[Federal Register Volume 67, Number 131 (Tuesday, July 9, 2002)]
[Rules and Regulations]
[Pages 45362-45380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16096]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 21, 22, 24, 25, 27, 73, 74, 80, 90, 95, 100, and 
101

[DA 02-847]


Competitive Bidding Procedures

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document makes conforming edits to service-specific 
competitive bidding rules and portions of the part 1 general 
competitive bidding rules in accordance with the authority delegated by 
the Commission. These conforming edits further the Wireless 
Telecommunication Bureau's (``Bureau'') continuing efforts to 
streamline its procedures in accordance with the Commission's biennial 
regulatory review obligations. In addition to making these conforming 
edits, the Bureau also exercises its delegated authority to make 
certain ministerial conforming amendments, including edits to correct 
competitive bidding provisions that were inadvertently altered or 
deleted. The intended effect of this action is to eliminate 
approximately 66 pages of redundant or unnecessary rules from the Code 
of Federal Regulations.

DATES: Effective August 8, 2002.

FOR FURTHER INFORMATION CONTACT: Francis Gutierrez or Robert Krinsky of 
the Auctions and Industry Analysis Division at (202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a summary of the Competitive Bidding 
Order adopted and released on April 11, 2002. After release of the 
order, the Bureau released three errata which made minor corrections to 
the order. The first two errata were incorporated into the version of 
the Competitive Bidding Order published in the FCC Record (17 FCC Rcd 
6534 (WTB 2002)). The third erratum was released on June 14, 2002, DA 
02-1414. All three errata have been incorporated in the text of the 
rules accompanying this Federal Register summary. The full text of 
these documents are available for public inspection and copying during 
regular business hours at the FCC Reference Information Center, Portals 
II, 445 12th Street, SW, Room CY-A257, Washington, DC, 20554. These 
documents may also be purchased from the Commission's duplicating 
contractor, Qualex International, Portals II, 445 12th Street, SW, Room 
CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-
863-2898, or via e-mail [email protected].

I. Introduction

    1. In the Competitive Bidding Order, the Wireless 
Telecommunications Bureau (``Bureau'') makes conforming edits to 
service-specific competitive bidding rules and portions of the part 1 
general competitive bidding rules in accordance with the authority 
delegated by the Commission in the Part 1 Fifth Report and Order, 65 FR 
52323 (August 29, 2000). These conforming edits further the Bureau's 
continuing efforts to streamline its procedures in accordance with the 
Commission's biennial regulatory review obligations set forth at 
section 11(a) of the Communications Act of 1934, as amended, and the 
recommendations contained in the 2000 Biennial Staff Report. In 
addition to making these conforming edits, the Bureau also exercises 
its delegated authority to make certain ministerial conforming 
amendments, including edits to correct competitive bidding provisions 
that were inadvertently altered or deleted by the Part 1 Third Report 
and Order, 63 FR 2315 (January 15, 1998), and the Competitive Bidding 
Sixth Report and Order, 60 FR 37786 (July 21, 1995). The Bureau also 
removes service-specific provisions that are redundant with the 
Bureau's delegated authority to conduct auctions. The effect of today's 
action is to eliminate approximately 66 pages of redundant or 
unnecessary rules from the Code of Federal Regulations (``CFR'').

II. Background

    2. In the Competitive Bidding Second Report and Order, 59 FR 22980 
(May 4, 1994), by amending part 1 of the Commission's rules to add a 
new subpart Q, the Commission established general competitive bidding 
rules that would apply to a variety of spectrum based services licensed 
by the Commission. In establishing these rules, the Commission intended 
that the general competitive bidding rules would apply to a particular 
service unless it adopted service-specific rules that varied from the 
part 1 general competitive bidding rules. Subsequently, the Commission 
adopted competitive bidding rules for a number of services. A 
consequence of the adoption of these service-specific competitive 
bidding rules was an unnecessary variation in procedures across 
services. Additionally, portions of the part 1 general competitive 
bidding rules were repeated almost verbatim in the service-specific 
competitive bidding rules. Accordingly, in 1997, based upon its 
experience with the competitive bidding process, the Commission 
initiated the part 1 proceeding to establish a uniform set of 
provisions for all services subject to competitive bidding, eliminate 
unnecessary rules, and provide for a more consistent and efficient 
licensing process.
    3. In the Part 1 Fifth Report and Order, the most recent 
comprehensive Order in the part 1 proceeding, the Commission determined 
that it had

[[Page 45363]]

made the majority of the changes contemplated by its prior orders. 
Therefore, the Commission recognized that it was appropriate to 
commence the next step in the process, i.e., eliminating service-
specific competitive bidding rules from the CFR that have either been 
superseded by or are redundant with the part 1 general competitive 
bidding rules. Accordingly, the Commission delegated to the Bureau the 
authority to make conforming edits to the CFR consistent with the part 
1 proceeding.

III. Discussion

    4. Pursuant to our delegated authority, the Competitive Bidding 
Order identifies and removes service-specific competitive bidding rules 
that have been superseded or made redundant by the part 1 general 
competitive bidding rules. In those instances in which service-specific 
departures from the part 1 general competitive bidding rules were 
tailored for a particular service, the Bureau retains such rules. In 
addition, pursuant to the Bureau's delegated authority to make 
ministerial conforming edits to Commission rules, the Bureau restores 
and revises certain rule sections that were inadvertently altered, 
deleted, or misstated.
    5. As explained, the Bureau modifies or removes service-specific 
competitive bidding rules in the following areas: (i) Scope of service-
specific competitive bidding rules; (ii) competitive bidding design 
options; (iii) competitive bidding mechanisms; (iv) bidding application 
and certification procedures, and prohibition of collusion; (v) 
submission of upfront payments; (vi) submission of down and full 
payments, and filing of long-form applications; (vii) procedures for 
filing petitions to deny against long-form applications; (viii) license 
grant, denial, default, and disqualification; (ix) designated entities; 
(x) unjust enrichment in license assignment or transfer of control; 
(xi) ownership disclosure requirements for short- and long-form 
applications; and (xii) definitions. Also, technical edits are made to 
Commission rules that refer to service-specific competitive bidding 
rules that have been removed or modified.
    6. Scope of service-specific competitive bidding rules. Each set of 
service-specific competitive bidding rules contains a provision that 
provides that the general competitive bidding rules set forth at part 
1, subpart Q of the Commission's rules apply unless the service-
specific rules indicate otherwise. This means that service-specific 
competitive bidding rules are necessary only to specify departures from 
or supplemental procedures to the part 1 competitive bidding rules. The 
Bureau adopts uniform language stating this proposition in all services 
subject to competitive bidding and modifies the following service-
specific rules: Secs. 21.950; 22.201; 22.228; 22.960; 24.301; 24.701; 
25.401; 27.201; 27.501(a); 27.701; 73.3572(e)(2), (f); 73.5000(a); 
80.1251; 90.801; 90.901; 90.1001; 90.1101; 95.816(a); 100.71; 101.537; 
101.1101; 101.1201; and 101.1317.
    7. Competitive bidding design options. Section 1.2103 of the 
Commission's rules outlines the general competitive bidding design 
options (or the different competitive bidding methodologies) for 
services or classes of services subject to competitive bidding. These 
competitive bidding design options include: simultaneous multiple-round 
auctions (using remote or on-site electronic bidding); sequential 
multiple-round auctions (using either oral ascending or remote and/or 
on-site electronic bidding); sequential or simultaneous single-round 
auctions (using either sealed paper or remote and/or on-site electronic 
bidding); combinatorial (package/contingent) bidding auctions; and 
real-time bidding in all electronic auction designs. The following 
service-specific rules, which are redundant with all or part of 
Sec. 1.2103, are removed: Secs. 21.951(a)-(a)(1); 22.203; 22.961; 
24.702; 90.802; 90.902; 90.1003; 100.72; 101.1102; and 101.1202.
    8. Competitive bidding mechanisms. Section 1.2104 of the 
Commission's rules describes the mechanisms used to implement the 
Commission's competitive bidding design provisions. This rule also sets 
forth the treatment of bid withdrawal, down and full payment default, 
and bidder disqualification. The following service-specific rules 
redundant with all or part of the competitive bidding design mechanism 
provisions of Sec. 1.2104 are modified or removed: Secs. 21.951(a)(2)-
(c); 22.205; 22.962; 25.402; 27.202; 73.5001; 90.803; 90.903(c)-(f); 
90.1005; 90.1015(b); 100.73; 101.1103; and 101.1203. Also, the 
following service-specific rules, which conflict or are redundant with 
all or part of the bid withdrawal, down or full payment default, and 
disqualification payment rules of Sec. 1.2104, are removed: 
Secs. 21.959(a)-(b); 22.207; 22.215(b); 22.963; 24.704; 27.203; 
73.5004(a); 90.805; 90.905; 90.1007; 100.74; and 100.78(b).
    9. Bidding application and certification procedures; prohibition of 
collusion. Section 1.2105 of the Commission's rules describes the 
short-form application (``FCC Form 175'') and certification procedures 
and the prohibition against applicant collusion. Section 1.2105 sets 
forth the information and certifications that applicants must provide 
to participate in an auction. This section also prohibits applicants 
from communicating with each other about bids, bidding strategies, or 
settlements if the applicants are bidding on licenses in the same 
geographic area unless applicants are members of bidding arrangements 
identified on a bidder's short-form application. This prohibition 
period commences at the short-form application filing deadline and 
concludes at the post-auction down payment deadline. The following 
service-specific rules, which are redundant with all or part of the 
part 1 short-form application and certification procedures in 
Sec. 1.2105, are removed in whole or in part: Secs. 21.952; 22.209; 
22.227; 22.964; 24.709(a)(4)-(5); 27.204(a)-(b); 90.806; 90.906; 
90.1009; 100.75; 101.531(a); 101.1104; and 101.1204. Also, the 
following service-specific rules, which are redundant with all or part 
of the prohibition on collusion in Sec. 1.2105, are modified or removed 
in whole or in part: Secs. 21.953; 25.405; 27.204(c); and 100.79.
    10. Submission of upfront payments. Section 1.2106 of the 
Commission's rules describes the procedures for submitting upfront 
payments, i.e., the sums an applicant that complies with the short-form 
application requirements tenders to the Commission before an auction in 
order to be qualified to bid. The following service-specific rules, 
which conflict or are redundant with all or part of Sec. 1.2106 of the 
Commission's rules, are removed in whole or in part: Secs. 21.954; 
22.211(a); 22.965(a); 24.706(a), (c); 24.711(a)(1); 24.716(a)(1); 
27.205; 73.5003(a); 90.807(a); 90.907(a); 90.1011(a); 100.76(a); 
101.1105(a); and 101.1205(a).
    11. Submission of down and full payments, and filing of long-form 
applications. Section 1.2107 of the Commission's rules describes the 
procedures for submitting down and full payments and filing the long-
form application (``FCC Form 601''). The Bureau recognizes that other 
licensing bureaus may use different FCC Forms for their long-form 
application. The down payment is the sum that the winning bidder(s) 
must tender to the Commission after the auction closes to bring its 
total deposit(s) up to twenty (20) percent of its high bid(s). This 
payment assures the Commission that the winning bidder is able to 
tender the full amount of its bid when it later comes due. Unless 
otherwise specified by public notice, the down payment must be made 
within ten (10) business days after the winning bidder is notified

[[Page 45364]]

