The substance of these special conditions has been published in the Federal Register for public comment in several prior instances with no substantive comments received. Therefore, the FAA finds, pursuant to 14 CFR 11.38(b), that new comments are unlikely, and notice and comment prior to this publication are unnecessary.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in title 14, Code of Federal Regulations (14 CFR) 11.35, the FAA will post all comments received without change to www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact received about these special conditions.

Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to these special conditions contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to these special conditions, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and the indicated comments will not be placed in the public docket of these special conditions. Send submissions containing CBI to the individual listed in the For Further Information Contact section above. Comments the FAA receives, which are not specifically designated as CBI, will be placed in the public docket for these special conditions.

The FAA invites interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

The FAA will consider all comments received by the closing date for comments. The FAA may change these special conditions based on the comments received.

On June 27, 2012, CFM International (CFM) applied for a new type certificate (TC) to include the LEAP-1A and -1C engine models. Additionally, on May 9, 2013, CFM applied for a new TC to include the LEAP-1B engine models. The LEAP engine models are high-bypass-ratio engines that incorporate a novel and unusual design feature—new woven composite fan blades. The woven composite fan blades will have significant differences in material property characteristics when compared to conventionally designed fan blades using non-composite metallic materials.

The FAA issued Special Condition No. 33-017-SC for the LEAP-1B engines with this design feature on October 30, 2015. Special Condition No. 33-017-SC became effective on December 21, 2015 (80 FR 72561, November 20, 2015). The FAA issued TC E00088EN on May 4, 2016. Subsequently, CFM highlighted an error in these Special Condition and submitted a type design change request on July 18, 2024. The FAA is proposing changes to Special Conditions No. 33-017-SC based on CFM's application.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.17, CFM must show that the Model LEAP-1B engines meet the applicable provisions of the applicable regulations in effect on the date of application, except as detailed in paragraphs 21.101(b) and (c). The FAA has determined the following certification basis for the LEAP-1B engine models:

Title 14 CFR part 33, “Airworthiness Standards: Aircraft Engines,” dated February 1, 1965, with Amendments 33-1 through 33-33, dated September 20, 2012.

If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for the LEAP-1B engine models because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the TC for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to complying with the applicable airworthiness regulations and special conditions, the CFM LEAP-1B engine models must also comply with the fuel venting and exhaust emission requirements of 14 CFR part 34.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

The LEAP-1B engine models will incorporate the following novel or unusual design feature:

The LEAP-1B engine models will incorporate woven composite fan blades. The woven composite fan blades will have significant differences in material property characteristics when compared to conventionally designed fan blades using non-composite metallic materials. Composite material design provides the capability to incorporate multiple load paths and crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

The woven composite fan blades are a novel and unusual design feature that require additional airworthiness standards for type certification of the LEAP-1B engine models. The current requirements of § 33.94 are based on single-load path metallic fan blade characteristics and service history and are not appropriate for the unusual design features of the woven composite fan blade found on the CFM LEAP series turbofan engines.

The properties of a composite blade are highly dependent of the composite ply configuration, matrix material, and manufacturing methods. The CFM LEAP engine incorporates 3-D woven resin transfer molding (RTM) technology in the design and manufacture of the blade.

FAA requires that CFM conduct the required material testing per § 33.15 to determine material characteristics that include the effects of defects, manufacturing variations, contamination, environmental effect, and service damage on the material capability and blade life.

Composite material design provides the capability to incorporate multiple load paths and crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade. The probability of failure that an appropriately designed composite fan blade will fail below the inner annulus flow path line may be highly improbable. The airworthiness regulations of 14 CFR part 33 do not contain adequate or appropriate safety standards for an aircraft engine incorporating these novel or unusual design features i.e., woven composite fan blades, including release of the fan blade under § 33.94(a)(1) at the inner annulus flow path line (only the airfoil) instead of the outermost retention feature.

Instead of blade failure at the outermost retention groove currently required by § 33.94(a)(1), the FAA has determined that a more realistic blade-out test can be achieved with a fan blade failure at the inner annulus flow path line i.e., releasing only the airfoil.

Additionally, the FAA considers any change to the design, manufacturing, materials, or service management to the blade below the inner annulus flow path to be a change that could affect the blade integrity. Therefore, the FAA has determined that the blade must be marked with a part and serial number, and that additional integrity requirements must be applied to the blade below the inner annulus flow path line.

Special conditions are necessary to ensure that the LEAP-1B woven composite design fan blades account for the differences in material properties and failure modes relative to conventional single-load path metallic blades. In addition, different containment requirements may be applied provided CFM shows that the blade design below the inner annulus flow path line provides multiple load paths and/or crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

The FAA, GE, and CFM recently found that the LEAP-1B proposed special conditions as they appeared in the applicable certification issue paper and the published special conditions do not accurately reflect one of the agreed-upon criterion for the proposed woven fan blade composite design. The FAA and CFM intended, as reflected in the compliance data for the LEAP-1B TC and certification issue paper, that the total probability of hazardous engine effects should be accounted for rather than the probability of an individual blade retention system failure as stated in paragraph (e), of the original special conditions. These amended special conditions correct this error in the published special conditions for the CFM LEAP-1B engines and are in line with CFM and FAA's intention.

Paragraph (e) as originally issued for Special Condition No. 33-017-SC reads as follows:

(e) Substantiate that during the service life of the engine, the total probability of an individual blade retention system failure resulting from all possible causes, as defined in § 33.75, will be extremely improbable with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

The new paragraph will now read, (consistent with the TC compliance data and Special Conditions Nos. 33-007-SC, published April 24, 2009, and 33-018-SC, published March 30, 2017):

(e) Substantiate that, during the service life of the engine, the total probability of the occurrence of a hazardous engine effect defined in § 33.75 due to an individual blade retention system failure resulting from all possible causes will be extremely improbable, with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions, as amended, are applicable to the model for which they are issued. Should the TC for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same TC be modified to incorporate the same novel or unusual design feature, these special conditions would apply to the other model as well.

This action affects only a certain novel or unusual design feature on the LEAP-1B engine models.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following amended special conditions are issued as part of the type certification basis for CFM International (CFM) LEAP-1B engine models.

In addition to the airworthiness standards in 14 CFR part 33, effective February 1, 1965, with Amendments 33-1 through 33-33 applicable to the CFM, LEAP-1B engine models:

(a) Conduct an engine fan blade containment test with the fan blade failing at the inner annulus flow path line instead of at the outermost retention groove.

(b) Substantiate by test and analysis, or other methods acceptable to the FAA, that a fan disk and fan blade retention system with minimum material properties can withstand, without failure, a centrifugal load equal to two times the maximum load the retention system could experience within approved engine operating limitations. The fan blade retention system includes the portion of the fan blade from the inner annulus flow path line inward to the blade dovetail, the blade retention components, and the fan disk and fan blade attachment features.

(c) Using a procedure approved by the FAA, establish an operating limitation that specifies the maximum allowable number of start-stop stress cycles for the fan blade retention system. The life evaluation must include the combined effects of high-cycle and low-cycle fatigue. If the operating limitation is less than 100,000 cycles, that limitation must be specified in Chapter 5 of the Engine Manual Airworthiness Limitation Section. The procedure used to establish the maximum allowable number of start-stop stress cycles for the fan blade retention system will incorporate the integrity requirements in paragraphs (c)(1), (2), and (3) of these special conditions for the fan blade retention system.

(1) An engineering plan, which establishes and maintains that the combinations of loads, material properties, environmental influences, and operating conditions, including the effects of parts influencing these parameters, are well known or predictable through validated analysis, test, or service experience.

(2) A manufacturing plan that identifies the specific manufacturing constraints necessary to consistently produce the fan blade retention system with the attributes required by the engineering plan.

(3) A service management plan that defines in-service processes for maintenance and repair of the fan blade retention system, which will maintain attributes consistent with those required by the engineering plan.

(d) Substantiate by test and analysis, or other methods acceptable to the FAA, that the blade design below the inner annulus flow path line provides multiple load paths and/or crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

(e) Substantiate that, during the service life of the engine, the total probability of the occurrence of a hazardous engine effect defined in § 33.75 due to an individual blade retention system failure resulting from all possible causes will be extremely improbable, with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

(f) Substantiate by test or analysis that not only will the engine continue to meet the requirements of § 33.75 following a lightning strike on the composite fan blade structure, but that the lightning strike will not cause damage to the fan blades that would prevent continued safe operation of the affected engine.

(g) Account for the effects of in-service deterioration, manufacturing variations, minimum material properties, and environmental effects during the tests and analyses required by paragraphs (a), (b), (c), (d), (e), and (f) of these special conditions.

(h) Propose fleet leader monitoring and field sampling programs that will monitor the effects of engine fan blade usage and fan blade retention system integrity.

(i) Mark each fan blade legibly and permanently with a part number and a serial number.

The substance of these special conditions has been published in the Federal Register for public comment in several prior instances with no substantive comments received. Therefore, the FAA finds, pursuant to 14 CFR 11.38(b), that new comments are unlikely, and notice and comment prior to this publication are unnecessary.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in title 14, Code of Federal Regulations (14 CFR) 11.35, the FAA will post all comments received without change to www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact received about these special conditions.

Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to these special conditions contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to these special conditions, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and the indicated comments will not be placed in the public docket of these special conditions. Send submissions containing CBI to the individual listed in the For Further Information Contact section above. Comments the FAA receives, which are not specifically designated as CBI, will be placed in the public docket for these special conditions.

The FAA invites interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

The FAA will consider all comments received by the closing date for comments. The FAA may change these special conditions based on the comments received.

On June 27, 2012, CFM International (CFM) applied for a new type certificate (TC) to include the LEAP-1A and -1C engine models. The LEAP engine models are high-bypass-ratio engines that incorporate a novel and unusual design feature—new woven composite fan blades. The woven composite fan blades will have significant differences in material property characteristics when compared to conventionally designed fan blades using non-composite metallic materials.

The FAA issued Special Condition No. 33-015-SC for this design feature on June 1, 2015. Special Condition No. 33-015-SC became effective on July 9, 2015 (80 FR 32440, June 9, 2015). The FAA issued TC E00089EN on November 20, 2015. Subsequently, CFM highlighted an error in the similar Special Condition No. 33-017-SC for the LEAP-1B engine models and submitted a type design change request on July 18, 2024. Upon review, the FAA determined that Special Condition No. 33-015-SC, which applies to the LEAP-1A and -1C engine models, contained the same error. The FAA is proposing changes to Special Condition No. 33-015-SC based on CFM's application.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.17, CFM must show that the Model LEAP-1A and -1C engines meet the applicable provisions of the applicable regulations in effect on the date of application, except as detailed in paragraphs 21.101(b) and (c). The FAA has determined the following certification basis for the LEAP-1A and -1C engine models:

Title 14 CFR part 33, “Airworthiness Standards: Aircraft Engines,” dated February 1, 1965, with Amendments 33-1 through 33-33, dated September 20, 2012.

