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Federal Register / Vol. 86, No. 39 / Tuesday, March 2, 2021 / Proposed Rules
III. Implementation of Part 1
Competitive Bidding Procedures 7. In the 2.5 GHz Report and Order, the Commission decided to conduct any auction of new 2.5 GHz band licenses in conformity with the amended part 1
rules. The Commissions part 1 rules require each applicant seeking to bid to acquire licenses in a spectrum auction to provide certain information in a short-form application FCC Form 175, including ownership details and numerous certifications. Part 1, subpart Qs, competitive bidding rules also contain a framework for the implementation of a competitive bidding design, application and certification procedures, reporting requirements, and the prohibition of certain communications. The rules and requirements proposed in this section would apply in either a single bidding round auction or an SMR auction, unless clearly indicated otherwise.

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A. Certification of Notice of Auction 108
Requirements and Procedures 8. In addition to the certifications already required under 47 CFR 1.2105, the Commission proposes to require any applicant seeking to participate in Auction 108 to certify in its short-form application, under penalty of perjury, that it has read the public notice adopting procedures for Auction 108
that will be released in advance of the short-form deadline, and that it has familiarized itself with those procedures and the requirements for obtaining a license and operating facilities in the 2.5
GHz band. The Commission believes that this requirement would help ensure that the applicant has reviewed the procedures for participation in the auction process and has investigated and evaluated those technical and marketplace factors that may have a bearing on its potential use of any licenses won at auction. Consequently, this requirement will promote an applicants successful participation and will minimize its risk of defaulting on its auction obligations. As with other required certifications, an auction applicants failure to make the required certification in its short-form application by the applicable filing deadline would render its application unacceptable for filing, and its application would be dismissed with prejudice. The Commission seeks comment on this proposal. The Commission also seeks comment on whether there are additional steps it should take with respect to the filing of short-form applications to further ensure and promote auction integrity.

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B. Bidding Credit Caps 9. Consistent with the Commissions decisions in the Updating Part 1 Report and Order, 80 FR 56764, September 18, 2015, the Commission seeks comment on establishing reasonable caps on the total bidding credit amount that an eligible small business, very small business, or rural service provider may be awarded for Auction 108. The Commission administers its bidding credit programs to promote small business and rural service provider participation in auctions and in the provision of spectrum-based services.
10. Eligibility for the small business bidding credit is determined according to a tiered schedule of small business size definitions that are based on an applicants average annual gross revenues for the relevant preceding period, and which determine the size of the bidding credit discount. In the 2.5
GHz Report and Order, the Commission determined that eligibility for the small business bidding credit in auctions of new licenses in the 2.5 GHz band would be defined using two of the thresholds of the standardized schedule of small business sizes. Specifically, the Commission determined that an entity with average annual gross revenues for the preceding five years not exceeding $55 million would be designated as a small business eligible for a 15%
bidding credit, and that an entity with average annual gross revenues for the preceding five years not exceeding $20
million would be designated as a very small business eligible for a 25%
bidding credit. The Commission further determined that entities providing commercial communication services to a customer base of fewer than 250,000
combined wireless, wireline, broadband, and cable subscribers in primarily rural areas would be eligible for the 15% rural service provider bidding credit. The Commission defined rural area as a county with a population density of 100 persons or fewer per square mile.
11. To protect the integrity of the bidding credit program and to mitigate the incentives for abuse, the Commission, in the Updating Part 1
Report and Order, established a process to implement a reasonable cap on the total bidding credit amount that an eligible small business or rural service provider may be awarded in any auction, based on an evaluation of the expected capital requirements presented by the particular service and inventory of licenses being auctioned. The Commission determined that bidding credit caps would be implemented on an auction-by-auction basis, but
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resolved that, for any particular auction, the total amount of the bidding credit cap for small businesses would not be less than $25 million, and the bidding credit cap for rural service providers would not be less than $10 million. For Auctions 101103, 105, and 107, the Commission adopted a $25 million cap on the total bidding credit amount that may be awarded to an eligible small business in each auction and a $10
million cap on rural service provider bidding credits in each auction.
12. The Commission proposes to adopt the same bidding credit caps for Auction 108. As the Commission did for its recent auctions of spectrum for nextgeneration wireless services, it believes that the range of potential use cases suitable for spectrum in the 2.5 GHz band, combined with the relatively small geographic areas for new flexibleuse overlay licenses of white space, may permit deployment of smaller-scale networks with lower total costs.
Moreover, past auction data suggest that the proposed caps will allow the substantial majority of eligible businesses in the auction to take advantage of the bidding credit program.
The Commission therefore believes that its proposed caps will promote the statutory goals of providing meaningful opportunities for bona fide small businesses to participate in the auction and in the provision of spectrum-based services, without compromising its responsibility to prevent unjust enrichment and ensure efficient and intensive use of spectrum.
13. Similarly, the Commission proposes to adopt a $10 million cap on the total bidding credit amount that may be awarded to an eligible rural service provider in Auction 108. An entity is not eligible for a rural service provider bidding credit if it has already claimed a small business bidding credit. Based on its experience with other spectrum auctions, the Commission anticipates that a $10 million cap on rural service provider bidding credits will not constrain the ability of any rural service provider to participate fully and fairly in Auction 108. In addition, to create parity in Auction 108 among eligible small businesses and rural service providers competing against each other in smaller markets, the Commission proposes a $10 million cap on the overall bidding credit amount that any winning small business bidder may apply to licenses won in counties located within any partial economic area PEA with a population of 500,000
or less.
14. The Commission seeks comment on these proposed caps. Specifically, do the expected capital requirements
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