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(1) (a) (i) 1) a)%8=(%  H*%FJq "i~'K2^18MSS888S8888SSSSSSSSSS88Jxir{icx{8Aui{x`xoYi{xxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/g><q*"xxxxWWxxxWWkkxxxf ^"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxx,?2?2>,H2H2H2H2H2J2J2!2222!2I822F2>>$?2@>J2:J2J2H2H2YHB$B$C26&6&6&62>$>?2J2J2J2J2J2J2^HH2@,@,@,J2?2J262?2H2<!22!!!WddddddddddddddddddddddddddddddddddddddddddddddddxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHHH222!,))22X222YY2#2222Y#!!442Ydd22==Ld2d2H2;SS88Y!42^x#"ddddHHddd2Hdd4HHYYddd2YYddd Y2!!dddddH=dYHHHHHHHHHH!d2H282YdHdC2!2H,29HNAddHHHHHHHHHHddddd.dHHHHdddddddddddddddddddHHddddddSC=NdHddd+;HHHHddddddHHH2HHdHHdddHHH,HHHH,HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!HHH!HHH!HHH!HHHHHHHHHHHHHH=?8=8C,?'A,J2H,!F,C8[8J,C2H,H=92=22?,H,C=H8N===H?J!2HHH=,====I!!2222HJ222HHH=!92,!ddhrZz.lZrrvvnFFZ8 = xP.-ԍ47 CFR  24.711.; The first installment payment plan is available to applicants with gross revenues in excess of $75 million. This plan provides for the payment of interest based on the 10year U.S. Treasury rate, plus 3.5 percent with payment of principal and interest amortized over the term of  YM-license.A?Md = xPb-ԍ47 CFR  24.711(b)(1).A  Y-x22. The second installment payment plan is available to those applicants with gross  Y-revenues between $40 and $75 million.D@ = xP -ԍ47 CFR  711(b)(2).D This plan provides for the payment of interest equal to the 10year U.S. Treasury rate plus 2.5 percent. The applicants eligible for this plan may pay interest only for one year with the principal and interest amortized over the remaining nine years of the license term. The third installment payment plan is available  Y-only to applicants that qualify as a small business or consortium of small businesses.BA = xP%-ԍ47 CFR  24.711(b)(3). B This plan provides for the payment of interest at the rate of the 10year U.S. Treasury rate plus 2.5 percent; however, the applicants eligible for this plan may pay interest only for two years"~ A0*((" with principal and interest amortized over the remaining eight years of the license term.  Y-x23. The remaining installment payment plans are available only to minorities or women. Specifically, the fourth plan provides interestonly payments for three years and payments of principal and interest over the remaining seven years of the license term and is only available to businesses owned by members of minority groups or women. The final and most favorable installment payment plan provides interestonly payments for six years and payments of principal and interest amortized over the remaining four years of the license term. This plan is only available to small businesses owned by members of minority groups or women. Previously, the Commission has determined that there is a basis for  Y -differentiating installment plans by size.B = zP -ԍSee Fifth R&O, 9 FCC Rcd at 5593,  139140; Fifth MO&O, 10 FCC Rcd at 458,  101.  Y -x24. Discussion. We propose to modify this rule to eliminate the special provisions that are tied to an applicant's status as a minority or womenowned business, and to provide for three installment payment plans that are based solely on financial size. In this regard, we propose to modify only installment payment plans available to small businesses with gross  Y-revenues under $40 million.CZ= xP-ԍThe first and second payment plans for eligible bidders with gross revenues exceeding $75 million and with gross revenues between $40 and $75 million will remain the same. 47 CFR  24.711(b)(1) and (2). We propose to extend the most favorable installment payment plan previously available only to small minority or womenowned firms to all small businesses. Thus, we propose that all small businesses be permitted to pay for their licenses in installments at the rate for tenyear U.S. Treasury obligations applicable on the date the license is granted and that payments include interest only for the first six years with payments of principal and interest amortized over the remaining four years of the license term. In effect, we are proposing the deletion of our current Section 24.711(b)(3) and (4) and the renumbering of Section 24.711(b)(5) as Section 24.711(b)(3) after the modification.  Y-x25. This rule change will grant small businesses the same installment plan available now to minority or womenowned small businesses. We believe this approach will prove to be the least disruptive to the existing agreements between prospective bidders and the financial community and will provide the most favorable plan to the smallest companies. We seek comment on this proposal which will enable all small business applicants to benefit from the most favorable installment payment plan that was previously only available to minority or womenowned small businesses.  X - D.xBidding Credits  Y-x26. Background. Our current rules provide for three tiers of bidding credits ranging between 10 percent and 25 percent. The bidding credit acts as a discount on the winning bid amount that a licensee actually has to pay for the license. A small business is granted a 10 percent bidding credit. A business that is owned by members of minority groups or women""C0*((#" is granted a 15 percent bidding credit. A small business owned by members of minority groups or women is allowed to aggregate the bidding credits for a 25 percent bidding credit.  