Sec.  73.5007   Designated entity provisions.

   (a) New entrant bidding credit. A winning bidder that qualifies as a “new
   entrant” may use a bidding credit to lower the cost of its winning bid on
   any broadcast construction permit. Any winning bidder claiming new entrant
   status must have de facto, as well as de jure, control of the entity
   utilizing the bidding credit. A thirty-five (35) percent bidding credit will
   be given to a winning bidder if it, and/or any individual or entity with an
   attributable interest in the winning bidder, have no attributable interest
   in any other media of mass communications, as defined in  Sec. 73.5008. A
   twenty-five (25) percent bidding credit will be given to a winning bidder if
   it, and/or any individual or entity with an attributable interest in the
   winning bidder, have an attributable interest in no more than three mass
   media facilities. No bidding credit will be given if any of the commonly
   owned mass media facilities serve the same area as the proposed broadcast or
   secondary broadcast station, or if the winning bidder, and/or any individual
   or entity with an attributable interest in the winning bidder, have
   attributable interests in more than three mass media facilities.
   Attributable interests held by a winning bidder in existing low power
   television, television translator or FM translator facilities will not be
   counted among the bidder's other mass media interests in determining
   eligibility for a bidding credit.

   (b) The new entrant bidding credit is not available to a winning bidder if
   it, and/or any individual or entity with an attributable interest in the
   winning bidder, have an attributable interest in any existing media of mass
   communications in the same area as the proposed broadcast or secondary
   broadcast facility.

   (1) Any existing media of mass communications will be considered in the
   “same area” as a proposed broadcast or secondary broadcast facility if the
   relevant defined service areas of the existing mass media facilities
   partially overlap, or are partially overlapped by, the proposed broadcast or
   secondary broadcast facility's relevant contour.

   (2) For purposes of determining whether any existing media of mass
   communications is in the “same area” as a proposed broadcast or secondary
   broadcast facility, the relevant defined service areas of the existing mass
   media facilities shall be as follows:

   (i) AM broadcast station—principal community contour (see  Sec. 73.24(i));

   (ii) FM Broadcast station—principal community contour (see  Sec. 73.315(a));

   (iii) Television broadcast station—television Grade B or equivalent contour
   (see  Sec. 73.683(a) for analog TV and  Sec. 73.622(e) for DTV);

   (iv) Cable television system—the franchised community of a cable system; and

   (v) Daily newspaper—community of publication.

   (3) For purposes of determining whether a proposed broadcast or secondary
   broadcast facility is in the “same area” as an existing mass media facility,
   the relevant contours of the proposed broadcast or secondary broadcast
   facility shall be as follows:

   (i) AM broadcast station—principal community contour (see  Sec. 73.24(i));

   (ii) FM broadcast station—principal community contour (see  Sec. 73.315(a));

   (iii) FM translator station—predicted, protected contour (see  Sec. 74.1204(a) of
   this chapter);

   (iv) Television broadcast station—television Grade B or equivalent contour
   (see  Sec. 73.683(a) for analog TV and  Sec. 73.622(e) for DTV).

   (v) Low power television or television translator station—predicted,
   protected contour (see  Sec. 74.707(a) of this chapter).

   (c) Unjust enrichment. If a licensee or permittee that utilizes a new
   entrant bidding credit under this subsection seeks to assign or transfer
   control of its license or construction permit to an entity not meeting the
   eligibility criteria for the bidding credit, the licensee or permittee must
   reimburse the U.S. Government for the amount of the bidding credit, plus
   interest based on the rate for ten-year U.S. Treasury obligations applicable
   on the date the construction permit was originally granted, as a condition
   of Commission approval of the assignment or transfer. If a licensee or
   permittee that utilizes a new entrant bidding credit seeks to assign or
   transfer control of a license or construction permit to an entity that is
   eligible for a lower bidding credit, the difference between the bidding
   credit obtained by the assigning party and the bidding credit for which the
   acquiring party would qualify, plus interest based on the rate for ten-year
   U.S. Treasury obligations applicable on the date the construction permit was
   originally granted, must be paid to the U.S. Government as a condition of
   Commission approval of the assignment or transfer. The amount of the
   reimbursement payments will be reduced over time. An assignment or transfer
   in the first two years after issuance of the construction permit to the
   winning bidder will result in a forfeiture of one hundred (100) percent of
   the value of the bidding credit; during year three, of seventy-five (75)
   percent of the value of the bidding credit; in year four, of fifty (50)
   percent; in year five, twenty-five (25) percent; and thereafter, no payment.
   If a licensee or permittee who utilized a new entrant bidding credit in
   obtaining a broadcast license or construction permit acquires within this
   five-year reimbursement period an additional broadcast facility or
   facilities, such that the licensee or permittee would not have been eligible
   for the new entrant credit, the licensee or permittee will generally not be
   required to reimburse the U.S. Government for the amount of the bidding
   credit.

   [ 64 FR 24526 , May 7, 1999, as amended at  68 FR 46358 , Aug. 5, 2003;  69 FR 72045 , Dec. 10, 2004]