68924 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

State and

county Location Dates and name of newspaperwhere notice was published

Chief executive officer of

community

Effective date of

modification

Community

number

Tarrant ....... City of Saginaw April 27, 2000, May 4, 2000,

The Times Record.

The Honorable Monte Nichols,

Mayor, City of Saginaw, P.O.

Box 79070, Saginaw, Texas

76179.

March 24, 2000 ......... 480610

Travis ......... Unincorporated

Areas.

May 2, 2000, May 9, 2000, Austin American Statesman.The Honorable Samuel T.

Biscoe, Travis County Judge,

P.O. Box 1748, Austin, Texas

78767–1748.

August 7, 2000 .......... 481026

Wichita ....... City of Wichita

Falls.

March 17, 2000, March 24,

2000, Wichita Falls Times

Record News.

The Honorable Kay Yeager,

Mayor, City of Wichita Falls,

1300 Seventh Street, Wichita

Falls, Texas 76301.

February 11, 2000 ..... 480662

Williamson City of Round

Rock.

March 23, 2000, March 30,

2000, Round Rock Leader.

The Honorable Charles Culpepper, Mayor, City of Round

Rock, City Hall, 221 East

Main Street, Round Rock,

Texas 78664.

February 8, 2000 ....... 481048

Utah:

Utah ........... City of Provo ..... March 17, 2000, March 24,

2000, The Daily Herald.

The Honorable Lewis Billings,

Mayor, City of Provo, 351

West Center, Provo, Utah

84604.

June 22, 2000 ........... 490159

Washington:

Chelan ....... Unincorporated

Areas.

March 24, 2000, March 31,

2000, Wenatchee World.

The Honorable John Hunter,

Chairperson, Chelan County

Board of Commissioners, 350

Orando Avenue, Wenatchee,

Washington 98801.

February 11, 2000 ..... 530015

Douglas ..... City of East

Wenatchee.

May 11, 2000, May 18, 2000,

Wenatchee World.

The Honorable Steve Lacy,

Mayor, City of East

Wenatchee, 215 Ninth Street

Northeast, East Wenatchee,

Washington 98802.

April 14, 2000 ............ 530038

(Catalog of Federal Domestic Assistance No.

83.100, ‘‘Flood Insurance.’’)

Dated: November 5, 2000.

Margaret E. Lawless,

Deputy Associate Director for Mitigation.

[FR Doc. 00–29128 Filed 11–14–00; 8:45 am]

BILLING CODE 6718–04–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 1

[WT Docket No. 97–82; FCC 00–274]

Competitive Bidding Procedures;

Correction

AGENCY: Federal Communications

Commission.

ACTION: Correcting amendments.

SUMMARY: This document contains

corrections to the final regulations

which were published in the Federal

Register of Tuesday, August 29, 2000,

(65 FR 52323). The regulations related

to the competitive bidding rules for all,

auctionable services in section 1.2110 of

the Commission’s rules.

DATES: Effective November 15, 2000.

FOR FURTHER INFORMATION CONTACT:

Leora Hochstein, Auctions and Industry

Analysis Division, Wireless

Telecommunications Bureau, at (202)

418–0660.

SUPPLEMENTARY INFORMATION: In the

Federal Register of August 29, 2000 (65

FR 52323), the Commission published a

summary of its Order on

Reconsideration of the Third Report and

Order, Fifth Report and Order (Order on

Reconsideration, Fifth Report and

Order) in WT Docket No. 97–82. That

document clarified and amended the

Commission’s competitive bidding rules

in an ongoing effort to establish a

uniform and streamlined set of general

competitive bidding rules for all

auctionable services and to reduce the

burden on both the Commission and the

public of conducting service-specific

auction rule makings.

Need for Correction

As published, the final regulations

contain errors which may prove to be

misleading and need to be clarified.

List of Subjects in 47 CFR Part 1

Communications common carriers,

Reporting and recordkeeping

requirements.