Y-x27. Discussion. We propose to increase the bidding credit for small businesses from 10 percent to 25 percent. We further propose to eliminate the remaining bidding credits. This rule change eliminates the race and genderbased bidding credits and extends the 25 percent bidding credit to all small businesses. We seek comment on this proposal. At the same time, this proposal will enhance the competitiveness of all small businesses which will receive an increase of 15 percent in their bidding credits. The positions of minority or womenowned small businesses will remain the same because they will be eligible for a 25 percent bidding credit. Consequently, this proposal should be the least disruptive to the current business arrangements and financial agreements.  Y -x28. This proposal will allow the Commission and prospective bidders to avoid litigation, allow the auction to proceed as close to its original schedule as possible and permit prospective bidders to maintain previously negotiated business arrangements and financial agreements. Thus, we recommend amending Section 24.712(a) to raise the bidding credit from 10 percent to 25 percent. We further recommend deleting Section 24.712(b) and (c) and renumbering Section 24.712(d) as Section 24.712(b). We seek comment on this outcome.  X- E. xCellular PCS CrossOwnership and CMRS Spectrum Aggregation Limit  Y-x29. Background. Our cellular PCS cross-ownership rule currently provides for a higher cellular ownership attribution threshold for small businesses, rural telephone  Y-companies and businesses owned by minorities or women than for other entities.@D= xP:-ԍ47 CFR 24.204(d)(2)(ii).@ Generally, our rules provide that partnership and other ownership interests, and any stock interest amounting to 20 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee shall be attributable for purposes of the cellular PCS cross Ye-ownership restrictions.1EeX= zPn-ԍId.1 If cellular ownership interests are held by small businesses, rural telephone companies or businesses owned by minorities or women, however, such interests are only attributable at the 40 percent or more level. In addition, cellular ownership interests held by entities with noncontrolling interests in a broadband PCS applicant licensee are  Y -subject to a 40 percent attribution threshold for purposes of Section 24.204. Similarly, our CMRS spectrum aggregation limit provides that partnership and other ownership interests, and any stock interest amounting to 20 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee shall be attributable for purposes of the cellular PCS crossownership restrictions, except that those interests held by small businesses, rural telephone companies or businesses owned by minorities or women, are only""E0*((#"  Y-attributable at the 40 percent or more level.EF= xPy-ԍ47 CFR  20.6(d)(2).E  Y-x30. Discussion. We propose to modify the cellular PCS crossownership and CMRS spectrum aggregation limit rules to remove the provisions which increase the cellular attribution threshold to 40 percent on the basis of the race or gender of the holder of the ownership interest or of the broadband PCS applicant in which such holder is an investor. Accordingly, we propose to modify Section 24.204(d)(2)(ii) of our rules to provide that the 40 percent cellular attribution threshold will continue to apply if the ownership interest is held by a small business or a rural telephone company or if the ownership interest is held by an entity with a noncontrolling equity interest in a broadband PCS licensee or applicant that is a small business. Similarly, we propose to modify Section 20.6(d)(2) of our rules to provide that the 40 percent cellular attribution threshold will continue to apply if the ownership interest is held by a small business or a rural telephone company (including those owned by minorities or women). Although this change could result in a lower cellular attribution threshold for businesses owned by minorities and women as well as for noncontrolling investors in broadband PCS applicants or licensees that are owned by minorities or women (with respect to our cellular PCS crossownership rule), we believe that this modification is necessary to ensure that our rules are insulated from legal challenge. Moreover, the proposed rule change to our cellular PCS crossownership rule may result in additional investment in broadband PCS applicants that are small businesses, because this rule change would extend the 40 percent cellular attribution threshold to such investors in broadband PCS applicants that are small businesses. We seek comment on this proposal. In addition, we recognize that both the cellular PCS crossownership rule and the CMRS spectrum aggregation limit apply to more than just the C block. We propose to limit our specific rule changes to affect only the C block.  X- Procedural Matters ĐTP  Xe- A.xRegulatory Flexibility Act xAs required by Section 603 of the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the proposals suggested in this document. The IRFA is set forth in Appendix B. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments on the rest of the Further Notice of Proposed Rule Making, but they must have a separate and distinct heading designating them as responses to the Initial Regulatory Flexibility Analysis. The Secretary shall send a copy of this Further Notice of Proposed Rule Making, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with paragraph 603(a) of the Regulatory Flexibility Act. Pub. L. No. 96354, 94"h$XF0*((%"  Y-Stat. 1164, 5 U.S.C.  601 et seq. (1981).  