If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for the LEAP-1A and -1C engine models because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the TC for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to complying with the applicable airworthiness regulations and special conditions, the CFM LEAP-1A and -1C engine models must also comply with the fuel venting and exhaust emission requirements of 14 CFR part 34.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

The LEAP-1A and -1C engine models will incorporate the following novel or unusual design feature:

The LEAP-1A and -1C engine models will incorporate woven composite fan blades. The woven composite fan blades will have significant differences in material property characteristics when compared to conventionally designed fan blades using non-composite metallic materials. Composite material design provides the capability to incorporate multiple load paths and crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

The woven composite fan blades are a novel and unusual design feature that require additional airworthiness standards for type certification of the LEAP-1A and -1C engine models. The current requirements of § 33.94 are based on single-load path metallic fan blade characteristics and service history and are not appropriate for the unusual design features of the woven composite fan blade found on the CFM LEAP series turbofan engines.

The properties of a composite blade are highly dependent of the composite ply configuration, matrix material, and manufacturing methods. The CFM LEAP engine incorporates 3-D woven resin transfer molding (RTM) technology in the design and manufacture of the blade.

FAA requires that CFM conduct the required material testing per § 33.15 to determine material characteristics that include the effects of defects, manufacturing variations, contamination, environmental effect, and service damage on the material capability and blade life.

Composite material design provides the capability to incorporate multiple load paths and crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade. The probability of failure that an appropriately designed composite fan blade will fail below the inner annulus flow path line may be highly improbable. The airworthiness regulations of 14 CFR part 33 do not contain adequate or appropriate safety standards for an aircraft engine incorporating these novel or unusual design features i.e., woven composite fan blades, including release of the fan blade under § 33.94(a)(1) at the inner annulus flow path line (only the airfoil) instead of the outermost retention feature.

Instead of blade failure at the outermost retention groove currently required by § 33.94(a)(1), the FAA has determined that a more realistic blade-out test can be achieved with a fan blade failure at the inner annulus flow path line i.e., releasing only the airfoil.

Additionally, the FAA considers any change to the design, manufacturing, materials, or service management to the blade below the inner annulus flow path to be a change that could affect the blade integrity. Therefore, the FAA has determined that the blade must be marked with a part and serial number, and that additional integrity requirements must be applied to the blade below the inner annulus flow path line.

Special conditions are necessary to ensure that the LEAP-1A and -1C woven composite design fan blades account for the differences in material properties and failure modes relative to conventional single-load path metallic blades. In addition, different containment requirements may be applied provided CFM shows that the blade design below the inner annulus flow path line provides multiple load paths and/or crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

The FAA, GE, and CFM recently found that the LEAP-1B proposed special conditions as they appeared in the applicable certification issue paper and the published special conditions do not accurately reflect one of the agreed-upon criterion for the proposed woven fan blade composite design. The FAA and CFM intended, as reflected in the compliance data for the LEAP-1B TC and certification issue paper, that the total probability of hazardous engine effects should be accounted for rather than the probability of an individual blade retention system failure as stated in paragraph (e), of the original special conditions. The design similarity of the fan blade between the CFM LEAP-1B and the CFM LEAP-1A and -1C prompted the need to correct paragraph (e) within both sets of special conditions to ensure proper design. These amended special conditions correct this error in the published special conditions for the CFM LEAP-1A and -1C engines and are in line with CFM and FAA's intention.

Paragraph (e) as originally issued for Special Condition No. 33-015-SC reads as follows:

(e) Substantiate that during the service life of the engine, the total probability of an individual blade retention system failure resulting from all possible causes, as defined in § 33.75, will be extremely improbable with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

The new paragraph will now read, (consistent with the TC compliance data and Special Condition Nos. 33-007-SC, published April 24, 2009, and 33-018-SC, published March 30, 2017):

(e) Substantiate that, during the service life of the engine, the total probability of the occurrence of a hazardous engine effect defined in § 33.75 due to an individual blade retention system failure resulting from all possible causes will be extremely improbable, with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions, as amended, are applicable to the model for which they are issued. Should the TC for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same TC be modified to incorporate the same novel or unusual design feature, these special conditions would apply to the other model as well.

This action affects only a certain novel or unusual design feature on the LEAP-1A and -1C engine models.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following amended special conditions are issued as part of the type certification basis for CFM International (CFM) LEAP-1A and -1C engine models.

In addition to the airworthiness standards in 14 CFR part 33, effective February 1, 1965, with Amendments 33-1 through 33-33 applicable to the CFM, LEAP-1A and -1C engine models:

(a) Conduct an engine fan blade containment test with the fan blade failing at the inner annulus flow path line instead of at the outermost retention groove.

(b) Substantiate by test and analysis, or other methods acceptable to the FAA, that a fan disk and fan blade retention system with minimum material properties can withstand, without failure, a centrifugal load equal to two times the maximum load the retention system could experience within approved engine operating limitations. The fan blade retention system includes the portion of the fan blade from the inner annulus flow path line inward to the blade dovetail, the blade retention components, and the fan disk and fan blade attachment features.

(c) Using a procedure approved by the FAA, establish an operating limitation that specifies the maximum allowable number of start-stop stress cycles for the fan blade retention system. The life evaluation must include the combined effects of high-cycle and low-cycle fatigue. If the operating limitation is less than 100,000 cycles, that limitation must be specified in Chapter 5 of the Engine Manual Airworthiness Limitation Section. The procedure used to establish the maximum allowable number of start-stop stress cycles for the fan blade retention system will incorporate the integrity requirements in paragraphs (c)(1), (2), and (3) of these special conditions for the fan blade retention system.

(1) An engineering plan, which establishes and maintains that the combinations of loads, material properties, environmental influences, and operating conditions, including the effects of parts influencing these parameters, are well known or predictable through validated analysis, test, or service experience.

(2) A manufacturing plan that identifies the specific manufacturing constraints necessary to consistently produce the fan blade retention system with the attributes required by the engineering plan.

(3) A service management plan that defines in-service processes for maintenance and repair of the fan blade retention system, which will maintain attributes consistent with those required by the engineering plan.

(d) Substantiate by test and analysis, or other methods acceptable to the FAA, that the blade design below the inner annulus flow path line provides multiple load paths and/or crack arresting features that prevent delamination or crack propagation to blade failure during the life of the blade.

(e) Substantiate that, during the service life of the engine, the total probability of the occurrence of a hazardous engine effect defined in § 33.75 due to an individual blade retention system failure resulting from all possible causes will be extremely improbable, with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.

(f) Substantiate by test or analysis that not only will the engine continue to meet the requirements of § 33.75 following a lightning strike on the composite fan blade structure, but that the lightning strike will not cause damage to the fan blades that would prevent continued safe operation of the affected engine.

(g) Account for the effects of in-service deterioration, manufacturing variations, minimum material properties, and environmental effects during the tests and analyses required by paragraphs (a), (b), (c), (d), (e), and (f) of these special conditions.

(h) Propose fleet leader monitoring and field sampling programs that will monitor the effects of engine fan blade usage and fan blade retention system integrity.

(i) Mark each fan blade legibly and permanently with a part number and a serial number.

The Coast Guard will enforce special local regulations in 33 CFR 100.901 for the Women Swimmin' for Hospicare regulated area listed in item 4 in Table 1 to § 100.901 from 6:00 a.m. to 12:00 p.m. on August 9, 2025. This action is being taken to provide for the safety of life on navigable waterways during this event. Our regulation for marine events within the Great Lakes Coast Guard District, item 4 in Table 1 to § 100.901, specifies the location of the regulated area Woman Swimmin' for Hospicare which encompasses portions of the Cayuga Lake. During the enforcement periods, as reflected in § 100.901, if you are the operator of a vessel in the regulated area you must comply with directions from the Patrol Commander or any Official Patrol displaying a Coast Guard ensign.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners, and Broadcast Notice to Mariners.

During the afternoon of August 17, 2025, a non-sanctioned public event is scheduled to take place. The event is advertised over various social-media sites, in which a large number of persons float down a segment of the St. Clair River, using inner tubes and other similar floatation devices. The 2025 float down event will occur from approximately 12 p.m. through 7 p.m. on August 17, 2025. This non-sanctioned event has taken place on the third Sunday in August annually since 2009.

No private or municipal entity requested a marine event permit from the Coast Guard for this event, and it has not received state or federal permits since its inception. The event has drawn over 5,000 participants of various ages annually. Despite plans put together by federal, state and local officials, emergency responders and law enforcement officials have been overburdened pursuing safety during this event. Medical emergencies, people drifting across the international border, and people trespassing on residential property when trying to get out of the water before the designated finish line are some of the numerous difficulties encountered during the float down event.

During the 2014 float-down event, a 19-year-old participant died. During the 2016 float down, a wind shift caused thousands of U.S. citizen rafters with no passports to drift into Canadian waters. The current and wind made it impossible for the rafters to paddle back into U.S. waters, necessitating significant coordination with the Canadian authorities. Despite these events, promotional information for the event continues to be published. More than 5,000 people are again anticipated to float down the river this year. No public or private organization holds themselves responsible as the event sponsor.

The Coast Guard is issuing this temporary rule under the authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the event sponsor did not notify the Coast Guard with sufficient time to publish an NPRM and immediate action is necessary to protect personnel, vessels, and the marine environment in the St. Clair River. It is impracticable and contrary to the public interest to publish an NPRM because we must establish this safety zone by August 17, 2025.

Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . For the same reasons discussed in the preceding paragraph, delaying the effective date of this rule would be impracticable because immediate action is needed to respond to the potential safety hazards associated with a float down event.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port, Detroit has determined that potential hazards associated with a float down event will be a safety concern for anyone in the float down area. The likely combination of large numbers of participants, strong river currents, limited rescue resources, and difficult emergency response scenarios could easily result in serious injuries or fatalities to float down participants and spectators. This rule is necessary to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone during the float down.

This rule establishes a safety zone from 12 p.m. through 7 p.m. on August 17, 2025. The safety zone will begin at Lighthouse Beach and encompass all U.S. waters of the St. Clair River bound by a line starting at a point on land north of Coast Guard Station Port Huron at position 43°00.416′ N; 082°25.333′ W, extending east to the international boundary to a point at position 43°00.416′ N; 082°25.033′ W, following south along the international boundary to a point at position 42°54.500′ N; 082°27.683′ W, extending west to a point on land just north of Stag Island at position 42°54.500′ N; 082°27.966′ W, and following north along the U.S. shoreline to the point of origin (WGS 84). Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Detroit or his designated representative. The Captain of the Port Detroit or his designated representative may be contacted via VHF Channel 16. Additionally, no one under the age of 18 will be permitted to enter the safety zone if they are not wearing a Coast Guard approved personal floatation device.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.

Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it.

This regulatory action determination is based on the size, location, and duration of the safety zone. Vessel traffic will not be able to safely transit around this safety zone which would impact a small, designated area of the St. Clair River for 7 hours. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM Marine Channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 7 hours that will prohibit entry in a portion of the St. Clair River where the float down event will take place. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard is issuing this temporary rule under the authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the complete information surrounding the event was not obtained with sufficient time to propose a rule, consider comments, and publish a final rule in time to respond to the potential safety risks associated with this high-speed boat race scheduled for August 8, 2025.

Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this rule for 30 days would be contrary to the public interest by inhibiting the Coast Guard's ability to protect attendees in the navigable waters high-speed boat race.

The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Lake Michigan (COTP) has determined that potential hazards associated with the Sheboygan Midwest Challenge would be a safety concern for anyone within the safety zone that is not participating in the event. The purpose of this rule is to ensure safety of vessels and the navigable waters in the safety zone before, during, and after the scheduled event.

