[Federal Register Volume 69, Number 200 (Monday, October 18, 2004)]
[Rules and Regulations]
[Pages 61317-61321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23187]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 99-266; FCC 04-202]


Extending Wireless Telecommunications Services to Tribal Lands

AGENCY: Federal Communications Commission.

ACTION: Final rules.

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SUMMARY: In this rule, the Commission modifies limited aspects of the 
rules previously adopted in this proceeding to provide incentives for 
wireless telecommunications carriers to serve individuals living on 
tribal lands. Specifically, the Commission raises the wireline 
telephone penetration rate at which tribal lands are eligible for a 
bidding credit from 70 percent or less, to 85 percent or less. The 
Commission also increases the amount of the bidding credit available to 
carriers that pledge to deploy on and serve qualifying tribal lands.

DATES: Effective December 17, 2004.

FOR FURTHER INFORMATION CONTACT: Renee Crittendon or Michael Connelly, 
Wireless Telecommunications Bureau, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Third Report and Order, FCC 04-202, adopted 
August 18, 2004, and released September 2, 2004. The full text of the 
Third Report and Order is available for public inspection during 
regular business hours at the FCC Reference Information Center, 445 
12th St., SW., Room CY-A257, Washington, DC 20554. The complete text 
may be purchased from the Commission's duplicating contractor: Best 
Copy & Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, 
DC 20554, telephone 800-378-3160, facsimile 202-488-5563, or via e-mail 
at <a href="/cdn-cgi/l/email-protection#730404045d151010331110031a0416115d101c1e"><span class="__cf_email__" data-cfemail="5a2d2d2d743c39391a38392a332d3f3874393537">[email protected]</span></a>.

Synopsis of Report and Order

I. Background

    1. In June 2000, the Commission issued a First Report and Order, 65 
FR 47349, August 2, 2000 (First R&O) which established the tribal lands 
bidding credit program and limited availability of the credit to 
federally recognized tribal areas with telephone penetration rates 
equal to or less than 70 percent, concluding that the bidding credits 
would assist tribal communities with the greatest need for access to 
telecommunications service. The Commission's Second Report and Order at 
68 FR 23417, May 2, 2003, modified and clarified aspects of the bidding 
credit procedures, including: extending the deadline for obtaining the 
certifications from the applicable tribal governments from 90 to 180 
days; clarifying the obligations of an assignee that has received the 
license from a licensee awarded a tribal lands bidding credit; 
requiring licensees to file an attachment along with their notification 
of construction; stating that it is providing coverage to 75 percent of 
the population of the tribal area for which the credit was awarded; and 
codifying penalties for failure to comply with build-out requirements, 
and failure to timely repay the bidding credit.
    2. In the Second Further Notice, 18 FCC Rcd 4775, March 14, 2003, 
the Commission sought comment on four discrete issues. First, the 
Commission asked whether it should reconsider or moderate the buildout 
obligations imposed on carriers in light of the lack of participation 
in the bidding credit program. Next, the Commission asked for comments 
on whether and how the bidding credit limit and formula might be 
modified to provide greater incentive for carriers to deploy facilities 
on tribal lands. Then, the Commission sought comment on whether it 
should adjust the bidding credit formula to incorporate data from the 
2000 Census figures rather than the 1990 figures in calculating tribal 
penetration for purposes of determining eligibility for the credit. 
Finally, the Commission sought comment on allowing carriers who obtain 
tribal lands bidding credits, to obtain additional credit for extending 
their coverage to immediately adjacent non-tribal areas that also have 
low penetration rates.