that it is the high bidder for a license(s). The Commission relies upon 
the long-form application to determine whether the winning bidder is 
qualified to be a licensee. The long-form application must be submitted 
within ten (10) business days after the winning bidder is notified that 
it is the high bidder. After submission of the down payment and long-
form application, the winning bidder must submit the full payment due 
on the license(s) within ten (10) business days of notification that 
the license(s) is ready for grant, unless it qualifies to make 
installment payments. If the winning bidder fails to make the full 
payment within this time period, it is afforded an additional ten (10) 
day period to make full payment, provided that it also pays a late fee 
equal to five (5) percent of the amount due. The following service-
specific rules, which conflict or are redundant with all or part of 
Sec. 1.2107 of the Commission's rules, are modified or removed in whole 
or in part: Secs. 21.955(a), (c); 21.958; 22.211(b); 22.213; 22.965(b); 
24.706(b); 24.711(a)(2); 24.716(a)(2); 25.404(a), (b); 27.206; 
73.3573(f)(5)(i); 73.5003(b)-(c); 74.1233(d)(5)(i); 90.807(b); 90.808; 
90.907(b); 90.908; 90.1011(b); 90.1013; 100.76(b); 101.531; 
101.1105(b); 101.1205(b); and 101.1206.
    12. Procedures for filing petitions to deny against long-form 
applications. Section 1.2108 of the Commission's rules describes the 
timing and procedures for filing petitions to deny a winning bidder's 
long-form application. The period for filing a petition to deny 
commences after the Commission releases a public notice announcing that 
a long-form application has been accepted for filing. Section 1.2108 
also provides that the length of time to file a petition to deny may 
vary on a service-specific basis, but cannot exceed ten (10) days. The 
following service-specific rules, which conflict or are redundant with 
all or part of Sec. 1.2108 of the Commission's rules, are modified or 
removed: Secs. 21.957; 90.1025(a); 101.1110; and 101.1207.
    13. License grant, denial, default, and disqualification. Section 
1.2109 of the Commission's rules addresses the consequences for a 
winning bidder that fails to timely make a down payment or full payment 
on its winning bid(s), withdraws its bid(s) after the auction has 
closed, violates the federal antitrust laws, or is otherwise found 
unqualified to be a licensee. The following service-specific rules, 
which conflict or are redundant with all or part of Sec. 1.2109 of the 
Commission's rules, are modified or removed: Secs. 21.959(c)-(e); 
22.207; 22.215; 22.967; 24.708; 24.711(a)(2); 24.716(a)(2); 25.406; 
27.208; 73.5004; 90.809(a); 90.909(a)-(b); 90.1015; and 100.78(a).
    14. Designated entities. Section 1.2110 of the Commission's rules 
sets forth certain provisions applicable to designated entities--small 
businesses, businesses owned by members of minority groups and/or 
women, and rural telephone companies. This section also provides the 
eligibility criteria for small businesses, defines terms specific to 
designated entities, and addresses bidding credits and other financial 
incentives available to certain designated entities. The following 
service-specific rules, which are redundant with certain portions of 
Sec. 1.2110 of the Commission's rules, are removed: Secs. 21.955(b); 
24.321(a)(7); 24.716(c); 27.210(b)(3)(ii), (c); 27.502(a)(7); 
90.812(a); and 101.538(a)(8). The Bureau also modifies or removes the 
following service-specific rules in whole or in part because they 
conflict or are redundant with Sec. 1.2110(b) of the Commission's 
rules, the part 1 eligibility criteria for small business status: 
Secs. 21.961(b)(2); 22.223(b)(2)-(4); 24.321(a)(3)-(5); 24.709(a)(2); 
24.720(b)(3)-(4); 27.210(b)(3); 27.502(a)(3)-(5); 80.1252(b)(3)-(4); 
90.814(b)(2); 90.912(b)(3); 90.1021(b)(3); 90.1103(b)(3)-(4); 
95.816(c)(3)-(4); 101.538(a)(5)-(6); and 101.1209(b)(2). The Bureau 
modifies the following service-specific rules by changing the term 
``controlling principal'' to ``controlling interest'' to conform the 
rules with the Commission's general competitive bidding rules: 
Secs. 90.912(b)(1)-(2); 90.913(a)(1); 90.1021(b)(1)-(2); 90.1023(a)(1); 
101.1109(a)(1); and 101.1112(b)-(e). Additionally, the Bureau modifies 
or removes the following service-specific rules in whole or in part 
because they conflict or are redundant with certain portions of 
Sec. 1.2110(c)(2) of the Commission's rules, the part 1 definition of 
``controlling interest': Secs. 22.223(e); 22.225(e); 24.321(b); 
27.502(b); 80.1252(c); 90.814(g); 90.1103(c); 95.816(d); and 
101.538(b). The Bureau also modifies Sec. 24.709 to clarify its 
applicability to existing licensees.
    15. Assignment or transfer of control: unjust enrichment. Section 
1.2111 of the Commission's rules contains the procedures and reporting 
requirements for assigning or transferring licenses. This section also 
contains the rules for partitioning a license and disaggregating 
spectrum, including the related matters of unjust enrichment, bidding 
credits, installment payments, the length of the license term, and 
construction requirements. The following service-specific rules, which 
are redundant with all or part of Sec. 1.2111 of the Commission's 
rules, are modified or removed in whole or in part: 
Secs. 21.960(b)(5)(i)-(ii), (d)(1); 22.217(b); 24.711(c); 24.712(c); 
24.714(c); 24.716(d); 24.717(c); 27.15(c); 27.209(d); 73.5009(a); 
90.810(b); 90.812(b); 90.813(c), (d)(2)(i); 90.910(b); 90.911(c); 
90.1017(b); 95.823(c)(1); 101.56(i); 101.535(a)(1), (c); 101.1107(e); 
101.1208(b); 101.1319(c); and 101.1323(c).
    16. Ownership disclosure requirements for short- and long-form 
applications. Section 1.2112 of the Commission's rules contains the 
Commission's ownership disclosure requirements for both the short-form 
application, which is a pre-requisite to participation in an auction, 
and the long-form application, which is filed by the winning bidder(s) 
to assist the Commission in determining whether the winning bidder is 
qualified to be a licensee. The Bureau modifies or removes 
Secs. 22.225(b), 90.815(a)-(b), 90.913(a)-(b), 90.1023(a)-(b), and 
101.1109(a)-(b) because these service-specific rules are redundant with 
the ownership disclosure requirements set forth in Sec. 1.2112 of the 
Commission's rules. The Bureau also modifies Sec. 73.5009(b) to 
indicate that the ownership disclosure requirements found at 
Sec. 1.2112(a) do not apply to the assignment or transfer of licenses 
or construction permits in the broadcast services subject to 
competitive bidding.
    17. Definitions. Section 1.2110 of the Commission's rules provides 
uniform definitions for ``affiliate,'' ``audits,'' ``businesses owned 
by members of minority groups and/or women,'' ``controlling 
interests,'' ``eligibility for small business provisions,'' ``gross 
revenues,'' and ``rural telephone company.'' The Bureau modifies or 
removes the following rules in whole or in part because they conflict 
or are redundant with Sec. 1.2110(c)(5) of the Commission's rules, the 
part 1 definition of ``affiliate'': Secs. 21.961(d); 22.223(d); 
22.225(e); 24.709(g); 24.720(l); 27.210(d); 90.814(h); 90.815(e); 
90.912(d); 90.913(d)(3); 90.1021(d); 90.1023(e); 90.1323(e); 
101.1112(h); and 101.1209(e). The Bureau modifies the definition of 
``audits'' in Sec. 1.2110(m) to clarify that all applicants and 
licensees claiming designated entity status are subject to audits. 
Accordingly, the following service-specific rules, which are redundant 
with Sec. 1.2110(m) of the Commission's rules, are removed: 
Secs. 21.960(g); 22.225(d); 24.709(d); 90.815(d); 90.913(d); 
90.1023(d); and 101.1109(d). The Bureau also removes

[[Page 45365]]

the following service-specific rules because they conflict or are 
redundant with Sec. 1.2110(c)(3) of the Commission's rules, the part 1 
definition for ``businesses owned by members of minority groups and/or 
women'': Secs. 24.709(g); 24.720(i); 90.814(e)-(f); and 90.815(e). The 
Bureau removes the following service-specific rules in whole or in part 
because they conflict or are redundant with Sec. 1.2110(n) of the 
Commission's rules, the part 1 definition of ``gross revenues'': 
Secs. 21.961(c); 22.223(c); 22.225(e); 24.709(g); 24.720(f); 27.210(c); 
90.814(d); 90.815(e); 90.912(c); 90.913(d)(3); 90.1021(c); 90.1023(e); 
90.1323(e); 101.1112(g); and 101.1209(d). The Bureau also modifies or 
removes the following service-specific rules in whole or in part 
because they are redundant with Sec. 1.2110(c)(4) of the Commission's 
rules, the part 1 definition of ``rural telephone company'': 
Secs. 24.720(e); 90.814(c); and 101.1209(c). The Bureau also adds a 
definition of ``total assets'' to Sec. 1.2110 of the Commission's rules 
to address the circumstances in which ``total assets'' information is 
relevant to the determination of whether an applicant (or licensee) is 
eligible for status as an entrepreneur. Accordingly, the Bureau deletes 
the redundant portions of the following service-specific rules that 
pertain to ``total assets'': Secs. 24.709(g); 24.720(g); and 90.815(e).
    18. Technical/ministerial edits to Commission rules. As a result of 
the conforming edits made in this Order, some of the service-specific 
competitive bidding rules refer to sections of the part 1 general 
competitive bidding rules that have been removed or modified. 
Accordingly, the Bureau modifies the following rules to eliminate or 
correct references to rules that have been removed or modified: 
Secs. 1.2107(e); 1.2110(f)(3)(ii)(B), (f)(3)(iii)-(iv), (vii); 
21.956(b)(3); 21.960(b)(4); 22.223(b)(3); 24.321(c)(1); 24.709; 
24.711(b)-(b)(2); 24.712(a)-(b); 24.714(d)(1), (d)(2)(i), (iii), 
(d)(3)(i), (ii); 24.716(b)-(b)(2); 24.717(a)-(b); 24.720(b)(5), (c)(2), 
(j)(2), (k)(4), (n)(3)-(4); 27.15(d)-(e); 73.3571(h)(4)(i); 
73.3573(f)(5)(ii); 73.5005(a); 73.5006(d); 80.1252(d); 90.705; 
90.813(d)(2)(ii)-(iv), (3)(ii), (e), (f); 90.814(a)(3); 90.910(a); 
90.1017(a); 90.1025(b); 90.1103(d); 95.816(e); 95.823(c)(2), 
(c)(2)(iii), (c)(3); 101.538(c); and 101.1319(b). Finally, the Bureau 
corrects errors in the following rules pursuant to its delegated 
authority under Sec. 0.331(d) to make ministerial conforming edits: 
Secs. 22.227; 24.711(b)(3)-(5); 73.5009; 90.809(b); 90.813(a); 
90.909(c); 90.913(a); 95.816(f); and 101.538(a)(7).

IV. Ordering Clause

    19. Parts 1, 21, 22, 24, 25, 27, 73, 74, 80, 90, 95, 100, and 101 
of the Commission's rules are amended in accordance with the foregoing 
Competitive Bidding Order and as set forth and becomes effective August 
8, 2002. This action is taken pursuant to the authority delegated by 
the Commission in the Part 1 Fifth Report and Order, 47 U.S.C. 155(c), 
and 47 CFR 0.131(c) and 0.331(d).

List of Subjects

47 CFR Parts 1 and 27

    Communications common carriers.

47 CFR Parts 21, 22, 24, 25, 73, 74, 80, 90, 95, 100, and 101

    Communications equipment.

Federal Communications Commission.
Kathleen O'Brien Ham,
Deputy Chief, Wireless Telecommunications Bureau.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 1, 21, 22, 24, 25, 27, 
73, 74, 80, 90, 95, 100, and 101 as follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 
and 325(e).

    2. Amend Sec. 1.2107 by revising paragraph (e) to read as follows:


Sec. 1.2107  Submission of down payment and filing of long-form 
applications.

* * * * *

    (e) A winning bidder that seeks a bidding credit to serve a 
qualifying tribal land, as defined in Sec. 1.2110(f)(3)(i), within a 
particular market must indicate on the long-form application (FCC Form 
601) that it intends to serve a qualifying tribal land within that 
market.
* * * * *

    3. Amend Sec. 1.2110 by revising paragraphs (b) introductory text, 
(b)(1), (f)(3)(ii)(B), (f)(3)(iii), (f)(3)(iv), (f)(3)(vii), and (m)(1) 
and adding new paragraph (o) to read as follows:


Sec. 1.2110  Designated entities.

* * * * *
    (b) Eligibility for small business and entrepreneur provisions.
    (1) Size attribution. (i) The gross revenues of the applicant (or 
licensee), its controlling interests and their affiliates shall be 
attributed to the applicant and considered on a cumulative basis and 
aggregated for purposes of determining whether the applicant (or 
licensee) is eligible for status as a small business. An applicant 
seeking status as a small business must disclose on its short- and 
long-form applications, separately and in the aggregate, the gross 
revenues of the applicant (or licensee), its controlling interests and 
their affiliates for each of the previous three years.
    (ii) If applicable, the total assets of the applicant (or 
licensee), its controlling interests and their affiliates shall be 
attributed to the applicant and considered on a cumulative basis and 
aggregated for purposes of determining whether the applicant (or 
licensee) is eligible for status as an entrepreneur. An applicant 
seeking status as an entrepreneur must disclose on its short- and long-
form applications, separately and in the aggregate, the gross revenues 
of the applicant (or licensee), its controlling interests and their 
affiliates for each of the previous two years.
* * * * *
    (f) * * *
    (3) * * *
    (ii) * * *
    (B) In addition, within ninety (90) days after the filing deadline 
for long-form applications, the winning bidder must amend its long-form 
application and file a certification that it will comply with the 
buildout requirements set forth in Sec. 1.2110(f)(vi) and consult with 
the tribal government regarding the siting of facilities and deployment 
of service on the tribal land.
    (iii) Bidding credit formula. Subject to the applicable bidding 
credit limit set forth in Sec. 1.2110(f)(3)(iv), the bidding credit 
shall equal three hundred thousand (300,000) dollars for the first two 
hundred (200) square miles (518 square kilometers) of qualifying tribal 
land, and fifteen hundred (1500) dollars for each additional square 
mile (2.590 square kilometers) of qualifying tribal land above two 
hundred (200) square miles (518 square kilometers).
    (iv) Bidding credit limit. If the high bid is equal to or less than 
one million (1,000,000) dollars, the maximum bidding credit calculated 
pursuant to Sec. 1.2110(f)(3)(iii) shall not exceed fifty (50) percent 
of the high bid. If the high bid is greater than one million 
(1,000,000) dollars, but equal to or less than two million (2,000,000) 
dollars, the maximum bidding credit calculated pursuant to 
Sec. 1.2110(f)(3)(iii) shall not exceed five hundred thousand (500,000) 
dollars. If the high bid is greater than two million (2,000,000) 
dollars, the

[[Page 45366]]

maximum bidding credit calculated pursuant to Sec. 1.2110(f)(3)(iii) 
shall not exceed twenty-five (25) percent of the high bid.
* * * * *
    (vii) Performance penalties. If a recipient of a bidding credit 
under this section fails to provide the post-construction certification 
required by Sec. 1.2110(f)(3)(vi), then it shall repay the bidding 
credit amount in its entirety, plus interest. The interest will be 
based on the rate for ten-year U.S. Treasury obligations applicable on 
the date the license is granted. Such payment shall be made within 
thirty (30) days of the third anniversary of the initial grant of its 
license.
* * * * *
    (m) * * *
    (1) Applicants and licensees claiming eligibility shall be subject 
to audits by the Commission, using in-house and contract resources. 
Selection for audit may be random, on information, or on the basis of 
other factors.
* * * * *
    (o) Total assets. Total assets shall mean the book value (except 
where generally accepted accounting principles (GAAP) require market 
valuation) of all property owned by an entity, whether real or 
personal, tangible or intangible, as evidenced by the most recently 
audited financial statements or certified by the applicant's chief 
financial offer or its equivalent if the applicant does not otherwise 
use audited financial statements.

PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES

    4. The authority citation for part 21 continues to read as follows:

    Authority: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313, 
403, 404, 410, 602, 48 Stat. as amended, 1064, 1066, 1070-1073, 
1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102; 47 U.S.C. 151, 
154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 602; 47 
U.S.C. 552, 554.


    5. Revise Sec. 21.950 to read as follows:


Sec. 21.950  MDS subject to competitive bidding.

    Mutually exclusive initial applications for MDS licenses are 
subject to competitive bidding. The general competitive bidding 
procedures set forth in part 1, subpart Q of this chapter will apply 
unless otherwise provided in this part.


Sec. 21.951 through Sec. 21.953  [Removed and Reserved]

    6. Remove and reserve Sec. 21.951 through Sec. 21.953.

    7. Revise Sec. 21.954 to read as follows:


Sec. 21.954  Submission of upfront payments.

    Applicants who are small businesses eligible for reduced upfront 
payments will be required to submit an upfront payment amount in 
accordance with Sec. 21.960(c).


Sec. 21.955  [Removed and Reserved]

    8. Remove and reserve Sec. 21.955.

    9. Amend Sec. 21.956 by revising paragraph (b)(3) to read as 
follows:


Sec. 21.956  Filing of long-form applications or statements of 
intention.

* * * * *
    (b) * * *
    (3) An exhibit complying with Secs. 1.2110(j) of this chapter and 
21.960(e), if the winning bidder submitting the long-from application 
or statement of intention claims status as a designated entity.
* * * * *

    10. Revise Sec. 21.957 to read as follows:


Sec. 21.957  Comments on statements of intention.

    In addition to the provisions of Sec. 21.30, parties wishing to 
comment or oppose the issuance of a BTA authorization in connection 
with the filing of a statement of intention by a winning bidder must do 
so prior to the Commission's issuance of the BTA authorization.

    11. Revise Sec. 21.958 to read as follows:


Sec. 21.958  Issuance of BTA licenses.

