Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / Rules and Regulations 61317

Dated: January 12, 2004. 

S.A. Kenney, 

Commander, JAGC, U.S. Navy, Deputy 

Assistant Judge Advocate, General (Admiralty 

and Maritime Law).

Editorial Note: This document was 

received at the Office of the Federal Register 

October 13, 2004.

[FR Doc. 04–23211 Filed 10–15–04; 8:45 am] 

BILLING CODE 3810–FF–P

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.

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 www.fcc@bcpiweb.com. 

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 

61318 Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / Rules and Regulations 

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, nontribal 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 federallyrecognized tribal areas that have a 

wireline telephone subscription rate 

equal to or below 70 percent. In the 

present item, the Commission amends 

§ 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 

§§ 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. 

Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / Rules and Regulations 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 

61320 Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / Rules and Regulations 

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 reauction, 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-bysite 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 

Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / Rules and Regulations 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

■ 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

■ 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).

■ 2. Amend § 1.2110 by revising 

paragraphs (f)(3)(i), (f)(3)(iii), and 

(f)(3)(iv) to read as follows:

§ 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 § 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 

§ 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 § 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 § 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