Accordingly, 47 CFR part 1 is

corrected by making the following

correcting amendments:

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. In § 1.2110 revise paragraph (c) to

read as follows:

§ 1.2110 Designated entities.

(c) Definitions.—(1) Small businesses.

The Commission will establish the

definition of a small business on a

service-specific basis, taking into

consideration the characteristics and

capital requirements of the particular

service.

(2) Controlling interests. (i) For

purposes of this section, controlling

interest includes individuals or entities

with either de jure or de facto control

of the applicant. De jure control is

evidenced by holdings of greater than 50

percent of the voting stock of a

corporation, or in the case of a

partnership, general partnership

interests. De facto control is determined

on a case-by-case basis. An entity must

disclose its equity interest and

demonstrate at least the following

indicia of control to establish that it

retains de facto control of the applicant:

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68925

(A) The entity constitutes or appoints

more than 50 percent of the board of

directors or management committee;

(B) The entity has authority to

appoint, promote, demote, and fire

senior executives that control the dayto-day activities of the licensee; and

(C) The entity plays an integral role in

management decisions.

(ii) Calculation of certain interests.

(A) Ownership interests shall be

calculated on a fully diluted basis; all

agreements such as warrants, stock

options and convertible debentures will

generally be treated as if the rights

thereunder already have been fully

exercised.

(B) Partnership and other ownership

interests and any stock interest equity,

or outstanding stock, or outstanding

voting stock shall be attributed as

specified.

(C) Stock interests held in trust shall

be attributed to any person who holds

or shares the power to vote such stock,

to any person who has the sole power

to sell such stock, and to any person

who has the right to revoke the trust at

will or to replace the trustee at will. If

the trustee has a familial, personal, or

extra-trust business relationship to the

grantor or the beneficiary, the grantor or

beneficiary, as appropriate, will be

attributed with the stock interests held

in trust.

(D) Non-voting stock shall be

attributed as an interest in the issuing

entity.

(E) Limited partnership interests shall

be attributed to limited partners and

shall be calculated according to both the

percentage of equity paid in and the

percentage of distribution of profits and

losses.

(F) Officers and directors of an entity

shall be considered to have a controlling

interest in the entity. The officers and

directors of an entity that controls a

licensee or applicant shall be

considered to have a controlling interest

in the licensee or applicant.

(G) Ownership interests that are held

indirectly by any party through one or

more intervening corporations will be

determined by successive multiplication

of the ownership percentages for each

link in the vertical ownership chain and

application of the relevant attribution

benchmark to the resulting product,

except that if the ownership percentage

for an interest in any link in the chain

exceeds 50 percent or represents actual

control, it shall be treated as if it were

a 100 percent interest.

(H) Any person who manages the

operations of an applicant or licensee

pursuant to a management agreement

shall be considered to have a controlling

interest in such applicant or licensee if

such person, or its affiliate, has

authority to make decisions or

otherwise engage in practices or

activities that determine, or significantly

influence:

(1) The nature or types of services

offered by such an applicant or licensee;

(2) The terms upon which such

services are offered; or

(3) The prices charged for such

services.

(I) Any licensee or its affiliate who

enters into a joint marketing

arrangement with an applicant or

licensee, or its affiliate, shall be

considered to have a controlling

interest, if such applicant or licensee, or

its affiliate, has authority to make

decisions or otherwise engage in

practices or activities that determine, or

significantly influence:

(1) The nature or types of services

offered by such an applicant or licensee;

(2) The terms upon which such

services are offered; or

(3) The prices charged for such

services.

(3) Businesses owned by members of

minority groups and/or women. Unless

otherwise provided in rules governing

specific services, a business owned by

members of minority groups and/or

women is one in which minorities and/

or women who are U.S. citizens control

the applicant, have at least greater than

50 percent equity ownership and, in the

case of a corporate applicant, have a

greater than 50 percent voting interest.