This rule establishes a safety zone which will be enforced each day, from 8 a.m. to 6 p.m., starting on August 8, 2025, and continuing through August 10, 2025. The safety zone will cover certain waters of Lake Michigan with a rectangle shaped racecourse offshore of Sheboygan, WI. The duration of the zone is intended to ensure the safety of vessels and these navigable waters before, during, and after the high-speed boat race. No vessels or persons will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.

Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it.

This regulatory action determination is based on characteristics of the safety zone. The safety zone created by this rule will be relatively small, is designed to minimize its impact on navigable waters, and is not anticipated to exceed 10 hours in duration each day the rule is in place. Furthermore, under certain conditions vessels may still transit through the safety zone when permitted by the COTP or designated representative.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 10 hours in duration each day that will prohibit entry into certain waters of Lake Michigan with a rectangle shaped racecourse offshore of Sheboygan, WI. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

This is a summary of the final rule portions of the Commission's Direct Final Rule, GN Docket No. 25-133; FCC 25-40, adopted on July 24, 2025, and released on July 28, 2025. The full text of this document is available for public inspection and can be downloaded at https://www.fcc.gov/document/fcc-deletes-obsolete-telegraph-rabbit-ear-receiver-phone-booth-rules-0. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format) by sending an email to fcc504@fcc.gov or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Paperwork Reduction Act. This document does not contain new or modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-3521. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, 44 U.S.C. 3506(c)(4).

Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Direct Final Rule to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

While we intend to use direct final rule procedures at the full Commission level, in recognition of past actions on delegated authority to adopt or repeal some rules without notice and comment, we take this opportunity to reaffirm that all Bureaus and Offices may continue to take such actions in situations that are exempt from the Administrative Procedure Act's (APA's) notice-and-comment requirements, consistent with such actions by Bureaus and Offices historically. To ensure uniformity in this regard and to address what, by historical happenstance, has resulted in varied formulations throughout our rules, we take this opportunity to standardize the delegated authority of Bureaus and Offices to act without notice and comment on matters that fall within the APA's good cause exception and otherwise do not involve new or novel issues. While rule changes adopted via direct final rule procedures are premised on the APA's good cause exception from notice and comment, our action clarifying and unifying the wording of delegations of authority to Bureaus and Offices also relies on a distinct exception from notice and comment under the APA—namely, the notice and comment exception for rules of “agency organization, procedure, or practice.” Delegation of authority to Bureaus and Offices bears simply on who within the agency will be acting, and not on issues of substance—thus fitting comfortably within the APA's notice and comment exception for rules of “agency organization, procedure, or practice.” In clarifying and affirming the delegated authority as historically used by Bureaus and Offices to adopt rule changes exempt from prior notice and comment under the APA, we find nothing that would cause the delegations at issue here to constitute substantive rules.

It is ordered that the amendments of the Commission's rules as set forth in this document shall be effective upon Federal Register publication of the specified amendments to the part 0 rules, which also shall serve as the date of public notice of that action. Because changes to our rules governing delegations of authority involve agency organization, procedure, or practice rather than “a substantive rule,” they are not subject to the default requirement that they take effect on or after 30 days after Federal Register publication.

It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of this Direct Final Rule in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends part 0 of Title 47 of the Code of Federal Regulations as follows:

This is a summary of the Commission's Report and Order and Second Report and Order in GN Docket Nos. 25-70, 25-71, and 13-185, adopted on July 24, 2025, and released on July 25, 2025 ( AWS-3 Report and Order ). The full text of this document is available at https://www.fcc.gov/document/fcc-updates-bidding-rules-aws-3-inventory-auction-0.

People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at 202-418-0530 (voice).

1. Advancing U.S. leadership in wireless is good for the U.S. economy, for U.S. national security, and for ensuring that every American has access to affordable, high-speed service. That is why the Commission is focused on freeing up more spectrum for consumer use.

2. With the AWS-3 Report and Order, the Commission moves to satisfy a bipartisan congressional mandate to auction licenses for AWS-3 spectrum in the Commission's inventory. The proceeds from this auction will fund the Commission's ongoing efforts to protect American networks from untrustworthy and insecure foreign equipment.

3. The Commission has held spectrum auctions for roughly 30 years. Auctions assign spectrum licenses to their highest and best use by allowing bidders to reveal their preferences and discover a market-clearing price. Commission auctions have proven a resounding success largely because the Commission has updated its rules to account for the lessons of the past. For example, in 2015, the Commission reformed its rules to protect the integrity of their auctions from fraud, collusion, and manipulation while promoting participation by bona fide small businesses and rural providers.

4. The AWS-3 Report and Order advances those time-tested objectives. First, the Commission adopts designated entity eligibility requirements for future AWS-3 spectrum license auctions that are in harmony with the requirements used in every 5G auction held since 2015. Updating the AWS-3 rules to match settled practice will give small businesses and rural service providers the predictability they need to participate meaningfully at auction. Next, the AWS-3 Report and Order updates the Commission's general part 1 competitive bidding rules for categorizing an entity as a “small business concern,” pursuant to the Small Business Runway Extension Act of 2018 (SBREA). In adopting these rules, the Commission rejects arguments from the affiliates of Auction 97 defaulters (whose unwillingness to pay the full amount of their gross winning bids led to significant AWS-3 spectrum sitting fallow in the Commission's inventory for nearly a decade) that the Commission conduct the next auction of AWS-3 licenses under the same rules that enabled the very bidding behavior that led to their defaults in the first place. Finally, the Commission declines to adopt a Tribal priority licensing window in advance of the next AWS-3 auction.

5. Shortly after the Commission adopted the Notice of Proposed Rulemaking in this proceeding ( NPRM ), 90 FR 11931 (March 13, 2025), the Office of Economics and Analytics (OEA), jointly with the Wireless Telecommunications Bureau (WTB), sought comment on proposed procedures for an auction of AWS-3 licenses (Auction 113). The AWS-3 Report and Order allows OEA and WTB to establish final procedures for Auction 113 in accordance with the adopted rules and to move forward with that auction.

6. In 2014, the Commission adopted service and bidding rules for the auction of AWS-3 spectrum licenses (Auction 97) in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz frequencies. Bidding in Auction 97 began in November 2014 and ended in January 2015. Auction 97 raised a total of $41,329,673,325 in net bids, with 31 bidders placing winning bids for a total of 1,611 licenses. Following that auction, certain winning bidders selectively defaulted on winning bids for 197 licenses. In March 2025, the Commission announced that it would conduct a new auction, Auction 113, for the AWS-3 spectrum that remained in the agency's inventory, most of which was available primarily due to Auction 97 defaults.

7. The Commission Provides Notice in 2014 that All AWS-3 Auctions Would Be Subject to Generally Applicable Rule Changes. Prior to Auction 97, the Commission provided clear notice that any and all future auctions of AWS-3 spectrum licenses would be subject to generally applicable changes to the part 1 competitive bidding rules. In particular, the Commission determined that any AWS-3 auction would be conducted in accordance with the general competitive bidding rules set forth in part 1, subpart Q of the Commission's rules except as “otherwise provided in” part 27.

8. The part 1 competitive bidding rules advance the agency's statutory directive by ensuring that designated entities (DEs), which are small businesses and rural telephone companies, have a meaningful opportunity to access wireless spectrum in FCC auctions. DEs are eligible for auction bidding credits, represented as percentage discounts from their winning bids. Eligibility requirements for DEs are set on a service-by-service basis, the capital requirements and other characteristics of each particular service establishing the appropriate threshold.

9. The Commission adopted service-specific bidding credits and DE eligibility requirements for the AWS-3 bands prior to Auction 97. The Commission provided a 15% small business bidding credit to entities with average annual gross revenues not exceeding $40 million and a 25% very small business bidding credit to entities with average annual gross revenues not exceeding $15 million. The average gross revenues would be calculated from the preceding three years. These thresholds were consistent with the standardized schedule of DE bidding credits in the Commission's rules at the time. The relevant definitions and thresholds for particular bidding credits were codified in the part 27 AWS-3 service rules. The DE eligibility requirements were modeled after the small business size standards and associated bidding credits that the Commission adopted for the AWS-1 band, based on the belief that the AWS-3 bands would be employed for purposes similar to those for the AWS-1 band.

10. DISH's DEs Improperly Claim $3.3 Billion in FCC Bidding Credits Intended For “Very Small Businesses.” Two participants in Auction 97, Northstar Wireless, LLC (Northstar) and SNR Wireless License Co. (SNR), made extensive use of bidding credits intended for “very small businesses.” In total, Northstar and SNR improperly claimed $3.3 billion in credits under the Commission's DE rules. They ultimately placed over $13.3 billion in gross winning bids on 702 of the 1611 licenses in Auction 97, or 43.5% of the available licenses.

11. SNR and Northstar were formed immediately before Auction 97 and funded almost exclusively by a large DISH Network Corporation (DISH). During the course of reviewing long-form applications following Auction 97, the Commission denied bidding credit eligibility for both Northstar and SNR. The Commission determined that the companies were under the de facto control of DISH and therefore were ineligible for the $3.3 billion of DE bidding credits for “very small businesses.”

12. Because SNR and Northstar were ineligible for the DE bidding credits they claimed, they were required to pay the full amount of their $13.3 billion bid price for those licenses. DISH and its DEs appealed the Commission's determination. The litigation finally came to a close in 2023 when a federal court of appeals upheld the Commission's determination and the Supreme Court declined to grant certiorari.

13. DISH's DEs Selectively Default on the AWS-3 Licenses They Won. Northstar and SNR selectively defaulted on winning bids for 197 AWS-3 licenses. Pursuant to the Commission's well-established part 1 rules governing defaults on winning bids, Northstar and SNR became liable for the difference between their winning bids in Auction 97 and the amount of winning bids for licenses accessing the same spectrum in subsequent auctions. Also pursuant to those rules, SNR and Northstar became liable for an additional payment equal to 15% of their own bids or the applicable subsequent winning bids, whichever was less. The upcoming auction of AWS-3 licenses may provide subsequent winning bids that ultimately determine the size of any deficiency payment owed by Northstar and SNR.

14. The Commission Overhauls its Competitive Bidding Rules and DE Eligibility in Response to Auction 97 Irregularities. After the close of Auction 97, the Commission became aware of allegations of significant bidding irregularities on the part of SNR and Northstar. The Commission also received numerous complaints about abuses of the DE program beyond the DISH-controlled entities. Commenters alleged that supposedly “small businesses” that claimed bidding credits were operating at the direction and control of large, well-financed corporations.

15. In response to these concerns, the Commission in 2015 significantly reformed its competitive bidding rules for future spectrum auctions. The reforms adopted in the Updating Part 1 Report and Order, 80 FR 56764 (September 18, 2015), were expressly informed by “lessons learned” in Auction 97. Many of the Commission's reforms were intended to expand the range of businesses eligible for DE benefits while simultaneously ending practices that had incentivized larger players to manipulate the DE regime. As the Commission explained, the changes to the part 1 rules were designed to promote auction participation by small businesses while ensuring “that valuable bidding credits are available only to those Congress intended,” namely, small businesses and rural providers.

