Associated Bidders, notify all Qualified Bidders of the identity of the Qualified Bidders who are Associated Bidders, which of those Associated Bidders has elected to participate in the Primary Bid Stage Procedure or the Multiple-round Auction, whichever is applicable, and which of those Associated Bidders shall accordingly not be entitled to participate in that Procedure or that Auction; or
    3.
  3. if the Secretary of State determines that a Qualified Bidder is an Associated Bidder in relation to an Existing Licensee, notify all Qualified Bidders of the identity of the Qualified Bidder who is an Associated Bidder in relation to an Existing Licensee, the identity of that Licensee and whether the Qualified Bidder has satisfied the Secretary of State that he is no longer an Associated Bidder in relation to that Licensee or alternatively that he shall not be entitled to participate in the Primary Bid Stage Procedure or the Multiple-round Auction, whichever is applicable.
    4.

Meaning of Associated Bidder

3.6.8

For the purposes of paragraph 3.6.1 above, a Bidder ("the first Bidder") is an Associated Bidder in relation to another Bidder ("the second Bidder") or an Existing Licensee if -

  1. a member of the Candidate Group in relation to the first Bidder -
  1. is a Participant with more than a 15% interest in the second Bidder or the Existing Licensee; or
    2.
  2. has an Economic Interest of more than 15% in the second Bidder or the Existing Licensee; or
  1. a person, not being a Candidate in relation to the first or second Bidders or the Existing Licensee -
    2.
  1. is a Participant with more than a 15% interest in both the first Bidder and the second Bidder or the first Bidder and the Existing Licensee;
  2. is a Participant with more than a 15% interest in the first Bidder and has an Economic Interest of more than 15% in the second Bidder or the Existing Licensee;
    3.
  3. is a Participant with more than a 15% interest in the second Bidder or the Existing Licensee and has an Economic Interest of more than 15% in the first Bidder; or
    4.
  4. has an Economic Interest of more than 15% in both the first and the second Bidder or in both the first Bidder and the Existing Licensee.
    5.

Section 7 - General

Additional Information

3.7.1

The Secretary of State may, during the preliminary part of the Application Stage, notify any Bidder of a reasonable request for additional information or documents relating to his Application with a reasonable time limit for the Bidder to submit such information or documents to the Secretary of State.

3.7.2

On receipt of a request made pursuant to paragraph 3.7.1 a Bidder shall use his best endeavours to provide the information or documents within the time limit specified.

3.7.3

If a Bidder fails to comply with paragraph 3.7.2 above, the Secretary of State may refuse to determine that Bidder as a Qualified Bidder in accordance with section 3 of this Part.

PART 4 - PRIMARY BID STAGE PROCEDURE

Section 1 - Preliminary

Commencement

4.1.1

In respect of any Region the Primary Bid Stage Procedure shall only apply if the number of Applications that have been received by the Secretary of State by the Application Date for Licences in that Region is less than or equal to the number of Licences available at that time and provided that no two or more Bidders have submitted Applications in respect of the same Licence in that Region. The Primary Bid Stage Procedure shall start on such date as the Secretary of State shall notify to the Qualified Bidders in relation to that Region and continue until the issue of the Provisional Award Notices.

Section 2 - Notification of Entitlement to the Provisional Award of Licences

4.2.1

In respect of any Region, within five Business Days after the date of issue of the Associated Bidder Notice under paragraph 3.6.7 above and provided that no two or more Bidders have submitted Applications in respect of the same Licence in that Region the Secretary of State shall notify each Bidder that the bid comprised in his Application has been successful and that he shall be entitled to the provisional award of the Licence that he has specified in his Application in accordance with the provisions of section 3 of this Part.

Section 3 - Provisional Award of Licences

Provisional Award Notice

4.3.1

Within 2 Business Days of the notification of entitlement to the provisional award under paragraph 4.2.1 above the Secretary of State shall issue to each Bidder entitled to the provisional award of a Licence in accordance with paragraph 4.2.1, a Provisional Award Notice which shall notify that Bidder of:

  1. the Licence which that Bidder is provisionally awarded;
    2.
  2. the amount which, subject to the satisfaction of any Pre-Conditions, as specified in Part 6 of this Notice, that Bidder shall pay to the Secretary of State in respect of the Licence notified in sub-paragraph (a) above; and
    3.
  3. the identity of all other Bidders notified in accordance with sub-paragraphs (a) and (b) above.
    4.

