**ATTACHMENT C**

**ELIGIBILITY FOR** **NEW ENTRANT BIDDING CREDIT;**

**OWNERSHIP DISCLOSURE REQUIREMENTS;**

**CONSORTIA AND JOINT BIDDING ARRANGEMENTS**

**ELIGIBILITY FOR** **NEW ENTRANT BIDDING CREDIT**

**A. General Eligibility Criteria**

To fulfill its obligations under Section 309(j) and further its
long-standing commitment to the diversification of broadcast facility
ownership, the Commission adopted a tiered New Entrant Bidding Credit
for auction applicants with no, or very few other media interests.

(1) **Determination of** **Eligibility for Bidding Credit**

For purposes of determining which entities qualify for a New Entrant
Bidding Credit, the following information should be considered: the
interests of the bidder, and of any individuals or entities with an
attributable interest in the bidder, in other media of mass
communications at the time of the short-form application filing
deadline.

The interests held by the bidder, and by any individual or entity with
an attributable interest in the bidder, in other media of mass
communications shall be considered when determining a bidder\'s
eligibility for the New Entrant Bidding Credit. Under traditional
broadcast attribution rules, those entities or individuals with an
attributable interest in a bidder include: all officers and directors of
a corporate bidder; any owner of 5% or more of the voting stock of a
corporate bidder; all partners and limited partners of a partnership
bidder, unless the limited partners are sufficiently insulated; and all
members of a limited liability company, unless insulated.[^1] In cases
where a bidder's spouse or close family member holds other media
interests, such interests are not automatically attributable to the
bidder. The Commission decides attribution issues in this context based
on certain factors traditionally considered relevant.[^2] Bidders should
note that the mass media attribution rules were recently revised.[^3]

Bidders are also reminded that, by *Memorandum Opinion and Order*
released August 5, 1999,[^4] the Commission further refined the
eligibility standards for the New Entrant Bidding Credit, judging it
appropriate to attribute the media interests held by very substantial
investors in, or creditors of, a bidder claiming new entrant status.
Specifically, the attributable mass media interests held by an
individual or entity with an equity and/or debt interest in a bidder
shall be attributed to that bidder for purposes of determining its
eligibility for the New Entrant Bidding Credit, if the equity and debt
interests, in the aggregate, exceed 33% of the total asset value of the
bidder, even if such an interest is non-voting. [^5]

Generally, media interests will be attributable for purposes of the New
Entrant Bidding Credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules.[^6] However, attributable interests held by a
winning bidder in existing low power television, television translator
or FM translator facilities will not be counted among the bidders\'
other mass media interests in determining its eligibility for a New
Entrant Bidding Credit.[^7] A medium of mass communications is defined
in 47 C.F.R § 73.5008 (b).

The bidder\'s attributable interests shall be determined as of the short
form (FCC Form 175) filing deadline. Bidders intending to divest a media
interest or make any other ownership changes, such as resignation of
positional interests, in order to avoid attribution for purposes of
qualifying for the New Entrant Bidding Credit must have consummated such
divestment transactions or have completed such ownership changes by no
later than the short-form filing deadline.[^8]

**(2) Application Showing**

Applicants are required to file supporting documentation as Exhibits A
and C to their FCC Form 175 short-form applications to establish that
they satisfy the eligibility requirements to qualify for a New Entrant
Bidding Credit.[^9] In addition, in those cases where a New Entrant
Bidding Credit is being sought, a certification under penalty of perjury
must be set forth in Exhibit C attesting to the eligibility of the
bidder for the level of Credit claimed.

**B. Bidding Credits**

Applicants that qualify for the New Entrant Bidding Credit, as set forth
in 47 C.F.R. § 73.5007,[^10] are eligible for a bidding credit that
represents the amount by which a bidder\'s winning bids are discounted.
The size of a New Entrant Bidding Credit depends on the number of
ownership interests in other media of mass communications that are
attributable to the bidder-entity and its attributable interest-holders:

-   A 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, has no attributable interest in any other media of
    mass communications, as defined in 47 C.F.R. § 73.5008; and,

-   A 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, has an attributable interest in no more than three
    mass media facilities, as defined in 47 C.F.R. § 73.5008; and,

-   No bidding credit will be given if any of the commonly owned mass
    media facilities serve the same area as the proposed broadcast
    station, as defined in 47 C.F.R. § 73.5007, 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.