16. Although the 2015 reforms expanded DE eligibility by raising the gross revenue thresholds for small business bidding credits and establishing a new bidding credit for eligible rural service providers, it also took several steps to protect the integrity of the DE program by: (i) prohibiting joint bidding arrangements between applicants; (ii) prohibiting the common control of separate auction applicants; (iii) requiring the establishment, on an auction-by-auction basis, of a maximum total discount of no less than $25 million that a winning eligible DE may receive; and (iv) modifying attribution rules to prevent the unjust enrichment of ineligible entities. These and other reforms resulted in changes to the Commission's part 1 rules, which apply generally to spectrum auctions. While existing service-specific competitive bidding rules, including those for the AWS-3 bands, specified that the part 1 competitive bidding rules would apply to mutually exclusive applications for licenses, the specific provisions related to designated entity eligibility in those services were never updated to reflect the increased gross revenue thresholds and the availability of the rural service provider bidding credit.

17. Congress Tightens the Definition of “Small Business Concern” for Federal Programs. In the 2018 SBREA, Congress amended provisions of the Small Business Act for defining a “small business concern.” In relevant part, the 2018 amendments required federal agencies to treat an entity as a “small business concern” only if the agency considered average gross receipts over the preceding five years.

18. In requiring a five-year lookback, Congress sought to more accurately reflect a business's long-term size. Congress also sought to combat fraud and abuse by making it harder for companies to manipulate short-term revenue fluctuations to improperly qualify as “small.”

19. The 2018 statutory amendments also responded to longstanding criticisms, raised over the years by Congress and agencies like the Small Business Administration (SBA) Office of Inspector General and the Government Accounting Office (GAO), that large firms had exploited loopholes to win preferential contracts and discounts intended for small businesses. Although service-specific small business definitions that the Commission has adopted for bidding credit eligibility since 2019 contain the congressionally mandated five-year lookback period, the Commission has not previously amended any of its prior-existing rules—including prior service-specific rules and the general part 1 rules to conform with the amended Small Business Act's standards.

20. To Fund Critical National Security Objectives, Congress Authorizes the FCC to Auction AWS-3 Licenses that DISH's DEs Selectively Defaulted After Auction 97. In the Spectrum and Secure Technology and Innovation Act of 2024, Congress directed the Commission to initiate systems of competitive bidding to grant licenses for spectrum in its inventory in the AWS-3 spectrum bands. Auction proceeds will support the Commission's Supply Chain Reimbursement Program, which reimburses eligible advanced communications service providers for their costs to remove, replace, and dispose of untrustworthy Huawei Technologies Company or ZTE Corporation equipment and services.

21. In February 2025, the Commission issued the NPRM as the first step to conduct Auction 113. As the 2015 reforms to the part 1 rules that were adopted in the immediate aftermath of Auction 97 to protect the integrity of Commission spectrum auctions already apply to this auction, the NPRM sought to update the part 27 requirements for DE eligibility in AWS-3 spectrum auctions based on the intervening developments proposing to set the average annual gross revenue eligibility requirements for very small and small business bidding credits at $20 million and $55 million, respectively and to incorporate the amended Small Business Act's five-year lookback period for calculating gross revenues. The NPRM also proposed to make the rural service provider bidding credit adopted in 2015 available for future auctions of AWS-3 spectrum licenses. These proposals would align DE eligibility requirements for Auction 113 with the requirements used in auctions for 5G-ready spectrum licenses conducted since Auction 97.

22. The Commission affirms that, consistent with its AWS-3 service-specific rules, any future auctions will be conducted using the part 1 competitive bidding rules that are in effect at the time of the auction. For Auction 113, that includes the reforms to the DE rules adopted as part of the 2015 Updating Part 1 Report and Order and any other changes that may be effectuated prior to the auction. For example, the Commission is considering a proposal to require auction applicants to make certain certifications as to whether they are owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary. If such a rule were to be adopted and made effective prior to the deadline for submitting an application to participate in Auction 113, the new requirement could apply to Auction 113 applicants. The Commission has repeatedly found that application of its part 1 competitive bidding rules, as modified by the 2015 Updating Part 1 Report and Order, to individual services serves the public interest. Consistent with that precedent, the Commission finds that conducting Auction 113 using these updated rules would similarly serve the public interest.

23. In 2015, the Commission modified its part 1 competitive bidding rules to facilitate competitive entry into the wireless industry by small businesses with capital and operational experience. The Commission sought to “provide meaningful opportunities to bona fide small businesses and rural service providers to participate in auctions and in the provision of spectrum-based services, and in providing such opportunities, to prevent unjust enrichment.” While the record in that proceeding supported these changes, some commenters strongly opposed several proposals, but their arguments initially failed to persuade the Commission, which proceeded to modify its rules, and later failed to persuade the U.S. Court of Appeals for the Third Circuit, which upheld certain challenged rules. The Third Circuit found that the Commission, in the Updating Part 1 Report and Order, “not only set forth a policy that is likely to allow continued participation by DEs, but also rationally explained why it expected no significant loss of DE participation.” Now, in this proceeding, one of the challenging parties seeks to revive those failed arguments. But they are no more persuasive now than they were when the Commission first rejected them a decade ago.

24. New data and the Commission's experience administering auctions over the last ten years prove the success of the modernized DE rules. Publicly available auction results demonstrate that the Commission and Third Circuit accurately foresaw that the rules adopted in 2015 would offer bona fide designated entities opportunities to participate in auctions and the provision of spectrum-based services. In every spectrum license auction since, the percentage of winning bidders that are designated entities has remained similar to or has risen higher than the percentage in Auction 97. In six of those eight auctions, the percentage of applicants qualifying to bid that were designated entities was higher than in Auction 97. This data meaningfully demonstrate that, consistent with the Commission's statutory duty, the part 1 rule modifications adopted in 2015 serve the public interest by using bidding preferences to ensure that small businesses and rural telephone companies are given the opportunity to participate in the provision of spectrum-based services. Accordingly, the Commission declines to conduct future auctions of AWS-3 spectrum licenses, including Auction 113, using the outdated rules that are no longer in effect.

25. The Commission is not persuaded by arguments that it may not use competitive bidding rules, including DE eligibility requirements, that differ from those used in Auction 97. Two commenters assert that the use of the current competitive bidding rules and procedures, as amended, for the upcoming AWS-3 auction would undermine robust participation by DEs. This claim is rooted in their fear that the DE eligibility rules adopted by the Commission would reduce the winning net bids in Auction 113 and thereby increase the amount of Northstar's and SNR's deficiency payments. The Commission finds that argument unavailing.

26. As an initial matter, all auctions conducted since 2015 have been conducted under the updated rules in effect at the time, including the increased gross revenue thresholds the AWS-3 Report and Order adopts for the AWS-3 service-specific rules. These rules have led to robust participation by small entities and rural providers. The Commission finds that their use in Auction 113 is likely to expand the pool of entities that can potentially qualify for DE bidding credits while still allowing the Commission to “prevent the unjust enrichment of entities that would be ineligible to receive DE benefits in their own right.”

27. The Commission has, from time to time, updated its auction rules to promote the efficient assignment of spectrum licenses, promote economic opportunity and competition, ensure that innovative technologies can be brought to market, and encourage auction participation by small businesses and rural providers. As demonstrated by the outcomes of auctions held since Auction 97, the reforms adopted in 2015 have served this purpose. The Commission therefore affirms that the updated rules will govern the conduct of Auction 113. As is the Commission's standard practice when adopting auction rules, and as it did in advance of Auction 97, the Commission also gives notice to potential auction participants that future auctions will be subject to any modifications that it may adopt for its part 1 general competitive bidding rules in the future.

28. The Commission adopts the proposal in the NPRM to update the AWS-3 service specific competitive bidding rules to align the gross revenue thresholds used to determine eligibility for small and very small business bidding credits with the DE eligibility requirements contained in the part 1 rules and the requirements of the SBREA. For purposes of DE eligibility, a small business is defined as an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $55 million for the preceding five years, and a very small business is an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $20 million for the preceding five years. This change will bring the DE eligibility requirements for AWS-3 services in line with the Commission's standardized schedule for small business bidding credits in part 1, subpart Q.

29. In accordance with the schedule of DE bidding credits set forth in part 1, a qualifying small business will continue to be eligible for a bidding credit of 15% and a qualifying very small business will be eligible for a bidding credit of 25%, subject to the bidding credit caps specified in 47 CFR 1.2110(f)(2)(ii).

30. The eligibility requirements that the AWS-3 Report and Order adopts harmonize the AWS-3 DE rules with both the part 1 standardized schedule of DE bidding credits and the amended Small Business Act's current five-year average gross receipts benchmark. By updating the AWS-3 DE eligibility requirements to match the requirements that have been used for all other auctions of 5G-ready services since 2015, the Commission provides small businesses and rural service providers with a simple, consistent, and predictable avenue for facilitating access to capital, thereby increasing participation and competition in an AWS-3 auction.

31. In all auctions of licenses likely to be used to provide 5G services in a variety of bands since the part 1 schedule of bidding credits was updated in 2015, the Commission has consistently used the DE business size standards that it adopted. That is, the Commission has used the two larger average gross revenue thresholds and associated bidding credits in the part 1 schedule of bidding credits. The results from these auctions demonstrate that using the two larger size standards to assign bidding credits has provided a real opportunity for bidders claiming eligibility as small businesses to win licenses to provide spectrum-based services at auction. By adopting average annual gross revenue thresholds that are not too high, and thus not overly inclusive, the Commission preserves the effectiveness of DE benefits for the small businesses that are intended to benefit from its DE rules. This proposal received strong support in the record, with the majority of commenters, including those representing small and rural interests, generally supporting raising the average annual gross revenue thresholds as proposed in the NPRM.

32. The Commission also adopts its proposals to amend the AWS-3 competitive bidding rules to reflect the five-year benchmark mandated by the amended Small Business Act. Adopting the benchmark will bring the AWS-3 competitive bidding rules into alignment with the Small Business Act, as the Commission has done for all other service specific designated entity requirements since 2019. Simultaneously, the Commission adopts its proposal to codify this requirement in its part 1 standardized schedule of bidding credits such that eligibility for small business bidding credits would be based on an entity's average gross revenues for the preceding five years. The Commission finds that this modification to the part 1 standardized schedule of bidding credits will ensure consistency with the requirements of the Small Business Act in spectrum bands that may be subject to competitive bidding in the future, and it adopts the proposal.

33. One commenter asks the Commission to go beyond its proposal and increase the eligibility threshold beyond the existing part 1 rules. That commenter did not propose any specific thresholds or provide a justification for why auctions of licenses for the AWS-3 spectrum in the Commission's inventory should be treated differently from other auctions for licenses likely to be used to provide 5G services. Based on the Commission's prior experience with bidding credits in spectrum auctions and the lack of service-specific justifications in the record, the Commission is not persuaded that it should adopt small business size standards for AWS-3 spectrum that differ from those used in auctions for other 5G-ready services.

34. Finally, the Commission declines to increase the bidding credit percentages for small businesses and very small businesses and declines to include the 35% bidding credit from its part 1 standardized schedule of bidding credits for entities with not more than $4 million in average annual gross revenues. When determining the amount of bidding credits and who should be eligible for them, the Commission takes care to avoid expanding the scope of DE benefits to a level that may incentivize gamesmanship. The Commission has consistently used only the two largest DE business size standards and associated bidding credits outlined in its part-1 rules when adopting service-specific rules for competitive bidding for spectrum licenses, including in Auction 97. This approach has facilitated the successful participation of many eligible small businesses in Commission auctions over the last decade and has provided uniformity and predictability for designated entities and other bidders as well. The Commission is not persuaded by the limited record before us that AWS-3 spectrum is different in a way that warrants deviating from the rule frameworks that have governed previous auctions. The Commission finds that the bidding credit percentages and thresholds in the part-1 size standards continue to “provide a simple, consistent, and predictable avenue for facilitating small business participation in auctions.”