    A winning bidder who submitted a long-form application for an MDS 
station license within its BTA service area pursuant to Sec. 21.956(a) 
will receive its BTA authorization concurrent with the grant of its MDS 
conditional station license within its BTA service area. A winning 
bidder who submitted a statement of intention with regard to its BTA 
service area pursuant to Sec. 21.956(a) will receive its BTA 
authorization following the Commission's review of its statement of 
intention. The Commission will issue a BTA authorization to a winning 
bidder within ten (10) business days following notification of receipt 
of full payment of the amount of the winning bid.


Sec. 21.959  [Removed and Reserved]

    12. Remove and reserve Sec. 21.959.

    13. Amend Sec. 21.960 by revising paragraph (b)(5) and removing 
paragraphs (d)(1), (d)(2) and (g) to read as follows:


Sec. 21.960  Designated entity provisions for MDS.

* * * * *
    (b) * * *
    (5) Unjust enrichment. If an eligible BTA authorization holder that 
utilizes installment financing under this subsection seeks to 
partition, pursuant to Sec. 21.931, a portion of its BTA containing 
one-third or more of the population of the area within its control in 
the licensed BTA to an entity not meeting the eligibility standards for 
installment payments, the holder must make full payment of the 
remaining unpaid principal and any unpaid interest accrued through the 
date of partition as a condition of approval.
* * * * *


Sec. 21.961  [Amended]

    14. Amend Sec. 21.961 by removing paragraphs (b)(2), (c) and (d) 
and by redesignating paragraph (b)(3) as (b)(2).

PART 22--PUBLIC MOBILE SERVICES

    15. The authority citation for part 22 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 222, 303, 309, and 332.


    16. Revise Sec. 22.201 to read as follows:


Sec. 22.201  Paging geographic area authorizations are subject to 
competitive bidding.

    Mutually exclusive initial applications for paging geographic area 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart and part 90 of this 
chapter.


Sec. 22.203 through Sec. 22.211  [Removed and Reserved]

    17. Remove and reserve Sec. 22.203 and Sec. 22.211.

    18. Revise Sec. 22.213 to read as follows:


Sec. 22.213  Filing of long-form applications.

    After an auction, the Commission will not accept long form 
applications for paging geographic authorizations from anyone other 
than the auction winners and parties seeking partitioned authorizations 
pursuant to agreements with auction winners under Sec. 22.221.


Sec. 22.215  [Removed and Reserved]

    19. Remove and reserve Sec. 22.215.

    20. Revise Sec. 22.217 to read as follows:


Sec. 22.217  Bidding credit for small businesses.

    A winning bidder that qualifies as a small business or a consortium 
of small businesses as defined in Sec. 22.223(b)(1)(i) may use a 
bidding credit of thirty-five (35) percent to lower the cost of its 
winning bid. A winning bidder that qualifies as a small business or 
consortium of small businesses as defined in Sec. 22.223(b)(1)(ii) may 
use a bidding credit of twenty-five (25)

[[Page 45367]]

percent to lower the cost of its winning bid.

    21. Amend Sec. 22.223 by removing paragraphs (b)(2), (b)(4), (c), 
(d) and (e), redesignating paragraph (b)(3) as (b)(2) and by revising 
newly redesignated paragraph (b)(2) to read as follows:


Sec. 22.223  Definitions concerning competitive bidding process.

* * * * *
    (b) * * *
    (2) A consortium of small businesses is a conglomerate organization 
formed as a joint venture between or among mutually independent 
business firms, each of which individually satisfies the definition of 
a small business in paragraph (b)(1)(i) or (b)(1)(ii) of this section. 
Each individual member must establish its eligibility as a small 
business, as defined in this section.

    22. Revise Sec. 22.225 to read as follows:


Sec. 22.225  Certifications, disclosures, records maintenance, and 
definitions.

    (a) Short-form applications: certifications and disclosure. In 
addition to certifications and disclosures required by part 1, subpart 
Q of this chapter, each applicant for a paging license which qualifies 
as a small business or consortium of small businesses shall append the 
following information as an exhibit to its FCC Form 175: the identity 
of the applicant's controlling interest and affiliates, and, if a 
consortium of small businesses, the members of the joint venture.
    (b) Records maintenance. All winning bidders qualifying as small 
businesses shall maintain at their principal place of business an 
updated file of ownership, revenue, and asset information, including 
any documents necessary to establish small businesses under 
Sec. 22.223. Licensees (and their successors-in-interest) shall 
maintain such files for the term of the license. Applicants that do not 
obtain the license(s) for which they applied shall maintain such files 
until the grant of such license(s) is final, or one year from the date 
of the filing of their short-form application (FCC Form 175), whichever 
is earlier.
    (c) Definitions. The terms small business and consortium of small 
businesses used in this section are defined in Sec. 22.223.

    23. Revise Sec. 22.227 to read as follows:


Sec. 22.227  Petitions to deny and limitations on settlements.

    (a) Procedures regarding petitions to deny long-form applications 
in the paging service will be governed by Sec. 1.939 of this chapter.
    (b) The consideration that an individual or an entity will be 
permitted to receive for agreeing to withdraw an application or 
petition to deny will be limited by the provisions set forth in 
Sec. 1.935 of this chapter.

    24. Revise Sec. 22.228 to read as follows:


Sec. 22.228  Cellular rural service area licenses subject to 
competitive bidding.

    Mutually exclusive initial applications for Cellular Rural Service 
Area licenses are subject to competitive bidding. The general 
competitive bidding procedures set forth in part 1, subpart Q of this 
chapter will apply unless otherwise provided in this subpart.

    25. Revise Sec. 22.960 to read as follows:


Sec. 22.960  Cellular unserved area radiotelephone licenses subject to 
competitive bidding.

    Mutually exclusive initial applications for cellular unserved area 
Phase I and Phase II licenses filed after July 26, 1993 are subject to 
competitive bidding. The general competitive bidding procedures set 
forth in part 1, subpart Q of this chapter will apply unless otherwise 
provided in this subpart.


Secs. 22.961 through 22.967  [Removed and Reserved]

    26. Remove and reserve Secs. 22.961 through 22.967.

PART 24--PERSONAL COMMUNICATIONS SERVICES

    27. The authority citation for part 24 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 309 and 332.


    28. Revise Sec. 24.301 to read as follows:


Sec. 24.301  Narrowband PCS subject to competitive bidding.

    Mutually exclusive initial applications for narrowband PCS service 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.

    29. Revise Sec. 24.321 to read as follows:


Sec. 24.321  Designated entities.

    (a) Eligibility for small business provisions. (1) A small business 
is an entity that, together with its controlling interests and 
affiliates, has average gross revenues not exceeding $ 40 million for 
the preceding three years.
    (2) A very small business is an entity that, together with its 
controlling interests and affiliates, has average gross revenues not 
exceeding $ 15 million for the preceding three years.
    (3) A consortium of small businesses (or a consortium of very small 
businesses) is a conglomerate organization formed as a joint venture 
between or among mutually independent business firms, each of which 
individually satisfies the definition in paragraph (a)(1) of this 
section (or each of which individually satisfies the definition in 
paragraph (a)(2) of this section). Where an applicant or licensee is a 
consortium of small businesses (or very small businesses), the gross 
revenues of each small business (or very small business) shall not be 
aggregated.
    (b) Bidding credits. (1) After August 7, 2000, a winning bidder 
that qualifies as a small business or a consortium of small businesses 
as defined in this section may use the bidding credit specified in 
Sec. 1.2110(f)(2)(iii) of this chapter. A winning bidder that qualifies 
as a very small business or a consortium of very small businesses as 
defined in this section may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter.
    (2)(i) Businesses owned by members of minority groups and women, 
including small businesses owned by members of minority groups and 
women, that are winning bidders on nationwide licenses on Channel 5, 
Channel 8, and Channel 11 prior to August 7, 2000 will be eligible for 
a twenty-five (25) percent bidding credit.
    (ii) Businesses owned by members of minority groups and women, 
including small businesses owned by members of minority groups and 
women, that are winning bidders on regional licenses on Channel 13 and 
Channel 17 prior to August 7, 2000 will be eligible for a forty (40) 
percent bidding credit.
    (c) Installment payments. Small businesses, including small 
businesses owned by members of minority groups and women, that are 
winning bidders on any regional license prior to August 7, 2000 will be 
eligible to pay the full amount of their winning bids in installments 
over the term of the license pursuant to the terms set forth in 
Sec. 1.2110(g) of this chapter.

    30. Revise Sec. 24.701 to read as follows:


Sec. 24.701  Broadband PCS subject to competitive bidding.

    Mutually exclusive initial applications for broadband PCS service 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.


Sec. 24.702  [Removed and Reserved]

    31. Remove and reserve Sec. 24.702.

[[Page 45368]]

Sec. 24.704  [Removed and Reserved]

    32. Remove and reserve Sec. 24.704.


Sec. 24.706  [Removed and Reserved]

    33. Remove and reserve Sec. 24.706.


Sec. 24.708  [Removed and Reserved]

    34. Remove and reserve Sec. 24.708.

    35. Revise Sec. 24.709 to read as follows:


Sec. 24.709  Eligibility for licenses for frequency Blocks C or F.

    (a) General rule for licenses offered for closed bidding. (1) No 
application is acceptable for filing and no license shall be granted to 
a winning bidder in closed bidding for frequency block C or frequency 
block F, unless the applicant, together with its affiliates and persons 
or entities that hold interests in the applicant and their affiliates, 
have had gross revenues of less than $125 million in each of the last 
two years and total assets of less than $500 million at the time the 
applicant's short-form application (Form 175) is filed.
    (2) Any licensee awarded a license won in closed bidding pursuant 
to the eligibility requirements of this section (or pursuant to 
Sec. 24.839(a)(2)) shall maintain its eligibility until at least five 
years from the date of initial license grant, except that a licensee's 
(or other attributable entity's) increased gross revenues or increased 
total assets due to nonattributable equity investments (i.e., from 
sources whose gross revenues and total assets are not considered under 
paragraph (b) of this section), debt financing, revenue from operations 
or other investments, business development, or expanded service shall 
not be considered.
    (3) Tiers. (i) For purposes of determining spectrum to which the 
eligibility requirements of this section are applicable, the BTA 
service areas (see Sec. 24.202(b)) are divided into two tiers according 
to their population as follows:
    (A) Tier 1: BTA service areas with population equal to or greater 
than 2.5 million;
    (B) Tier 2: BTA service areas with population less than 2.5 
million.
    (ii) For Auction No. 35, the population of individual BTA service 
areas will be based on the 1990 census. For auctions beginning after 
the start of Auction No. 35, the population of individual BTA service 
areas will be based on the most recent available decennial census.
    (4) Application of eligibility requirements. (i) The following 
categories of licenses will be subject to closed bidding pursuant to 
the eligibility requirements of this section in auctions that begin 
after the effective date of this paragraph.
    (A) For Tier 1 BTAs, one of the 10 MHz C block licenses (1895-1900 
MHz paired with 1975-1980 MHz);
    (B) For Tier 2 BTAs, two of the 10 MHz C block licenses (1895-1900 
MHz paired with 1975-1980 MHz; 1900-1905 MHz paired with 1980-1985 MHz) 
and all 15 MHz C block licenses.
    (ii) Notwithstanding the provisions of paragraph (a)(4)(i) of this 
section, any C block license for operation on spectrum that has been 
offered, but not won by a bidder, in closed bidding in any auction 
beginning on or after March 23, 1999, will not be subject in a 
subsequent auction to closed bidding pursuant to the eligibility 
requirements of this section.
    (5) Special rule for licensees disaggregating or returning certain 
spectrum in frequency block C.
    (i) In addition to entities qualifying for closed bidding under 
paragraph (a)(1) of this section, any entity that was eligible for and 
participated in the auction for frequency block C, which began on 
December 18, 1995, or the reauction for frequency block C, which began 
on July 3, 1996, will be eligible to bid for C block licenses offered 
in closed bidding in any reauction of frequency block C spectrum that 
begins within two years of March 23, 1999.
    (ii) In cases of merger, acquisition, or other business combination 
of entities, where each of the entities is eligible to bid for C block 
licenses offered in closed bidding in any reauction of C block spectrum 
on the basis of the eligibility exception set forth in paragraph 
(a)(5)(i) of this section, the resulting entity will also be eligible 
for the exception specified in paragraph (a)(5)(i) of this section.
    (iii) In cases of merger, acquisition, or other business 
combination of entities, where one or more of the entities are 
ineligible for the exception set forth in paragraph (a)(5)(i) of this 
section, the resulting entity will not be eligible pursuant to 
paragraph (a)(5)(i) of this section unless an eligible entity possesses 
de jure and de facto control over the resulting entity.
    (iv) The following restrictions will apply for any reauction of 
frequency block C spectrum conducted after March 24, 1998:
    (A) Applicants that elected to disaggregate and surrender to the 
Commission 15 MHz of spectrum from any or all of their frequency block 
C licenses, as provided in Amendment of the Commission's Rules 
Regarding Installment Payment Financing for Personal Communications 
Services (PCS) Licensees, Second Report and Order and Further Notice of 
Proposed Rule Making, WT Docket No. 97-82, 12 FCC Rcd 16,436 (1997), as 
modified by the Order on Reconsideration of the Second Report and 
Order, WT Docket No. 97-82, FCC 98-46 (rel. Mar. 24, 1998), will not be 
eligible to apply for such disaggregated spectrum until 2 years from 
the start of the reauction of that spectrum.
    (B) Applicants that surrendered to the Commission any of their 
frequency block C licenses, as provided in Amendment of the 
Commission's Rules Regarding Installment Payment Financing for Personal 
Communications Services (PCS) Licensees, Second Report and Order and 
Further Notice of Proposed Rule Making, WT Docket No. 97-82, 12 FCC Rcd 
16,436 (1997), as modified by the Order on Reconsideration of the 
Second Report and Order, WT Docket No. 97-82, FCC 98-46 (rel. Mar. 24, 
1998), will not be eligible to apply for the licenses that they 
surrendered to the Commission until 2 years from the start of the 
reauction of those licenses if they elected to apply a credit of 70% of 
the down payment they made on those licenses toward the prepayment of 
licenses they did not surrender.
    (b) Exceptions to general rule.
    (1) Scope. The following provisions apply to licenses acquired in 
Auctions No. 5, 10, 11 or 22, or pursuant to Sec. 24.839(a)(2) or 
(a)(3) prior to October 30, 2000.
    (i) Small business consortia. Where an applicant (or licensee) is a 
consortium of small businesses, the gross revenues and total assets of 
each small business shall not be aggregated.
    (ii) Publicly-traded corporations. Where an applicant (or licensee) 
is a publicly traded corporation with widely dispersed voting power, 
the gross revenues and total assets of a person or entity that holds an 
interest in the applicant (or licensee), and its affiliates, shall not 
be considered.
    (iii) 25 Percent equity exception. The gross revenues and total 
assets of a person or entity that holds an interest in the applicant 
(or licensee), and its affiliates, shall not be considered so long as:
    (A) Such person or entity, together with its affiliates, holds only 
nonattributable equity equaling no more than 25 percent of the 
applicant's (or licensee's) total equity;
    (B) Except as provided in paragraph (b)(1)(v) of this section, such 
person or entity is not a member of the applicant's (or licensee's) 
control group; and
    (C) The applicant (or licensee) has a control group that complies 
with the minimum equity requirements of paragraph (b)(1)(v) of this 
section, and, if the applicant (or licensee) is a

