Sec. 90.1017  Bidding credits, down payments, and installment payments 
          for small businesses and very small businesses.

    (a) Bidding credits. A winning bidder that qualifies as a small 
business or a consortium of small businesses as defined in 
Sec. 90.1021(b)(1) or Sec. 90.1021(b)(4) may use a bidding credit of 10 
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 Sec. 90.1021(b)(2) or Sec. 90.1021(b)(4) may 
use a bidding credit of 25 percent to lower the cost of its winning bid.
    (b) Unjust enrichment--bidding credits. (1) If a small business or 
very small business (as defined in Secs. 90.1021(b)(1) and 
90.1021(b)(2), respectively) that utilizes a bidding credit under this 
section seeks to transfer control or assign an authorization to an 
entity that is not a small business or a very small business, or seeks 
to make any other change in ownership that would result in the licensee 
losing eligibility as a small business or very small business, the small 
business or very small business must seek Commission approval and 
reimburse the U.S. government for the amount of the bidding credit, plus 
interest at the rate imposed for installment financing at the time the 
license was awarded, as a condition of approval of the assignment, 
transfer, or other ownership change.
    (2) If a very small business (as defined in Sec. 90.1021(b)(2)) that 
utilizes a bidding credit under this section seeks to transfer control 
or assign an authorization to a small business meeting the eligibility 
standards for a lower bidding credit, or seeks to make any other change 
in ownership that would result in the licensee qualifying for a lower 
bidding credit under this section, the licensee must seek Commission 
approval and reimburse the U.S. government for the difference between 
the amount of the bidding credit obtained by the licensee and the 
bidding credit for which the assignee, transferee, or licensee is 
eligible under this section,

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plus interest at the rate imposed for installment financing at the time 
the license was awarded, as a condition of the approval of such 
assignment, transfer, or other ownership change.
    (3) The amount of payments made pursuant to paragraphs (b)(1) and 
(b)(2) of this section will be reduced over time as follows: A transfer 
in the first two years of the license term will result in a forfeiture 
of 100 percent of the value of the bidding credit (or the difference 
between the bidding credit obtained by the original licensee and the 
bidding credit for which the post-transfer licensee is eligible); in 
year 3 of the license term the payment will be 75 percent; in year 4 the 
payment will be 50 percent; and in year 5 the payment will be 25 
percent, after which there will be no assessment.
    (c) Down payments. Winning bidders in a 220 MHz service auction that 
qualify as small businesses under Sec. 90.1021(b)(1) or very small 
businesses under Sec. 90.1021(b)(2) must submit a down payment to the 
Commission in an amount sufficient to bring their total deposits up to 
20 percent of their winning bids. Small businesses and very small 
businesses must bring their deposit up to 10 percent of their winning 
bids within ten (10) business days following a Public Notice announcing 
the close of bidding. Prior to licensing, by a date and time to be 
specified by Public Notice, they must pay an additional 10 percent.
    (d) Installment payments. (1) Each licensee that qualifies as a 
small business under Sec. 90.1021(b)(1) or as a very small business 
under Sec. 90.1021(b)(2) may pay the remaining 80 percent of the net 
auction price for the license in installment payments over the term of 
the geographic area license. Interest charges shall be fixed at the time 
of licensing at a rate equal to the rate for ten-year U.S. Treasury 
obligations plus 2.5 percent. An eligible licensee may make interest-
only payments for two years. Payments of interest and principal shall be 
amortized over the remaining eight years of the license term.
    (2) Late installment payment. Any licensee that submits a scheduled 
installment payment more than fifteen days late will be charged a late 
payment fee equal to five percent of the amount of the past due payment.
    (3) Payments will be applied in the following order: Late charges, 
interest charges, principal payments.
    (e) Unjust enrichment--installment payments. (1) If a licensee that 
utilizes installment financing under this section seeks to assign or 
transfer control of its license to an entity not meeting the eligibility 
standards for installment financing, the licensee must seek Commission 
approval and make full payment of the remaining unpaid principal and 
unpaid interest accrued through the date of assignment or transfer as a 
condition of Commission approval.
    (2) If a licensee that utilizes installment financing under this 
section seeks to make any change in ownership structure that would 
result in the licensee losing eligibility for installment payments, the 
licensee shall first seek Commission approval before making such a 
change in ownership structure and must make full payment of the 
remaining unpaid principal and unpaid interest accrued through the date 
of such change in ownership structure as a condition of Commission 
approval.