§ 27.1213   Designated entity provisions for BRS in Commission auctions
commencing prior to January 1, 2004.

   (a) Eligibility for small business provisions. For purposes of
   Commission auctions commencing prior to January 1, 2004 for BRS
   licenses, a small business is an entity that together with its
   affiliates has average annual gross revenues that are not more than $40
   million for the preceding three calendar years.

   (b) Designated entities. As specified in this section, designated
   entities that are winning bidders in Commission auctions commencing
   prior to January 1, 2004 for BTA service areas are eligible for special
   incentives in the auction process. See 47 CFR 1.2110.

   (c) Installment payments. Small businesses and small business consortia
   may elect to pay the full amount of their winning bids in Commission
   auctions commencing prior to January 1, 2004 for BTA service areas in
   installments over a ten (10) year period running from the date that
   their BTA authorizations are issued.

   (1) Upon issuance of a BTA authorization to a winning bidder in a
   Commission auction commencing prior to January 1, 2004 that is eligible
   for installment payments, the Commission will notify such eligible BTA
   authorization holder of the terms of its installment payment plan. For
   BRS, such installment payment plans will:

   (i) Impose interest based on the rate of ten (10) year U.S. Treasury
   obligations at the time of issuance of the BTA authorization, plus two
   and one half (2.5) percent;

   (ii) Allow installment payments for a ten (10) year period running from
   the date that the BTA authorization is issued;

   (iii) Begin with interest-only payments for the first two (2) years;
   and

   (iv) Amortize principal and interest over the remaining years of the
   ten (10) year period running from the date that the BTA authorization
   is issued.

   (2) Conditions and obligations. See § 1.2110(g)(4) of this chapter.

   (3) Unjust enrichment. If an eligible BTA authorization holder that
   utilizes installment financing under this subsection seeks to
   partition, pursuant to applicable rules, 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.

   (d) Reduced upfront payments. For purposes of Commission auctions
   commencing prior to January 1, 2004 for BRS licenses, a prospective
   bidder that qualifies as a small business, or as a small business
   consortia, is eligible for a twenty-five (25) percent reduction in the
   amount of the upfront payment otherwise required. To be eligible to bid
   on a particular BTA, a small business will be required to submit an
   upfront payment equal to seventy-five (75) percent of the upfront
   payment amount specified for that BTA in the public notice listing the
   upfront payment amounts corresponding to each BTA service area being
   auctioned.

   (e) Bidding credits. For purposes of Commission auctions commencing
   prior to January 1, 2004 for BRS licenses, a winning bidder that
   qualifies as a small business, or as a small business consortia, may
   use a bidding credit of fifteen (15) percent to lower the cost of its
   winning bid on any of the BTA authorizations awarded in the Commission
   BRS auctions commencing prior to January 1, 2004.

   (f) Short-form application certification; Long-form application or
   statement of intention disclosure. A BRS applicant in a Commission
   auction commencing prior to January 1, 2004 claiming designated entity
   status shall certify on its short-form application that it is eligible
   for the incentives claimed. A designated entity that is a winning
   bidder for a BTA service area(s) shall, in addition to information
   otherwise required, file an exhibit to either its initial long-form
   application for a BRS station license, or to its statement of intention
   with regard to the BTA, which discloses the gross revenues for each of
   the past three years of the winning bidder and its affiliates. This
   exhibit shall describe how the winning bidder claiming status as a
   designated entity satisfies the designated entity eligibility
   requirements, and must list and summarize all agreements that affect
   designated entity status, such as partnership agreements, shareholder
   agreements, management agreements and other agreements, including oral
   agreements, which establish that the designated entity will have both
   de facto and de jure control of the entity. See 47 CFR 1.2110(i).

   (g) Records maintenance. All holders of BTA authorizations acquired in
   a Commission auction commencing prior to January 1, 2004 that claim
   designated entity status shall maintain, at their principal place of
   business or with their designated agent, an updated documentary file of
   ownership and revenue information necessary to establish their status.
   Holders of BTA authorizations or their successors in interest shall
   maintain such files for a ten (10) year period running from the date
   that their BTA authorizations are issued. The files must be made
   available to the Commission upon request.

   [ 69 FR 72034 , Dec. 10, 2004, as amended at  71 FR 35190 , June 19, 2006]

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