Sec.  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  Sec. 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]