[[Page 45369]]

corporation, owns at least 50.1 percent of the applicant's (or 
licensee's) voting interests, and, if the applicant (or licensee) is a 
partnership, holds all of its general partnership interests.
    (iv) 49.9 Percent equity exception. The gross revenues and total 
assets of a person or entity that holds an interest in the applicant 
(or licensee), and its affiliates, shall not be considered so long as:
    (A) Such person or entity, together with its affiliates, holds only 
nonattributable equity equaling no more than 49.9 percent of the 
applicant's (or licensee's) total equity;
    (B) Except as provided in paragraph (b)(1)(vi) of this section, 
such person or entity is not a member of the applicant's (or 
licensee's) control group; and
    (C) The applicant (or licensee) has a control group that complies 
with the minimum equity requirements of paragraph (b)(1)(vi) of this 
section and, if the applicant (or licensee) is a corporation, owns at 
least 50.1 percent of the applicant's (or licensee's) voting interests, 
and, if the applicant (or licensee) is a partnership, holds all of its 
general partnership interests.
    (v) Control group minimum 25 percent equity requirement. In order 
to be eligible to exclude gross revenues and total assets of persons or 
entities identified in paragraph (b)(1)(iii) of this section, and 
applicant (or licensee) must comply with the following requirements:
    (A) Except for an applicant (or licensee) whose sole control group 
member is a preexisting entity, as provided in paragraph (b)(1)(v)(B) 
of this section, at the time the applicant's short-form application 
(Form 175) is filed and until at least three years following the date 
of initial license grant, the applicant's (or licensee's) control group 
must own at least 25 percent of the applicant's (or licensee's) total 
equity as follows:
    (1) At least 15 percent of the applicant's (or licensee's) total 
equity must be held by qualifying investors, either unconditionally or 
in the form of options exercisable, at the option of the holder, at any 
time and at any exercise price equal to or less than the market value 
at the time the applicant files its short-form application (Form 175);
    (2) Such qualifying investors must hold 50.1 percent of the voting 
stock and all general partnership interests within the control group, 
and must have de facto control of the control group and of the 
applicant;
    (3) The remaining 10 percent of the applicant's (or licensee's) 
total equity may be owned, either unconditionally or in the form of 
stock options, by any of the following entities, which may not comply 
with Sec. 24.720(i)(1):
    (i) Institutional Investors;
    (ii) Noncontrolling existing investors in any preexisting entity 
that is a member of the control group;
    (iii) Individuals that are members of the applicant's (or 
licensee's) management; or
    (iv) Qualifying investors, as specified in Sec. 24.720(i)(4).
    (4) Following termination of the three-year period specified in 
paragraph (b)(1)(v)(A) of this section, qualifying investors must 
continue to own at least 10 percent of the applicant's (or licensee's) 
total equity unconditionally or in the form of stock options subject to 
the restrictions in paragraph (b)(1)(v)(A)(1) of this section. The 
restrictions specified in paragraphs (b)(1)(v)(A)(3)(i) through 
(b)(1)(v)(A)(3)(iv) of this section no longer apply to the remaining 
equity after termination of such three-year period.
    (B) At the election of an applicant (or licensee) whose control 
group's sole member is a preexisting entity, the 25 percent minimum 
equity requirements set forth in paragraph (b)(1)(v)(A) of this section 
shall apply, except that only 10 percent of the applicant's (or 
licensee's) total equity must be held in qualifying investors, and that 
the remaining 15 percent of the applicant's (or licensee's) total 
equity may be held by qualifying investors, or noncontrolling existing 
investors in such control group member or individuals that are members 
of the applicant's (or licensee's) management. These restrictions on 
the identity of the holder(s) of the remaining 15 percent of the 
licensee's total equity no longer apply after termination of the three-
year period specified in paragraph (b)(1)(v)(A) of this section.
    (vi) Control group minimum 50.1 percent equity requirement. In 
order to be eligible to exclude gross revenues and total assets of 
persons or entities identified in paragraph (b)(1)(iv) of this section, 
an applicant (or licensee) must comply with the following requirements:
    (A) Except for an applicant (or licenses) whose sole control group 
member is a preexisting entity, as provided in paragraph (b)(1)(vi)(B) 
of this section, at the time the applicant's short-form application 
(Form 175) is filed and until at least three years following the date 
of initial license grant, the applicant's (or licensee's) control group 
must own at least 50.1 percent of the applicant's (or licensee's) total 
equity as follows:
    (1) At least 30 percent of the applicant's (or licensee's) total 
equity must be held by qualifying investors, either unconditionally or 
in the form of options, exercisable at the option of the holder, at any 
time and at any exercise price equal to or less than the market value 
at the time the applicant files its short-form application (Form 175);
    (2) Such qualifying investors must hold 50.1 percent of the voting 
stock and all general partnership interests within the control group 
and must have de facto control of the control group and of the 
applicant;
    (3) The remaining 20.1 percent of the applicant's (or licensee's) 
total equity may be owned by qualifying investors, either 
unconditionally or in the form of stock options not subject to the 
restrictions of paragraph (b)(1)(vi)(A)(1) of this section, or by any 
of the following entities which may not comply with Sec. 24.720(i)(1):
    (i) Institutional investors, either unconditionally or in the form 
of stock options;
    (ii) Noncontrolling existing investors in any preexisting entity 
that is a member of the control group, either unconditionally or in the 
form of stock options;
    (iii) Individuals that are members of the applicant's (or 
licensee's) management, either unconditionally or in the form of stock 
options; or
    (iv) Qualifying investors, as specified in Sec. 24.720(i)(4).
    (4) Following termination of the three-year period specified in 
paragraph (b)(1)(vi)(A) of this section, qualifying investors must 
continue to own at least 20 percent of the applicant's (or licensee's) 
total equity unconditionally or in the form of stock options subject to 
the restrictions in paragraph (b)(1)(vi)(A)(1) of this section. The 
restrictions specified in paragraph (b)(1)(vi)(A)(3)(i) through 
(b)(1)(vi)(A)(3)(iv) of this section no longer apply to the remaining 
equity after termination of such three-year period.
    (B) At the election of an applicant (or licensee) whose control 
group's sole member is a preexisting entity, the 50.1 percent minimum 
equity requirements set forth in paragraph (b)(1)(vi)(A) of this 
section shall apply, except that only 20 percent of the applicant's (or 
licensee's) total equity must be held by qualifying investors, and that 
the remaining 30.1 percent of the applicant's (or licensee's) total 
equity may be held by qualifying investors, or noncontrolling existing 
investors in such control group member or individuals that are members 
of the applicant's (or licensee's) management. These restrictions on 
the identity of the holder(s) of the remaining 30.1 percent

[[Page 45370]]

of the licensee's total equity no longer apply after termination of the 
three-year period specified in paragraph (b)(1)(vi)(A) of this section.
    (vii) Calculation of certain interests. Except as provided in 
paragraphs (b)(1)(v) and (b)(1)(vi) of this section, ownership 
interests shall be calculated on a fully diluted basis; all agreements 
such as warrants, stock options and convertible debentures will 
generally be treated as if the rights thereunder already have been 
fully exercised, except that such agreements may not be used to appear 
to terminate or divest ownership interests before they actually do so, 
in order to comply with the nonattributable equity requirements in 
paragraphs (b)(1)(iii)(A) and (b)(1)(iv)(A) of this section.
    (viii) Aggregation of affiliate interests. Persons or entities that 
hold interest in an applicant (or licensee) that are affiliates of each 
other or have an identify of interests identified in 
Sec. 1.2110(c)(5)(iii) will be treated as though they were one person 
or entity and their ownership interests aggregated for purposes of 
determining an applicant's (or licensee's) compliance with the 
nonattributable equity requirements in paragraphs (b)(1)(iii)(A) and 
(b)(1)(iv)(A) of this section.

    Example 1 for paragraph (b)(1)(viii). ABC Corp. is owned by 
individuals, A, B, and C, each having an equal one-third voting 
interest in ABC Corp. A and B together, with two-thirds of the stock 
have the power to control ABC Corp. and have an identity of 
interest. If A & B invest in DE Corp., a broadband PCS applicant for 
block C, A and B's separate interests in DE Corp. must be aggregated 
because A and B are to be treated as one person.
    Example 2 for paragraph (b)(1)(viii). ABC Corp. has subsidiary 
BC Corp., of which it holds a controlling 51 percent of the stock. 
If ABC Corp. and BC Corp., both invest in DE Corp., their separate 
interests in DE Corp. must be aggregated because ABC Corp. and BC 
Corp. are affiliates of each other.

    (2) The following provisions apply to licenses acquired pursuant to 
Sec. 24.839(a)(2) or (a)(3) on or after October 30, 2000. In addition 
to the eligibility requirements set forth at 24.709(a) and (b), 
applicants and/or licensees seeking to acquire C and/or F block 
licenses pursuant to 24.839(a)(2) or (a)(3) will be subject to the 
controlling interest standard in 1.2110(c)(2) of this chapter for 
purposes of determining unjust enrichment payment obligations. See 
Sec. 1.2111 of this chapter.
    (c) Short-form and long-form applications: Certifications and 
disclosure.
    (1) Short-form application. In addition to certifications and 
disclosures required by part 1, subpart Q of this chapter, each 
applicant to participate in closed bidding for frequency block C or 
frequency block F shall certify on its short-form application (Form 
175) that it is eligible to bid on and obtain such license(s), and (if 
applicable) that it is eligible for designated entity status pursuant 
to this section and Sec. 24.720, and shall append the following 
information as an exhibit to its Form 175:
    (i) For all applicants: The applicant's gross revenues and total 
assets, computed in accordance with paragraphs (a) of this section and 
Sec. 1.2110(b)(1) through (b)(2) of this chapter.
    (ii) For all applicants that participated in Auction Nos. 5, 10, 
11, and/or 22:
    (A) The identity of each member of the applicant's control group, 
regardless of the size of each member's total interest in the 
applicant, and the percentage and type of interest held;
    (B) The citizenship and the gender or minority group classification 
for each member of the applicant's control group if the applicant is 
claiming status as a business owned by members of minority groups and/
or women;
    (C) The status of each control group member that is an 
institutional investor, an existing investor, and/or a member of the 
applicant's management;
    (D) The identify of each affiliate of the applicant and each 
affiliate of individuals or entities identified pursuant to paragraphs 
(c)(1)(ii)(A) and (c)(1)(ii)(C) of this section;
    (E) A certification that the applicant's sole control group member 
is a preexisting entity, if the applicant makes the election in either 
paragraph (b)(1)(v)(B) or (b)(1)(vi)(B)of this section; and
    (F) For an applicant that is a publicly traded corporation with 
widely disbursed voting power:
    (1) A certified statement that such applicant complies with the 
requirements of the definition of publicly traded corporation with 
widely disbursed voting power set forth in Sec. 24.720(h);
    (2) The identify of each affiliate of the applicant.
    (iii) For each applicant claiming status as a small business 
consortium, the information specified in paragraph (c)(1)(ii) of this 
section, for each member of such consortium.
    (2) Long-form application. In addition to the requirements in 
subpart I of this part and other applicable rules (e.g., Secs. 20.6(e) 
and 20.9(b) of this chapter), each applicant submitting a long-form 
application for a license(s) for frequency block C or F shall in an 
exhibit to its long-form application:
    (i) Disclose separately and in the aggregate the gross revenues and 
total assets, computed in accordance with paragraphs (a) and (b) of 
this section, for each of the following: The applicant; the applicant's 
affiliates, the applicant's control group members; the applicant's 
attributable investors; and affiliates of its attributable investors;
    (ii) List and summarize all agreements or other instruments (with 
appropriate references to specific provisions in the text of such 
agreements and instruments) that support the applicant's eligibility 
for a license(s) for frequency block C or frequency block F and its 
eligibility under Secs. 24.711, 24.712, 24.714 and 24.720, including 
the establishment of de facto and de jure control; such agreements and 
instruments include articles of incorporation and bylaws, shareholder 
agreements, voting or other trust agreements, partnership agreements, 
management agreements, joint marketing agreements, franchise 
agreements, and any other relevant agreements (including letters of 
intent), oral or written; and
    (iii) List and summarize any investor protection agreements and 
identify specifically any such provisions in those agreements 
identified pursuant to paragraph (c)(2)(ii) of this section, including 
rights of first refusal, supermajority clauses, options, veto rights, 
and rights to hire and fire employees and to appoint members to boards 
of directors or management committees.
    (3) Records maintenance. All applicants, including those that are 
winning bidders, shall maintain at their principal place of business an 
updated file of ownership, revenue and asset information, including 
those documents referenced in paragraphs (c)(2)(ii) and (c)(2)(iii) of 
this section and any other documents necessary to establish eligibility 
under this section or under the definitions of small business and/or 
business owned by members of minority groups and/or women. Licensees 
(and their successors in interest) shall maintain such files for the 
term of the license. Applicants that do not obtain the license(s) for 
which they applied shall maintain such files until the grant of such 
license(s) is final, or one year from the date of the filing of their 
short-form application (Form 175), whichever is earlier.
    (d) Definitions. The terms consortium of small businesses, control 
group, existing investor, institutional investor, nonattributable 
equity, preexisting entity, publicly traded corporation with

[[Page 45371]]

widely dispersed voting power, qualifying investor, and small business 
used in this section are defined in Sec. 24.720.

    36. Revise Sec. 24.711 to read as follows:


Sec. 24.711  Installment payments for licenses for frequency Block C.

    Installment payments. Each eligible licensee of frequency Block C 
may pay the remaining 90 percent of the net auction price for the 
license in installment payments pursuant to Sec. 1.2110(f) of this 
chapter and under the following terms:
    (a) For an eligible licensee with gross revenues exceeding $75 
million (calculated in accordance with Sec. 1.2110(b) of this chapter 
and Sec. 24.709(b)) in each of the two preceding years (calculated in 
accordance with Sec. 1.2110(o) of this chapter), interest shall be 
imposed based on the rate for ten-year U.S. Treasury obligations 
applicable on the date the license is granted, plus 3.5 percent; 
payments shall include both principal and interest amortized over the 
term of the license.
    (b) For an eligible licensee with gross revenues not exceeding $75 
million (calculated in accordance with Sec. 1.2110(b) of this chapter 
and Sec. 24.709(b)) in each of the two preceding years, interest shall 
be imposed based on the rate for ten-year U.S. Treasury obligations 
applicable on the date the license is granted, plus 2.5 percent; 
payments shall include interest only for the first year and payments of 
interest and principal amortized over the remaining nine years of the 
license term.
    (c) For an eligible licensee that qualifies as a small business or 
as a consortium of small businesses, interest shall be imposed based on 
the rate for ten-year U.S. Treasury obligations applicable on the date 
the license is granted; payments shall include interest only for the 
first six years and payments of interest and principal amortized over 
the remaining four years of the license term.

    37. Revise 24.712 to read as follows:


Sec. 24.712  Bidding credits for licenses won for frequency Block C.

    (a) Except with respect to licenses won in closed bidding in 
auctions that begin after March 23, 1999, a winning bidder that 
qualifies as a small business or a consortium of small businesses as 
defined in Sec. 24.720(b)(1) or Sec. 24.720(b)(3) may use a bidding 
credit of fifteen percent, as specified in Sec. 1.2110(f)(2)(iii) of 
this chapter, to lower the cost of its winning bid.
    (b) Except with respect to licenses won in closed bidding in 
auctions that begin after March 23, 1999, a winning bidder that 
qualifies as a very small business or a consortium of very small 
businesses as defined in Sec. 24.720(b)(2) or Sec. 24.720(b)(4) may use 
a bidding credit of twenty-five percent as specified in 
Sec. 1.2110(f)(2)(ii) of this chapter, to lower the cost of its winning 
bid.
    (c) Unjust enrichment. The unjust enrichment provisions of 
Sec. 1.2111(d) and (e)(2) of this chapter shall not apply with respect 
to licenses acquired in either the auction for frequency block C that 
began on December 18, 1995, or the reauction of block C spectrum that 
began on July 3, 1996.

    38. Amend Sec. 24.714 by removing paragraph (c), redesignating 
paragraphs (d), (e), and (f) as paragraphs (c), (d), and (e) and 
revising newly redesignated paragraphs (c)(1), (c)(2)(i), (c)(2)(iii), 
(c)(3)(i), and (c)(3)(ii) to read as follows:


Sec. 24.714  Partitioned licenses and disaggregated spectrum.

* * * * *
    (c) * * *
    (1) Apportioning the balance on installment payment plans. When a 
winning bidder elects to pay for its license through an installment 
payment plan pursuant to Secs. 1.2110(g) of this chapter or 24.716, and 
partitions its licensed area or disaggregates spectrum to another 
party, the outstanding balance owed by the licensee on its installment 
payment plan (including accrued and unpaid interest) shall be 
apportioned between the licensee and partitionee or disaggregatee. Both 
parties will be responsible for paying their proportionate share of the 
outstanding balance to the U.S. Treasury. In the case of partitioning, 
the balance shall be apportioned based upon the ratio of the population 
of the partitioned area to the population of the entire original 
license area calculated based upon the most recent census data. In the 
case of disaggregation, the balance shall be apportioned based upon the 
ratio of the amount of spectrum disaggregated to the amount of spectrum 
allocated to the licensed area.
    (2) * * *
    (i) When a winning bidder elects to pay for its license through an 
installment payment plan, and partitions its license or disaggregates 
spectrum to another party that would not qualify for an installment 
payment plan or elects not to pay its share of the license through 
installment payments, the outstanding balance owed by the licensee 
(including accrued and unpaid interest shall be apportioned according 
to Sec. 24.714(c)(1)).
* * * * *
    (iii) The licensee shall be permitted to continue to pay its pro 
rata share of the outstanding balance and shall receive new financing 
documents (promissory note, security agreement) with a revised payment 
obligation, based on the remaining amount of time on the original 
installment payment schedule. These financing documents will replace 
the licensee's existing financing documents, which shall be marked 
``superseded'' and returned to the licensee upon receipt of the new 
financing documents. The original interest rate, established pursuant 
to Sec. 1.2110(g)(3)(i) of this chapter at the time of the grant of the 
initial license in the market, shall continue to be applied to the 
licensee's portion of the remaining government obligation. The Bureau 
will require, as a further condition to approval of the partial 
assignment application, that the licensee execute and return to the 
U.S. Treasury the new financing documents within 30 days of the Public 
Notice conditionally granting the partial assignment application. 
Failure to meet this condition will result in the automatic 
cancellation of the grant of the partial assignment application.
* * * * *
    (3) * * *
    (i) Where both parties to a partitioning or disaggregation 
agreement qualify for installment payments, the partitionee or 
disaggregatee will be permitted to make installment payments on its 
portion of the remaining government obligations, as calculated 
according to Sec. 24.714(c)(1).
    (ii) Each party will be required, as a condition to approval of the 
partial assignment application, to execute separate financing documents 
(promissory note, security agreement) agreeing to pay their pro rata 
portion of the balance due (including accrued and unpaid interest) 
based upon the installment payment terms for which they qualify under 
the rules. The financing documents must be returned to the U.S. 
Treasury within thirty (30) days of the Public Notice conditionally 
granting the partial assignment application. Failure by either party to 
meet this condition will result in the automatic cancellation of the 
grant of the partial assignment application. The interest rate, 
established pursuant to Sec. 1.2110(g)(3)(i) of this chapter at the 
time of the grant of the initial license in the market, shall continue 
to be applied to both parties' portion of the balance due. Each party 
will receive a license for their portion of the partitioned market or 
disaggregated spectrum.
* * * * *

    39. Revise Sec. 24.716 to read as follows:

[[Page 45372]]

Sec. 24.716  Installment payments for licenses for frequency Block F.

    Installment Payments. Each eligible licensee of frequency Block F 
may pay the remaining 80 percent of the net auction price for the 
license in installment payments pursuant to Sec. 1.2110(g) of this 
chapter and under the following terms:
    (a) For an eligible licensee with gross revenues exceeding $75 
million (calculated in accordance with Sec. 1.2110(b) of this chapter 
and, when applicable, Sec. 24.709(b)) in each of the two preceding 
years (calculated in accordance with Sec. 1.2110(o) of this chapter), 
interest shall be imposed based on the rate for ten-year U.S. Treasury 
obligations applicable on the date the license is granted, plus 3.5 
percent; payments shall include both principal and interest amortized 
over the term of the license;
    (b) For an eligible licensee with gross revenues not exceeding $75 
million (calculated in accordance with Sec. 1.2110(b) of this chapter 
and, when applicable, Sec. 24.709(b)) in each of the two preceding 
years (calculated in accordance with Sec. 1.2110(o) of this chapter), 
interest shall be imposed based on the rate for ten-year U.S. Treasury 
obligations applicable on the date the license is granted, plus 2.5 
percent; payments shall include interest only for the first year and 
payments of interest and principal amortized over the remaining nine 
years of the license term; or
    (c) For an eligible licensee that qualifies as a small business or 
as a consortium of small businesses, interest shall be imposed based on 
the rate for ten-year U.S. Treasury obligations applicable on the date 
the license is granted; payments shall include interest only for the 
first two years and payments of interest and principal amortized over 
the remaining eight years of the license term.

    40. Revise Sec. 24.717 to read as follows:


Sec. 24.717  Bidding credits for licenses for frequency Block F.

    (a) Except with respect to licenses won in closed bidding in 
auctions that begin after March 23, 1999, a winning bidder that 
qualifies as a small business or a consortium of small businesses as 
defined in Sec. 24.720(b)(1) or Sec. 24.720(b)(3) may use a bidding 
credit of fifteen percent, as specified in Sec. 1.2110(f)(2)(iii) of 
this chapter, to lower the cost of its winning bid.
    (b) Except with respect to licenses won in closed bidding in 
auctions that begin after March 23, 1999, a winning bidder that 
qualifies as a very small business or a consortium of very small 
businesses as defined in Sec. 24.720(b)(2) or Sec. 24.720(b)(4) may use 
a bidding credit of twenty-five percent as specified in 
Sec. 1.2110(f)(2)(ii) of this chapter, to lower the cost of its winning 
bid.

    41. Revise Sec. 24.720 to read as follows:


Sec. 24.720  Definitions.

    (a) Scope. The definitions in this section apply to Secs. 24.709 
through 24.717, unless otherwise specified in those sections.
    (b) Small business; very small business; consortia.
    (1) A small business is an entity that, together with its 
affiliates and persons or entities that hold interest in such entity 
and their affiliates, has average annual gross revenues that are not 
more than $40 million for the preceding three years.
    (2) A very small business is an entity that, together with its 
affiliates and persons or entities that hold interests in such entity 
and their affiliates, has average annual gross revenues that are not 
more than $15 million for the preceding three years.
    (3) A small business consortium is a conglomerate organization 
formed as a joint venture between or among mutually independent 
business firms, each of which individually satisfies the definition of 
a small business in paragraph (b)(1) of this section.
    (4) A very small business consortium is a conglomerate organization 
formed as a joint venture between or among mutually independent 
business firms, each of which individually satisfies the definition of 
a very small business in paragraph (b)(2) of this section.
    (c) Business Owned by Members of Minority Groups and/or Women. A 
business owned by members of minority groups and/or women is an entity:
    (1) In which the qualifying investor members of an applicant's 
control group are members of minority groups and/or women who are 
United States citizens; and
    (2) That complies with the requirements of Secs. 24.709(b)(1)(iii) 
and (b)(1)(v) or Sec. 24.709(b)(1)(iv) and (b)(vi).
    (d) Small Business Owned by Members of Minority Groups and/or 
Women: Consortium of Small Businesses Owned by Members of Minority and/
or Women. A Small business owned by members of minority groups and/or 
women is an entity that meets the definitions in both paragraphs (b) 
and (c) of this section. A consortium of small businesses owned by 
members of minority groups and/or women is a conglomerate organization 
formed as a joint venture between mutually-independent business firms, 
each of which individually satisfies the definitions in paragraphs (b) 
and (c) of this section.
    (e) Institutional Investor. An institutional investor is an 
insurance company, a bank holding stock in trust accounts through its 
trust department, or an investment company as defined in 15 U.S.C. 80a-
3(a), including within such definition any entity that would otherwise 
meet the definition of investment company under 15 U.S.C. 80a-3(a) but 
is excluded by the exemptions set forth in 15 U.S.C. 80a-3(b) and (c), 
without regard to whether such entity is an issuer of securities; 
provided that, if such investment company is owned, in whole or in 
part, by other entities, such investment company, such other entities 
and the affiliates of such other entities, taken as a whole, must be 
primarily engaged in the business of investing, reinvesting or trading 
in securities or in distributing or providing investment management 
services for securities.
    (f) Nonattributable Equity. (1) Nonattributable equity shall mean:
    (i) For corporations, voting stock or non-voting stock that 
includes no more than twenty-five percent of the total voting equity, 
including the right to vote such stock through a voting trust or other 
arrangement;
    (ii) For partnerships, joint ventures and other non-corporate 
entities, limited partnership interests and similar interests that do 
not afford the power to exercise control of the entity.
    (2) For purposes of assessing compliance with the equity limits in 
Secs. 24.709 (b)(1)(iii)(A) and (b)(1)(iv)(A), where such interests are 
not held directly in the applicant, the total equity held by a person 
or entity shall be determined by successive multiplication of the 
ownership percentages for each link in the vertical ownership chain.
    (g) Control Group. A control group is an entity, or a group of 
individuals or entities, that possesses de jure control and de facto 
control of an applicant or licensee, and as to which the applicant's or 
licensee's charters, bylaws, agreements and any other relevant 
documents (and amendments thereto) provide:
    (1) That the entity and/or its members own unconditionally at least 
50.1 percent of the total voting interests of a corporation;
    (2) That the entity and/or its members receive at least 50.1 
percent of the annual distribution or any dividends paid on the voting 
stock of a corporation;
    (3) That, in the event of dissolution or liquidation of a 
corporation, the entity and/or its members are entitled to

[[Page 45373]]

receive 100 percent of the value of each share of stock in its 
possession and a percentage of the retained earnings of the concern 
that is equivalent to the amount of equity held in the corporation; and
    (4) That, for other types of businesses, the entity and/or its 
members have the right to receive dividends, profits and regular and 
liquidating distributions from the business in proportion to the amount 
of equity held in the business.

    Note to Paragraph (g): Voting control does not always assure de 
facto control, such as for example, when the voting stock of the 
control group is widely dispersed (see e.g., 
Sec. 1.2110(c)(5)(ii)(C) of this chapter).

    (h) Publicly Traded Corporation with Widely Dispersed Voting Power. 
A publicly traded corporation with widely dispersed voting power is a 
business entity organized under the laws of the United States:
    (1) Whose shares, debt, or other ownership interests are traded on 
an organized securities exchange within the United States;
    (2) In which no person:
    (i) Owns more than 15 percent of the equity; or
    (ii) Possesses, directly or indirectly, through the ownership of 
voting securities, by contract or otherwise, the power to control the 
election of more than 15 percent of the members of the board of 
directors or other governing body of such publicly traded corporation; 
and
    (3) Over which no person other than the management and members of 
the board of directors or other governing body of such publicly traded 
corporation, in their capacities as such, has de facto control.
    (4) The term person shall be defined as in section 13(d) of the 
Securities and Exchange Act of 1934, as amended (15 U.S.C. 78(m)), and 
shall also include investors that are commonly controlled under the 
indicia of control set forth in the definition of affiliate in 
Sec. 1.2110(c)(5) of the Commission's rules.
    (i) Qualifying Investor; Qualifying Minority and/or Woman Investor.
    (1) A qualifying investor is a person who is (or holds an interest 
in) a member of the applicant's (or licensee's) control group and whose 
gross revenues and total assets, when aggregated with those of all 
other attributable investors and affiliates, do not exceed the gross 
revenues and total assets limits specified in Sec. 24.709(a), or, in 
the case of an applicant (or licensee) that is a small business, do not 
exceed the gross revenues limit specified in paragraph (b) of this 
section.
    (2) A qualifying minority and/or woman investor is a person who is 
a qualifying investor under paragraph (i)(1) of this section, who is 
(or holds an interest in) a member of the applicant's (or licensee's) 
control group and who is a member of a minority group or a woman and a 
United States citizen.
    (3) For purposes of assessing compliance with the minimum equity 
requirements of Sec. 24.709(b)(1)(v) and (b)(1)(vi), where such equity 
interests are not held directly in the applicant, interests held by 
qualifying investors or qualifying minority and/or woman investors 
shall be determined by successive multiplication of the ownership 
percentages for each link in the vertical ownership chain.
    (4) For purposes of Sec. 24.709 (b)(1)(v)(A)(3) and 
(b)(1)(vi)(A)(3), a qualifying investor is a person who is (or holds an 
interest in) a member of the applicant's (or licensee's) control group 
and whose gross revenues and total assets do not exceed the gross 
revenues and total assets limits specified in Sec. 24.709(a).
    (j) Preexisting entity; Existing investor. A preexisting entity is 
an entity that was operating and earning revenues for at least two 
years prior to December 31, 1994. An existing investor is a person or 
entity that was an owner of record of a preexisting entity's equity as 
of November 10, 1994, and any person or entity acquiring de minimis 
equity holdings in a preexisting entity after that date.

    Note to Paragraph (j): In applying the term existing investor to 
de minimis interests in preexisting entities obtained or increased 
after November 10, 1994, the Commission will scrutinize any 
significant restructuring of the preexisting entity that occurs 
after that date and will presume that any change of equity that is 
five percent or less of the preexisting entity's total equity is de 
minimis. The burden is on the applicant (or licensee) to demonstrate 
that changes that exceed five percent are not significant.

PART 25--SATELLITE COMMUNICATIONS

    42. The authority citation for part 25 continues to read as 
follows:

    Authority: 47 U.S.C. 701-744. Interprets or applies Sections 4, 
301, 302, 303, 307, 309 and 332 of the Communications Act, as 
amended, 47 U.S.C. Sections 154, 301, 302, 303, 307, 309 and 332, 
unless otherwise noted.


    43. Revise Sec. 25.401 to read as follows:


Sec. 25.401  Satellite DARS applications subject to competitive 
bidding.

    Mutually exclusive initial applications for DARS service licenses 
are subject to competitive bidding. The general competitive bidding 
procedures set forth in part 1, subpart Q of this chapter will apply 
unless otherwise provided in this part.


Sec. 25.402  [Removed and Reserved]

    44. Remove and reserve Sec. 25.402.

    45. Revise Sec. 25.404 to read as follows:


Sec. 25.404  Submission of down payment and filing of long-form 
applications.

    A high bidder that meets its down payment obligations in a timely 
manner must, within thirty (30) business days after being notified that 
it is a high bidder, submit an amendment to its pending application to 
provide the information required by Sec. 25.144.


Sec. 25.405 through Sec. 25.406  [Removed and Reserved]

    46. Remove and reserve Sec. 25.405 through Sec. 25.406.

PART 27--MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES

    47. The authority citation for part 27 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 307, 309, 332, 336, and 
337 unless otherwise noted.


    48. Amend Sec. 27.15 by removing paragraph (c) and redesignating 
paragraphs (d) and (e) as (c) and (d).
    49. Revise Sec. 27.201 to read as follows:


Sec. 27.201  WCS in the 2305-2320 MHz and 2345-2360 MHz bands subject 
to competitive bidding.

    Mutually exclusive initial applications for WCS licenses in the 
2305-2320 MHz and 2345-2360 MHz bands are subject to competitive 
bidding. The general competitive bidding procedures set forth in part 
1, subpart Q of this chapter will apply unless otherwise provided in 
this subpart.


Sec. 27.202 through Sec. 27.206  [Removed and Reserved]

    50. Remove and reserve Sec. 27.202 through Sec. 27.206.


Sec. 27.208  [Removed and Reserved]

    51. Remove and reserve Sec. 27.208.


Sec. 27.209  [Amended]

    52. Amend Sec. 27.209 by removing paragraph (d).

    53. Revise Sec. 27.210 to read as follows:


Sec. 27.210  Definitions

    (a) Scope. The definitions in this section apply to Sec. 27.209, 
unless otherwise specified in those sections.
    (b) Small Business; Very Small Business; Consortia.
    (1) A small business is an entity that, together with its 
affiliates and controlling principals, has average

[[Page 45374]]

annual gross revenues that are not more than $40 million for the 
preceding three years.
    (2) A very small business is an entity that, together with its 
affiliates and controlling principals, has average annual gross 
revenues that are not more than $15 million for the preceding three 
years.
    (3) For purposes of paragraphs (b)(1) and (b)(2) of this section, 
the personal net worth of an applicant and its affiliates is not 
included in the applicant's gross revenues.
    (4) A consortium of small businesses (or a consortium of very small 
businesses) is a conglomerate organization formed as a joint venture 
between or among mutually independent business firms, each of which 
individually satisfies the definition in paragraph (b)(1) of this 
section or each of which satisfies the definition in paragraph (b)(2) 
of this section. Where an applicant (or licensee) is a consortium of 
small businesses, the gross revenues of each small business shall not 
be aggregated.

    54. Amend Sec. 27.501 by revising paragraph (a) to read as follows:


Sec. 27.501 746-764  MHz and 776-794 MHz bands subject to competitive 
bidding.

    (a) Mutually exclusive initial applications for licenses in the 
746-764 MHz and 776-794 MHz bands are subject to competitive bidding. 
The general competitive bidding procedures set forth in part 1, subpart 
Q of this chapter will apply unless otherwise provided in this subpart.
* * * * *

    55. Revise Sec. 27.502 to read as follows:


Sec. 27.502  Designated entities.

    Eligibility for small business provisions.
    (a) A small business is an entity that, together with its 
controlling interests and affiliates, has average gross revenues not 
exceeding $40 million for the preceding three years.
    (b) A very small business is an entity that, together with its 
controlling interests and affiliates, has average gross revenues not 
exceeding $15 million for the preceding three years.
    (c) A consortium of small businesses (or a consortium of very small 
businesses) is a conglomerate organization formed as a joint venture 
between or among mutually independent business firms, each of which 
individually satisfies the definition in paragraph (a)(1) of this 
section (or each of which individually satisfies the definition in 
paragraph (a)(2) of this section).

    56. Revise Sec. 27.701 to read as follows:


Sec. 27.701 698-746  MHz bands subject to competitive bidding.

    Mutually exclusive initial applications for licenses in the 698-746 
MHz band are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.

PART 73--RADIO BROADCAST SERVICES

    57. The authority citation for part 73 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 334 and 336.

    58. Amend Sec. 73.3571 by revising paragraph (h)(4)(i) to read as 
follows:


Sec. 73.3571  Processing of AM broadcast station applications.

* * * * *
    (h) * * *
    (4)(i) The auction will be held pursuant to the procedures set 
forth in Secs. 1.2101 et seq. and 73.5000 et seq. Subsequent to the 
auction, the FCC will release a Public Notice announcing the close of 
the auction and identifying the winning bidders. Winning bidders will 
be subject to the provisions of Sec. 1.2107 of this chapter regarding 
down payments and will be required to submit the appropriate down 
payment within 10 business days of the Public Notice. Pursuant to 
Sec. 1.2107 of this chapter and Sec. 73.5005, a winning bidder that 
meets its down payment obligations in a timely manner must, within 30 
days of the release of the Public Notice announcing the close of the 
auction, submit the appropriate long-form application for each 
construction permit for which it was the winning bidder. Long-form 
applications filed by winning bidders shall include the exhibits 
identified in Sec. 73.5005(a).
* * * * *

    59. Amend Sec. 73.3572 by revising paragraphs (e) and (f) to read 
as follows:


Sec. 73.3572  Processing of TV broadcast, Class A TV broadcast, low 
power TV, TV translator and TV booster station applications.

* * * * *
    (e) The FCC will specify by Public Notice, pursuant to 
Sec. 73.5002, a period for filing applications for a new non-reserved 
television, low power TV and TV translator stations or for major 
modifications in the facilities of such authorized stations and major 
modifications in the facilities of Class A TV stations.
    (f) Applications for minor modification of Class A TV, low power 
TV, TV translator and TV booster stations may be filed at any time, 
unless restricted by the FCC, and will be processed on a ``first-come/
first-served'' basis, with the first acceptable application cutting off 
the filing rights of subsequent, competing applicants. Provided, 
however, that applications for minor modifications of Class A TV and 
those of TV broadcast stations may become mutually exclusive until 
grant of a pending Class A TV or TV broadcast minor modification 
application.
* * * * *

    60. Amend Sec. 73.3573 by revising paragraph (f)(5)(i) and 
(f)(5)(ii) to read as follows:


Sec. 73.3573  Processing FM broadcast station applications.

* * * * *
    (f) * * *
    (5) * * *
    (i) Pursuant to Sec. 1.2107 of this chapter and Sec. 73.5005, a 
winning bidder that meets its down payment obligations in a timely 
manner must, within 30 days of the release of the public notice 
announcing the close of the auction, submit the appropriate long-form 
application for each construction permit for which it was the winning 
bidder. Long-form applications filed by winning bidders shall include 
the exhibits identified in Sec. 73.5005(a).
    (ii) These applications will be processed and the FCC will 
periodically release a Public Notice listing such applications that 
have been accepted for filing and announcing a date by which petitions 
to deny must be filed in accordance with the provisions of 
Secs. 73.5006 and 73.3584 of this chapter. If the applicant is duly 
qualified, and upon examination, the FCC finds that the public 
interest, convenience and necessity will be served by the granting of 
the winning bidder's long-form application, a Public Notice will be 
issued announcing that the construction permit is ready to be granted. 
Each winning bidder shall pay the balance of its winning bid in a lump 
sum within 10 business days after release of the Public Notice, as set 
forth in Sec. 1.2109(a) of this chapter and Sec. 73.5003. Construction 
permits will be granted by the Commission following the receipt of the 
full payment.
* * * * *

    61. Amend Sec. 73.5000 by revising paragraph (a) to read as 
follows:


Sec. 73.5000  Services subject to competitive bidding.

    (a) Mutually exclusive applications for new facilities and for 
major changes to existing facilities in the following broadcast 
services are subject to competitive bidding: AM; FM; FM

[[Page 45375]]

translator; analog television; low power television; television 
translator; Instructional Television Fixed Service (ITFS); and Class A 
television. Mutually exclusive applications for minor modifications of 
Class A television and television broadcast are also subject to 
competitive bidding. The general competitive bidding procedures set 
forth in part 1, subpart Q of this chapter will apply unless otherwise 
provided in part 73 or part 74 of this chapter.
* * * * *


Sec. 73.5001  [Removed and Reserved]

    62. Remove and reserve Sec. 73.5001.

    63. Revise Sec. 73.5003 to read as follows:


Sec. 73.5003  Submission of full payments.

    If a winning bidder fails to pay the balance of its winning bid in 
a lump sum by the applicable deadline as specified by the Commission, 
it will be allowed to make payment within ten (10) business days after 
the payment deadline, provided that it also pays a late fee equal to 
five (5) percent of the amount due. Broadcast construction permits and 
ITFS licenses will be granted by the Commission following the receipt 
of full payment.


Sec. 73.5004  [Removed and Reserved]

    64. Remove and reserve Sec. 73.5004.

    65. Amend Sec. 73.5005 by revising paragraph (a) to read as 
follows:


Sec. 73.5005  Filing of long-form applications.

    (a) Within thirty (30) days following the close of bidding and 
notification to the winning bidders, each winning bidder must submit an 
appropriate long-form application (FCC Form 301, FCC Form 346, FCC Form 
349 or FCC Form 330) for each construction permit or license for which 
it was the high bidder. Long-form applications filed by winning bidders 
shall include the exhibits required by 47 CFR 1.2107(d) (concerning any 
bidding consortia or joint bidding arrangements); Sec. 1.2110(j) 
(concerning designated entity status, if applicable); and Sec. 1.2112 
(a) and (b) (concerning disclosure of ownership and real party in 
interest information, and, if applicable, disclosure of gross revenue 
information for small business applicants).
* * * * *

    66. Amend Sec. 73.5006 by revising paragraph (d) to read as 
follows:


Sec. 73.5006  Filing of petitions to deny against long-form 
applications

* * * * *
    (d) If the Commission denies or dismisses all petitions to deny, if 
any are filed, and is otherwise satisfied that an applicant is 
qualified, a public notice will be issued announcing that the broadcast 
construction permit(s) or ITFS license(s) is ready to be granted, upon 
full payment of the balance of the winning bid(s). See 47 CFR 73.5003. 
Construction of broadcast stations or ITFS facilities shall not 
commence until the grant of such permit or license to the winning 
bidder.

    67. Revise Sec. 73.5009 to read as follows:


Sec. 73.5009  Assignment or transfer of control.

    (a) The unjust enrichment provisions found at Secs. 1.2111(b) 
through (e) of this chapter shall not apply to applicants seeking 
approval of a transfer of control or assignment of a broadcast 
construction permit or license within three years of receiving such 
permit or license by means of competitive bidding.
    (b) The ownership disclosure requirements found at Sec. 1.2112(a) 
of this chapter shall not apply to an applicant seeking consent to 
assign or transfer control of a broadcast construction permit or 
license awarded by competitive bidding.

PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER 
PROGRAM DISTRIBUTIONAL SERVICES

    68. The authority citation for part 74 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 307, 336(f), 336(h) and 554.


    69. Amend Sec. 74.1233 by revising paragraph (d)(5)(i) to read as 
follows:


Sec. 74.1233  Processing FM translator and booster station 
applications.

* * * * *
    (d) * * *
    (5)(i) Pursuant to Sec. 1.2107 of this chapter, a winning bidder 
that meets its down payment obligations in a timely manner must, within 
30 days of the release of the public notice announcing the close of the 
auction, submit the appropriate long-form application for each 
construction permit for which it was the winning bidder. Long-form 
applications filed by winning bidders shall include the exhibits 
identified in Sec. 73.5005 of this chapter.
* * * * *

PART 80--STATIONS IN THE MARITIME SERVICES

    70. The authority citation for part 80 continues to read as 
follows:

    Authority: Secs. 4, 303, 307(e), 309, and 332, 48 Stat. 1066, 
1082, as amended; 47 U.S.C. 154, 303, 307(e), 309, and 332, unless 
otherwise noted. Interpret or apply 48 Stat. 1064-1068, 1081-1105, 
as amended; 47 U.S.C. 151-155, 301-609; 3 UST 3450, 3 UST 4726, 12 
UST 2377.


    71. Revise Sec. 80.1251 to read as follows:


Sec. 80.1251  Maritime communications subject to competitive bidding.

    Mutually exclusive initial applications for VPCSA licenses and AMTS 
coast station licenses are subject to competitive bidding. The general 
competitive bidding procedures set forth in part 1, subpart Q of this 
chapter will apply unless otherwise provided in this part.

    72. Amend Sec. 80.1252 by removing paragraph (b)(4), redesignating 
paragraphs (b)(5) and (d) as paragraphs (b)(3) and (c), and revising 
newly redesignated paragraph (c) to read as follows:


Sec. 80.1252  Designated entities.

* * * * *
    (c) A winning bidder that qualifies as a small business or 
consortium of small businesses as defined in Sec. 80.1252(b)(1) or 
Sec. 80.1252(b)(3) may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies 
as a very small business or consortium of very small businesses as 
defined in Sec. 80.1252(b)(2) or Sec. 80.1252(b)(3) may use the bidding 
credit specified in Sec. 1.2110(f)(2)(i) of this chapter.

PART 90--PRIVATE LAND MOBILE RADIO SERVICES

    73. The authority citation for part 90 continues to read as 
follows:

    Authority: Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of 
the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 
303(g), 303(r), 332(c)(7).


    74. Amend Sec. 90.705 by revising the first sentence to read as 
follows:


Sec. 90.705  Forms to be used.