The Secretary of State shall publish details of the provisional award of the Licences on the Auction website.

4.3.2

For the purposes of sub-paragraph 4.3.1(b) above, the amount payable shall be a sum equal to the Licence Fee less either -

  1. the Deposit; or
    2.
  2. if the Deposit has been subject to the deduction of penalties, a sum representing the balance of the Deposit, if any.
    3.

PART 5 - MULTIPLE-ROUND AUCTION STAGE

Section 1 - Preliminary

5.1.1

Where, in relation to any Region, two or more Bidders submit Applications in respect of the same Licence in that Region by the Application Date calculated in accordance with paragraph 2.1.6(a) above the Secretary of State shall, within five Business Days after the date of issue of the Associated Bidder Notice under paragraph 3.6.7 above notify the Bidders that all the Licences in that Region that remain to be awarded shall be open to award by means of a Multiple-round Auction.

Section 2 - Preparation for a Multiple-round Auction

5.2.1

Not less than five Business Days before the date of any Multiple-round Auction inrelation to any Region the Secretary of State shall notify each Bidder of -

  1. the Multiple-round Auction Date;
  2. the identity of all Bidders who shall participate in that Multiple-round Auction;
  3. the details of the Licences to be included in that Multiple-round Auction;
    4.
  4. the identity of the Current Price Bidder, if any, in respect of each Licence for the purposes of the First Round;
    5.
  5. the time at which the First Round shall start on the Multiple-round Auction Date; and
    6.
  6. the period of time for the First Round.
    7.

5.2.2

Following the issue of a Bidder Notice under section 4 of Part 3 of this Notice, the Secretary of State shall issue to each of the Bidders a Bidder Participation Notice which shall -

  1. provide each Bidder with a set of numbered passwords which that Bidder shall use to confirm to the Secretary of State that any communication which the Secretary of State receives in accordance with the provisions of this Part has originated from that Bidder;
    2.
  2. specify the Secretary of State's telephone numbers for that Bidder for the purposes of section 4 of this Part; and
    3.
  3. provide the appropriate Bidding Schedules.
    4.

5.2.3

Within two Business Days of the Business Day of receipt of a Bidder Participation Notice issued in accordance with paragraph 5.2.2, the Bidder shall notify the Secretary of State of the names of three Authorised Persons each of whom the Bidder has provided with authority to participate, either jointly or severally, in any way in the Multiple-round Auction on behalf of the Bidder with specimens of their signatures.

5.2.4

If, after the Secretary of State has notified Bidders of the Multiple-round Auction Date under paragraph 5.2.1 above, the Secretary of State is of the opinion that it is impractical that the Multiple-round Auction should be held on the date notified, the Secretary of State may notify Bidders of a different date as the Multiple-round Auction Date, provided that such date shall not be a date earlier than that originally notified.

5.2.5

If, after the Secretary of State has notified Bidders of the time of the First Round in accordance with paragraph 5.2.1(d) above, the Secretary of State is of the opinion that it is impractical for the First Round to commence at the time notified, the Secretary of State may notify Bidders of a different time provided that such time is not earlier than the time originally notified.

Section 3 - The Multiple-round Auction

Purpose

5.3.1

The purpose of a Multiple-round Auction is to provide a procedure to determine -

  1. in respect of each Region where two or more Bidders have submitted Applications in respect of the same Licence, which of the Bidders is entitled to a provisional grant of a Licence, and which Licence, in that Region; and
    2.
  2. the final bids which, subject to the requirements of this Part and Part 6, shall form the basis of the Licence Fee payable in respect of each of the Licences.
    3.

Structure of a Multiple-round Auction

5.3.2

Each Multiple-round Auction shall consist of a sequence of Rounds and shall start with the First Round on the date and at the time notified to the Bidders in accordance with paragraph 5.2.1.

5.3.3

Each Round shall consist of the period of time notified in accordance with paragraph 5.2.1(e) or 5.3.8(g) as the case may be, during which all Bidders who are not Current Price Bidders shall notify the Secretary of State of one of the following -

  1. a valid bid for a Licence in accordance with paragraphs 5.3.23 to 5.3.27; or
    2.
  2. withdrawal in accordance with paragraphs 5.3.20 to 5.3.21.
    3.

Consequences of failure to notify

5.3.4

If a Bidder fails to notify the Secretary of State in accordance with the provisions of paragraph 5.3.3, the Secretary of State may notify the Bidder of a further period, not exceeding ten minutes, during which he is required to comply with the requirements of that paragraph.