35. Consistent with the findings in the Updating Part 1 Report and Order and the Commission's approach in other bands where the spectrum is likely to be used to provide 5G services, the Commission adopts its proposal to offer a 15% bidding credit to a rural service provider, as defined in 47 CFR 1.2110(f)(4)(i) and subject to the bidding credit cap defined in 47 CFR 1.2110(f)(4)(ii), that has not claimed a small business bidding credit. Those commenters that addressed this proposal generally supported extending bidding credits to rural service providers in auctions of licenses for AWS-3 spectrum. Permitting bidders to claim a rural service provider bidding credit in Auction 113, a bidding credit that was not available when this spectrum was initially auctioned, will allow a diversity of service providers to compete more effectively for spectrum licenses in rural areas. The Commission finds that adopting this bidding credit will promote robust participation in Auction 113.

36. Some commenters advocate for increasing the bidding credit percentage for rural service providers so that it matches the percentage provided to very small businesses, generally reasoning that more small businesses will be eligible for the larger bidding credit given the new thresholds that the Commission is adopting, in addition to new entrants. As with calls to increase the bidding credit percentages for small business designated entities, the commenters advocating to increase the bidding credit percentage for rural service providers fail to demonstrate that services particular to the limited number of licenses being auctioned in the AWS-3 band would materially benefit from a larger rural service provider bidding credit. The Commission sees nothing in the record that disturbs its conclusion when it adopted a rural service provider credit that “rural service providers generally have greater access to capital and infrastructure than other small businesses or new entrants,” making it appropriate for the rural service provider credit to equal the smallest credit amount available to a small business.

37. The Commission's past experience with the rural service provider bidding credit indicates that the existing part 1 rural service provider bidding credit achieves an appropriate balance of the statutory obligations that the Commission is charged with pursuing, while sufficiently enabling rural service providers to compete for spectrum licenses. Thus, the Commission confirms that the part 1 rural service provider bidding credit standard will apply for auctions of licenses for AWS-3 spectrum as proposed in the NPRM.

38. The Commission will conduct Auction 113 under the part 1 competitive bidding rules in effect at the time of the auction, and not part 1 rules that were in effect during Auction 97. As the NPRM observed, when establishing the AWS-3 service ahead of Auction 97, the Commission “specified that such licenses would be subject to competitive bidding and that the competitive bidding procedures contained in part 1 of the Commission's rules would apply, unless otherwise specified.” The current part 1 rules include improvements related to DEs that were adopted in the wake of Auction 97. The Commission's longstanding part 1 rules have led to robust participation by small entities and rural providers. Notwithstanding the assertions of two commenters, nothing in the language of the AWS-3 2014 Report and Order, 79 FR 32366 (June 4, 2014), or the part 27 rules indicates that the part 1 rules used in Auction 97 must be used to conduct any and all future auctions of licenses for AWS-3 spectrum.

39. Under the Commission's rules, any auction involving AWS-3 licenses will be governed by the “general competitive bidding procedures set forth 47 CFR part 1, subpart Q.” Neither commenter addresses the straightforward application of the text of these rules. Instead, they claim that Auction 113 will be a continuation of Auction 97 and therefore the Commission must continue to use the 2014 part 1 rules in future AWS-3 auctions, including Auction 113. In an attempt to marry Auction 113 to Auction 97, a commenter interprets the words “subsequent auction” and “re-auction,” that appear in the Commission's rules regarding the consequences of an auction default, to require an “inextricable link” between the first auction and the second.

40. In reality, these phrases mean the opposite of what the commenter asserts. The terms “subsequent auction” and “re-auction,” on their face, refer to a new auction that will offer licenses for spectrum that has been offered but not successfully assigned in a prior auction. In all material respects, Auction 97 has concluded: the Commission has completed the process of competitive bidding, issued licenses to all winning bidders, finished the transition process, and accomplished all other prerequisites to the provision of wireless service for licenses that were successfully auctioned. Bidding in Auction 97 concluded more than a decade ago. The Commission's default rules rely on bids in two auctions of licenses for the same spectrum to determine the consequences of a default in the first one, but this does not suggest that the second auction is a continuation of the first. The Commission is entitled to set the rules of each auction within its statutory parameters. By using the updated part 1 rules, the Commission is able to leverage experience and expertise that it did not have at the time of Auction 97, and indeed leverage its experience in Auction 97 itself, to better promote robust competition and combat fraud in Auction 113.

41. Using the part 1 rules in effect at the time of future AWS-3 auctions is consistent with applicable law and the reasonable expectations of any party involved in Auction 97. Applying current part 1 rules in future AWS-3 auctions is consistent with due process of law. Application of the Commission's rules at the time of the auction is neither a prohibited primary retroactive application nor secondary retroactive application of the rules. Furthermore, one commenter's contention that changes in rules applicable to Auction 97 and a future AWS-3 auction effectively single out the defaulters in Auction 97 for differential treatment ignores their own legal responsibility as defaulters.

42. Primary retroactivity. An agency order is impermissible as “primarily retroactive” if it alters the past legal consequences of past actions. An order can be primarily retroactive if it (1) increases a party's liability for past conduct; (2) impairs rights a party possessed when he acted; or (3) imposes new duties with respect to transactions already completed.

43. Applying part 1 rules in effect at the time of Auction 113 will not alter “the past legal consequences for past actions” taken by Northstar and SNR. To the contrary, the “past legal consequences of past actions” by Northstar and SNR were determined by the Commission's rules governing default penalties, which were well established prior to Action 97 and have not changed in any meaningful way since then. It is those rules, not the DE rules, that determines a defaulter's liabilities, rights, and duties.

44. As such, applying part 1 rules in effect when Auction 113 commences would not increase DISH's liability for past conduct by penalizing Northstar and SNR in the form of a larger deficiency payment owed than if the Auction 97 DE rules remained in place. The Commission's default payment rules determine the amounts of Northstar's and SNR's default payment obligations or, in other words, the default payment rules establish the liabilities applicable to the defaulters. Pursuant to the rules, a bidder's obligation to pay its entire bid amount is set when its bid is accepted, and after default, the amount due may be reduced based on the results of a later auction. The amount that a defaulter will ultimately owe is determined by the delta between its winning bid and the winning bid in a subsequent auction, and if the subsequent winning bid equals or exceeds the defaulted bid, no deficiency payment will be assessed. The bidding rules that are applied in a subsequent auction would not increase DISH's liability for past conduct because the maximum amount of the liability due to its past conduct was established at the time DISH defaulted, and the Commission's rules controlling default payments have not changed. Accordingly, using those rules in a future AWS-3 auction would not increase DISH's liability for past conduct.

45. Secondary Retroactivity. A commenter further claims that conducting Auction 113 using the part 1 rules that are in effect at that time would have secondary retroactive effect, making their use impermissible. A change in law that does not result in primary retroactivity nonetheless can still be impermissibly secondarily retroactive. This sort of retroactivity is “characteristic of a rule having exclusively `future effect' but affects the desirability of past transactions.” However, simply having an effect, even if negative, on expectations based on past rules does not make a new rule secondarily retroactive.

46. As a preliminary matter, the commenter could not reasonably rely on a future AWS-3 auction replicating Auction 97, with respect to rules or outcome. At the outset of the AWS-3 service, the Commission gave notice that future AWS-3 auctions would rely on the part 1 rules then in effect, meaning that the participants should never have relied upon the Auction 97 rules being applied in perpetuity. The Commission expressly admonished bidders that any future auction of AWS-3 spectrum, which would determine subsequent winning bid amounts for purposes of default obligations, could be subject to updated rules. Participants in Auction 97 were on notice of potential for changes in the Commission's competitive bidding rules, and they reasonably should have expected the Commission to update or modernize its rules in an auction being held over a decade later. It would be irresponsible for the Commission to ignore the vast changes involving spectrum-based services since Auction 97. As the D.C. Circuit has recognized, “an agency must be allowed to adjust its policies to changing circumstances, within the framework of the rules it established in advance of the auction.”

47. Moreover, the benefits of applying the revised part 1 rules in a future AWS-3 auction will outweigh the burden claimed by the commenter. Agencies must “balance the harmful `secondary retroactivity' of upsetting prior expectations or existing investments against the benefits of applying their rules to those preexisting interests.” In 2015, the Commission updated the part 1 rules after finding that the rule amendments served the public interest, and evidence in the record shows that DE participation in Commission auctions has been enhanced by those updates. That finding was made in part based on the experience the Commission gained from administering Auction 97, an auction in which the defaults of Northstar and SNR significantly affected the outcome. The actions taken by the Commission in the AWS-3 Report and Order further align eligibility criteria for DE bidding credits for AWS-3 spectrum licenses with the Commission's part 1 rules and with the DE eligibility requirements used in auctions for 5G-ready spectrum licenses since Auction 97. The “amorphous injury” to Northstar and SNR, a purely speculative decrease in winning bid amounts in Auction 113, is outweighed by the public interest benefits in enhancing bona fide DE participation in spectrum auctions and in harmonizing the competitive bidding rules. In conducting Auction 113 pursuant to the reformed part 1 rules, the Commission is exercising its discretion to balance fairness to losing bidders with the needs of the market and the public interest. Accordingly, there is no impermissible secondary retroactivity.

48. Disparate Treatment. In support of its argument that due process requires that Auction 113 be conducted using Auction 97 part 1 rules, one commenter complains that Northstar and SNR would be impermissibly “singled out” by the use of modified part 1 rules. This argument is unsupported and unpersuasive. It disregards Northstar's and SNR's own responsibility for improperly claiming bidding credits under the Commission's DE rules in Auction 97. Northstar and SNR, and their guarantors, will be subject to default obligations based on their defaulted winning bids in Auction 97, bids that they won while relying on improperly claimed bidding credits, pursuant to a rule that applied to all other Auction 97 participants. Had any other winning bidder defaulted in that auction, it would have had its final default payment determined just as Northstar's and SNR's will be. The only thing that “singles out” Northstar and SNR is that they voluntarily defaulted on winning bids of over $3 billion in Auction 97 after improperly claiming billions in small business bidding credits. The commenter similarly argues that the participants are unique in that any bidders in future auctions outside the AWS-3 band will have fresh, revised expectations based on application of the Commission's post-Auction 97 revisions to its part 1 competitive bidding rules. But this claim ignores that the Commission regularly admonishes potential auction participants that future auctions will also be subject to any modifications that the Commission may adopt for its part 1 general competitive bidding rules in the future.

49. The Commission finds no merit in one commenter's contention that it failed to comply with the Administrative Procedure Act (APA). The commenter complains that the Commission's use of a fixed comment period from the release of the NPRM rather than from the date of its Federal Register publication does not meet APA requirements. The APA requires that notice of regulatory action be published in the Federal Register and permits action only after such notice is provided. It does not define the minimum period of notice before a deadline for comments. Commission rules state that “a reasonable time will be provided” and that such time will be “specified in the NPRM,” without prescribing a specific length of time.

50. The NPRM was adopted at the Commission Open Meeting on February 27, 2025, and was released by publication on the Commission's website on February 28, 2025. It set a deadline for comments to be filed by March 31 and for reply comments by April 14. The Federal Register published a summary of the NPRM, including information about the dates for comments and replies, on March 13, or 12 business days and 18 calendar days prior to the comment deadline.