For applicants that are partnerships,

every general partner must be either a

minority and/or woman (or minorities

and/or women) who are U.S. citizens

and who individually or together own at

least 50 percent of the partnership

equity, or an entity that is 100 percent

owned and controlled by minorities

and/or women who are U.S. citizens.

The interests of minorities and women

are to be calculated on a fully diluted

basis; agreements such as stock options

and convertible debentures shall be

considered to have a present effect on

the power to control an entity and shall

be treated as if the rights thereunder

already have been fully exercised.

However, upon a demonstration that

options or conversion rights held by

non-controlling principals will not

deprive the minority and female

principals of a substantial financial

stake in the venture or impair their

rights to control the designated entity, a

designated entity may seek a waiver of

the requirement that the equity of the

minority and female principals must be

calculated on a fully-diluted basis. The

term minority includes individuals of

Black or African American, Hispanic or

Latino, American Indian or Alaskan

Native, Asian, and Native Hawaiian or

Pacific Islander extraction.

(4) Rural telephone companies. A

rural telephone company is any local

exchange carrier operating entity to the

extent that such entity—

(i) Provides common carrier service to

any local exchange carrier study area

that does not include either:

(A) Any incorporated place of 10,000

inhabitants or more, or any part thereof,

based on the most recently available

population statistics of the Bureau of the

Census, or

(B) Any territory, incorporated or

unincorporated, included in an

urbanized area, as defined by the

Bureau of the Census as of August 10,

1993;

(ii) Provides telephone exchange

service, including exchange access, to

fewer than 50,000 access lines;

(iii) Provides telephone exchange

service to any local exchange carrier

study area with fewer than 100,000

access lines; or

(iv) Has less than 15 percent of its

access lines in communities of more

than 50,000 on the date of enactment of

the Telecommunications Act of 1996.

(5) Affiliate. (i) An individual or

entity is an affiliate of an applicant or

of a person holding an attributable

interest in an applicant if such

individual or entity—

(A) Directly or indirectly controls or

has the power to control the applicant,

or

(B) Is directly or indirectly controlled

by the applicant, or

(C) Is directly or indirectly controlled

by a third party or parties that also

controls or has the power to control the

applicant, or

(D) Has an ‘‘identity of interest’’ with

the applicant.

(ii) Nature of control in determining

affiliation.

(A) Every business concern is

considered to have one or more parties

who directly or indirectly control or

have the power to control it. Control

may be affirmative or negative and it is

immaterial whether it is exercised so

long as the power to control exists.

Example. An applicant owning 50 percent

of the voting stock of another concern would

have negative power to control such concern

since such party can block any action of the

other stockholders. Also, the bylaws of a

corporation may permit a stockholder with

less than 50 percent of the voting stock to

block any actions taken by the other

stockholders in the other entity. Affiliation

exists when the applicant has the power to

control a concern while at the same time

another person, or persons, are in control of

the concern at the will of the party or parties

with the power to control.

68926 Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations

(B) Control can arise through stock

ownership; occupancy of director,

officer or key employee positions;

contractual or other business relations;

or combinations of these and other

factors. A key employee is an employee

who, because of his/her position in the

concern, has a critical influence in or

substantive control over the operations

or management of the concern.

(C) Control can arise through

management positions where a

concern’s voting stock is so widely

distributed that no effective control can

be established.

Example. In a corporation where the

officers and directors own various size blocks

of stock totaling 40 percent of the

corporation’s voting stock, but no officer or

director has a block sufficient to give him or

her control or the power to control and the

remaining 60 percent is widely distributed

with no individual stockholder having a

stock interest greater than 10 percent,

management has the power to control. If

persons with such management control of the

other entity are persons with attributable

interests in the applicant, the other entity

will be deemed an affiliate of the applicant.

