Proposed Rule2025-03801
Competitive Bidding Rules for Auction of AWS-3 Licenses
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 13, 2025
Issuing agencies
Federal Communications Commission
Abstract
In this document, the Federal Communications Commission (Commission or FCC) seeks comment on changes to its rules regarding eligibility for designated entity bidding credits in auctions for licenses in the in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz (AWS-3) bands. The Commission also seeks comment on an update to its competitive bidding rules that would align this rule with the Small Business Act.
Full Text
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[Federal Register Volume 90, Number 48 (Thursday, March 13, 2025)]
[Proposed Rules]
[Pages 11931-11937]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-03801]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 27
[GN Docket Nos. 13-185, 25-70, 25-71; FCC 25-12; FR ID 283609]
Competitive Bidding Rules for Auction of AWS-3 Licenses
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission or FCC) seeks comment on changes to its rules regarding
eligibility for designated entity bidding credits in auctions for
licenses in the in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz
(AWS-3) bands. The Commission also seeks comment on an update to its
competitive bidding rules that would align this rule with the Small
Business Act.
DATES: Comments are due on or before March 31, 2025; reply comments are
due on or before April 14, 2025.
ADDRESSES: You may submit comments, identified by GN Docket Nos. 25-70,
25-71, and 13-185, by any of the following methods:
<bullet> Federal Communications Commission's Website: <a href="https://www.fcc.gov/ecfs">https://www.fcc.gov/ecfs</a>. Follow the instructions for submitting comments.
<bullet> People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: <a href="/cdn-cgi/l/email-protection#0c4a4f4f393c384c6a6f6f226b637a"><span class="__cf_email__" data-cfemail="63252020565357230500004d040c15">[email protected]</span></a> or phone: 202-418-
0530.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Lyndsey Grunewald of the Office of
Economics and Analytics, Auction Division, at (202) 418-0957 or
<a href="/cdn-cgi/l/email-protection#236f5a4d4750465a0d6451564d4654424f47634540400d444c55"><span class="__cf_email__" data-cfemail="a2eedbccc6d1c7db8ce5d0d7ccc7d5c3cec6e2c4c1c18cc5cdd4">[email protected]</span></a>, or Yasiman Montgomery of the Office of
Economics and Analytics, Auction Division, at (202) 418-0424 or
<a href="/cdn-cgi/l/email-protection#d28bb3a1bbbfb3bcfc9fbdbca6b5bdbfb7a0ab92b4b1b1fcb5bda4"><span class="__cf_email__" data-cfemail="ecb58d9f85818d82c2a18382988b8381899e95ac8a8f8fc28b839a">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM) in GN Docket Nos. 25-70, 25-71, and 13-
185, FCC 25-12, adopted on February 27, 2025, and released on February
28, 2025. The full text of this document is available for public
inspection at the following internet address: <a href="https://www.fcc.gov/document/fcc-proposes-updates-bidding-rules-aws-3-inventory-auction">https://www.fcc.gov/document/fcc-proposes-updates-bidding-rules-aws-3-inventory-auction</a>.
Comment Filing Procedures
Pursuant to 47 CFR 1.415 and1.419, interested parties may file
comments and reply comments on or before the dates indicated in the
DATES section of this document. Comments should refer to GN Docket Nos.
25-70, 25-71, and 13-185. Comments may be filed using the Commission's
Electronic Comment Filing System (ECFS).
<bullet> Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: <a href="https://www.fcc.gov/ecfs/">https://www.fcc.gov/ecfs/</a>.
<bullet> Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing for each docket.
<bullet> Filings can be sent by hand or messenger delivery, by
commercial courier, or by the U.S. Postal Service Express Mail. All
filings must be addressed to the Secretary, Federal Communications
Commission.
<bullet> Hand-delivered or messenger-delivered paper filings for
the Commission's Secretary are accepted between 8 a.m. and 4 p.m. by
the FCC's mailing contractor at 9050 Junction Drive, Annapolis
Junction, MD 20701. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building.
<bullet> Commercial courier deliveries (any deliveries not by the
U.S. Postal Service) must be sent to 9050 Junction Drive, Annapolis
Junction, MD 20701.
<bullet> Filings sent by U.S. Postal Service First-Class Mail,
Priority Mail, and Priority Mail Express must be sent to 45 L Street
NE, Washington, DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format) send an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="5d3b3e3e686d691d3b3e3e733a322b">[email protected]</a> or call the
Consumer & Governmental Affairs Bureau at (202) 418-0530.