II. Discussion

A. Modifying the Construction Requirements of the Tribal Lands Bidding 
Credit

    3. In the Second Further Notice, the Commission sought comment on 
modifying the requirement that, within three years of grant of a 
license, a carrier must cover 75 percent of the tribal area for which 
the bidding credit was awarded. The Commission's underlying objective 
in applying the more stringent construction requirement was to 
encourage winning bidders that are committed to providing 
telecommunications services in Indian Country, and that will deploy 
those services rapidly. The Commission continues to believe that the 
heightened requirement serves those dual purposes, and believes that 
relaxing these requirements is not necessary to further the goals of 
the bidding credit program. The Commission also notes that should a 
carrier be unable to fulfill its construction requirement at the end of 
three years, it may seek a waiver from the relevant Commission rule. 
Therefore, the Commission determined not to modify the construction 
requirement. Rather, it strongly encourages parties to seek waivers of 
specific rules or file other requests for regulatory relief in those 
instances where greater flexibility than the rules allow would 
facilitate the provision of service to tribal lands. Also, because the 
Commission recognizes the unique sovereign status of Indian tribes, the 
trust relationship between the federal government and Indian tribes, 
and the Commission's ongoing federal obligation to guarantee the right 
of Indian tribes to self-government, the Commission declined to adopt a 
suggestion to allow applicants, as opposed to tribal governments, to 
certify compliance with certain baseline eligibility requirements.

B. Increasing the Bidding Credit Limit

    4. In the Second Further Notice, the Commission asked commenters 
whether the current credit amounts were adequate or whether the bidding 
credit limit, as presently structured, was insufficient for applicants 
to recover costs for building on tribal lands. Determining that an 
increase in the bidding credit limit is warranted in order to further 
mitigate the economic risk associated with provision of service, the 
Commission adopted the following formula for calculating the credit 
amount. A winning bidder may receive a $500,000 credit for up to the 
first 200 square miles (518 square kilometers) of qualifying tribal 
land within its license area. In instances where qualifying tribal 
lands within a license area exceed 200 square miles (518 kilometers), a 
winning bidder may receive an additional $2500 per square mile (2.59 
square kilometers), or $500,000 for each additional 200 square

[[Page 61318]]

miles (518 square kilometers). 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 and equal to or less than $2 million, the cap 
will be $500,000. Finally, where the gross bid amount exceeds $2 
million, the cap will be 35 percent of the gross bid.

C. Adjustment of the Eligibility Criteria Based on 2000 Census Data

    5. In the Second Further Notice, the Commission noted that the 
statistics used in the initial notice for the tribal lands bidding 
credit program cited 1990 Census data, which showed that basic 
telecommunications service to Indian Country generally was well below 
the national average. The Commission sought comment on the advisability 
of using data from the 2000 Census, which indicated that average 
telephone penetration rates on tribal lands increased markedly during 
the 1990s, asking how that new information should be incorporated into 
the bidding credit formula.
    6. While the increased rates in penetration, subscribership, and 
facilities deployment reflect the Commission's resolve in assuring that 
all Americans, including those living in Indian Country, have the 
benefits of access to basic telecommunications services, the Commission 
noted, nevertheless, that well over half of tribes continue to have 
penetration rates below our national average. The Commission therefore 
raised the telephone penetration level at which tribal lands are 
eligible for a credit. At the current 70 percent benchmark, based on 
the 2000 Census data, only a few dozen (out of nearly 450) federally 
recognized tribal lands would qualify under our rules for a tribal 
lands bidding credit. The Commission believes that raising the wireline 
telephone penetration benchmark from 70 to 85 percent will both 
increase the number of qualifying tribal lands eligible for this 
bidding credit program (to roughly 150) and provide a greater incentive 
for carriers to deploy facilities on tribal lands. The Commission also 
believes that an 85 percent benchmark for tribal lands bidding credit 
eligibility represents a balance between its efforts to expand the 
scope of, and encourage participation in, the existing tribal lands 
bidding credit program, with the Commission's objective to target those 
tribal communities with the greatest need for access to 
telecommunications services.

