Electric field fluctuations identified as electrostatic ion cyclotron waves, double layers, and near solitary wave potential structures have been observed in the auroral particle acceleration region by the S3-3 and Viking satellites. Here these electric fields are explained in terms of a three-dimensional model of nonlinear ion hole/clump instability. A novel feature of the instability is its occurrence in plasma that is linearly stable to ion acoustic and electrostatic ion cyclotron waves, the inferred state of the plasma in the auroral acceleration region. A growing ion hole has a double layer potential structure which, in the latter phase of the instability, decays to a near solitary wave potential structure. In addition, the holes can coexist with and be a source for electrostatic ion cyclotron waves. Instability thresholds, amplitudes for potentials, electric fields, and density depletions, as well as fluctuation velocities, lifetimes, scale sizes, and relative probabilities for occurrence are calculated and compared with the satellite data. ¿ American Geophysical Union 1991