Ex Parte Rules. The proceeding the NPRM initiates shall be treated
as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Persons making ex parte presentations must
file a copy of any written presentation or a memorandum summarizing any
oral presentation within two business days after the presentation
(unless a different deadline applicable to the Sunshine period
applies). Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must (1) list all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with 47 CFR 1.1206(b). In proceedings governed by
47 CFR 1.49(f) or for which the Commission has made available a method
of electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
Providing Accountability Through Transparency Act. Consistent with
the
[[Page 11932]]
Providing Accountability Through Transparency Act, Public Law 118-9, a
summary of the NPRM will be available on <a href="https://www.fcc.gov/proposed-rulemakings">https://www.fcc.gov/proposed-rulemakings</a>.
Synopsis
I. Introduction
1. In the Spectrum and Secure Technology and Innovation Act of
2024, Public Law 118-159, Congress directed the Commission to initiate
a system of competitive bidding to grant licenses for spectrum in its
inventory in the AWS-3 spectrum bands. Auction proceeds will support
the Commission's Supply Chain Reimbursement Program, which implements
the Secure and Trusted Communications Networks Act of 2019 by
reimbursing eligible advanced communications service providers for
their costs to remove, replace, and dispose of untrustworthy Huawei
Technologies Company or ZTE Corporation equipment and services.
2. In the NPRM, the Commission takes the first step towards an
effective auction by proposing to harmonize outdated rules related to
competitive bidding for such licenses with more recent Commission
practice in spectrum auctions. The Commission also proposes to update
its general part 1 competitive bidding rules to reflect statutory
requirements regarding the categorization of an entity as a small
business concern.
3. For roughly 30 years, the Commission effectively and efficiently
used auctions to assign spectrum licenses to those who value them most
highly, and in doing so served the public interest goals of encouraging
innovation and promoting competition in wireless services. The
Commission's actions today advance those same goals while fulfilling
Congress's recent mandate with respect to AWS-3 spectrum.
II. Background
4. The term AWS-3 is used by the Commission to refer to spectrum in
the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands. In 2014, the
Commission assigned licenses for spectrum in the AWS-3 bands through
competitive bidding in Auction 97. Nevertheless, there remains spectrum
in these bands that is not currently licensed, due to various
circumstances, including the selective defaults by two winning bidders
on their bids for a significant number of licenses. Pursuant to
congressional mandate, the Commission will now offer licenses for such
unassigned AWS-3 spectrum in a new auction.
5. Prior to Auction 97, the Commission adopted service-specific
rules for licenses within those bands, which specified that such
licenses would be subject to competitive bidding and that the
competitive bidding procedures contained in part 1 of the Commission's
rules would apply, unless otherwise specified. The Commission also
adopted AWS-3-specific rules related to the treatment of entities
designated by Congress in section 309(j)(3) and (4) of the
Communications Act of 1934, as Amended to be given opportunities to
participate in spectrum-based services (designated entities or DEs),
including eligibility standards for small and very small business
bidding credits.
6. Since then, two significant regulatory and legislative
developments have left the AWS-3 competitive bidding rules out of step
with current Commission practice for spectrum auctions. First, when the
Commission updated its part 1 competitive bidding rules in 2015, it
amended the eligibility requirements for small business bidding
credits, adopted a 15% bidding credit for rural service providers, and
established a process to implement a reasonable cap on the total amount
of bidding credits that an eligible small business or rural service
provider may be awarded in any auction. Second, in 2018, Congress
amended the Small Business Act to prohibit an agency from prescribing a
size standard for categorizing a business concern that provides
services as a small business concern based on its annual average gross
revenues unless the proposed size standard is based on the average over
no less than a five-year period.
7. The AWS-3 competitive bidding rules have not been updated to
reflect these developments, and the general part 1 bidding rules have
not been updated to reflect the changes to the Small Business Act. The
Commission therefore proposes to do so now.
III. Updating the Designated Entity Rules for the AWS-3 Spectrum Bands
8. Section 309(j)(4)(D) of the Communications Act instructs the
Commission to ensure that small businesses, rural telephone companies,
and businesses owned by members of minority groups and women are given
the opportunity to participate in the provision of spectrum-based
services, and, for such purposes, consider the use of bidding
preferences. Since 1994, the Commission has offered these designated
entities bidding credits, which provide a percentage discount on
winning bids, to facilitate their participation in auctions of spectrum
licenses. The Commission sets out the general framework for DE bidding
credits in its part 1 competitive bidding rules and separately adopts
rules in particular services that define designated entity eligibility
and bidding credit amounts for each service, taking into account the
capital requirements and other characteristics of each particular
service.