51. That notice satisfied the requirements of the APA and the Commission's rules and gave interested parties a sufficient opportunity to participate in the rulemaking. The commenter does not claim that the comment period was unreasonably short or that it was prejudiced in any way. In fact, the commenter hired outside counsel and filed 18 pages of comments by the March 31 deadline. Eleven other parties filed comments within this time period, and no party claimed to have been unable to meet a filing deadline or otherwise sought additional time to address the NPRM.

52. The Commission are likewise unpersuaded by the commenter's claim that the Commission violated the APA by “failing to identify and seek any comment on any issue relating to the inextricable linkage of Auctions 97 and 113.” The APA requires an agency to publish a notice that identifies “either the terms or substance of the proposed rule or a description of the subjects and issues involved.” That notice “must be sufficient to fairly apprise interested parties of the issues involved, but it need not specify every precise proposal which the agency may ultimately adopt as a rule.” The Commission satisfied that requirement when it proposed updating the DE rules for Auction 113.

53. Contrary to two commenters' assertions, changes to the competitive bidding rules do not breach DISH's guaranties. One of the commenters relied on a savings clause in the guaranties, a provision that the guaranties may be enforced to the fullest extent permissible under the laws and public policies in the event that and to the extent that “the obligations of the Guarantor under this Guaranty shall be adjudicated to be invalid or unenforceable.” The commenter contends that because changing the bidding credit rules from Auction 97 violates its due process rights, enforcing the guaranties would exceed the savings clause provision of “permissible” enforcement. Changes in the Commission's bidding credit rules do not prejudice any rights of the commenter protected by due process and its strained reading of the savings clause fails to prove any breach of the guaranties.

54. The commenter suggests that applying the part 1 competitive bidding rules in effect at the time that the auction takes place is somehow analogous to the government's actions in the Supreme Court case of United States v. Winstar Corp. The Commission find it is not. In that case, the Supreme Court addressed the enforcement of a regulation that contradicted contractual assurances of specific future accounting treatment that a banking regulator had made to induce healthier savings and loan companies to purchase failing financial entities. In contrast, the commenter never received any contractual assurance that future AWS-3 auctions would be conducted under the Auction 97 rules, and the Commission never extended any such assurance. To the contrary, the Commission provided notice that its competitive bidding rules would be subject to future changes.

55. Likewise, the Commission's improvement of its competitive bidding rules does not breach any applicable covenant of good faith and fair dealing. Notwithstanding claims by the commenters the underlying default obligations are set by 47 CFR 1.2104(g) and those liabilities are reflected in the guaranties. The final amount of those obligations will be determined by the applicable subsequent winning bids, not by any of the changes that the Commission has made to the competitive bidding rules since Auction 97 or makes in the AWS-3 Report and Order. Whatever the subsequent winning bid amounts, the commenter remains liable for any deficiency regardless of the DE rules, or any other particular rules, in a future auction.

56. Finally, two commenters request that, if it does not apply the 2014 part 1 rules in Auction 113, the Commission refrain from requiring any deficiency payments pursuant to 47 CFR 1.2104(g) and from “enforcing the DISH guaranties.” Obviously, the Commission has not yet assessed a final default payment for the defaulted bids from Auction 97. Indeed, the outcome of a future auction of AWS-3 spectrum licenses may prove such a request to be unnecessary if the subsequent winning bids are equal to or greater than Northstar's and SNR's prior defaulted winning bids. Thus, the Commission declines to consider the commenters request that it refrain from requiring any deficiency payments pursuant to 47 CFR 1.2104(g) and from enforcing the DISH guaranties” if it amends the rules as proposed in the NPRM.

57. The commenters' request in this regard is similar to that of the petitioner in Mountain Solutions in that the default liability, if any, is not yet ripe. Indeed, the request here is even more premature. In Mountain Solutions, there were subsequent winning bids for seven of the ten licenses involved in the petitioner's defaults. In this case, by contrast, there are no subsequent winning bids with respect to the defaults by the participants. As one commenter observes, at this point, any injury related to deficiency payments and enforcement of the guaranties is speculative and, accordingly, any requests for related Commission action are premature. The Commission therefore does not need to consider any request by the commenters for relief from the obligations of the involved parties under the rules and the guaranties until after the Commission is able to calculate any final payment for the defaults.

58. In the NPRM, the Commission sought comment on the possible use of a Tribal licensing window for Auction 113. After consideration of the comments received in response, the Commission finds that it would not be in the public interest to implement a Tribal licensing window for the inventory proposed for Auction 113.

59. In seeking comment on a possible Tribal licensing window, the Commission noted that the Spectrum and Secure Technology and Innovation Act directs the Commission to use competitive bidding to “grant licenses for spectrum in the inventory of the Commission as of the date of enactment of this Act in the bands of frequencies referred to by the Commission as the `AWS-3 bands.' ” The Act also directs proceeds from the auction to the general fund of the Treasury to, among other things, reimburse funds borrowed by the Commission to carry out the Commission's Supply Chain Reimbursement Program. The Spectrum and Secure Technology and Innovation Act also includes a directive for the Commission to “initiate systems of competitive bidding under section 309(j)” for these AWS-3 licenses within 18 months of enactment and provision to processing applications and grant licenses notwithstanding the lapse in the Commission's broader authority under 47 U.S.C. 309(j), indicating congressional urgency in moving forward with Auction 113.

60. Within this context, the Commission sought comment on whether a Tribal licensing window for any relevant portions of the limited number of AWS-3 licenses available for auction would be permissible according to the language of the statute. Additionally, the Commission sought comment on the appropriate eligibility requirements to adopt should it offer a Tribal licensing window. The Commission sought comment on the putative benefits of a Tribal licensing window given the bandwidth available for auction and the presence of Federal operations in the band. Finally, the Commission sought general comment on the potential impact of a Tribal licensing window on the process for auctioning these licenses.

61. Numerous Tribal entities and their representatives, including Tribal Governments, a Tribal regulatory entity, a Tribal wireless provider, and public interest groups, filed in support of including a Tribal licensing window in Auction 113. They argued that adopting a Tribal licensing window would serve the public interest, promote Tribal spectrum access, and support access to communications services in rural, unserved, and underserved areas. In addition, a number of commenters address the eligibility criteria for a Tribal licensing window in Auction 113, referencing previous proceedings where the Commission prioritized Tribal licensing. By contrast, another commenter opposed including a Tribal licensing window in Auction 113, arguing that doing so would not be consistent with the goals of the Spectrum and Secure Technology and Innovation Act, which include auctioning the valuable AWS-3 spectrum, which has “already been sitting in the Commission's inventory unused for far too long.”

62. The Commission finds that it would not be in the public interest to implement a Tribal licensing window in the context of Auction 113, given Congress's specific directives in the Spectrum and Secure Technology and Innovation Act regarding the inventory to be licensed and the timetable for doing so. Congress was clear in the Spectrum and Secure Technology and Innovation Act that the Commission is to auction all the unassigned AWS-3 spectrum in its inventory as of December 2024, and that the proceeds from the auction are ultimately to be used to reimburse the Treasury for funds deposited in the Spectrum Auction Trust Fund to fill the funding shortfall in the Supply Chain Reimbursement Program and support the removal of telecommunications equipment that poses a risk to national security. What is more, the text of the Spectrum and Secure Technology and Innovation Act reflects the urgent public interest in moving expeditiously to secure American networks from equipment that poses a risk to national security, and in using proceeds from the AWS-3 spectrum auction to achieve that goal. The Commission agrees with the one commenter that conducting a Tribal licensing window, which would remove spectrum prior to the auction from the congressionally specified inventory and could potentially reduce the auction proceeds available for the Supply Chain Reimbursement Program, would not further the public interest goals of the Spectrum and Secure Technology and Innovation Act. Additionally, one commenter argues that an auction of AWS-3 inventory licenses can still benefit Tribes. However, there is disagreement about whether this is true. Another commenter counters that it has seen too many cases where auction winners acquire licenses covering Navajo lands but do not build infrastructure because it is not economically lucrative to do so, or if they do, Navajo lands are the very last areas built out. Although the Commission does not adopt a Tribal priority window for Auction 113, it acknowledges its trust relationship with Tribal Nations, and remains committed to finding ways to address the connectivity challenges facing Tribal Nations.

63. Furthermore, as the commenter suggested, conducting a Tribal licensing window in connection with Auction 113 could further delay the AWS-3 spectrum from being used to provide service. This spectrum has been in inventory for a decade now amidst protracted litigation and the subsequent lapse of the Commission's auction authority. With the Spectrum and Secure Technology and Innovation Act, Congress provided the authority to auction these licenses and established a clear and swift timeline for moving forward. Consistent with the public benefits of this well-established service and as reflected by the legislative action, the public interest mandates prioritizing expeditious licensing. Several commenters claim that implementing a Tribal licensing window would not delay the auction and such a window could even be held simultaneously with traditional bidding to expedite the process. The Commission does not find these arguments compelling. In the Commission's experience with the Tribal priority window in the 2.5 GHz auction, considerable time and resources were required in order to establish and conduct a Tribal licensing window with adequate outreach and support for potential participants. Additionally, the Commission does not find it feasible to hold a Tribal licensing window and bidding simultaneously as it would not allow bidders sufficient time to develop business plans or assess market conditions as required by the Communications Act. Finally, because the Commission declines to adopt a Tribal licensing window, it finds it unnecessary at this time to evaluate the various proposals in the record regarding eligibility criteria for participation in a Tribal licensing window for Auction 113.

64. Paperwork Reduction Act Analysis. The Office of Management and Budget (OMB) has approved the collection of information in the Application to Participate in an FCC Auction, FCC Form 175, including collecting five years of annual revenue information from applicants for a small business bidding credit and information from applicants for a rural service provider bidding credit. The AWS-3 Report and Order does not contain new or substantively modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. Therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198.

65. Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the AWS-3 Report and Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

66. Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice-and-comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule and policy changes contained in this Order on small entities.

67. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission incorporated an Initial Regulatory Flexibility Analysis (IRFA) in the NPRM. The Commission sought written public comment on the proposals and issues raised in the NPRM, including comment on the IRFA. No comments were filed addressing the IRFA.

68. In the AWS-3 Report and Order, the Commission updates the DE rules for AWS-3 spectrum bands to enable the Commission to offer licenses for spectrum within those bands that is currently in the Commission's inventory through competitive bidding in the near future. In addition, the AWS-3 Report and Order resolves all remaining open issues and also addresses comments from small and other entities that were filed in response to the NPRM. Together, the rules that the Commission adopts will further its goal of facilitating the use of presently fallow spectrum and further advancing the deployment of fifth generation wireless (5G) services by efficiently bringing to auction licenses covering spectrum that is likely to be used to provide 5G services. In addition, these rules will also foster competition in wireless services by facilitating participation in an auction of licenses for AWS-3 spectrum by entities designated by in 47 U.S.C. 309(j)(3) and (4) (the Act) to be given opportunities to participate in spectrum-based services (designated entities or DEs).

69. Specifically, the AWS-3 Report and Order adopts rules that provide small businesses and rural service providers with greater opportunities to participate in the provisioning of 5G services by aligning the Commission's outdated, service-specific eligibility requirements for AWS-3 with its current practice. Additionally the AWS-3 Report and Order modifies the part 1 size definitions for small business bidding credits so that the length of time over which revenues are averaged for determining bidding credit eligibility is five years, in conformance with the Small Business Act, as amended.