D. Extending the Tribal Lands Bidding Credit to Adjacent Non-Tribal 
Areas With Low Penetration Rates

    7. The Commission sought comment on a limited expansion of the 
bidding credit program that would allow carriers who obtain tribal 
lands bidding credits to obtain additional credit for extending their 
coverage to immediately adjacent non-tribal areas that have comparably 
low penetration rates, noting that certain areas abutting tribal lands 
often share the same characteristics as tribal lands (e.g., significant 
Native American population, income levels, terrain, etc.), but do not 
otherwise qualify for the tribal lands bidding credit. In particular, 
the Commission requested that commenters discuss how to define the 
geographic areas eligible for an additional credit, the appropriate 
certification process, and any other measures or conditions that should 
be adopted to safeguard the integrity of the process. The Commission 
also requested comment on its legal authority to extend the bidding 
credit in such a way.
    8. While noting that it continues to seek ways to extend 
telecommunications service to all Americans, including providing 
incentives to carriers that will serve areas that might otherwise be 
neglected, the Commission decided not to extend the bidding credit 
program to adjacent non-tribal areas at this time. The Commission noted 
that, using Census tract data, the number of immediately adjacent non-
tribal areas that would qualify for such a bidding credit (i.e., a 
tract wholly outside tribal lands with a telephone penetration rate 
equal to or less than eighty-five percent) is negligible. In 
particular, an estimated two percent of census tracts wholly outside 
but immediately adjacent to tribal lands have a telephone penetration 
rate equal to or less than 85 percent. Accordingly, it does not appear 
that expanding the bidding credit program to adjacent non-tribal areas 
with low penetration rates would have any marked impact on increased 
subscribership or facilities deployment for those areas. The Commission 
also noted that nothing in its rules prevents a licensee that has been 
awarded a tribal lands bidding credit from providing service to 
immediately adjacent, non-tribal areas.

III. Procedural Matters

A. Final Regulatory Flexibility Act Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the First Report and Order and Further Notice of 
Proposed Rulemaking and the Second Report and Order and Second Further 
Notice of Proposed Rulemaking. The Commission sought written public 
comment on the proposals in the First Further Notice and Second Further 
Notice, including comment on the IRFA. This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA.
A. Need for, and Objectives of, the Third Report and Order
    In this Third Report and Order, the Commission modifies rules 
previously adopted in the First Report and Order in this proceeding to 
provide incentives for wireless telecommunications carriers to serve 
individuals living on tribal lands. In that proceeding, the Commission 
authorized the grant of bidding credits to winning bidders who deploy 
facilities and provide service to federally-recognized tribal areas 
that have a wireline telephone subscription rate equal to or below 70 
percent. In the present item, the Commission amends Sec.  
1.2110(f)(3)(i) of the Commission's rules to increase the wireline 
telephone subscription rate for a qualifying tribal land to equal to or 
less than 85 percent with the intention of increasing participation in 
the bidding credit program; it also amends Sec. Sec.  1.2110(f)(3)(iii) 
and (iv) to increase the bidding credit available to applicants that 
deploy facilities on and provide wireless services to qualifying tribal 
lands. The objective of these actions, and of this Third Report and 
Order, is to address the need to provide incentives for carrier to 
provide wireless telecommunications services on generally underserved 
tribal lands. This Third Report and Order also addresses issues raised 
in the Second Further Notice of Proposed Rulemaking. In the Second 
Further Notice, the Commission requested comment on whether it should 
expand the use of bidding credits. Specifically, it sought comment as 
to whether to: (1) Modify the program's construction requirements; (2) 
increase the bidding credit limit; (3) adjust the eligibility criteria 
based on data from the 2000 Census; and (4) allow carriers who obtain 
tribal lands bidding credits, to obtain additional credit for extending 
their coverage to immediately adjacent non-tribal areas that also have 
low penetration rates.