9. Under the existing framework for competitive bidding for
licenses in the AWS-3 spectrum bands, a winning bidder for AWS-3
licenses is eligible for a small business bidding credit if that
entity, together with its affiliates, its controlling interests, and
the affiliates of its controlling interests, has average gross revenues
not exceeding $40 million for the preceding three years. A winning
bidder for AWS-3 licenses is eligible for a very small business bidding
credit if that entity, together with its affiliates, its controlling
interests, and the affiliates of its controlling interests, has average
gross revenues not exceeding $15 million for the preceding three years.
10. In light of the congressional mandate to initiate a system of
competitive bidding to grant licenses for spectrum in its inventory in
the AWS-3 spectrum bands, the Commission proposes to harmonize the AWS-
3 DE rules with both the updated part 1 rules for designated entities
and the Small Business Act's new five-year average gross receipts
benchmark. Specifically, the Commission proposes to define a small
business as an entity that, together with its affiliates, its
controlling interests and the affiliates of its controlling interests,
has average gross revenues that are not more than $55 million for the
preceding five years; and to amend the AWS-3 definition of a very small
business as an entity that, together with its affiliates, its
controlling interests and the affiliates of its controlling interests,
has average gross revenues that are not more than $20 million for the
preceding five years. Moreover, in accordance with the schedule of DE
bidding credits set forth in part 1, the Commission proposes that a
qualifying small business would be eligible for a bidding credit of 15%
and a qualifying very small business would be eligible for a bidding
credit of 25%. The Commission also proposes to create a separate 15%
bidding credit for rural service providers. For auctions of AWS-3
licenses, consistent with the part 1 rules, a cap would be established
on an auction-by-auction basis on the total discount that a winning
bidder eligible for a small business bidding credit or rural service
provider bidding credit may receive.
[[Page 11933]]
A. Harmonizing Average Gross Revenue Thresholds for Small Business
Bidding Credits With the Part 1 Rules
11. In 2015, the Commission updated the part 1 gross revenue
thresholds for small business bidding credit eligibility. Specifically,
the Commission amended 47 CFR 1.2110(f) to increase the three tiers of
gross revenue thresholds defining eligibility for each small business
bidding credit as follows:
<bullet> Businesses with average annual gross revenues for the
preceding three years not exceeding $4 million would be eligible for a
35% bidding credit;
<bullet> Businesses with average annual gross revenues for the
preceding three years not exceeding $20 million would be eligible for a
25% bidding credit; and
<bullet> Businesses with average annual gross revenues for the
preceding three years not exceeding $55 million would be eligible for a
15% bidding credit.
12. When the Commission adopted the revenue thresholds and
associated bidding credits for the generally applicable schedule of
small business bidding credits in part 1, its intent was to encourage
small business participation in spectrum license auctions, and to
ensure that its gross revenue definitions accurately reflect what
constitutes a small business in today's marketplace, taking into
consideration the relative size of the large, national providers.
Beginning in 2015, with the adoption of competitive bidding rules for
licenses in the 600 MHz band in Auction 1002, the Commission
consistently has used only the two largest designated entity business
size standards and associated bidding credits outlined in its part 1
rules when adopting service specific rules for competitive bidding for
spectrum licenses. This approach has facilitated the successful
participation of many eligible small businesses in Commission auctions
over the last decade. The Commission expects that entities seeking to
participate in the auction of licenses in the AWS-3 bands may face
challenges similar to those utilizing the spectrum in other 5G-ready
services that have been auctioned more recently, including issues and
costs related to developing markets, technologies, and services. The
Commission therefore proposes to adopt for the AWS-3 service rules the
small business definitions for the two higher gross revenues thresholds
of $55 million and $20 million that are in its standardized part 1
schedule for small business bidding credits.
13. The Commission seeks comment on whether the characteristics of
services that utilize spectrum in the AWS-3 bands and their individual
licensing models suggest that it should adopt the small business size
standards and associated bidding credits proposed in the NPRM.
Commenters addressing this proposal or advocating for any alternative
should explain why licenses in the AWS-3 bands should be treated
similarly or differently than licenses for spectrum for other 5G-ready
services, and are strongly encouraged to provide specific, data-driven
arguments in support of their proposals.
B. Implementing Small Business Act Benchmarks for Categorizing a
Business as a Small Business Concern Based on Average Annual Gross
Revenues
14. The standardized schedule of bidding credits provided in the
AWS-3 competitive bidding rules defines small and very small businesses
based on average gross revenues for the preceding three years. In
December 2018, Congress amended the Small Business Act with respect to
how an agency such as the Commission may prescribe size standards for
categorizing a business concern as a small business concern. In
relevant part, Congress required that Federal agencies that categorize
business concerns that provide services as a small business concern
based on annual average gross receipts may only do so if the agency
considers such receipts over a period of not less than five years. All
service-specific small business definitions the Commission has adopted
for bidding credit eligibility since 2020 contain the congressionally
mandated five-year lookback period, but the Commission has not yet
amended any of its prior-existing rules to conform with the Small
Business Act's standards. Therefore, in preparing to auction the
licenses for AWS-3 spectrum in its inventory, the Commission proposes
to amend the AWS-3 competitive bidding rules to reflect the same five-
year benchmark mandated by the Small Business Act, and the Commission
seeks comment on this proposal.
