# Presentation: 736540

## Tribal Lands Bidding Credits

**Extending Wireless Services to Tribal Lands**
- Michael Connelly
- Attorney, Mobility Division
- February 23, 2005

- Multiple Address Systems Spectrum Auction
- Auction No. 59 Seminar

**Notes:**
Hello I’m Michael Connelly, an attorney with the Mobility Division, and I’m pleased to be here to talk about the Commission’s Tribal Land Bidding Credits program.

## Tribal Lands Bidding Credits

- Credits given to winning bidders in Commission spectrum auctions who deploy facilities on and provide services to qualifying tribal lands.
- A qualifying tribal land is any federally recognized tribal area that has a wireline telephone penetration rate equal to or less than 85 percent.

**Notes:**
What are TLBCs?  They’re credits given to winning bidders in Commission spectrum auctions who deploy facilities on and provide services to qualifying tribal lands.   What are qualifying tribal lands?  They’re any federally recognized tribal area that has a wireline telephone penetration rate equal to or less than 85 percent.  I want to point out that the Commission recently amended its tribal lands rules; it used to be that a reservation or tribal land had to have a penetration rate of 70% or less.  That number made sense when the rules first came out in the late 90s.  Now, there are just a few tribes with such a low penetration rate, so the Commission decided to raise the number to 85%.  This new penetration rate becomes effective on December 17; because this auction doesn’t begin until January 2005, the new rules (the 85 percent) will be the number to use). On the auctions website they’ve posted a listing of federally-recognized tribal lands that qualify using 2000 census data.  Note that the list contains tribal lands with telephone penetration rates above 85% and are therefore not “qualifying tribal lands,” so make sure that they tribe you’re interested in serving actually has a wireline penetration rate at or below 85 percent.

##     Method of Calculation

- The Commission awards:
- $500,000 for the first 200 square miles (518 square kilometers) of qualifying tribal land; and
- $2500 for each additional square mile (2.59 square kilometers).

**Notes:**
The Commission will award:

1) $500,000 for the first 200 square miles of qualifying tribal land; and 
2) $2,500 for each additional square mile

Again, these are news number that came about as a result of the amendment to the rules

## Bidding Credit Limit

- Maximum limit placed on credits.
- For gross bid amounts of $1 million or less, the cap will be 50 percent of the gross bid.
- For gross bid amounts of greater than $1 million, but less than or equal to $2 million, the cap will be $500,000.
- For gross bid amounts exceeding $2 million, the cap will be 35 percent of the gross bid.

**Notes:**
All credits will be subject to a maximum limit based on the gross bid amount for the license for which the credit is sought.
Where the gross bid amount is $1 million or less, the cap will be 50 percent of the gross bid.
Where the gross bid amount is greater than $1 million, but less than or equal to $2 million, the cap will be $500,000.
Where the gross bid exceeds $2 million, the cap will be 35 percent of the gross bid.; this last number, the 35 percent, also is a result of the recent amendment. 

## Increased Bidding Credits

- Waiver requests for a higher bidding credit will be considered by the Commission, pursuant to rule § 1.925
- Applicant must demonstrate that its infrastructure costs exceed the available credit under the formula.
- Such requests will be subject to the applicable bidding credit cap.

**Notes:**
Waiver requests for a higher bidding credit will be considered by the Commission where an applicant demonstrates that its infrastructure costs exceed the available credit under the formula.
Such requests will be subject to the applicable bidding credit cap.
Note: Eligibility for, or calculation of, tribal land bidding credits is not related to, or affected by, that for small business bidding credits.
If qualified, you may receive both a small business bidding credit and a tribal lands bidding credit for a particular market. 
(If receiving both small business BC and TLBC, the TLBC is calculated on the gross bid.)

## Applicant indicates each market for which they seek tribal lands bidding credits on their long-form by the 601 filing deadline.
Applicants are allowed 180 calendar days to amend their long-forms and attach the required certifications. 

- Applicants are allowed 180 calendar days to amend their long-forms and attach the required certifications.

- Applying for Tribal Lands Bidding Credits

**Notes:**
If you’ve reviewed When applying for TLBC, you will need to Indicate on your long form the markets for which you are seeking TLBC

After filing your long form, you have 180 days to amend your 601 to provide your required certifications. 

