Federal Register - June 23, 2021
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Source: Federal Register
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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations
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are attributable to the applicant, on a license-by-license basis, if the disclosable interest holder has an agreement with the applicant to use, in any manner, more than 25% of the spectrum capacity of any license won by the applicant and acquired with a bidding credit during the five-year unjust enrichment period for the applicable license. For purposes of this requirement, a disclosable interest holder of an applicant seeking designated entity benefits is defined as any individual or entity holding a 10%
or greater interest of any kind in the applicant, including but not limited to, a 10% or greater interest in any class of stock, warrants, options, or debt securities in the applicant or licensee.
Any applicant seeking a bidding credit for licenses won in Auction 110 will be subject to this attribution rule and must make the requisite disclosures.
84. Certain disclosable interest holders may be excluded from this attribution rule. Specifically, an applicant claiming the rural service provider bidding credit may have spectrum license use agreements with a disclosable interest holder, without having to attribute the disclosable interest holders subscribers, so long as the disclosable interest holder is independently eligible for a rural service provider credit and the use agreement is otherwise permissible under the Commissions existing rules.
If applicable, the applicant must attach to its FCC Form 175 any additional information as may be required to indicate any license or license area that may be subject to this attribution rule or to demonstrate its eligibility for the exception from this attribution rule.
Consistent with the Commissions limited information procedures, the Commission intends to withhold from public disclosure all information contained in any such attachments until after the close of Auction 110.
c. Exceptions From Attribution Rules for Small Businesses and Rural Service Providers 85. Applicants claiming designated entity benefits may be eligible for certain exceptions from the Commissions attribution rules. For example, in calculating an applicants gross revenues under the controlling interest standard, the Commission will not attribute to the applicant the personal net worth, including personal income, of its officers and directors.
However, to the extent that the officers and directors of the applicant are controlling interest holders of other entities, the gross revenues of those entities will be attributed to the
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applicant. Moreover, if an officer or director operates a separate business, then the gross revenues derived from that business would be attributed to the applicant.
86. The Commission has also exempted from attribution to the applicant the gross revenues of the affiliates of a rural telephone cooperatives officers and directors, if certain conditions specified in section 1.2110b4iii of the Commissions rules are met. An applicant claiming this exemption must provide, in an attachment, an affirmative statement that the applicant, affiliate and/or controlling interest is an eligible rural telephone cooperative within the meaning of section 1.2110b4iii, and the applicant must supply any additional information as may be required to demonstrate eligibility for the exemption from the attribution rule.
87. An applicant claiming a rural service provider bidding credit may be eligible for an exception from the Commissions attribution rules as an existing rural partnership. To qualify for this exception, an applicant must be a rural partnership providing service as of July 16, 2015, and each member of the rural partnership must individually have fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers. Because each member of the rural partnership must individually qualify for the bidding credit, by definition, a partnership that includes a nationwide provider as a member will not be eligible for the benefit.
88. Finally, a consortium of small businesses or rural service providers may seek an exception from the Commissions attribution rules. Under the Commissions rules, a consortium of small businesses or rural service providers is a conglomerate organization composed of two or more entities, each of which individually satisfies the definition of small business or rural service provider. A consortium must provide additional information for each member demonstrating each members eligibility for the claimed bidding credit in order to show that the applicant satisfies the eligibility criteria for the bidding credit. The gross revenue or subscriber information of each consortium member will not be aggregated for purposes of determining the consortiums eligibility for the claimed bidding credit. This information must be provided, however, to ensure that each consortium member qualifies for the bidding credit sought by the consortium.
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I. Provisions Regarding Former and Current Defaulters 89. Pursuant to the rules governing competitive bidding, each applicant must make certifications regarding whether it is a current or former defaulter or delinquent. A current defaulter or delinquent is not eligible to participate in Auction 110, but a former defaulter or delinquent may participate so long as it is otherwise qualified and makes an upfront payment that is 50%
more than would otherwise be necessary. Accordingly, each applicant must certify under penalty of perjury on its FCC Form 175 that it, its affiliates, its controlling interests, and the affiliates of its controlling interests are not in default on any payment for a Commission construction permit or license including down payments and that it is not delinquent on any non-tax debt owed to any Federal agency.
Additionally, an applicant must certify under penalty of perjury whether it along with its controlling interests has ever been in default on any payment for a Commission construction permit or license including down payments or has ever been delinquent on any non-tax debt owed to any Federal agency, subject to the exclusions described below. For purposes of making these certifications, the term controlling interest is defined in section 1.2105a4i of the Commission rules.
90. Under the Commissions rule regarding applications by former defaulters, an applicant is considered a former defaulter or a former delinquent when, as of the FCC Form 175 deadline, the applicant or any of its controlling interests has defaulted on any Commission construction permit or license or has been delinquent on any non-tax debt owed to any Federal agency, but has since remedied all such defaults and cured all of the outstanding non-tax delinquencies. For purposes of the certification under section 1.2105a2xii, the applicant may exclude from consideration any cured default on a Commission construction permit or license or cured delinquency on a non-tax debt owed to a Federal agency for which any of the following criteria are met: 1 The notice of the final payment deadline or delinquency was received more than seven years before the FCC Form 175 filing deadline, 2 the default or delinquency amounted to less than $100,000, 3 the default or delinquency was paid within two quarters i.e., six months after receiving the notice of the final payment deadline or delinquency, or 4 the default or delinquency was the subject of a legal or arbitration proceeding and
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