C. Rural Service Provider Bidding Credit in the AWS-3 Spectrum Bands
15. In the Updating Part 1 Report and Order, 80 FR 56764 (Sept. 18,
2015), the Commission created a 15% bidding credit for eligible rural
service providers. In making this bidding credit available for the
first time, the Commission concluded that, in furtherance of statutory
objectives of section 309(j)(3)(A-B) of the Act, the rural service
provider bidding credit would allow a diversity of service providers to
compete more effectively for spectrum licenses in rural areas.
Consistent with the findings in the Updating Part 1 Report and Order
and its approach in other bands where the spectrum is likely to be used
to provide 5G services, in any future auction of licenses in the AWS-3
bands, the Commission proposes to offer a rural service provider, as
defined in 47 CFR 1.2110(f)(4)(i), that has not claimed a small
business bidding credit, a 15% bidding credit. The Commission seeks
comment on this proposal.
16. Commenters addressing this proposal or advocating for any
alternative should consider whether there are any particular
characteristics of licenses in the AWS-3 bands that may affect whether
rural service providers will apply for a bidding credit.
IV. Updating the Benchmark for Determining a Small Business's Average
Gross Revenues Under the Part 1 Rules
17. As noted, all service-specific competitive bidding rules that
the Commission has adopted since the Small Business Act was amended in
2018 have incorporated a five-year average gross receipts benchmark for
determining eligibility for small business bidding credits.
Nonetheless, the part 1 competitive bidding rules still reflect the
three-year benchmark adopted by the Commission in 2015. To ensure
continued consistency with the requirements of the Small Business Act
in spectrum bands that may be subject to competitive bidding in the
future, the Commission proposes to codify these requirements in its
part 1 competitive bidding rules such that eligibility for small
business bidding credits would be based on an entity's average gross
revenues for the preceding five years. The Commission seeks comment on
this proposal.
V. Tribal Licensing Window
18. In 2019, the Commission adopted a pre-auction Tribal licensing
window in the 2.5 GHz band to give Tribal nations an opportunity to
obtain licenses for unassigned spectrum over Tribal lands in rural
areas. The Commission seek comment on the possibility of a similar
Tribal licensing window for any relevant portions of the limited number
of inventory AWS-3 licenses expected to be made available for auction
in this proceeding.
19. The Spectrum and Secure Technology and Innovation Act, Public
Law 118-159, provides that the Commission shall initiate systems of
competitive bidding to grant licenses for spectrum in the inventory of
the Commission in the AWS-3 bands. The
[[Page 11934]]
Act also directs proceeds from the auction to support, among other
things, the Commission's Supply Chain Reimbursement Program. Does the
statutory directive to employ competitive bidding for these licenses
permit a Tribal licensing window like the one in the 2.5 GHz band prior
to an auction of the AWS-3 licenses?
20. The Commission seeks comment on the putative benefits of a
Tribal licensing window, to the extent it is allowed by law. For
example, do the AWS-3 licenses for the spectrum in the Commission's
inventory provide sufficient bandwidth to give Tribal entities an
opportunity to provide broadband wireless service? Does the presence of
Federal operations and the requirement to coordinate with such
operations affect the suitability of this spectrum for a Tribal
licensing window? For example, similar to the approach in the 2.5 GHz
band, should the Commission offer AWS-3 licenses with overlay rights
covering geographic license areas in which a license is granted through
a Tribal licensing window in order to avoid irregular gaps between
spectrum areas? Should the Commission adopt eligibility criteria that
are similar to that used in the 2.5 GHz Tribal licensing window, such
as limiting eligible entities to federally recognized Tribes, entities
owned and controlled by such Tribes, or consortia of such Tribes? If
the Commission does not adopt the same or similar eligibility criteria
to that used for the 2.5 GHz Tribal Window, what alternative criteria
should the Commission use? The Commission seeks comment on whether rule
changes to the AWS-3 service rules would be necessary to implement
these or other frameworks.
21. The Commission also seeks general comment on the potential
impact of a Tribal licensing window on the auction of AWS-3 licenses.
For example, how might any necessary rule changes affect the auction's
timing? Should the Commission utilize the same procedures for an AWS-3
Tribal licensing window as those used in the 2.5 GHz window?