[[Page 61319]]

    The Commission believes that increasing the wireline telephone 
subscription rate at which tribal lands are eligible for a bidding 
credit to 85 percent or less, will have the affect of increasing 
participation in the program by increasing the number of qualifying 
tribes and providing additional incentives to carriers to enter into 
agreements with tribal governments to deploy wireless services within 
Indian Country. The Commission also believes that increasing the amount 
of bidding credit available will provide additional incentives to 
prospective wireless providers in Indian Country. Regarding the other 
issues raised, the Commission believes that the lack of a record 
supporting the proposed changes in the rules, as well as the 
availability of ad hoc or waiver process remedies, make it 
inappropriate to adopt those proposals as rules at this time. 
Specifically, the Commission does not believe that modifying the 
construction requirements or extending the bidding credit to adjacent, 
non-tribal lands will further the objectives of this Third Report and 
Order.
B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    No comments were filed that specifically addressed the rules and 
policies proposed in the IRFA.
C. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply
    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 rules adopted herein. 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 which: (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 
Administration (SBA).
    Cellular Licensees. The SBA has developed a small business size 
standard for small businesses in the category ``Cellular and Other 
Wireless Telecommunications.'' Under that SBA category, a business is 
small if it has 1,500 or fewer employees. According to the Bureau of 
the Census, only twelve firms from a total of 1238 cellular and other 
wireless telecommunications firms operating during 1997 had 1,000 or 
more employees. Therefore, even if all twelve of these firms were 
cellular telephone companies, nearly all cellular carriers were small 
businesses under the SBA's definition. In addition, the Commission 
notes that there are 1807 cellular licenses; however, a cellular 
licensee may own several licenses. According to the most recent Trends 
in Telephone Service data, Industry Analysis Division, Wireline 
Competition Bureau, Table 5.3--Number of Telecommunications Service 
Providers that are Small Businesses (May 2002), 858 carriers reported 
that they were engaged in the provision of either cellular service, 
Personal Communications Service (PCS), or Specialized Mobile Radio 
telephony services, which are placed together in that data. The 
Commission estimates that 291 of these are small under the SBA small 
business size standard. Accordingly, based on this data, the Commission 
estimates that not more than 291 cellular service providers will be 
affected by these revised rules.
    220 MHz Radio Service--Phase I Licensees. The 220 MHz service has 
both Phase I and Phase II licenses. Phase I licensing was conducted by 
lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized 
to operate in the 220 MHz band. The Commission has not developed a 
definition of small entities specifically applicable to such incumbent 
220 MHz Phase I licensees. To estimate the number of such licensees 
that are small businesses, the Commission applies the definition under 
the SBA rules applicable to ``Cellular and Other Wireless 
Telecommunication'' companies. This category provides that a small 
business is a wireless company employing no more than 1,500 persons. 
According to the Bureau of the Census, only twelve firms from a total 
of 1238 cellular and other wireless telecommunications firms operating 
during 1997 had 1,000 or more employees. If this general ratio 
continues in 2002 in the context of Phase I 220 MHz licensees, the 
Commission estimates that nearly all such licensees are small 
businesses under the SBA's small business standard.
    220 MHz Radio Service `` Phase II Licensees. The Phase II 220 MHz 
service is a new service, and is subject to spectrum auctions. In the 
220 MHz Third Report and Order, the Commission adopted a small business 
size standard for defining ``small'' and ``very small'' businesses for 
purposes of determining their eligibility for special provisions such 
as bidding credits and installment payments. This small business 
standard indicates that a ``small business'' is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $15 million for the preceding three years. 
A ``very small business'' is defined as an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
that do not exceed $3 million for the preceding three years. The SBA 
has approved these small size standards. Auctions of Phase II licenses 
commenced on September 15, 1998, and closed on October 22, 1998. In the 
first auction, 908 licenses were auctioned in three different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area 
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 683 were sold. Thirty-nine small businesses won 
licenses in the first 220 MHz auction. The second auction included 225 
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies 
claiming small business status won 158 licenses.
    700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, the 
Commission adopted a small business size standard for ``small 
businesses'' and ``very small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A small business is an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
not exceeding $40 million for the preceding three years. Additionally, 
a ``very small business'' is an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
are not more than $15 million for the preceding three years. An auction 
of 52 Major Economic Area (MEA) licenses commenced on September 6, 
2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 
96 licenses were sold to 9 bidders. Five of these bidders were small 
businesses that won a total of 26 licenses. A second auction of 700 MHz 
Guard Band licenses commenced on February 13, 2001 and closed on 
February 21, 2001. All eight of the licenses auctioned were sold to 
three bidders. One of these bidders was a small business that won a 
total of two licenses.
    Lower 700 MHz Band Licenses. The Commission adopted criteria for 
defining three groups of small businesses for purposes of determining 
their eligibility for special provisions such as bidding credits. The 
Commission has defined a small business as an entity that, together 
with