(iii) Identity of interest between and

among persons. Affiliation can arise

between or among two or more persons

with an identity of interest, such as

members of the same family or persons

with common investments. In

determining if the applicant controls or

has the power to control a concern,

persons with an identity of interest will

be treated as though they were one

person.

Example. Two shareholders in

Corporation Y each have attributable

interests in the same PCS application. While

neither shareholder has enough shares to

individually control Corporation Y, together

they have the power to control Corporation

Y. The two shareholders with these common

investments (or identity in interest) are

treated as though they are one person and

Corporation Y would be deemed an affiliate

of the applicant.

(A) Spousal affiliation. Both spouses

are deemed to own or control or have

the power to control interests owned or

controlled by either of them, unless they

are subject to a legal separation

recognized by a court of competent

jurisdiction in the United States. In

calculating their net worth, investors

who are legally separated must include

their share of interests in property held

jointly with a spouse.

(B) Kinship affiliation. Immediate

family members will be presumed to

own or control or have the power to

control interests owned or controlled by

other immediate family members. In

this context ‘‘immediate family

member’’ means father, mother,

husband, wife, son, daughter, brother,

sister, father- or mother-in-law, son- or

daughter-in-law, brother- or sister-inlaw, step-father or -mother, step-brother

or -sister, step-son or -daughter, half

brother or sister. This presumption may

be rebutted by showing that the family

members are estranged, the family ties

are remote, or the family members are

not closely involved with each other in

business matters.

Example. A owns a controlling interest in

Corporation X. A’s sister-in-law, B, has an

attributable interest in a PCS application.

Because A and B have a presumptive kinship

affiliation, A’s interest in Corporation Y is

attributable to B, and thus to the applicant,

unless B rebuts the presumption with the

necessary showing.

(iv) Affiliation through stock

ownership. (A) An applicant is

presumed to control or have the power

to control a concern if he or she owns

or controls or has the power to control

50 percent or more of its voting stock.

(B) An applicant is presumed to

control or have the power to control a

concern even though he or she owns,

controls or has the power to control less

than 50 percent of the concern’s voting

stock, if the block of stock he or she

owns, controls or has the power to

control is large as compared with any

other outstanding block of stock.

(C) If two or more persons each owns,

controls or has the power to control less

than 50 percent of the voting stock of a

concern, such minority holdings are

equal or approximately equal in size,

and the aggregate of these minority

holdings is large as compared with any

other stock holding, the presumption

arises that each one of these persons

individually controls or has the power

to control the concern; however, such

presumption may be rebutted by a

showing that such control or power to

control, in fact, does not exist.

(v) Affiliation arising under stock

options, convertible debentures, and

agreements to merge. Stock options,

convertible debentures, and agreements

to merge (including agreements in

principle) are generally considered to

have a present effect on the power to

control the concern. Therefore, in

making a size determination, such

options, debentures, and agreements are

generally treated as though the rights

held thereunder had been exercised.

However, an affiliate cannot use such

options and debentures to appear to

terminate its control over another

concern before it actually does so.

Example 1. If company B holds an option

to purchase a controlling interest in company

A, who holds an attributable interest in a PCS

application, the situation is treated as though

company B had exercised its rights and had

come owner of a controlling interest in

company A. The gross revenues of company

B must be taken into account in determining

the size of the applicant.

Example 2. If a large company, BigCo,

holds 70% (70 of 100 outstanding shares) of

the voting stock of company A, who holds an

attributable interest in a PCS application, and

gives a third party, SmallCo, an option to

purchase 50 of the 70 shares owned by

BigCo, BigCo will be deemed to be an affiliate

of company A, and thus the applicant, until

SmallCo actually exercises its option to

purchase such shares. In order to prevent

BigCo from circumventing the intent of the

rule which requires such options to be

considered on a fully diluted basis, the

option is not considered to have present

effect in this case.

Example 3. If company A has entered into

an agreement to merge with company B in

the future, the situation is treated as though

the merger has taken place.