VI. Procedural Matters
22. Paperwork Reduction Act Analysis. The NPRM seeks comment on
proposed rules that may result in new or modified information
collection requirements. The Commission, as part of its continuing
effort to reduce paperwork burdens, invites the general public and the
OMB to comment on the information collection requirements contained in
the NPRM, as required by the Paperwork Reduction Act of 1995. In
addition, pursuant to the Small Business Paperwork Relief Act of 2002,
the Commission seeks specific comment on how it might further reduce
the information collection burden for small business concerns with
fewer than 25 employees.
23. Initial Regulatory Flexibility Analysis. The policies and rules
proposed in the NPRM may have a significant economic impact on a
substantial number of small entities. Therefore, as required by the
Regulatory Flexibility Act of 1980, as amended (RFA), 5 U.S.C. 603, the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant economic impact on small entities of
the policies and rules addressed in the NPRM. The IRFA is set forth in
Appendix B to the NPRM. Written public comments are requested on the
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments on the NPRM. The Commission will
send a copy of the NPRM, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. In addition, the NPRM
and IRFA (or summaries thereof) will be published in the Federal
Register.
24. The NPRM initiates a proceeding to update the designated entity
rules for the AWS-3 spectrum bands in order to enable the Commission to
offer through competitive bidding, and in the near future, licenses for
spectrum within those bands that is currently in the Commission's
inventory. Together these proposals will further the Commission's goal
to facilitate the use of fallow spectrum and the deployment of fifth
generation wireless (5G) services by efficiently bringing to auction
licenses covering spectrum that is likely to be used to provide 5G
services. The Commission also seeks comment on the possibility of a
pre-auction Tribal licensing window for any relevant portions of
inventory AWS-3 licenses expected to be made available for auction and
on the putative benefits of such a window.
25. Specifically, the NPRM proposes to:
<bullet> Provide small businesses and rural service providers with
greater opportunity to participate in the provision of 5G service by
aligning the Commission's outdated, service-specific eligibility
requirements for AWS-3 with current practice;
<bullet> Modify the part 1 size definitions for small business
bidding credits so that the length of time over which revenues are
averaged for determining bidding credit eligibility is five years, in
conformance with the Small Business Act.
26. The proposed action is authorized pursuant to 47 U.S.C. 151,
154(i), 301, 303(r), 304, and 309(j).
27. The RFA directs agencies to provide a description of, and where
feasible, an estimate of, the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term small entity as having the same meaning as the terms small
business, small organization, and small governmental jurisdiction. In
addition, the term small business has the same meaning as the term
small business concern under the Small Business Act. A small business
concern is one that: (1) is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Act.
28. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. The Commission's actions, over time, may affect small
entities that are not easily categorized at present. The Commission
therefore describes, at the outset, three broad groups of small
entities that could be directly affected herein. First, while there are
industry specific size standards for small businesses that are used in
the regulatory flexibility analysis, according to data from the Small
Business Administration's Office of Advocacy, in general a small
business is an independent business having fewer than 500 employees.
These types of small businesses represent 99.9% of all businesses in
the United States, which translates to 32.5 million businesses.
29. Next, the type of small entity described as a small
organization is generally any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field. The
Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 or
less to delineate its annual electronic filing requirements for small
exempt organizations. Nationwide, for tax year 2020, there were
approximately 447,689 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
30. Finally, the small entity described as a small governmental
jurisdiction is defined generally as governments of cities, counties,
towns, townships, villages, school districts, or special districts,
with a population of less than fifty thousand. U.S. Census Bureau data
from the 2017 Census of Governments indicate there were 90,075 local
governmental jurisdictions consisting of
[[Page 11935]]
general purpose governments and special purpose governments in the
United States. Of this number, there were 36,931 general purpose
governments (county, municipal, and town or township) with populations
of less than 50,000 and 12,040 special purpose governments--independent
school districts with enrollment populations of less than 50,000.
Accordingly, based on the 2017 U.S. Census of Governments data, the
Commission estimates that at least 48,971 entities fall into the
category of small governmental jurisdictions.
31. Licenses Assigned by Auctions. The Commission's small business
size standards with respect to licenses assigned by auction involve
eligibility for bidding credits and installment payments in the auction
of licenses for various wireless frequencies. In the auction of these
licenses, the Commission may define and adopt criteria for different
classes of small businesses--very small, small or entrepreneur. The
criteria for these small business classes may be statutorily defined in
the Commission's rules or may require consultation with the U.S. Small
Business Administration, Office of Size Standards. For licenses subject
to auction, the number of winning bidders that qualify as small
businesses at the close of an auction does not necessarily represent
the number of small businesses currently in service. In addition, the
Commission does not generally track subsequent business size unless, in
the context of assignments or transfers, unjust enrichment issues are
implicated.