[[Page 61320]]

its affiliates and controlling principals, has average gross revenues 
not exceeding $40 million for the preceding three years. A very small 
business is defined as an entity that, together with its affiliates and 
controlling principals, has average gross revenues that are not more 
than $15 million for the preceding three years. Additionally, the lower 
700 MHz Service has a third category of small business status that may 
be claimed for Metropolitan/Rural Service Area (MSA/RSA) licenses. The 
third category is entrepreneur, which is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years. An auction of 704 licenses (one license in each of the 734 
MSAs/RSAs and one license in each of the six Economic Area Groupings 
[EAGs]) commenced on August 27, 2002, and closed on September 18, 2002. 
Of the 740 licenses available for auction, 484 licenses were sold to 
102 winning bidders. Seventy-two of the winning bidders claimed small 
business, very small business or entrepreneur status and won a total of 
329 licenses.
    Private and Common Carrier Paging. In the Paging Second Report and 
Order, the Commission adopted a small size standard for ``small 
businesses'' for purposes of determining their eligibility for special 
provisions such as bidding credits and installment payments. A small 
business is an entity that, together with its affiliates and 
controlling principals, has average gross revenues not exceeding $15 
million for the preceding three years. The SBA has approved this 
definition. An auction of Metropolitan Economic Area (MEA) licenses 
commenced on February 24, 2000, and closed on March 2, 2000. Of the 985 
licenses auctioned, 440 were sold. Fifty-seven companies claiming small 
business status won. At present, there are approximately 24,000 Private 
Paging site-specific licenses and 74,000 Common Carrier Paging 
licenses. According to the most recent Trends in Telephone Service, 608 
carriers reported that they were engaged in the provision of either 
paging or ``other mobile'' services. Of these, the Commission estimates 
that 589 are small, under the SBA-approved small business size 
standard. The Commission estimates that the majority of private and 
common carrier paging providers would qualify as small entities under 
the SBA definition.
    Broadband Personal Communications Service (PCS). The broadband PCS 
spectrum is divided into six frequency blocks designated A through F, 
and the Commission has held auctions for each block. The Commission has 
created a small business size standard for Blocks C and F as an entity 
that has average gross revenues of less than $40 million in the three 
previous calendar years. For Block F, an additional small business size 
standard for ``very small business'' was added and is defined as an 
entity that, together with their affiliates, has average gross revenues 
of not more than $15 million for the preceding three calendar years. 
These small business size standards, in the context of broadband PCS 
auctions, have been approved by the SBA. No small businesses within the 
SBA-approved small business size standards bid successfully for 
licenses in Blocks A and B. There were 90 winning bidders that 
qualified as small entities in the Block C auctions. A total of 93 
``small'' and ``very small'' business bidders won approximately 40% of 
the 1,479 licenses for Blocks D, E, and F. On March 23, 1999, the 
Commission reauctioned 347 C, D, E, and F Block licenses; there were 48 
small business winning bidders. Based on this information, we conclude 