(vi) Affiliation under voting trusts. (A)

Stock interests held in trust shall be

deemed controlled by any person who

holds or shares the power to vote such

stock, to any person who has the sole

power to sell such stock, and to any

person who has the right to revoke the

trust at will or to replace the trustee at

will.

(B) If a trustee has a familial, personal

or extra-trust business relationship to

the grantor or the beneficiary, the stock

interests held in trust will be deemed

controlled by the grantor or beneficiary,

as appropriate.

(C) If the primary purpose of a voting

trust, or similar agreement, is to separate

voting power from beneficial ownership

of voting stock for the purpose of

shifting control of or the power to

control a concern in order that such

concern or another concern may meet

the Commission’s size standards, such

voting trust shall not be considered

valid for this purpose regardless of

whether it is or is not recognized within

the appropriate jurisdiction.

(vii) Affiliation through common

management. Affiliation generally arises

where officers, directors, or key

employees serve as the majority or

otherwise as the controlling element of

the board of directors and/or the

management of another entity.

(viii) Affiliation through common

facilities. Affiliation generally arises

where one concern shares office space

and/or employees and/or other facilities

with another concern, particularly

where such concerns are in the same or

related industry or field of operations,

or where such concerns were formerly

affiliated, and through these sharing

arrangements one concern has control,

or potential control, of the other

concern.

(ix) Affiliation through contractual

relationships. Affiliation generally

Federal Register / Vol. 65, No. 221 / Wednesday, November 15, 2000 / Rules and Regulations 68927

arises where one concern is dependent

upon another concern for contracts and

business to such a degree that one

concern has control, or potential

control, of the other concern.

(x) Affiliation under joint venture

arrangements. (A) A joint venture for

size determination purposes is an

association of concerns and/or

individuals, with interests in any degree

or proportion, formed by contract,

express or implied, to engage in and

carry out a single, specific business

venture for joint profit for which

purpose they combine their efforts,

property, money, skill and knowledge,

but not on a continuing or permanent

basis for conducting business generally.

The determination whether an entity is

a joint venture is based upon the facts

of the business operation, regardless of

how the business operation may be

designated by the parties involved. An

agreement to share profits/losses

proportionate to each party’s

contribution to the business operation is

a significant factor in determining

whether the business operation is a joint

venture.

(B) The parties to a joint venture are

considered to be affiliated with each

other. Nothing in this subsection shall

be construed to define a small business

consortium, for purposes of determining

status as a designated entity, as a joint

venture under attribution standards

provided in this section.

(xi) Exclusion from affiliation

coverage. For purposes of this section,

Indian tribes or Alaska Regional or

Village Corporations organized pursuant

to the Alaska Native Claims Settlement

Act (43 U.S.C. 1601 et seq.), or entities

owned and controlled by such tribes or

corporations, are not considered

affiliates of an applicant (or licensee)

that is owned and controlled by such

tribes, corporations or entities, and that

otherwise complies with the

requirements of this section, except that

gross revenues derived from gaming

activities conducted by affiliate entities

pursuant to the Indian Gaming

Regulatory Act (25 U.S.C. 2701 et seq.)

will be counted in determining such

applicant’s (or licensee’s) compliance

with the financial requirements of this

section, unless such applicant

establishes that it will not receive a

substantial unfair competitive advantage

because significant legal constraints

restrict the applicant’s ability to access

such gross revenues.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 00–29094 Filed 11–14–00; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 24

[PP Docket No. 93–253; FCC 00–299]

Broadband Personal Communications

Services (PCS) Competitive Bidding

and the Commercial Mobile Radio

Service Spectrum Cap

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document denies various

petitioners’ requests to alter the

Commission’s C and F block

competitive bidding rules. It does not

change the rules except to reinstate

provisions that had been inadvertently

eliminated from the rules in a previous

order. The Commission’s determination

with respect to these requests promotes

the goals of the Communications Act.