X- B.x Ex Parte Rules NonRestricted Proceeding  Y-xThis is a nonrestricted notice and comment rule making proceeding. Ex parte presentations are permitted except during the Sunshine Agenda period, provided they are  Yz-disclosed as provided in Commission rules. See generally 47 CFR  1.1202, 1.1203, and 1.1206(a).  X7- C.xComment Dates xPursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commissions Rules, 47 CFR  1.415 and 1.419, interested parties may file comments on or before July 7, 1995. Notwithstanding Section 1.415(c) of the Commission's Rules, 47 CFR  1.415(c), we are not inviting reply comments. To file formally in this proceeding you must file an original and four copies of all comments and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original plus nine copies. You should send your comments to Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. Comments will be available for public inspection during regular business hours in the Reference Center of the Federal Communications Commission, 1919 M Street, N.W., Room 239, Washington, D.C. 20554.  X- D.xOrdering Clause xAuthority for issuance of this Further Notice of Proposed Rule Making is contained in Sections 4(i), 303(r), and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r) and 309(j).  X-  Xk-E.xContact Persons xFor further information concerning this proceeding, contact Kathleen O'Brien Ham at 4180660 (Auctions Division, Wireless Telecommunications Bureau), Ramona Melson or D'wana Speight at (202) 4180620 (Legal Branch, Commercial Wireless Division, Wireless Telecommunications Bureau), or Peter Tenhula at 4181720 (Office of General Counsel). x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton x` `  hhActing Secretary "@&F0*((`'"  X-& APPENDIX A  X-T  X-`PROPOSED RULES TP Parts 20 and 24 of Chapter I of Title 47 of the Code of Federal Regulations are amended as follows:  XH- PART 20 COMMERCIAL MOBILE RADIO SERVICES 1. The authority citation for Part 20 continues to read as follows: AUTHORITY: Secs 4, 303, and 332, 48 Stat. 1066, 1082, as amended; 47 U.S.C.  154, 303, and 332, unless otherwise noted.  Y - 2. Section 20.6 is amended by revising paragraph (d)(2) to read as follows:  Xy-  20.6 CMRS spectrum aggregation limit. * * * * * (d)* * * (2) Partnership and other ownership interests and any stock interest amounting to 20 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee will be attributable, except that ownership will not be attributed unless the partnership and other ownership interests and any stock interest amount to 40 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee if the ownership interest is held by a small business or a rural telephone company or a business owned by minorities or women, as these terms are defined in  1.2110 of this chapter or other provisions of the Commission's Rules. For purposes of broadband PCS licenses for frequency block C, the 40 percent attribution level shall only apply to interests held by a small business or a rural telephone company. * * * * *  X- PART 24 PERSONAL COMMUNICATIONS SERVICES 1. The authority citation for Part 24 continues to read as follows: AUTHORITY: Secs. 4, 301, 302, 303, 309 and 332, 48 Stat. 1066, 1082, as amended; 47 U.S.C.  154, 301, 302, 303, 309 and 332, unless otherwise noted. 2. Section 24.204 is amended by revising paragraph (d)(2)(ii) to read as follows:  X#'-  24.204 Cellular eligibility. "#'F0*((P("Ԍl:* * * * * (d)* * * (2)* * * (ii) Partnership and other ownership interests and any stock interest amounting to 20 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee will be attributable, except that ownership will not be attributed unless the partnership and other ownership interests and any stock interest amount to 40 percent or more of the equity, or outstanding stock, or outstanding voting stock of a cellular licensee if the ownership interest is held by a small business, a rural telephone company, or a business owned by minorities and/or women, as these terms are defined in  1.2110 of this chapter, or if the ownership interest is held by an entity with a noncontrolling equity interest in a broadband PCS licensee or applicant that is a small business owned by minorities and/or women as defined in  24.720. For purposes of broadband PCS licenses for frequency block C, the 40 percent attribution level shall only apply to interests held by a small business or rural telephone company, or if interests are held by an entity with a noncontrolling equity interest in a licensee or applicant that is a small business as defined in  24.720. B***** TP 3. Section 24.709 is amended by revising the heading and paragraphs (a), (b)(6), (c)(1)(ii)(B), (c)(2), (c)(2)(ii) and (e) to read as follows:  X-  24.709 Eligibility for licenses for frequency Block C.  Y-(a) General Rule. (1) No application is acceptable for filing and no license shall be granted for frequency  Y~-block C, unless the applicant, together with its affiliates and persons or entities that hold  Yi-interests in the applicant and their affiliates, have gross revenues of less than $125 million in  YT-each of the last two years and total assets of less than $500 million at the time the applicants shortform application (Form 175) is filed.  