70. Lastly, the proceeds generated from the auctions will bolster another of the Commission's long-standing objectives: protecting U.S. national security by supporting the Commission's Supply Chain Reimbursement Program, which implements the Secure and Trusted Communications Networks Act of 2019 through its reimbursement of eligible advanced communications service providers, some of which are small entities, for their costs incurred through the removal, replacement, and disposal of equipment and services provided by untrustworthy entities such as Huawei Technologies Company or ZTE Corporation.

71. There were no comments filed that specifically addressed the information presented in the IRFA.

72. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response to the NPRM.

73. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning under the Small Business Act. In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

74. Small Businesses, Small Organizations, Small Governmental Jurisdictions. The Commission actions, over time, may affect small entities that are not easily categorized at present. The Commission therefore describes three broad groups of small entities that could be directly affected by our actions. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, in general, a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States, which translates to 34.75 million businesses. Next, “small organizations” are not-for-profit enterprises that are independently owned and operated and not dominant their field. While the Commission does not have data regarding the number of non-profits that meet that criteria, over 99 percent of nonprofits have fewer than 500 employees. Finally, “small governmental jurisdictions” are defined as cities, counties, towns, townships, villages, school districts, or special districts with populations of less than fifty thousand. Based on the 2022 U.S. Census of Governments data, the Commission estimate that at least 48,724 out of 90,835 local government jurisdictions have a population of less than 50,000.

75. Licenses Assigned by Auctions. The Commission's small business size standards with respect to licenses assigned by auction involve eligibility for bidding credits in the auction of licenses for various wireless frequencies. In the auction of these licenses, the Commission may define and adopt criteria for different classes of small businesses. The criteria for these small business classes may be defined in the Commission's rules or may require consultation with the U.S. Small Business Administration, Office of Size Standards. For licenses subject to auction, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. In addition, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.

76. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of that number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 594 providers that reported they were engaged in the provision of wireless services. Of these providers, the Commission estimates that 511 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

77. Advanced Wireless Services (AWS)—(1710-1755 MHz and 2110-2155 MHz bands (AWS-1); 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands (AWS-2); 2155-2175 MHz band (AWS-3); 2000-2020 MHz and 2180-2200 MHz (AWS-4)). Spectrum is made available and licensed in these bands for the provision of various wireless communications services. Wireless Telecommunications Carriers (except Satellite) is the closest industry with a SBA small business size standard applicable to these services. The SBA small business size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms that operated in this industry for the entire year. Of this number, 2,837 firms employed fewer than 250 employees. Thus, under the SBA size standard, the Commission estimates that a majority of licensees in this industry can be considered small.

78. According to Commission data as of December 2021, there were approximately 4,472 active AWS licenses. The Commission's small business size standards with respect to AWS involve eligibility for bidding credits in the auction of licenses for these services. For the first auction of AWS licenses, the Commission defined a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million. Pursuant to these definitions, 57 winning bidders claiming status as small or very small businesses won 215 of 1,087 licenses. In the most recent auction of AWS licenses, 15 of 37 bidders qualifying for status as small or very small businesses won licenses.

79. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time the Commission is not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.

80. Satellite Telecommunications. This industry comprises firms “primarily engaged in providing telecommunications services to other establishments in the telecommunications and broadcasting industries by forwarding and receiving communications signals via a system of satellites or reselling satellite telecommunications.” Satellite telecommunications service providers include satellite and earth station operators. The SBA small business size standard for this industry classifies a business with $44 million or less in annual receipts as small. U.S. Census Bureau data for 2017 show that 275 firms in this industry operated for the entire year. Of that number, 242 firms had revenue of less than $25 million. Consequently, using the SBA's small business size standard most satellite telecommunications service providers can be considered small entities. The Commission notes however, that the SBA's revenue small business size standard is applicable to a broad scope of satellite telecommunications providers included in the U.S. Census Bureau's Satellite Telecommunications industry definition. Additionally, the Commission neither requests nor collects annual revenue information from satellite telecommunications providers, and is therefore unable to more accurately estimate the number of satellite telecommunications providers that would be classified as a small business under the SBA size standard.

81. The RFA directs agencies to describe the economic impact of proposed rules on small entities, as well as projected reporting, recordkeeping and other compliance requirements, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.

82. The Commission expects that the rules adopted in the AWS-3 Report and Order will impose new and/or additional reporting or recordkeeping and/or other compliance obligations on small entities as well as other applicants and licensees. These obligations are discussed in greater detail in the AWS-3 Report and Order. The Commission believes that these rules assist the Commission in meeting its statutory goals by facilitating the auction, and subsequent use, of unassigned spectrum. Further, the Commission does not believe that the costs and/or administrative burdens associated with the adopted rules will unduly burden small entities. The Commission notes that the rules adopted in the AWS-3 Report and Order modify requirements that were in place prior to the last major update to the Commission's competitive bidding rules in 2015 in order to bring them in line with the policies and procedures that have been used in auctions of 5G-ready services since 2015. Therefore, small entities that have participated in Commission auctions since 2015 may already be familiar with such policies and requirements and may have the necessary processes and procedures in place to facilitate compliance, thereby resulting in minimal incremental costs to comply with the modifications adopted in the AWS-3 Report and Order.

83. Typically, the auction procedures inform prospective applicants that they should familiarize themselves with the Commission's general competitive bidding rules, Commission decisions regarding competitive bidding procedures, application requirements, obligations of Commission licensees, construction permit holders, and support recipients, and the Commission's service rules for the frequency band available in the auction or for construction permits or universal service support, and that they must be thoroughly familiar with the procedures, terms, and conditions contained in the public notice adopting procedures for the auction. The Commission therefore do not expect that the amended definitions adopted in the AWS-3 Report and Order will increase the need for small entities to hire attorneys, engineers, consultants, or other professionals because it does not increase the level of education or due diligence beyond what was required of applicants under the previous competitive bidding rules for the AWS-3 spectrum bands.

84. As mentioned, the AWS-3 Report and Order adopts rule changes that will affect reporting, recordkeeping, and/or other compliance requirements for small and other entities. The AWS-3 Report and Order amends the Commission's rules related to designated entities eligible for bidding credits for licenses subject to auction in the AWS-3 bands. It adopts the same revenue thresholds that the Commission has used in recent years to determine eligibility for small and very small business bidding credits, which are provided for in the Commission's part 1 standardized schedule of bidding credits. It also amends the AWS-3 bidding credit eligibility criteria to align with the amended Small Business Act's requirement that federal agencies that categorize business concerns that provide services as a “small business concern” based on annual average gross receipts only do so if the agency considers such receipts “over a period of not less than five years.” Specifically, the Commission adopts a requirement for an entity to have average gross revenues for the preceding five years not exceeding $55 million to be a small business, and such an entity would be eligible for a bidding credit of 15%. To be classified as a very small business an entity would be required to have average gross revenues for the preceding five years not exceeding $20 million and would be eligible for a bidding credit of 25%. The Commission also adopts a rural service provider bidding credit for auctions of licenses for AWS-3 spectrum that has been offered. Lastly, the AWS-3 Report and Order modifies the Commission's general part 1 competitive bidding rules to incorporate the five-year average gross receipts benchmark for the purpose of determining which entities qualify for small business bidding credits for consistency with the Small Business Act.

85. The RFA requires an agency to provide, “a description of the steps the agency has taken to minimize the significant economic impact on small entities including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.”

86. The rules adopted by the Commission in the AWS-3 Report and Order reflect its efforts to minimize significant economic impact to small entities where practicable and its consideration of various alternatives in reaching its conclusions. For example, the adopted rules update the competitive bidding rules for the AWS-3 spectrum bands to align with current practices. The Commission considered alternatives that would apply rules that deviated from our prevailing practices. However, by adopting rules similar to the DE rules that have been used in recent auctions of wireless, 5G-ready spectrum, compliance burdens on small businesses will be minimized, as many small businesses will already be familiar with these requirements. As a result, the adopted approach could lessen the compliance costs for small entities who have participated in any wireless spectrum auction since 2015.

87. Competitive Bidding and Bidding Credits for Small Entities. The Commission administers bidding credit programs to promote small business service provider participation in auctions and in the provision of spectrum-based services. Based on the Commission's analysis of past auction data, the relative costs of participation are lowered for small businesses that take full advantage of the bidding credit programs. The current DE rules for auctions of licenses in AWS-3 spectrum bands were adopted prior to the last major update to the part 1 competitive bidding rules in 2015. Thus, as mentioned in the prior section, the Commission has modified these DE rules so that they conform with the DE rules set forth in part 1, subpart Q, of the Commission's rules and are consistent with recent auctions. Specifically, the Commission modifies the DE rules for AWS-3 to apply the current part 1 definition of a qualifying “small business” and a “very small business” and apply the bidding credits for these two categories, and for rural service providers. The Commission also modifies the part 1 size definitions for small business bidding credits so that the amount of time over which revenues are averaged for determining bidding credit eligibility is five years, in conformance with the Small Business Act. The Commission considered comments suggesting it implement larger bidding credits for small businesses. The Commission concludes, however, that the bidding credit percentages adopted in the AWS-3 Report and Order will sufficiently enable small businesses seeking to participate in auctions to gain access to capital, thereby fostering their increased participating and competitive in auctions, without incentivizing gamesmanship.

88. In addition, to reduce costs to small and other entities, the Commission provides resources and educational materials to assist all auction participants, including small entities, with understanding the requirements of auction participation, including applying for bidding credits. Small entities and other auction participants may seek clarification of, or guidance regarding, auction procedures, the competitive bidding rules, and any requirements related to the authorizations or support to be made available through the auction from Commission staff prior to each auction's application window. Further, an FCC Auctions Hotline provides small entities one-on-one access to Commission staff for information about the auction process and procedures. Lastly, through the FCC Auctions Technical Support Hotline, the Commission provides a technical assistance resource to small entities and other applicants, on issues such as access to or navigation within the electronic short-form application (FCC Form 175) and use of the bidding system.

89. The Commission will send a copy of the AWS-3 Report and Order, including the FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the AWS-3 Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the SBA.

90. It is ordered , pursuant to the authority found in sections 1, 2, 4(i), 303, and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 303, and 309(j); the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025, H.R. 5009, 118th Cong. Div. D, Title LIV, section 5403, that the Report and Order and Second Report and Order is adopted.

91. It is further ordered that the rules and requirements as adopted in the Report and Order and Second Report and Order will become effective thirty (30) days after publication in the Federal Register .

92. It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of the Report and Order and Second Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

93. It is further ordered that the Commission's Office of the Secretary, shall send a copy of the Report and Order and Second Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 27 to read as follows:

This is a summary of the direct final rule portion of the Commission's Direct Final Rule, GN Docket No. 25-133; FCC 25-40, adopted on July 24, 2025, and released on July 28, 2025. The full text of this document is available for public inspection and can be downloaded at https://www.fcc.gov/document/fcc-deletes-obsolete-telegraph-rabbit-ear-receiver-phone-booth-rules-0. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format) by sending an email to fcc504@fcc.gov or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Comment Period and Filing Procedures. Interested parties may file comments on or before the dates provided in the DATES section of this document. Comments must be filed in GN Docket No. 25-133. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

• All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.

• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 45 L Street NE, Washington, DC 20554.