DATES: Effective November 15, 2000.

FOR FURTHER INFORMATION CONTACT:

Audrey Bashkin, Attorney, Auctions

and Industry Analysis Division,

Wireless Telecommunications Bureau,

at (202) 418–0660.

SUPPLEMENTARY INFORMATION: This is a

summary of an Order on

Reconsideration in the Amendment of

the Commission’s Rules Regarding

Broadband PCS Competitive Bidding

and the Commercial Mobile Radio

Service Spectrum Cap. The complete

text of the Order on Reconsideration is

available for inspection and copying

during normal business hours in the

FCC Reference Center (Room CY–A257),

445 12th Street, SW, Washington, DC. It

may also be purchased from the

Commission’s copy contractor,

International Transcription Services,

Inc. (ITS, Inc.), 1231 20th Street, NW,

Washington, DC 20036, (202) 857–3800.

It is also available on the Commission’s

web site at http://www.fcc.gov/wtb/

auctions. 

I. Introduction

1. In this Order on Reconsideration,

we first address three petitions for

reconsideration of the Commission’s

Fifth Memorandum Opinion and Order

in PP Docket No. 93–253 (‘‘Competitive

Bidding Fifth Memorandum Opinion

and Order’’) in which the Commission

resolved petitions for reconsideration or

clarification of its rules governing

competitive bidding for ‘‘entrepreneurs’

block’’ (C and F block) Personal

Communications Services licenses in

the 2 GHz band (‘‘broadband PCS’’), See

59 FR 63210 (December 7, 1994). We

next address nine petitions for

reconsideration of the Commission’s

Report and Order in WT Docket No. 96–

59 and GN Docket No. 90–314 (‘‘DEF

Report and Order’’) in which the

Commission modified its competitive

bidding and ownership rules for

broadband PCS. See 61 FR 33859 (July

1, 1996). Finally, we reinstate

provisions which, in the Competitive

Bidding Sixth Report and Order, were

inadvertently eliminated from one of the

Commisson’s competitive bidding rules.

See 60 FR 37786 (July 21, 1995).

II. Background

2. Consistent with Congress’ mandate

to promote the participation of small

businesses, rural telephone companies,

and businesses owned by members of

minority groups and women

(collectively, ‘‘designated entities’’) in

the provision of spectrum-based

services, the Commission originally

limited eligibility for C and F block PCS

licenses to ‘‘entrepreneurs’’ and adopted

special provisions for those blocks to

assist small and women- and minorityowned businesses. The Commission

considers entrepreneurs, with regard to

the C and F blocks, to be those entities

that can meet the auction and licensing

eligibility requirements of § 24.709 of

the Commission’s rules. The principal

requirement is set forth in § 24.709(a)(1),

as follows:

No application is acceptable for filing and

no license shall be granted for frequency

block C or frequency block F, unless the

applicant, together with its affiliates and

persons or entities that hold interests in the

applicant and their affiliates, have gross

revenues of less than $125 million in each of

the last two years and total assets of less than

$500 million at the time the applicant’s

short-form application (Form 175) is filed.

Under § 24.709, C and F block licensees

are required to maintain their eligibility

until at least five years from the date of

the initial license grant. Licensees,

however, are permitted to grow beyond

the gross revenue and total assets caps

through equity investment by nonattributable investors, debt financing,

revenue from operations, business

development, or expanded service.

3. The Commission has held four

entrepreneurs’ block PCS auctions to

date, Auction No. 5, the first auction of

C block spectrum, ended on May 6,

1996 and was followed quickly by

Auction No. 10, another C block

auction, which concluded on July 16,

1996. Auction No. 11, the first F block

auction, ended on January 14, 1997, and

also included D and E block spectrum.

The fourth auction, Auction No. 22,

made available additional C and F

block, as well as E block, spectrum and

concluded on April 15, 1999.