32. Wireless Telecommunications Carriers (except Satellite). This
industry comprises establishments engaged in operating and maintaining
switching and transmission facilities to provide communications via the
airwaves. Establishments in this industry have spectrum licenses and
provide services using that spectrum, such as cellular services, paging
services, wireless internet access, and wireless video services. The
Small Business Act size standard for this industry classifies a
business as small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2017 show that there were 2,893 firms in this industry
that operated for the entire year. Of that number, 2,837 firms employed
fewer than 250 employees. Additionally, based on Commission data in the
2021 Universal Service Monitoring Report, as of December 31, 2020,
there were 797 providers that reported they were engaged in the
provision of wireless services. Of these providers, the Commission
estimates that 715 providers have 1,500 or fewer employees.
Consequently, using the Small Business Act's small business size
standard, most of these providers can be considered small entities.
33. Advanced Wireless Services (AWS). Spectrum is made available
and licensed in these bands for the provision of various wireless
communications services. Wireless Telecommunications Carriers (except
Satellite) is the closest industry with a Small Business Act small
business size standard applicable to these services. The Small Business
Act small business size standard for this industry classifies a
business as small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2017 show that there were 2,893 firms that operated in
this industry for the entire year. Of this number, 2,837 firms employed
fewer than 250 employees. Thus, under the Small Business Act size
standard, the Commission estimates that a majority of licensees in this
industry can be considered small.
34. According to Commission data as of December 2021, there were
approximately 4,472 active AWS licenses. The Commission's small
business size standards with respect to AWS involve eligibility for
bidding credits in the auction of licenses for these services. For the
auction of AWS licenses, the Commission previously has defined a small
business as an entity with average annual gross revenues for the
preceding three years not exceeding $40 million, and a very small
business as an entity with average annual gross revenues for the
preceding three years not exceeding $15 million. Pursuant to these
definitions, 57 winning bidders claiming status as small or very small
businesses won 215 of 1,087 licenses. In the most recent auction of AWS
licenses 15 of 37 bidders qualifying for status as small or very small
businesses won licenses.
35. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time the Commission is not
able to estimate the number of licensees with active licenses that
would qualify as small under the Small Business Act's small business
size standard.
36. Satellite Telecommunications. This industry comprises firms
primarily engaged in providing telecommunications services to other
establishments in the telecommunications and broadcasting industries by
forwarding and receiving communications signals via a system of
satellites or reselling satellite telecommunications. Satellite
telecommunications service providers include satellite and earth
station operators. The Small Business Act small business size standard
for this industry classifies a business with $38.5 million or less in
annual receipts as small. U.S. Census Bureau data for 2017 show that
275 firms in this industry operated for the entire year. Of this
number, 242 firms had revenue of less than $25 million. Additionally,
based on Commission data in the 2021 Universal Service Monitoring
Report, as of December 31, 2020, there were 71 providers that reported
they were engaged in the provision of satellite telecommunications
services. Of these providers, the Commission estimates that
approximately 48 providers have 1,500 or fewer employees. Consequently,
using the Small Business Act's small business size standard, a little
more than two-thirds of these providers can be considered small
entities.
37. The Commission expects that the rules proposed in the NPRM will
impose new and/or additional reporting or recordkeeping and/or other
compliance obligations on small entities as well as other applicants
and licensees, if adopted. The Commission believes that these rules
assist the Commission in meeting its statutory goals by facilitating
the auction, and subsequent use, of unassigned spectrum. The Commission
does not believe that the costs and/or administrative burdens
associated with the rules will unduly burden small entities. The
Commission notes that several of the proposed rule changes modify
requirements that were adopted prior to the last major update to the
Commission's competitive bidding rules in 2015 in order to bring them
in line with the policies and procedures that have been used in
auctions of 5G-ready services since 2015. Therefore, small entities
that have participated in Commission auctions since 2015 may already be
familiar with such policies and requirements and have the processes and
procedures in place to facilitate compliance resulting in minimal
incremental costs to comply with the proposals in the NPRM.
38. Typically, the auction procedures inform prospective applicants
that they
[[Page 11936]]
should familiarize themselves with the Commission's general competitive
bidding rules, Commission decisions regarding competitive bidding
procedures, application requirements, obligations of Commission
licensees, construction permit holders, and support recipients, and the
Commission's service rules for the frequency band available in the
auction or for construction permits or universal service support, and
that they must be thoroughly familiar with the procedures, terms, and
conditions contained in the public notice adopting procedures for the
auction. The Commission therefore does not expect that the amended
definitions proposed in the NPRM will increase the need for small
entities to hire attorneys, engineers, consultants, or other
professionals because it does not increase the level of education or
due diligence beyond what was required of applicants under the previous
competitive bidding rules for the AWS-3 spectrum bands.