that the number of small broadband PCS licensees will include the 90 
winning C Block bidders and the 93 qualifying bidders in the D, E, and 
F blocks plus the 48 winning bidders in the re-auction, for a total of 
231 small entity PCS providers as defined by the SBA small business 
standards and the Commission's auction rules. On January 26, 2001, the 
Commission completed the auction of 422 C and F Broadband PCS licenses 
in Auction No. 35. Of the 35 winning bidders in this auction, 29 
qualified as ``small'' or ``very small'' businesses.
    Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. In March 2002, 106 MTA and BTA narrowband PCS licenses were 
granted to 4 licensees. Each of the licensees are small or very small 
businesses.
    Specialized Mobile Radio (SMR). Pursuant to 47 CFR 90.814(b)(1), 
the Commission has established a small business size standard for 
purposes of auctioning 900 MHz SMR licenses, 800 MHz SMR licenses for 
the upper 200 channels, and 800 MHz SMR licenses for the lower 230 
channels on the 800 MHz band as a firm that has had average annual 
gross revenues of $15 million or less in the three preceding calendar 
years. The SBA has approved this small business size standard for the 
800 MHz and 900 MHz auctions. Sixty winning bidders for geographic area 
licenses in the 900 MHz SMR band qualified as small businesses under 
the $15 million size standard. The auction of the 525 800 MHz SMR 
geographic area licenses for the upper 200 channels began on October 
28, 1997, and was completed on December 8, 1997. Ten (10) winning 
bidders for geographic area licenses for the upper 200 channels in the 
800 MHz SMR band qualified as small businesses under the $15 million 
size standard.
    The auction of the 1,050 800 MHz SMR geographic area licenses for 
the General Category channels began on August 16, 2000, and was 
completed on September 1, 2000. Eleven (11) winning bidders for 
geographic area licenses for the General Category channels in the 800 
MHz SMR band qualified as small businesses under the $15 million size 
standard. In an auction completed on December 5, 2000, a total of 2,800 
Economic Area licenses in the lower 80 channels of the 800 MHz SMR 
service were sold. Of the 22 winning bidders, 19 claimed ``small 
business'' status. Thus, 40 winning bidders for geographic licenses in 
the 800 MHz SMR band qualified as small business. In addition, there 
are numerous incumbent site-by-site SMR licensees on the 800 and 900 
MHz band. The Commission awards bidding credits in auctions for 
geographic area 800 MHz and 900 MHz SMR licenses to firms that had 
revenues of no more than $15 million in each of the three previous 
calendar years. This analysis applies to SMR providers in the 800 MHz 
and 900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. The Commission does 
not know how many firms provide 800 MHz or 900 MHz geographic area SMR 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues of no more than $15 million. One 
firm has over $15 million in revenues. The Commission assumes, for 
purposes of this analysis, that all of the remaining existing extended 
implementation authorizations are held by small entities, as that small 
business size standard is established by SBA.
D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    This Third Report and Order modifies a basic qualification for 
participation in the tribal lands bidding credit program. The 
Commission increases the wireline telephone subscription rate for an 
area to qualify for the tribal lands bidding credit from 70 percent or 
less to 85

[[Page 61321]]