5.3.5

Following the expiry of the further period notified in accordance with paragraph 5.3.4 above, the Secretary of State may notify, on separate occasions, two further periods, neither of which may exceed ten minutes during which the Bidder must comply with paragraph 5.3.3.

5.3.6

If a Bidder has failed to comply with paragraph 5.3.3, or at the expiry of any further period the Secretary of State may have notified in accordance with paragraph 5.3.5, then -

  1. subject to sub-paragraph (b) below, the Secretary of State may notify the Bidder of his exclusion from that Multiple-round Auction;
    2.
  2. if the Bidder has failed to comply at the expiry of a third period notified in accordance with paragraph 5.3.5, the Secretary of State shall notify the Bidder of his exclusion from that Multiple-round Auction; and
    3.
  3. if the Bidder is excluded from a Multiple-round Auction in accordance with paragraph (a) or (b) above, the Secretary of State may also notify the Bidder that all or part of that Bidder's Deposit is forfeit as a Penalty.
    4.

5.3.7

In making a notification in accordance with paragraph 5.3.4 or 5.3.5 above, the Secretary of State shall state the time at which the relevant period will expire.

Results and Notification of Next Round

5.3.8

After the First Round, the Secretary of State shall, not less than 30 minutes before the start of each subsequent Round, make available to each Bidder the following information -

  1. details of any Current Price in respect of each of the Licences;
    2.
  2. the numerical value of each bid made in the previous Round, the Licence to which it relates, and the identity of the Bidder who submitted the bid;
    3.
  3. the identity of any Bidder or Bidders who have notified their withdrawal from that Multiple-round Auction;
    4.
  4. the identity of any Bidder or Bidders who have been excluded from that Multiple-round Auction by the Secretary of State;
  5. the time at which the next Round shall start;
    6.
  6. the period of time for the next Round;
    7.
  7. the minimum bid for each Licence as determined in accordance with paragraphs 5.3.12 to 5.3.17;
  8. the identity of any Current Price Bidders in relation to each of the Licences.

Final Round

5.3.9

The Final Round shall be the Round at the end of which no Bidder has notified the Secretary of State of a bid.

Number of Rounds

5.3.10

There shall be at least one Round on each Business Day.

5.3.11

The number of Rounds on each Business Day shall be at the discretion of the Secretary of State.

Minimum bids

5.3.12

Before the start of each Round , the Secretary of State shall determine the minimum bid for each of the Licences in accordance with paragraph 5.3.17 below.

5.3.13

Before the start of each Round the Secretary of State shall first determine the specific raise for each Licence in relation to which a bid has been made at the end of the previous Round. In relation to each Licence the specific raise shall be determined as 15% of the relevant Current Price or such lower percentage as the Secretary of State may specify (rounded up in either case to the nearest £10,000).

For the avoidance of doubt the Secretary of State may, in accordance with this paragraph, specify different percentages for each Licence.

5.3.14

If no bid was made in the previous Round for a Licence in relation to which there is a Current Price, the specific raise shall be deemed to be that which was last determined in accordance with paragraph 5.3.13.

5.3.15

If there is no Current Price for a Licence, the Secretary of State shall not determine a specific raise for that Licence.

5.3.16

After she has made her determinations in accordance with paragraph 5.3.13, the Secretary of State shall then determine the minimum bid for each of the Licences in accordance with paragraph 5.3.17.

5.3.17 The Secretary of State shall determine the minimum bid for each of the Licences as either -

  1. if there is no Current Price for the Licence, the Reserve Price for that Licence; or
    2.
  2. if there is a Current Price for the Licence, the total of -
  1. the Current Price; and
    2.
  2. the specific raise last determined for that Licence in accordance with paragraph 5.3.13.
    3.

Current Price

5.3.18

The Current Price shall, in relation to each Licence -

  1. where a complete and valid Application has been made for that Licence, in the First Round be the Reserve Price in respect of that Licence; and
    2.
  2. in each Round after the First Round be the highest valid bid made by a Bidder for that Licence in a previous Round during which a bid was made for that Licence.