Paperwork Reduction Act. This document does not contain new or modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-3521. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, 44 U.S.C. 3506(c)(4).

Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Direct Final Rule to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

Today marks the next step in a bold initiative to modernize the Commission's regulatory framework and pave the way for the next generation of innovation. In this proceeding, we have launched a sweeping review eventually aimed at eliminating outdated rules, reducing unnecessary regulatory burdens, accelerating infrastructure deployment, promoting network modernization, and spurring innovation. Our goal is clear: streamline, simplify, and smartly deregulate across multiple fronts simultaneously to better serve the public and support technological progress.

In initiating this proceeding, we generally sought to identify rules that are outdated, obsolete, unlawful, anticompetitive, or otherwise no longer in the public interest. In today's item, we specifically focus on the repeal of certain rules for which prior notice and comment are unnecessary, but for which we elect to provide an opportunity for input on that assessment. Absent any significant adverse comments in response to this Direct Final Rule, these rules will be repealed. Pursuant to the framework established here, direct final rule procedures also can be employed in the future in other scenarios where prior notice and comment is unnecessary under the Administrative Procedure Act (APA). We thus reject commenters' unwarranted concerns that direct final rule procedures will be employed by the Commission outside scenarios where prior notice and comment is unnecessary under the APA. Where deregulation triggers the notice-and-comment rulemaking process required by the APA, the Commission will proceed in that manner, just as it is doing with respect to other deregulatory items this month on which the full Commission will vote.

Good Cause to Forgo Notice and Comment. Under the APA, when an agency for “good cause” finds that notice and public comment “are impracticable, unnecessary, or contrary to the public interest,” it need not follow notice and comment procedures before modifying or repealing rules. Prior notice and comment are “unnecessary” when “‘the administrative rule is a routine determination, insignificant in nature and impact, and inconsequential to the industry and to the public.’”

We have identified 11 rule provisions—covering 39 regulatory burdens, 7,194 words, and 16 pages—that plainly do not serve the public interest any longer because they govern obsolete technology, outdated marketplace conditions, expired deadlines, or repealed legal obligations. Applying the “good cause” standard discussed above, we conclude that prior notice and comment are unnecessary before repealing the rules identified in this document.

Direct Final Rule Process. At times when the Commission has found prior notice and comment unnecessary before modifying or repealing rules, it simply adopted the relevant rule change without any additional process. Although we reserve the right to proceed in that manner, we elect in this decision to proceed using what commonly is known as a “direct final rule” process. Although the FCC is not bound by the Administrative Conference of the United States' (ACUS's) direct final rule recommendations or the practices employed by other agencies, we have considered them to the extent that they provided a useful point of reference subject to tailoring appropriate to our specific circumstances.

By proceeding through a direct final rule, the Commission chooses to provide expanded opportunities for public comment when it is not legally required to do so under the “good cause” standard. We thus reject claims that our actions somehow seek to evade the APA or neglect the proper importance of notice and comment. Further, although the Commission has adopted specific rules codified in the Code of Federal Regulations related to notice-and-comment rulemaking procedures, there is no legal requirement that we adopt rules before employing processes permitted by the APA and the Communications Act.

Under a direct final rule process, rule changes are adopted without prior notice and comment, but accompanied by an opportunity for the public to file comments—and if we conclude that significant adverse comments have been filed, the relevant rule changes would not take effect until after a full notice and comment process.

In particular, we will publish this item adopting direct final rules in the Federal Register , and allow for comment from interested parties within 10 days of Federal Register publication. Although some commenters advocate for a longer comment period such as the 30 day period reflected in ACUS's recommendations, we are not persuaded to adopt such timeframes for this particular direct final rule. Under the APA's good cause exception, we would have been justified proceeding immediately to rule as we have in the past without providing an opportunity for comment, but have elected to employ direct final rule procedures to guide future action. An unnecessarily long comment period would simply represent an unwarranted penalty on the Commission for electing to pursue this approach. And given the discrete number of rules and rationales for repeal implicated in this order, we are not persuaded that a longer comment cycle is needed. That is particularly true where, as here, advocates for groups that might be interested in the rules at issue have shown themselves to already be well aware of the contemplated changes even before adoption of the direct final rule, let alone Federal Register publication. In different circumstances in the future, such as where there is a significantly larger number of rules at issue (many or all of which require more involved analyses in support of repeal under the good cause exception), we remain able to adopt longer comment periods if warranted.

Until 10 days after Federal Register publication, this shall be a “permit-but-disclose” proceeding for purposes of our ex parte rules. Because this comment process is directed toward the discrete objective of the direct final rule process, and to avoid unwarranted delay in that process, we prohibit filings addressing the rule changes contemplated in this Direct Final Rule more than 10 days after Federal Register publication, absent further direction from the Commission published in the Federal Register . Up until that date, we find it in the public interest to continue to operate under permit-but-disclosure procedures in this regard, consistent with the status of the In Re: Delete, Delete, Delete proceeding more generally. This both accords with the purpose of the comment process for direct final rules, and is similar (though not identical) to actions the Commission has taken in other contexts to provide a defined end-point for public filings to enable the Commission to focus its attention on the submissions already before it. Although in this instance no filings will be permitted after 10 days from Federal Register publication, we create a limited carve-out that allows a petition for reconsideration of this action to be filed 30 days after Federal Register publication, consistent with the requirements of section 405(a) of the Communications Act. In the event that a petition for reconsideration is filed, we will subsequently specifically address any comment process associated with such a petition.

The direct final rules will be effective 60 days after Federal Register publication. To the extent that the Commission receives comments on these direct final rules, we will evaluate whether they are significant adverse comments that warrant further procedures before changing the rules. In our assessment, we plan to be guided by ACUS's recommendation that “[a]n agency should consider any comment received during direct final rulemaking to be a significant adverse comment if the comment explains why: a. The [direct final] rule would be inappropriate, including challenges to the rule's underlying premise or approach; or b. The [direct final] rule would be ineffective or unacceptable without a change.” The touchstone for analysis is whether a comment materially calls into question the conclusion that prior notice and comment is unnecessary under the APA, which is the predicate for use of direct final rule procedures. While we expect the formulation provided by ACUS to be a useful guide for conducting that analysis, our statutory determination of “good cause” to forgo notice and comment ultimately represents the critical issue, rather than the particular language used by ACUS.

In the event that we conclude that significant adverse comments have been filed, the Bureaus and Offices responsible for the rules subject to this Direct Final Rule will publish a timely withdrawal in the Federal Register so that this Direct Final Rule does not become effective until any appropriate additional procedures have been followed. If significant adverse comments are filed only with respect to a subset of the rule revision(s) addressed by this Direct Final Rule, the pertinent Bureaus and Offices will withdraw the portions of the Direct Final Rule that were subject to significant adverse comments. For example, if a significant adverse comment is filed regarding a single rule within a direct final rule addressing multiple rules, we will publish a withdrawal addressing only that rule. We disagree with any suggestion that the Commission may not evaluate what procedural path to take after a particular rule change has been withdrawn. It would be an unwarranted deterrent to the use of direct final rule procedures if, after withdrawing a rule change that was subject to a significant adverse comment, the agency was precluded from relying on procedures that otherwise would have been available but for its initial direct final rule—including not only notice and comment rulemaking, but potentially other procedures such as a new direct final rule, an interim final rule, or some other approach.

In the event that no comments are filed in response to this Direct Final Rule, we do not anticipate publishing a confirmation of the effective date in the Federal Register , but simply will allow the rule changes to take effect as originally specified. We reject calls to delay the effective date of the rule changes here simply because the Commission does not plan to publish a confirmation notice that rule changes will take effect as contemplated by the Direct Final Rule. ACUS recommends merely that agencies “consider” a longer effective date where no confirmation notice is published if the agency needs to ensure it has adequate time to withdraw the rule in the event it receives significant adverse comments. Thus, the additional time is for the benefit of the agency, not the public. Particularly where we are repealing rules—and thus no regulated entities will be required to come into compliance with new duties—on grounds like those relied upon here, we are not persuaded by generic requests for additional time that a lengthier effective date actually is needed.

Where comments are filed, but none of the comments are significant adverse comments, where warranted by the record the pertinent Bureaus and Offices will issue a Public Notice that will briefly explain why any comments filed were not determined to be significant adverse comments. Although the PN is a document in a non-notice and comment rulemaking proceeding, nothing in that document is required to be published in the Federal Register by the Administrative Procedure Act given that the PN is not itself adopting new or modified rules. As a result, the Commission also need not publish the PN in the Federal Register to establish the date of “public notice” for the PN under § 1.4(b)(1) of the rules—which is limited to documents in rulemaking proceedings “required by the Administrative Procedure Act, 5 U.S.C. 552, 553, to be published in the Federal Register ”—and instead the date of public notice of these PNs will be the release date. Although some commenters suggest that the failure to publish this Public Notice in the Federal Register stands in contrast to what ACUS recommends, the ACUS recommendation does not contemplate such an explanation being issued at all—let alone one published in the Federal Register . Indeed, the ACUS recommendation recognizes even publication of a confirmation notice in the Federal Register —let alone an associated explanation—as optional. We thus are not persuaded that it would serve the public interest—including the efficiency goals of this proceeding—to voluntarily elect to publish such Public Notices in the Federal Register .

Although the Commission has a history of seeking to eliminate outdated, inappropriate, or otherwise unwarranted regulations, including by actions on delegated authority, we elect to take this step at the full Commission level.

Finally, in specifying the mechanics of the direct final rule process as it will be used by the full Commission, we again rely on the notice and comment exception for rules of “agency organization, procedure, or practice.” The procedures to be followed in direct final rulemaking bear simply on how parties will interact with the agency, and not on any substantive duties or obligations. This fits comfortably within the APA's notice and comment exception for rules of “agency organization, procedure, or practice.”

Although we do not foreclose the possibility of adopting codified rules governing direct final rule procedures in the future, we believe that whether any new procedures are needed to “best conduce to the proper dispatch of business and to the ends of justice” most effectively can be discerned based on practical Commission experience, rather than speculation. In the meantime, the use of direct final rule procedures as established by this Direct Final Rule will provide a useful tool to proceed with repealing outdated or unwarranted rules where prior notice and comment is unnecessary under the APA.

Accordingly, it is ordered that, pursuant to sections 4(i), 4(j), 201(b), and 303(r) of the Communications Act, 47 U.S.C. 154(i), (j), 201(b), 303(r), this Direct Final Rule is adopted . Except as specified below, this Direct Final Rule shall be effective upon Federal Register publication of the rule changes set forth in this document, which also shall serve as the date of public notice of that action.

It is further ordered that the amendments of the Commission's rules as set forth in this document shall be effective 60 days after Federal Register publication. In the event that significant adverse comments are filed, we direct the Bureaus and Offices responsible for the rules subject to this Direct Final Rule to publish a timely document in the Federal Register withdrawing the rule so that the rule change does not become effective until any additional procedures have been followed. In the event that significant adverse comments are filed with respect to only a subset of the rule revisions, we direct the Bureau or Office responsible for such rule revision to publish a timely document in the Federal Register withdrawing only such rule so that the rule change does not become effective until any additional procedures have been followed.

It is further ordered that the Office of the Managing Director, Performance Program Management, shall send a copy of this Direct Final Rule in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends parts 1, 24, 63 and 79 of Title 47 of the Code of Federal Regulations as follows: