[Code of Federal Regulations] [Title 47, Volume 5, Parts 80 to End] [Revised as of October 1, 1999] From the U.S. Government Printing Office via GPO Access [CITE: 47CFR95.816] [Page 547-549] TITLE 47--TELECOMMUNICATION PART 95--PERSONAL RADIO SERVICES--Table of Contents Subpart F--218-219 MHz Service Sec. 95.816 Competitive bidding proceedings. (a) Mutually exclusive 218-219 MHz Service initial applications are subject to competitive bidding. (b) The General Procedures set forth in 47 CFR part 1, subpart Q are applicable to competitive bidding proceedings used to select among mutually exclusive applicants for initial 218-219 MHz Service licenses. (c) The specific procedures applicable to auctioning particular 218- 219 MHz Service licenses will be set forth by Public Notice. Generally, the following competitive bidding procedures will be used to auction mutually exclusive 218-219 MHz Service licenses. The Commission, however, may design and test alternative procedures. (1) Competitive bidding design options and mechanisms. The Wireless Telecommunications Bureau will select competitive bidding design(s) and mechanisms in accordance with Secs. 1.2103 and 1.2104 of this chapter. If simultaneous multiple round bidding is used, the Wireless Telecommunications Bureau has the discretion to vary the duration of the bidding rounds or the interval at which bids are accepted at any time before or during the course of the auction. (2) Forms. (i) Applicants must submit short-form applications (FCC Form 175) as specified in Commission Public Notices. Minor deficiencies may be corrected prior to the auction. Major modifications such as changes in ownership, failure to sign an application or failure to submit required certifications will result in the dismissal of the application. See 1.2105(a) and (b) of this chapter. (ii) Applicants must submit a long-form application (FCC Form 601) within ten (10) business days after being notified that it is the winning bidder for a license. See Sec. 1.2107(c) and (d) of this chapter. (3) Upfront payments. Each eligible bidder in the 218-219 MHz Service auction will be required to submit an upfront payment of $9,000 per MSA license and $2,500 per RSA license for the maximum number of licenses on which it intends to bid pursuant to section 1.2106 of this chapter and procedures specified by Public Notice. (4) Down payments. See Sec. 1.2107(b) of this chapter. (5) Full payment. Auction winners, except for small businesses eligible for installment payments, must pay the balance of their winning bids in a lump sum within five (5) business days following the grant of their license(s). [[Page 548]] The grant of a license(s) to an auction winner(s) will be conditioned on the timely payment of all monies due the Commission. See 47 CFR 1.2109(a). (6) Default or disqualification. See Sec. 1.2104 (g)(2) of this chapter. (d) Designated entities. Designated entities are small businesses, and businesses owned by members of minority groups and/or women, as defined in 47 CFR 1.2110(b). (1) Bidding credits. (i) A winning bidder that qualifies as a small business (as defined in 95.816(d)(4)(i) of this section) may use a bidding credit of 10 percent to lower the cost of its winning bid. (ii) A winning bidder that qualifies as a very small business (as defined in 95.816(d)(4)(ii) of this section) may use a bidding credit of 15 percent to lower the cost of its winning bid. (2) Installment payments. Each licensee that qualifies as a small business may pay the remaining 80 percent of the net auction price in quarterly installment payments pursuant to Sec. 1.2110(e) of this chapter. Licensees who qualify for installment payments are entitled to pay their winning bid amount in installments over the term of the license, with interest charges to be fixed at the time of licensing at a rate equal to the rate for five-year U.S. Treasury obligations. Payments shall include interest only for the first two years and payments of interest and principal amortized over the remaining three years of the license term. A license issued to an eligible small business that elects installment payments shall be conditioned on the full and timely performance of the license holder's quarterly payments. (3) Audits. (i) Applicants and licensees claiming eligibility under this section 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. (ii) Consent to such audits is part of the certification included in the short-form application (Form 175). Such consent shall include consent to the audit of the applicant's or licensee's books, documents, and other material (including accounting procedures and practices) regardless of form or type, sufficient to confirm that such applicant's or licensee's representations are, and remain, accurate. Such consent shall include inspection at all reasonable times of the facilities, or parts thereof, engaged in providing and transacting business, or keeping records regarding licensed 218-219 MHz Service and shall also include consent to the interview of principals, employees, customers and suppliers of the applicant or licensee. (4) Definitions--(i) Small business. A 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. (ii) Very small business. 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 $3 million for the preceding three years. (iii) Gross revenues. Gross revenues shall mean all income received by an entity, whether earned or passive, before any deductions are made for costs of doing business (e.g., cost of goods sold), as evidenced by audited financial statements for the relevant number of most recently completed calendar years, or, if audited financial statements were not prepared on a calendar-year basis, for the most recently completed fiscal years preceding the filing of the applicant's short-form application (Form 175). If an entity was not in existence for all or part of the relevant period, gross revenues shall be evidenced by the audited financial statements of the entity's predecessor-in-interest or, if there is no identifiable predecessor-in-interest, unaudited financial statements certified by the applicant as accurate. When an applicant does not otherwise use audited financial statements, its gross revenues may be certified by its chief financial officer or its equivalent. (iv) Controlling interest shall be attributable. Controlling interest means majority voting equity ownership, any general partnership interest, or any [[Page 549]] means of actual working control (including negative control) over the operation of the licensee, in whatever manner exercised. (v) Multiplier. Ownership interests that are held indirectly by any party through one or more intervening corporations will be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain and application of the relevant attribution benchmark to the resulting product, except that if the ownership percentage for an interest in any link in the chain exceeds 50 percent or represents actual control, it shall be treated as if it were a 100 percent interest. (5) A licensee's (or other attributable entity's) increased gross revenues due to nonattributable equity investments (i.e., from sources whose gross revenues are not considered under 95.816(d)(4)(iv) of this section), debt financing, revenue from operations or other investments, business development or expanded service shall not be considered to result in the licensee losing eligibility for preferences as a small business or very small business under this section. (e) Unjust enrichment. See Sec. 1.2111 of this chapter. [59 FR 24957, May 13, 1994, as amended at 61 FR 49075, Sept. 18, 1996; 61 FR 60205, Nov. 27, 1996; 63 FR 2350, Jan. 15, 1998; 63 FR 68977, Dec. 14, 1998]