Current Price Bidder

5.3.19

In relation to each Licence the Current Price Bidder is -

  1. for the purposes of the First Round, the Bidder who was the first person to submit a complete and valid Application for that Licence in the Region to which the Multiple-round Auction relates; and
    2.
  2. in relation to any Round except the First Round, the Bidder who, in relation to that Licence, last bid the Current Price for that Licence or has been selected in relation to that Licence following a Tie Bid.
    3.

For the purposes of sub-paragraph (a) above, where more than one person submitted a complete and valid application for the same Licence in that Region the Secretary of State shall employ a random method to determine which of those persons shall be the Current Price Bidder in relation to that Licence for the purposes of the First Round.

Withdrawal

5.3.20

Any Bidder who is not a Current Price Bidder may, during any Round, notify his withdrawal from the Auction.

5.3.21

If a Bidder notifies his withdrawal from the Auction that Bidder shall not be entitled to participate in future Rounds.

Ties

5.3.22

If in any Round two or more Bidders bid the same highest bid (the "Tie Bid") in respect of a Licence, the Secretary of State shall employ a random method to determine which Bidder shall be deemed to be the Current Price Bidder in relation to that Licence.

Valid Bids

5.3.23

A bid shall consist of identifying a Licence in the particular Region by assigning the number 1, 2 or 3, as specified in Part 2 of the Schedule to the Wireless Telegraphy Regulations, and a sum of money which that Bidder undertakes to pay in respect of that Licence.

5.3.24

A Bidder shall not bid a sum for a Licence which is less than the minimum bid last notified for that Licence.

5.3.25

All bids shall be made in multiples of £10,000.

5.3.26

During any one Round, no Bidder shall be entitled to make a bid for more than one Licence in the Region but may bid for a different Licence in each Round.

5.3.27

A bid shall only be valid if submitted to the Secretary of State in accordance with the provisions of section 4 of this Part and accompanied by the correct password.

Re-starting a Multiple-round Auction

5.3.28

If one or more Bidders is notified by the Secretary of State of their exclusion from a Multiple-round Auction at any time during that Auction, the Secretary of State shall consider whether the conduct of such Bidders before their exclusion, or the fact of the exclusion of such Bidders from that Multiple-round Auction, is such that, if that Multiple-round Auction proceeds, it is likely to have a material effect on one or both of -

  1. the identity of the Bidders who would be granted the Licences in accordance with Part 6; and
    2.
  2. the Licence Fee which would be paid for a Licence.

5.3.29

If the Secretary of State considers that the conduct of the excluded Bidders would, in accordance with paragraph 5.3.28, have a material effect on one or both of the matters specified in sub-paragraphs (a) and (b) of paragraph 5.3.28 above, she may, after having consulted all remaining Bidders, either -

  1. continue that Multiple-round Auction; or
    2.
  2. re-start that Multiple-round Auction with the First Round as specified in paragraph 5.3.2 as if, subject to paragraph 5.3.33 below, that Multiple-round Auction had not taken place.
    3.

5.3.30

In the event that a Multiple-round Auction is re-started in accordance with paragraph 5.3.29(b) above, the Bidders entitled to participate in the First Round of the re-started Multiple-round Auction shall be all Bidders who originally participated in the First Round of that Multiple-round Auction, except such Bidders as may have been excluded from that Multiple-round Auction.

5.3.31

If at any time during a Multiple-round Auction the Secretary of State becomes aware that she has made an error in registering the value of bids made by one or more Bidders in a previous Round, she shall consider whether the error is such that, if that Multiple-round Auction proceeds, it would be likely to have a material effect on one or both of the matters referred to in sub-paragraphs (a) and (b) of paragraph 5.3.28 above.

5.3.32

If the Secretary of State considers that the error would, in accordance with paragraph 5.3.28, be likely to have a material effect on one or both of the matters specified in sub-paragraphs (a) and (b) of paragraph 5.3.28 above, she may, after having consulted all remaining Bidders and such Bidders, if any, who have notified their withdrawal from that Multiple-round Auction since the error was made -

  1. continue that Multiple-round Auction;
    2.
  2. re-start that Multiple-round Auction with the First Round as specified in paragraph 5.3.2 as if, subject to paragraph 5.3.34 below, that Auction had not taken place; or
    3.
  3. re-start the Round of that Multiple-round Auction in which the bid was made which was the subject of the error.
    4.