Bidding credits are not cumulative; qualifying applicants receive either
the 25 percent or the 35 percent bidding credit, but not both.
Attributable interests are defined in 47 C.F.R. § 73.3555 and Note 2 of
that section. Bidders should note that unjust enrichment provisions
apply to a winning bidder that utilizes a bidding credit and
subsequently seeks to assign or transfer control its license or
construction permit to an entity not qualifying for the same level of
bidding credit.[^11]

**OWNERSHIP DISCLOSURE REQUIREMENTS**

All applicants must comply with the uniform Part 1 ownership disclosure
standards and provide information set forth in Sections 1.2105 and
1.2112 of the Commission's rules. Specifically, in completing Form 175,
applicants will be required to file in Exhibit A, a full and complete
statement of the ownership of the bidding entity.[^12] The ownership
disclosure standards for the short form are set forth in Section 1.2112
of the Commission's rules. Bidders should note that, under Section
1.2112 (a)(4), the short form must list, *inter alia*, the names,
addresses and citizenship of any party holding options permitting the
acquisition of a ten percent or greater equity interest in the
application, as well as the amount and percentage held.

Applicants owned by minorities or women, as defined in 47 C.F.R. §
1.2110(b)(2), may attach an exhibit (Exhibit D) regarding this status.
This applicant status information is collected for statistical purposes
only and assists the Commission in monitoring the participation of
\"designated entities\" in its auctions. Applicants wishing to submit
additional information may do so in Exhibit E -Miscellaneous Information
-- to the FCC Form 175.

**CONSORTIA AND JOINT BIDDING ARRANGEMENTS**

Applicants will be required to identify on their short-form applications
any parties with whom they have entered into any consortium
arrangements, joint ventures, partnerships or other agreements or
understandings which relate in any way to the competitive bidding
process. *See* 47 C.F.R. §§ 1.2105(a)(2)(viii); 1.2105(c)(1). Applicants
will also be required to certify on their short form applications that
they have not entered into any explicit or implicit agreements,
arrangements or understandings of any kind with any parties, other than
those identified, regarding the amount of their bids, bidding
strategies, or the particular construction permits on which they will or
will not bid. *See* 47 C.F.R*.* § 1.2105(a)(2)(ix). In cases where such
consortia or joint bidding arrangement are contemplated, applicants must
submit an Exhibit B to the FCC Form 175.

.

[^1]: *See* 47 C.F.R. § 73.3555 Note 2.

[^2]: *See* *Clarification of Commission Policies Regarding Spousal
    Attribution*, 7 FCC Rcd 1920 (1992).

[^3]: *See Review of the Commission's Regulations Governing Attribution
    of Broadcast and Cable/MDS Interests*, MM Docket No. 94-150, FCC
    99-207 (rel. August 6, 1999) (prior history omitted).

[^4]: *Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service Licenses*, MM Docket No. 97-234, 64 Fed.
    Reg. 44856 (August 18, 1999).

[^5]: *See* 47 C.F. R. § 73.5008.

[^6]: Further, any bidder asserting new entrant status must have *de
    facto* as well as *de jure* control of the entity claiming the
    bidding credit. 47 C.F.R. § 73.5007. Typically, *de jure* control is
    evidenced by ownership of at least 50.1 percent of an entity\'s
    voting stock or equivalent level of interest in cases where the
    bidder is not a corporate entity. *De facto* control is determined
    on a case-by-case basis.

[^7]: ^?^ *Memorandum Opinion and Order on* *Reconsideration* at ¶ 75.

[^8]: The fact that, on the short form filing deadline, a bidder has a
    pending or granted application to assign or transfer control of a
    media interest shall not be sufficient to avoid attribution. Bidders
    must have consummated the transaction by the short form filing
    deadline to avoid attribution.

[^9]: See 47 C.F.R. § 1.2105.

[^10]: Section 73.5007 of the Commission's rules was most recently
    revised pursuant to the *Memorandum* *Opinion and Order on
    Reconsideration*. The revised version of the rule became effective
    on July 6, 1999.

[^11]: *See* 47 C.F.R. § 73.5007( c ).

[^12]: Section 73.5002 of the broadcast competitive bidding procedural
    rules specifies the bidding procedures, certification requirements,
    and anti-collusion rules applicable to applications for commercial
    broadcast services that are subject to auction. Subsection (b) of
    that rule requires the timely submission of short-form applications
    *along with all required certifications, information and exhibits
    pursuant to the provisions of 47 C.F.R. § 1.2105(a).* Section
    1.2105, in turn, requires the disclosure on the short-form of
    applicant ownership information as set forth in Section 1.2112.