## Required Certifications

- Required certifications consist of:
- Tribal Government Certification
- It will allow the applicant to site facilities and provide service on its tribal land(s), in accordance with FCC rules;
- It has not and will not enter into an exclusive contract with the applicant precluding entry by other carriers, and will not unreasonably discriminate against any carrier; and
- Its tribal land is a qualifying tribal land as defined by the FCC rules, *i.e.* areas that have a telephone penetration rate at or below 85 percent.
- Applicant Certification
- It will consult with the tribal government about siting facilities and providing service on its land; and
- It will comply with the three-year buildout requirement.

**Notes:**
And what are those required certs?  There are two – one form the tribal government, the other from the applicant:
Tribal Government Certification, which must state that:
a) It will allow the applicant to site facilities and provide service on its tribal land(s), in accordance with our rules;
b) That it has not and will not enter into an exclusive contract with the applicant precluding entry by other carriers, and will not unreasonably discriminate against any carrier; and
c) That its tribal land is a qualifying tribal land as defined by our rules.

and the Applicant cert, which will state that the applicant will:
 1) It will consult with the tribal government about siting facilities and providing service on its land; and 
2) That it will comply with the three-year buildout requirement. 

## Construction Requirement

- In order to verify compliance with the tribal lands buildout requirement, licensees are required to file a notification of construction (FCC Form 601, Schedule K)
- Must be filed at the conclusion of the three-year buildout period.
- Must state that they have constructed and are operating a system that covers 75 percent of the population of the qualifying tribal land.

**Notes:**
In order to verify compliance with the tribal lands buildout requirement, licensees are required to file a notification of construction (FCC Form 601, Schedule K) at the conclusion of the three-year buildout period, stating that they have constructed and are operating a system that covers 75 percent of the population of the qualifying tribal land.
You will need to make an affirmative showing of 75% pop coverage to the tribal land

## Repayment 

- If the certification is not filed or if the buildout requirement is not met, the licensee must repay the bidding credit amount plus interest.
- Repayment is due 30 days after the conclusion of the three-year buildout requirement.
- Failure to repay will result in automatic termination of the license.

**Notes:**
Repayment of the tribal lands bidding credit may be required under certain circumstances.
If the certification is not filed or if the buildout requirement is not met, the licensee must repay the bidding credit amount plus interest (interest is based on 10-year U.S. Treasury rate).
Repayment is due 30 days after the conclusion of the three-year buildout requirement.
Failure to repay will result in automatic termination of the license

## Transfers and Assignments 

- Transfers of Control or assignments of licenses that received tribal lands bidding credits is permitted
- Obligations of license automatically transfer to assignee
- If partitioning a license, transfer of TLBC allowed _only_ if tribal land is "wholly contained" within either the original or partitioned area.

**Notes:**
Transfers of Control or assignments of licenses that received tribal lands bidding credits is permitted, but may require repayment of the credit under certain circumstances.
When transferring a license that received a TLBC, all obligations of license will automatically transfer to the assignee.
If partitioning a license, transfer of the TLBC is allowed only if tribal land is "wholly contained" within either the original or partitioned area.

## Further Information

- See:
- 47 C.F.R. § 1.2110(f)(3).
- Winning Bidder/Closing Public Notice
- Auction Website _[www.fcc.gov/wtb/auction](http://www.fcc.gov/wtb/auction)__ (select the link for “Info on Tribal Land Bidding Credit”)_
- Contact:
- Michael Connelly, phone: (202) 418-0132, or email: michael.connelly@fcc.gov

**Notes:**
I hope tribal lands bidding credits fit in to your business plan, and that both you and the tribe can benefit from your taking part.  The Commission is seeking to encourage more applicants to provide service to tribal lands.  Do you have any questions?  Thanks

## Tribal Lands Bidding Credits

- THE END
***Disclaimer: This presentation is provided as informal staff information and assistance; it is not legal advice, nor is it a binding opinion of the WTB or FCC.  ***

**Notes:**
This concludes the TLBC presentation.

Please note that this presentation is provided as informal staff information and assistance; it is not legal advice, nor is it a binding opinion of the WTB or FCC.  

Thank you, and good luck.