    Phase II applications for EA, Regional, or Nationwide radio 
facilities under this subpart must be prepared in accordance with 
Secs. 1.2105 and 1.2107 of this chapter. * * *

    75. Revise Sec. 90.801 to read as follows:


Sec. 90.801  900 MHz SMR spectrum subject to competitive bidding.

    Mutually exclusive initial applications for 900 MHz SMR service 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.

[[Page 45376]]

Sec. 90.802 through Sec. 90.803  [Removed and Reserved]

    76. Remove and reserve Sec. 90.802 through Sec. 90.803.


Sec. 90.805 through Sec. 90.806  [Removed and Reserved]

    77. Remove and reserve Sec. 90.805 through Sec. 90.806.

    78. Revise Sec. 90.807 to read as follows:


Sec. 90.807  Submission of upfront payments.

    Each bidder in the 900 MHz SMR auction will be required to submit 
an upfront payment of $0.02 per MHz per pop, for the maximum number of 
licenses (in terms of MHz-pops) on which it intends to bid.


Sec. 90.808  [Removed and Reserved]

    79. Remove and reserve Sec. 90.808.

    80. Revise Sec. 90.809 to read as follows:


Sec. 90.809  License grants.

    MTA licenses pursued through competitive bidding will be granted 
pursuant to the requirements specified in Sec. 1.945 of this chapter.

    81. Revise Sec. 90.810 to read as follows:


Sec. 90.810  Bidding credits for small businesses.

    A winning bidder that qualifies as a small business or a consortium 
of small businesses, as defined in Sec. 90.814(b)(1)(i), may use a 
bidding credit of 15 percent to lower the cost of its winning bid on 
any of the blocks identified in Sec. 90.617(d), Table 4B. A winning 
bidder that qualifies as a small business or a consortium of small 
businesses, as defined in Sec. 90.814(b)(1)(ii), may use a bidding 
credit of 10 percent to lower the cost of its winning bid on any of the 
blocks identified in Sec. 90.617(d), Table 4B.


Sec. 90.812  [Removed and Reserved]

    82. Remove and reserve Sec. 90.812.

    83. Amend Sec. 90.813 by removing paragraph (c), redesignating 
paragraphs (d), (e), and (f) as paragraphs (c), (d), and (e), and by 
revising paragraph (a) and newly redesignated paragraph (c) to read as 
follows:


Sec. 90.813  Partitioned licenses and disaggregated spectrum.

    (a) Eligibility. Parties seeking approval for partitioning and 
disaggregation shall request an authorization for partial assignment of 
a license pursuant to Sec. 1.948 of this chapter.
* * * * *
    (c) Installment payments--(1) Apportioning the balance on 
installment payment plans. When a winning bidder elects to pay for its 
license through an installment payment plan pursuant to Sec. 90.812, 
and partitions its licensed area or disaggregates spectrum to another 
party, the outstanding balance owed by the licensee on its installment 
payment plan (including accrued and unpaid interest) shall be 
apportioned between the licensee and partitionee or disaggregatee. Both 
parties will be responsible for paying their proportionate share of the 
outstanding balance to the U.S. Treasury. In the case of partitioning, 
the balance shall be apportioned based upon the ratio of the population 
of the partitioned area to the population of the entire original 
license area calculated based upon the most recent census data. In the 
case of disaggregation, the balance shall be apportioned based upon the 
ratio of the amount of spectrum disaggregated to the amount of spectrum 
allocated to the licensed area.
    (2) Parties not qualified for installment payment plans.
    (i) The partitionee or disaggregatee shall, as a condition of the 
approval of the partial assignment application, pay its entire pro rata 
amount within 30 days of Public Notice conditionally granting the 
partial assignment application. Failure to meet this condition will 
result in a rescission of the grant of the partial assignment 
application.
    (ii) The licensee shall be permitted to continue to pay its pro 
rata share of the outstanding balance and shall receive new financing 
documents (promissory note, security agreement) with a revised payment 
obligation, based on the remaining amount of time on the original 
installment payment schedule. These financing documents will replace 
the licensee's existing financing documents which shall be marked 
``superseded'' and returned to the licensee upon receipt of the new 
financing documents. The original interest rate, established pursuant 
to Sec. 1.2110(g)(3)(i) of this chapter at the time of the grant of the 
initial license in the market, shall continue to be applied to the 
licensee's portion of the remaining government obligation. The Bureau 
will require, as a further condition to approval of the partial 
assignment application, that the licensee execute and return to the 
U.S. Treasury the new financing documents within 30 days of the Public 
Notice conditionally granting the partial assignment application. 
Failure to meet this condition will result in the automatic 
cancellation of the grant of the partial assignment application.
    (iii) A default on the licensee's payment obligation will only 
affect the licensee's portion of the market.
    (3) Parties qualified for installment payment plans.
    (i) Where both parties to a partitioning or disaggregation 
agreement qualify for installment payments, the partitionee or 
disaggregatee will be permitted to make installment payments on its 
portion of the remaining government obligation, as calculated according 
to paragraph (d)(1) of this section.
    (ii) Each party will be required, as a condition to approval of the 
partial assignment application, to execute separate financing documents 
(promissory note, security agreement) agreeing to pay their pro rata 
portion of the balance due (including accrued and unpaid interest) 
based upon the installment payment terms for which they qualify under 
the rules. The financing documents must be returned to the U.S. 
Treasury within thirty (30) days of the Public Notice conditionally 
granting the partial assignment application. Failure by either party to 
meet this condition will result in the automatic cancellation of the 
grant of the partial assignment application. The interest rate, 
established pursuant to Sec. 1.2110(g)(3)(i) of this chapter at the 
time of the grant of the initial license in the market, shall continue 
to be applied to both parties' portion of the balance due. Each party 
will receive a license for their portion of the partitioned market or 
disaggregated spectrum.
    (iii) A default on an obligation will only affect that portion of 
the market area held by the defaulting party.
    (iv) Partitionees and disaggregatees that qualify for installment 
payment plans may elect to pay some of their pro rata portion of the 
balance due in a lump sum payment to the U.S. Treasury and to pay the 
remaining portion of the balance due pursuant to an installment payment 
plan.
* * * * *

    84. Amend Sec. 90.814 by removing paragraphs (b)(2), (c), (d), (e), 
(f), (g), and (h), redesignating paragraph (b)(3) as (b)(2), and by 
revising newly redesignated paragraph (b)(2) to read as follows:


Sec. 90.814  Definitions.

* * * * *
    (b) * * *
    (2) A small business consortium is a conglomerate organization 
formed as a joint venture between or among mutually independent 
business firms, each of which individually satisfies either definition 
of a small business in paragraph (b)(1) of this section. In a 
consortium of small businesses, each individual member must establish 
its eligibility as a small business, as defined in this section.

[[Page 45377]]


    85. Revise Sec. 90.815 to read as follows:


Sec. 90.815  Certifications, disclosures, records maintenance, and 
definitions.

    (a) Short-Form Applications: certifications and disclosure. Each 
applicant for an MTA license which qualifies as a small business or 
consortium of small businesses shall append the following information 
as an exhibit to its short-form application (Form 175): The identity of 
the applicant's affiliates, persons or entities that hold attributable 
interests in such entity, and their affiliates, and, if a consortium of 
small businesses, the members in the joint venture.
    (b) Records maintenance. All winning bidders qualifying as small 
businesses, shall maintain at their principal place of business an 
updated file of ownership, revenue and asset information, including any 
documents necessary to establish eligibility as a small business and/or 
consortium of small businesses under Sec. 90.814. Licensees (and their 
successors in interest) shall maintain such files for the term of the 
license.
    (c) Definitions. The terms affiliate, business owned by members of 
minority groups and/or women, consortium of small businesses, gross 
revenues, members of minority groups, nonattributable equity, small 
business and total assets used in this section are defined in 
Sec. 90.814.

    86. Revise Sec. 90.901 to read as follows:


Sec. 90.901 900  MHz SMR spectrum subject to competitive bidding.

    Mutually exclusive initial applications for 800 MHz band licenses 
in Spectrum Blocks A through V are subject to competitive bidding. The 
general competitive bidding procedures set forth in part 1, subpart Q 
of this chapter will apply unless otherwise provided in this subpart.


Sec. 90.902  [Removed and Reserved]

    87. Remove and reserve Sec. 90.903.

    88. Revise Sec. 90.903 to read as follows:


Sec. 90.903  Competitive bidding mechanisms.

    (a) Sequencing. The Wireless Telecommunications Bureau will 
establish and may vary the sequence in which 800 MHz SMR licenses for 
Spectrum Blocks A through V will be auctioned.
    (b) Grouping. (1) All EA licenses for Spectrum Blocks A through V 
will be auctioned simultaneously, unless the Wireless 
Telecommunications Bureau announces, by Public Notice prior to the 
auction, an alternative method of grouping these licenses for auction.
    (2) Spectrum blocks D through V. All EA licenses for Spectrum 
Blocks D through V will be auctioned by the following Regions:
    (i) Region 1 (Northeast): The Northeast Region consists of the 
following MTAs: Boston-Providence, Buffalo-Rochester, New York, 
Philadelphia, and Pittsburgh.
    (ii) Region 2 (South): The South Region consists of the following 
MTAs: Atlanta, Charlotte-Greensboro-Greenville-Raleigh, Jacksonville, 
Knoxville, Louisville-Lexington-Evansville, Nashville, Miami-Fort 
Lauderdale, Richmond-Norfolk, Tampa-St. Petersburg-Orlando, and 
Washington-Baltimore; and, Puerto Rico and United States Virgin 
Islands.
    (iii) Region 3 (Midwest): The Midwest Region consists of the 
following MTAs: Chicago, Cincinnati-Dayton, Cleveland, Columbus, Des 
Moines-Quad Cities, Detroit, Indianapolis, Milwaukee, Minneapolis-St. 
Paul, and Omaha.
    (iv) Region 4 (Central): The Central Region consists of the 
following MTAs: Birmingham, Dallas-Fort Worth, Denver, El Paso-
Albuquerque, Houston, Kansas City, Little Rock, Memphis-Jackson, New 
Orleans-Baton Rouge, Oklahoma City, San Antonio, St. Louis, Tulsa, and 
Wichita.
    (v) Region 5 (West): The West Region consists of the following 
MTAs: Honolulu, Los Angeles-San Diego, Phoenix, Portland, Salt Lake 
City, San Francisco-Oakland-San Jose, Seattle (including Alaska), and 
Spokane-Billings; and, American Samoa, Guam, and the Northern Mariana 
Islands.


Sec. 90.905 through Sec. 90.908  [Removed and Reserved]

    89. Remove and reserve Sec. 90.905 through Sec. 90.908.

    90. Revise Sec. 90.909 to read as follows:


Sec. 90.909  License grants.

    EA licenses pursued through competitive bidding procedures will be 
granted pursuant to the requirements specified in Sec. 1.945 of this 
chapter.

    91. Revise Sec. 90.910 to read as follows:


Sec. 90.910  Bidding credits.

    A winning bidder that qualifies as a very small business or a 
consortium of very small businesses, as defined in Secs. 90.912(b)(2) 
and (b)(4), may use a bidding credit of 35 percent to lower the cost of 
its winning bid on Spectrum Blocks A through V. A winning bidder that 
qualifies as a small business or a consortium of small businesses, as 
defined in Secs. 90.912(b)(1) or (b)(3), may use a bidding credit of 25 
percent to lower the cost of its winning bid on Spectrum Blocks A 
through V.


Sec. 90.911  [Amended]

    92. Amend Sec. 90.911 by removing paragraph (c) and redesignating 
paragraphs (d), (e), (f) and (g) as (c), (d), (e) and (f).

    93. Amend Sec. 90.912 by removing paragraphs (b)(3), (c) and (d), 
redesignating paragraphs (b)(4) and (b)(5) as paragraphs (b)(3) and 
(b)(4) and revising paragraphs (b)(1) and (b)(2) to read as follows:


Sec. 90.912  Definitions.

* * * * *
    (b) * * *
    (1) A small business is an entity that together with its affiliates 
and controlling interests, has average gross revenues that do not 
exceed $15 million for the three preceding years; or
    (2) A very small business is an entity that together with its 
affiliates and controlling interests, has average gross revenues that 
do not exceed $3 million for the three preceding years.
* * * * *

    94. Revise Sec. 90.913 to read as follows:


Sec. 90.913  Certifications, disclosures, records maintenance, and 
definitions.

    (a) Short-form applications: certifications and disclosure. Each 
applicant for an EA license which qualifies as a small business or 
consortium of small businesses under Sec. 90.912(b) shall append as an 
exhibit to its short-form application (FCC Form 175): The identity of 
the applicant's affiliates and controlling principals, and, if a 
consortium of small businesses (or a consortium of very small 
businesses), the members of the joint venture.
    (b) Records maintenance. All winning bidders qualifying as small 
businesses or very small businesses, shall maintain at their principal 
place of business an updated file of ownership, revenue and asset 
information, including any document necessary to establish eligibility 
as a small business, very small business and/or consortium of small 
businesses (or consortium of very small businesses) under Sec. 90.912. 
Licensees (and their successors in interest) shall maintain such files 
for the term of the license.
    (c) Definitions. The terms small business, very small business, 
consortium of small businesses, and consortium of very small businesses 
used in this section are defined in Sec. 90.912.

    95. Revise Sec. 90.1001 to read as follows:


Sec. 90.1001  220 MHz service subject to competitive bidding.

    Mutually exclusive initial applications for 200 MHz geographic

[[Page 45378]]

area licenses are subject to competitive bidding. The general 
competitive bidding procedures set forth in part 1, subpart Q of this 
chapter will apply unless otherwise provided in this subpart.


Sec. 90.1003 through Sec. 90.1015  [Removed and Reserved]

    96. Remove and reserve Sec. 90.1003 through Sec. 90.1015.
    97. Revise Sec. 90.1017 to read as follows:


Sec. 90.1017  Bidding credits for small businesses and very small 
businesses.

    A winning bidder that qualifies as a small business or a consortium 
of small businesses, as defined in Secs. 90.1021(b)(1) or 
90.1021(b)(3), may use a bidding credit of 25 percent to lower the cost 
of its winning bid. A winning bidder that qualifies as a very small 
business or a consortium of very small businesses, as defined in 
Secs. 90.1021(b)(2) or 90.1021(b)(3), may use a bidding credit of 35 
percent to lower the cost of its winning bid.

    98. Amend Sec. 90.1021, by removing paragraphs (b)(3), (c) and (d), 
redesignating paragraph (b)(4) as paragraph (b)(3) and revising 
paragraphs (b)(1) and (b)(2) to read as follows:


Sec. 90.1021  Definitions concerning competitive bidding process.