5.3.33

If the Secretary of State re-starts a Round of a Multiple-round Auction in accordance with paragraph 5.3.32(c) above then -

  1. the Bidders who shall be entitled to participate in the re-started Round of that Multiple-round Auction shall be -
  1. such Bidders who were participating in that Multiple-round Auction when the Secretary of State became aware of the error referred to in paragraph 5.3.31 above; and
    2.
  2. any Bidders who have notified their withdrawal from that Multiple-round Auction after such error was made; and
  1. any Round subsequent to the Round in respect of which the error occurred and which took place before the discovery of the error shall, subject to paragraph 5.3.34 below, be treated as though it had not taken place.

5.3.34

Any re-start of a Multiple-round Auction or a Round of that Auction in accordance with the above provisions shall not affect any Penalty which may have been made in respect of a Bidder's Deposit during the original conduct of that Auction.

5.3.35

Notwithstanding paragraphs 5.3.30 and 5.3.33 above, the Secretary of State may, in her absolute discretion, refuse to re-admit a Bidder who has previously withdrawn from a Multiple-round Auction, if such Bidder has contravened any of the provisions of Part 7 of this Notice, whether such contravention occurred before or after his withdrawal.

Re-starting a Round

5.3.36

If at any time, whether before or during any Round of a Multiple-round Auction, the Secretary of State is of the opinion that due to exceptional circumstances, including but not limited to a technical fault, it is necessary to cancel or abandon that Round, as the case may be, she shall, as soon as practicable, notify all Bidders that the Round shall not take place or is deemed void, as the case may be, and, within a reasonable period, notify all Bidders of a time when the Round is to be re-started. Where a Round is abandoned after its commencement it shall be restarted as if that Round had not taken place.

Section 4 - Electronic Bidding

Electronic Bidding Method

5.4.1

Subject to paragraph 5.4.2, all Bidders shall participate in a Multiple-round Auction by means of the Electronic Bidding Method.

Emergency back-up bidding procedures

5.4.2

If -

  1. at any time during a Multiple-round Auction Stage the Secretary of State is of the opinion that one or both of the following apply -
  1. the Electronic Bidding Method is no longer effective for the purposes of continuing that Multiple-round Auction with the participation of one or more Bidders; and
  2. the Auction Location is no longer suitable for the conduct of that Multiple-round Auction;

she may notify all Bidders of one or more of the following -

(aa) that one or more Bidders shall continue to participate in that Multiple-round Auction by telephone, using a number notified to the relevant Bidder in the Bidder Participation Notice, whereby bidding shall take the form of the transmission of Messages comprising two-way live speech;

(bb) that one or more Bidders shall send one or more of his Authorised Persons to the Auction Location for the purpose of continuing that Multiple-round Auction;

(cc) that one or more Bidders shall send by messenger the Bidding Schedules to the Auction Location;

(dd) an Alternative Auction Location within 50 kilometres of the Auction Location for the purpose of continuing that Multiple-round Auction either using the Electronic Bidding Method, or in one or more of the ways specified in accordance with one or more of sub-paragraphs (aa) to (cc) above.

Acknowledgements

5.4.3

On receipt of any Bidding Schedule or any other communication accompanied by a valid password, which is sent by a Bidder to the Secretary of State in accordance with any provision of this Part, the Secretary of State shall acknowledge receipt.

Identification of Bidders

5.4.4

Where any Bidder communicates with the Secretary of State during a Multiple-round Auction the Bidder shall confirm his identity by providing a specified numbered password which has been notified to the Bidder in the Bidder Participation Notice or under paragraph 5.4.6 below, and for the purposes of any communications, except oral communications, shall provide the specified signature of one of the Authorised Persons.

5.4.5

Any communication made by the Bidder in connection with this Notice after issue of the Bidder Participation Notice and before issue of the Provisional Award Notice shall not be valid unless accompanied by a password and its number in accordance with paragraph 5.4.4.

5.4.6

The Secretary of State may at any time notify additional passwords to the Bidder for the purpose of any provision of this Notice.

Bidding Schedules

5.4.7

Where any Bidder participates in a Multiple-round Auction using any of the following -

  1. the delivery of documents by messenger;
    2.
  2. manual participation at the Auction Location in accordance with paragraph 5.4.2; or
    3.
  3. attendance of one or more of the Bidder's Authorised Persons at a location within 50 kilometres of the Auction Location in accordance with paragraph 5.4.2.
    4.

that Bidder may only validly participate by use of the appropriate Bidding Schedules which have been provided to the Bidders in accordance with paragraph 5.2.2(c).

Telephone Participation

5.4.8

If any Bidd