39. The NPRM proposes a number of rule changes that will affect
reporting, recordkeeping, and other compliance requirements. Each of
these changes is described in the IRFA. The NPRM also seeks comment on
the possibility of a pre-auction Tribal licensing window for any
relevant portions of inventory AWS-3 licenses expected to be made
available for auction.
40. In the NPRM, the Commission proposes to amend the Commission's
rules related to designated entities eligible for bidding credits for
licenses subject to auction in the AWS-3 bands. The Commission proposes
to use the same revenue thresholds that the Commission has used in
recent years to determine eligibility for small and very small business
bidding credits, which are provided for in the Commission's part 1
standardized schedule of bidding credits. The Commission proposes to
amend the AWS-3 bidding credit eligibility criteria to align with the
Small Business Act's requirement that Federal agencies that categorize
business concerns that provide services as a small business concern
based on annual average gross receipts only do so if the agency
considers such receipts over a period of not less than five years.
Specifically, the Commission proposes a requirement for an entity to
have average gross revenues for the preceding five years not exceeding
$55 million to be a small business, and such an entity would be
eligible for a bidding credit of 15%. To be classified as a very small
business an entity would be required to have average gross revenues for
the preceding five years not exceeding $20 million and would be
eligible for a bidding credit of 25%. The Commission also proposes to
offer a rural service bidding credit.
41. In addition, the Commission proposes to modify the Commission's
general part 1 competitive bidding rules to incorporate the five-year
average gross receipts benchmark for the purpose of determining which
entities qualify for small business bidding credits for consistency
with the Small Business Act.
42. The RFA requires an agency to describe and discuss any
significant alternatives to its proposed approach that would minimize
economic impacts to small entities while allowing the agency to achieve
its regulatory objectives. Such alternatives may include: (1) the
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and reporting requirements under the rule for small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof for
small entities.
43. The proposals in the NPRM would update the competitive bidding
rules for the AWS-3 spectrum bands to align with current practices.
Because the proposed rules are similar to the designated entity rules
that have been used in recent auctions of wireless, 5G-ready spectrum,
many small businesses will already be familiar with these requirements.
This could lessen the compliance costs for small entities who have
participated in any wireless spectrum auction since 2015. The
Commission seeks comment on whether any other approach would minimize
compliance costs for small entities wishing to participate in this
auction.
44. Competitive Bidding and Bidding Credits for Small Entities. The
Commission administers bidding credit programs to promote small
business service provider participation in auctions and in the
provision of spectrum-based services. Based on the Commission's
analysis of past auction data, the relative costs of participation are
lowered for small businesses that take full advantage of the bidding
credit programs. The current designated entity rules for auctions of
licenses in AWS-3 spectrum bands were adopted prior to the last major
update to the part 1 competitive bidding rules in 2015. Thus, as
mentioned in the prior section, the Commission has proposed to modify
these designated entity rules so that they conform with the designed
entity rules set forth in part 1, subpart Q, of the Commission's rules
and are consistent with recent auctions. Specifically, the Commission
proposes to modify the designated entity rules for these services to
apply the current part 1 definition of a qualifying small business and
a very small business and apply the bidding credits for these two
categories, and for rural service providers. The Commission also
proposes to modify the part 1 size definitions for small business
bidding credits so that the amount of time over which revenues are
averaged for determining bidding credit eligibility is five years, in
conformance with the Small Business Act.
45. The Commission provides resources and educational materials to
assist all auction participants, including small entities, with
understanding the requirements of auction participation, including
applying for bidding credits. Small entities and other auction
participants may seek clarification of, or guidance regarding, auction
procedures, the competitive bidding rules, and any requirements related
to the authorizations or support to be made available through the
auction from Commission staff prior to each auction's application
window. Additionally, an FCC Auctions Hotline provides small entities
one-on-one access to Commission staff for information about the auction
process and procedures. The FCC Auctions Technical Support Hotline is
another resource that provides technical assistance to applicants,
including small entities, on issues such as access to or navigation
within the electronic short-form application (FCC Form 175) and use of
the bidding system. The Commission seeks comment on additional means to
assist small entities with participation in spectrum auctions.
46. No Federal rules duplicate, overlap, or conflict with the
proposed rules.
VII. Ordering Clauses
48. It is ordered, pursuant to the authority found in sections 1,
2, 4(i), 303, and 309(j) of the Communications Act of 1934, 47 U.S.C.