percent or less. The Commission also increases the amount of bidding 
credit available that may be awarded to auction high bidders for 
deploying facilities on and providing service to qualifying tribal 
lands. The Commission does not propose any additional reporting, 
recordkeeping or compliance requirements.
E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
developing its approach, which may include the following four 
alternatives (among others): (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 or 
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.
    In the Third Report and Order, the Commission first declined to 
modify the current construction requirements for a licensee that has 
been awarded a bidding credit for serving qualifying tribal lands, 
believing that the Commission's underlying objective (rapid deployment 
to underserved Indian Country) is best served by the current rules; 
this action will have no significant impact on small entities. Next, 
the Commission increased the amount of bidding credit to 500,000 
dollars for the first 200 square miles of qualifying tribal lands, and 
2,500 dollars for each additional square mile above the first 200 
square miles; this action will have no significant negative impact on 
small entities. While the Commission considered leaving the existing 
bidding credit amount in place, it determined that increasing the 
bidding credit amount would provide a greater incentive for carriers 
and may benefit small entities that are capable of providing wireless 
services to Indian Country. The Commission also set the wireline 
telephone subscription rate for a qualifying tribal land at 85 percent 
or less, in order to increase the number of tribes whose lands qualify 
for the bidding credit; this action will have no significant impact on 
small entities. While the Commission considered implementing a 
benchmark above 85 percent or leaving the benchmark at 75 percent, it 
concluded that an 85 percent benchmark represents a balance between its 
efforts to expand the scope of, and encourage participation in, the 
existing tribal lands bidding credit program, with the Commission's 
objective to target tribal communities with the greatest need for 
access to telecommunications services. Finally, the Commission declined 
to extend the tribal lands bidding credit to carriers serving adjacent, 
non-tribal lands, as it believed such action does not further the 
objective of this program; this action will not have a significant 
economic impact on small entities.

B. Paperwork Reduction Act Analysis

    9. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified ``information collection burden for small business 
concerns with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198.

IV. Ordering Clauses

    10. Pursuant to the authority of sections 1, 4(i), 303(r), and 
309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 303(r), and 309(j), this Third Report and Order is adopted.
    11. Pursuant to the authority of sections 4(i), 7, 303(c), 303(f), 
303(g), 303(r), and 332 of the Communications Act of 1934, as amended, 
47 U.S.C. 154(i), 157, 303(c), 303(f), 303(g), 303(r), and 332, the 
rule changes specified in Appendix A are adopted.
    12. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of the Third Report and Order, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 1

    Communications common carriers, telecommunications.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR subpart Q of part 1 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. 151, 154(i), 154(j), 155, 225, 303(r), 309 
and 325(e).


0
2. Amend Sec.  1.2110 by revising paragraphs (f)(3)(i), (f)(3)(iii), 
and (f)(3)(iv) to read as follows:


Sec.  1.2110  Designated entities.

* * * * *
    (f) * * *
    (3) * * *
    (i) Qualifying tribal land means any federally recognized Indian 
tribe's reservation, Pueblo, or Colony, including former reservations 
in Oklahoma, Alaska Native regions established pursuant to the Alaska 
Native Claims Settlement Act (85 Stat. 688), and Indian allotments, 
that has a wireline telephone subscription rate equal to or less than 
eighty-five (85) percent based on the most recently available U.S. 
Census Data.
* * * * *
    (iii) Bidding credit formula. Subject to the applicable bidding 
credit limit set forth in Sec.  1.2110(f)(3)(iv), the bidding credit 
shall equal five hundred thousand (500,000) dollars for the first two 
hundred (200) square miles (518 square kilometers) of qualifying tribal 
land, and twenty-five hundred (2500) dollars for each additional square 
mile (2.590 square kilometers) of qualifying tribal land above two 
hundred (200) square miles (518 square kilometers).
    (iv) Bidding credit limit. If the high bid is equal to or less than 
one million (1,000,000) dollars, the maximum bidding credit calculated 
pursuant to Sec.  1.2110(f)(3)(iii) shall not exceed fifty (50) percent 
of the high bid. If the high bid is greater than one million 
(1,000,000) dollars, but equal to or less than two million (2,000,000) 
dollars, the maximum bidding credit calculated pursuant to Sec.  
1.2110(f)(3)(iii) shall not exceed five hundred thousand (500,000) 
dollars. If the high bid is greater than two million (2,000,000) 
dollars, the maximum bidding credit calculated pursuant to Sec.  
1.2110(f)(3)(iii) shall not exceed thirty-five (35) percent of the high 
bid.
* * * * *

[FR Doc. 04-23187 Filed 10-15-04; 8:45 am]
BILLING CODE 6712-01-P


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