* * * * *
    (b) * * *
    (1) A small business is an entity that, together with its 
affiliates and controlling interests, has average gross revenues that 
are not more than $15 million for the preceding three years.
    (2) A very small business is an entity that, together with its 
affiliates and controlling interests, has average gross revenues that 
are not more than $3 million for the preceding three years.
* * * * *

    99. Revise Sec. 90.1023 to read as follows:


Sec. 90.1023  Certifications, disclosures, and records maintenance.

    (a) Short-form applications: certifications and disclosure. In 
addition to certifications and disclosures required in part 1, subpart 
Q, of this chapter, each applicant for a 220 MHz service geographic 
area license which qualifies as a small business, very small business, 
consortium of small businesses, or consortium of very small businesses, 
shall append the following information as an exhibit to its FCC Form 
175: the identity of the applicant's affiliates and controlling 
interests, and, if a consortium of small businesses (or consortium of 
very small businesses), the members of the joint venture.
    (b) Records maintenance. All winning bidders qualifying as small 
businesses or very small businesses shall maintain at their principal 
place of business an updated file of ownership, revenue, and asset 
information, including any documents necessary to establish eligibility 
as a small business or very small business and/or consortium of small 
businesses (or consortium of very small businesses) under Sec. 90.1021. 
Licensees (and their successors-in-interest) shall maintain such files 
for the term of the license. Applicants that do not obtain the 
license(s) for which they applied shall maintain such files until the 
grant of such license(s) is final, or one year from the date of the 
filing of their short-form application (FCC Form 175), whichever is 
earlier.
    (c) Definitions. The terms affiliate, small business, very small 
business, consortium of small businesses (or consortium of very small 
businesses), and gross revenues used in this section are defined in 
Sec. 90.1021.

    100. Revise Sec. 90.1025 to read as follows:


Sec. 90.1025  Limitations on settlements.

    The consideration that an individual or an entity will be permitted 
to receive for agreeing to withdraw an application or a petition to 
deny will be limited by the provisions set forth in Sec. 1.2105(c) of 
this chapter.

    101. Revise Sec. 90.1101 to read as follows:


Sec. 90.1101  Location and Monitoring Service subject to competitive 
bidding.

    Mutually exclusive initial applications for multilateration 
Location and Monitoring Service licenses are subject to competitive 
bidding. The general competitive bidding procedures set forth in part 
1, subpart Q of this chapter will apply unless otherwise provided in 
this subpart.

    102. Amend Sec. 90.1103 by removing paragraphs (b)(3), (b)(4), and 
(c), redesignating paragraphs (b)(5) and (d) as paragraphs (b)(3) and 
(c), and revising newly redesignated paragraph (c) to read as follows:


Sec. 90.1103  Designated entities.

* * * * *
    (c) A winning bidder that qualifies as a small business or a 
consortium of small businesses as defined in paragraphs (b)(1) or 
(b)(3) of this section may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies 
as a very small businesses or a consortium of very small businesses as 
defined in paragraph (b)(2) or (b)(3) of this section may use the 
bidding credit specified in Sec. 1.2110(f)(2)(i) of this chapter.

PART 95--PERSONAL RADIO SERVICES

    103. The authority citation for part 95 continues to read as 
follows:

    Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47 
U.S.C. 154, 303.


    104. Amend Sec. 95.816 by removing paragraphs (c)(3), (c)(4), and 
(d), redesignating paragraphs (c)(5), (e), and(f) as paragraphs (c)(3), 
(d), and (e), revising paragraph (a) and newly redesignated paragraphs 
(d) and (e) to read as follows:


Sec. 95.816  Competitive bidding proceedings.

    (a) Mutually exclusive initial applications for 218-219 MHz Service 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this part.
* * * * *
    (d) Bidding credits. A winning bidder that qualifies as a small 
business or a consortium of small businesses as defined in this 
subsection may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies 
as a very small business or a consortium of very small businesses as 
defined in this subsection may use the bidding credit specified in 
accordance with Sec. 1.2110(f)(2)(i) of this chapter.
    (e) Winning bidders in Auction No. 2, which took place on July 28-
29, 1994, that, at the time of auction, met the qualifications under 
the Commission's rules then in effect, for small business status will 
receive a twenty-five percent bidding credit pursuant to Amendment of 
Part 95 of the Commission's Rules to Provide Regulatory Flexibility in 
the 218-219 MHz Service, Report and Order and Memorandum Opinion and 
Order, FCC 99-239 (released September 10, 1999).

    105. Amend Sec. 95.823 by removing paragraph (c)(1), redesignating 
paragraphs (c)(2) and (c)(3) as paragraphs (c)(1) and (c)(2), and 
revising newly redesignated paragraph (c)(1)(iii) to read as follows:


Sec. 95.823  Geographic partitioning and spectrum disaggregation.

* * * * *
    (c) * * *
    (1) * * *
    (i) * * *
    (ii) * * *
    (iii) The partitionor or disaggregator shall be permitted to 
continue to pay its pro rata share of the outstanding balance and, if 
applicable, shall receive loan documents evidencing the partitioning 
and disaggregation. The original interest

[[Page 45379]]

rate, established pursuant to Sec. 1.2110(g)(3)(i) of this chapter at 
the time of the grant of the initial license in the market, shall 
continue to be applied to the partitionor's or disaggregator's portion 
of the remaining government obligation.
* * * * *

PART 100--DIRECT BROADCAST SATELLITE SERVICE

    106. The authority citation for part 100 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 335, 309 and 554.


    107. Revise Sec. 100.71 to read as follows:


Sec. 100.71  DBS subject to competitive bidding.

    Mutually exclusive initial applications for DBS service licenses 
are subject to competitive bidding. The general competitive bidding 
procedures set forth in part 1, subpart Q of this chapter will apply 
unless otherwise provided in this part.


Sec. 100.72 through Sec. 100.76  [Removed and Reserved]

    108. Remove and reserve Sec. 100.72 through Sec. 100.76.


Sec. 100.78 through Sec. 100.79  [Removed and Reserved]

    109. Remove and reserve Sec. 100.78 through Sec. 100.79.

PART 101--FIXED MICROWAVE SERVICES

    110. The authority citation for part 101 continues to read as 
follows:

    Authority: 47 U.S.C. 154, 303.


    111. Amend Sec. 101.56 by revising paragraph (i) to read as 
follows:


Sec. 101.56  Partitioned service areas (PSAs) and disaggregated 
spectrum.

* * * * *
    (i) Licensees, including those using bidding credits in a 
competitive bidding procedure, shall have the authority to partition 
service areas or disaggregate spectrum.


Sec. 101.531  [Removed and Reserved]

    112. Remove and reserve Sec. 101.531.


Sec. 101.535  [Amended]

    113. Amend Sec. 101.535 by removing paragraphs (a)(1) and (c), 
redesignating paragraphs (a)(2), (a)(3), (d), and (e) as (a)(1), 
(a)(2), (c), and (d).

    114. Revise Sec. 101.537 to read as follows:


Sec. 101.537  24 GHz band subject to competitive bidding.

    Mutually exclusive initial applications for 24 GHz band licenses 
are subject to competitive bidding. The general competitive bidding 
procedures set forth in part 1, subpart Q of this chapter will apply 
unless otherwise provided in this subpart.

    115. Amend Sec. 101.538 by removing paragraphs (a)(5), (a)(6), 
(a)(8), and (b), and redesignating paragraphs (a)(7) and (c) as 
paragraphs (a)(5) and (b), and revising newly redesignated paragraphs 
(a)(5) and (b) to read as follows:


Sec. 101.538  Designated entities.

    (a) * * *
    (5) A consortium of very small businesses, a consortium of small 
businesses, or a consortium of entrepreneurs is a conglomerate 
organization formed as a joint venture between or among mutually 
independent business firms, each of which individually satisfies the 
applicable definition in paragraphs (a)(1), (a)(2) or (a)(3) of this 
section. Where an applicant or licensee is a consortium of very small 
businesses, a consortium of small businesses, or a consortium of 
entrepreneurs, the gross revenues of each very small business, small 
business, or entrepreneur shall not be aggregated.
* * * * *
    (b) Bidding credits. A winning bidder that qualifies as a very 
small business or a consortium of very small businesses as defined in 
this section may use the bidding credit specified in 
Sec. 1.2110(f)(2)(i) of this chapter. A winning bidder that qualifies 
as a small business or a consortium of small businesses as defined in 
this section may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies 
as an entrepreneur or a consortium of entrepreneurs as defined in this 
section may use the bidding credit specified in Sec. 1.2110(f)(2)(iii) 
of this chapter.

    116. Revise Sec. 101.1101 to read as follows:


Sec. 101.1101  LMDS service subject to competitive bidding.

    Mutually exclusive initial applications for LMDS licenses are 
subject to competitive bidding procedures. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.


Sec. 101.1102 through Sec. 101.1105  [Removed and Reserved]

    117. Remove and reserve Sec. 101.1102 through Sec. 101.1105.

    118. Revise Sec. 101.1107 to read as follows:


Sec. 101.1107  Bidding credits for very small businesses, small 
businesses and entrepreneurs.

    (a) A winning bidder that qualifies as a very small business or a 
consortium of very small businesses pursuant to Sec. 101.1112 may use a 
bidding credit of 45 percent to lower the cost of its winning bid.
    (b) A winning bidder that qualifies as a small business or a 
consortium of small businesses pursuant to Sec. 101.1112 may use a 
bidding credit of 35 percent to lower the cost of its winning bid.
    (c) A winning bidder that qualifies as an entrepreneur or a 
consortium of entrepreneurs pursuant to Sec. 101.1112 may use a bidding 
credit of 25 percent to lower the cost of its winning bid.
    (d) The bidding credits referenced in paragraphs (a), (b) and (c) 
of this section are not cumulative.

    119. Revise Sec. 101.1109 to read as follows:


Sec. 101.1109  Certifications, disclosures, and records maintenance.

    (a) Short-form applications: certifications and disclosure. In 
addition to certifications and disclosures required in part 1, subpart 
Q, of this chapter, each applicant for an LMDS license which qualifies 
as a very small business, small business or entrepreneurs pursuant to 
Sec. 101.1112 shall append the following information as an exhibit to 
its short-form applications (FCC Form 175): The identities of the 
applicant's affiliates and controlling interests.
    (b) Records maintenance. All winning bidders qualifying as very 
small businesses, small businesses or entrepreneurs shall maintain at 
their principal place of business an updated file of ownership, 
revenue, and asset information, including any document necessary to 
establish eligibility as a very small business, small business or 
entrepreneur. Licensees (and their successors-in-interest) shall 
maintain such files for the term of the license. Applicants that do not 
obtain the license(s) for which they applied shall maintain such files 
until the grant of such license(s) is final, or one year from the date 
of the filing of their short-form application (FCC Form 175), whichever 
is earlier.


Sec. 101.1110  [Removed and Reserved]

    120. Remove and reserve Sec. 101.1110.

    121. Revise Sec. 101.1112 to read as follows:

[[Page 45380]]

Sec. 101.1112  Definitions.

    (a) Scope. The definitions in this section apply to Secs. 101.1101 
through 101.1112, unless otherwise specified in those sections.
     (b) Very small business. A very small business is an entity that, 
together with its affiliates and controlling interests, has average 
gross revenues for the three preceding years of not more than $15 
million.
    (c) Small business. A small business is an entity that, together 
with its affiliates and controlling interests, has average gross 
revenues for the three preceding years of more than $15 million but not 
more than $40 million.
    (d) Entrepreneur. An entrepreneur is an entity that, together with 
its affiliates and controlling interests, has average gross revenues 
for the three preceding years of more than $40 million but not more 
than $75 million.
    (e) For purposes of determining whether an entity meets the 
definition of very small business, small business or entrepreneur, the 
gross revenues of the applicant, its affiliates and controlling 
interests shall be considered on a cumulative basis and aggregated.
    (f) Consortium. A consortium of very small businesses, small 
businesses or entrepreneurs is a conglomerate organization formed as a 
joint venture between or among mutually independent business firms, 
each of which individually satisfies the definition of a very small 
business, small business or entrepreneur. Each individual member must 
establish its eligibility as a very small business, small business or 
entrepreneur. Where an applicant (or licensee) is a consortium of very 
small businesses, small businesses or entrepreneurs, the gross revenues 
of each business shall not be aggregated.

    122. Revise Sec. 101.1201 to read as follows:


Sec. 101.1201  38.6-40.0 GHz subject to competitive bidding.

    Mutually exclusive initial applications for 38.6-40.0 GHz band 
licenses are subject to competitive bidding. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.


Sec. 101.1202 through Sec. 101.1207  [Removed and Reserved]

    123. Remove and reserve Sec. 101.1202 through Sec. 101.1207.

    124. Revise Sec. 101.1208 to read as follows:


Sec. 101.1208  Bidding credits for small businesses.

    A winning bidder that qualifies as a small business or a consortium 
of small businesses, (as defined in Sec. 101.1209(b)(1)(i) may use a 
bidding credit of 25 percent to lower the cost of its winning bid on 
any of the licenses in this part. A winning bidder that qualifies as a 
very small business or a consortium of very small businesses, as 
defined in Sec. 101.1209(b)(1)(ii), may use a bidding credit of 35 
percent to lower the cost of its winning bid on any of the licenses in 
this part.

    125. Amend Sec. 101.1209 by removing paragraphs (b)(2), (c), (d), 
and (e), and redesignating paragraph (b)(3) as (b)(2), and revising 
newly redesignated paragraph (b)(2) to read as follows:


Sec. 101.1209  Definitions.

* * * * *
    (b) * * *
    (2) A small business consortium is a conglomerate organization 
formed as a joint venture between or among mutually independent 
business firms, each of which individually satisfies either definition 
of a small business in paragraphs (b)(1) of this section.

    126. Revise Sec. 101.1317 to read as follows:


Sec. 101.1317  Competitive bidding procedures for mutually exclusive 
MAS EA applications.

    Mutually exclusive initial applications for licenses in the 
portions of the MAS bands licensed on a geographic area basis are 
subject to competitive bidding procedures. The general competitive 
bidding procedures set forth in part 1, subpart Q of this chapter will 
apply unless otherwise provided in this subpart.

    127. Amend Sec. 101.1319 by removing paragraph (c) and revising 
paragraph (b) to read as follows:


Sec. 101.1319  Competitive bidding provisions.

* * * * *
    (b) Bidding credits. A winning bidder that qualifies as a small 
business, as defined in this section, or a consortium of small 
businesses, may use the bidding credit specified in 
Sec. 1.2110(f)(2)(ii) of this chapter. A winning bidder that qualifies 
as a very small business, as defined in this section, or a consortium 
of very small businesses, may use the bidding credit specified in 
Sec. 1.2110(f)(2)(i) of this chapter.


Sec. 101.1323  [Amended]

    128. Amend Sec. 101.1323 by removing paragraph (c) and 
redesignating paragraphs (d) and (e) as paragraphs (c) and (d).

[FR Doc. 02-16096 Filed 7-8-02; 8:45 am]
BILLING CODE 6712-01-P