151, 152, 154(i), 303, and 309(j); the Servicemember Quality of Life
Improvement and National Defense Authorization Act for Fiscal Year
2025, H.R.5009, 118th Cong. Div. D, Title LIV, section 5403; and Sec.
1.411 of the Commission's Rules, 47 CFR 1.411, that the Notice of
Proposed Rulemaking is hereby adopted.
49. It is further ordered that the Commission's Office of the
Secretary, shall send a copy of the Notice of Proposed Rulemaking,
including the
[[Page 11937]]
Initial Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
List of Subjects
47 CFR Part 1
Administrative practice and procedure, Reporting and recordkeeping
requirements, Telecommunications.
47 CFR Part 27
Administrative practice and procedure, Communications common
carriers, Reporting and recordkeeping requirements.
Federal Communications Commission.
Marlene Dortch,
Secretary.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR parts 1 and 27 to
read as follows:
PART 1--PRACTICE AND PROCEDURE
0
1. The authority citation for part 1 continues to read as follows:
Authority: 47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note; 47
U.S.C. 1754, unless otherwise noted.
0
2. Amend Sec. 1.2110 by revising paragraphs (b)(1)(i) and (f)(2)(i) to
read as follows:
Sec. 1.2110 Designated entities.
* * * * *
(b) * * *
(1) * * *
(i) The gross revenues of the applicant (or licensee), its
affiliates, its controlling interests, and the affiliates of its
controlling interests shall be attributed to the applicant (or
licensee) and considered on a cumulative basis and aggregated for
purposes of determining whether the applicant (or licensee) is eligible
for status as a small business, very small business, or entrepreneur,
as those terms are defined in the service-specific rules in this
chapter. An applicant seeking status as a small business, very small
business, or entrepreneur, as those terms are defined in the service-
specific rules in this chapter, must disclose on its short- and long-
form applications, separately and in the aggregate, the gross revenues
for each of the previous five years of the applicant (or licensee), its
affiliates, its controlling interests, and the affiliates of its
controlling interests.
* * * * *
(f) * * *
(2) * * *
(i) Size of bidding credits. A winning bidder that qualifies as a
small business, and has not claimed a rural service provider bidding
credit pursuant to paragraph (f)(4) of this section, may use the
following bidding credits corresponding to its respective average gross
revenues for the preceding 5 years:
(A) Businesses with average gross revenues for the preceding 5
years not exceeding $4 million are eligible for bidding credits of 35
percent;
(B) Businesses with average gross revenues for the preceding 5
years not exceeding $20 million are eligible for bidding credits of 25
percent; and
(C) Businesses with average gross revenues for the preceding 5
years not exceeding $55 million are eligible for bidding credits of 15
percent.
* * * * *
PART 27--MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES
0
3. The authority citation for part 27 continues to read as follows:
Authority: 47 U.S.C. 154, 301, 302a, 303, 307, 309, 332, 336,
337, 1403, 1404, 1451, and 1452, unless otherwise noted.
0
4. Amend Sec. 27.1106 by revising paragraphs (a) and (b) and adding
paragraph (c) to read as follows:
Sec. 27.1106 Designated Entities in the 1695-1710 MHz, 1755-1780 MHz,
and 2155-2180 MHz bands.
* * * * *
(a) Small business. (1) A small business is an entity that,
together with its affiliates, its controlling interests, and the
affiliates of its controlling interests, has average gross revenues not
exceeding $55 million for the preceding five (5) years.
(2) A very small business is an entity that, together with its
affiliates, its controlling interests, and the affiliates of its
controlling interests, has average gross revenues not exceeding $20
million for the preceding five (5) years.
(b) Bidding credits. A winning bidder that qualifies as a small
business as defined in this section or a consortium of small businesses
may use the bidding credit specified in Sec. 1.2110(f)(2)(i)(C) of
this chapter, subject to the cap specified in Sec. 1.2110(f)(2)(ii) of
this chapter. A winning bidder that qualifies as a very small business
as defined in this section or a consortium of very small businesses may
use the bidding credit specified in Sec. 1.2110(f)(2)(i)(B) of this
chapter, subject to the cap specified in Sec. 1.2110(f)(2)(ii) of this
chapter.
(c) Rural service provider bidding credit. A rural service
provider, as defined in Sec. 1.2110(f)(4) of this chapter, which has
not claimed a small business bidding credit may use a bidding credit of
15 percent as specified in Sec. 1.2110(f)(4)(i) of this chapter,
subject to the cap specified in Sec. 1.2110(f)(4)(ii) of this chapter.
[FR Doc. 2025-03801 Filed 3-12-25; 8:45 am]
BILLING CODE 6712-01-P
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