Y(- (2) The gross revenues and total assets of the applicant (or licensee), and its affiliates, and (except as provided in paragraph (b) of this section) of persons or entities that hold interests  Y-in the applicant (or licensee), and their affiliates, shall be attributed to the applicant and considered on a cumulative basis and aggregated for purposes of determining whether the applicant (or licensee) is eligible for a licensee for frequency block C under this section. (3) Any licensee awarded a license pursuant to this section (or pursuant to  24.839(d)(2)) shall maintain its eligibility until at least five years from the date of initial license grant,  Y#-except that a licensees (or other attributable entitys) increased gross revenues or increased  Yv$-total assets due to nonattributable equity investments (i.e., from sources whose gross  Ya%-revenues, and total assets are not considered under paragraph (b) of this section), debt financing, revenue from operations or other investments, business development or expanded service shall not be considered."5'F0*((P("Ԍ Y- (b)* * *  Y- (6) Control Group Minimum 50.1 Percent Equity Requirement. In order to be eligible to  Y-exclude gross revenues and total assets of persons or entities identified in paragraph (b)(4) of this section, an applicant (or licensee) must comply with the following requirements:  Y- (i) Except for an applicant (or licensee) whose sole control group member is a preexisting  Y-entity, as provided in paragraph (b)(6)(ii) of this section, at the time the applicants shortform application (Form 175) is filed and until at least three years following the date of initial  Yi-license grant, the applicants (or licensees) control group must own at least 50.1 percent of the applicants (or licensees) total equity as follows: (A) at least 30 percent of the applicants (or licensees) total equity must be held by  Y& -qualifying investors, either unconditionally or in the form of options, exercisable at the option of the holder, at any time and at any exercise price equal to or less than the market value at the time the applicant files its shortform application (Form 175);  Y - (B) Such qualifying investors must hold 50.1 percent of the voting stock and all general  Y -partnership interests within the control group and must have de facto control of the control group and of the applicant; (C) The remaining 20.1 percent of the applicants (or licensees) total equity may be owned  Y-by qualifying investors, either unconditionally or in the form of stock options not subject to the restrictions of paragraph (b)(6)(i)(A) of this section, or by any of the following entities which may not comply with  24.720(n)(1):  YH- (1)  Institutional investors, either unconditionally or in the form of stock options;  Y3-  (2) Noncontrolling existing investors in any preexisting entity that is a member of the control  Y-group, either unconditionally or in the form of stock options; or  Y -  (3) Individuals that are members of the applicants (or licensees) management, either unconditionally or in the form of stock options. (D) Following termination of the threeyear period specified in paragraph (b)(6)(i) of this  Y-section, qualifying investors must continue to own at least 20 percent of the applicants (or licensees) total equity, either unconditionally or in the form of stock options subject to the restrictions in paragraph (b)(6)(i)(A) of this section. The restrictions specified in paragraph  Y-(b)(6)(i)(C)(1) through (4) of this section no longer apply to the remaining equity after termination of such threeyear period.  YT- (ii) At the election of an applicant (or licensee) whose control groups sole member is a  Y?-preexisting entity, the 50.1 percent minimum equity requirements set forth in paragraph (b)(6)(i) of this section shall apply, except that only 20 percent of the applicants (or  Y-licensees) total equity must be held by qualifying investors, and that the remaining 30.1  Y-percent of the applicants (or licensees) total equity may be held by qualifying investors, or  Y -noncontrolling existing investors in such control group member or individuals that are members of the applicants (or licensees) management. These restrictions on the identity of the holder(s) of the remaining 30.1 percent of the licensees total equity no longer apply after  Y#-termination of the threeyear period specified in paragraph (b)(6)(i) of this section.  Yx%-l:* * * * * (c)* * *"J'F0*((P("Ԍ Y- (1) Shortform Application. In addition to certifications and disclosures required by Part 1,  Y-subpart Q of this Chapter and  24.813, each applicant for a license for frequency Block C shall certify on its shortform application (Form 175) that it is eligible to bid on and obtain such license(s), and (if applicable) that it is eligible for designated entity status pursuant to this section and  24.720, and shall append the following information as an exhibit to its Form 175: l:* * * * * (ii)* * * (B) The citizenship and the gender or minority group classification for each member of the  Y -applicants control group if the applicant is a business owned by members of minority groups  Y -and/or women;  l:* * * * *  Y - (2) Longform Application. In addition to the requirements in subpart I of this part and other applicable rules (e.g.,  24.204(f), 20.6(e) of this chapter, and 20.9 (b of this chapter), each applicant submitting a longform application for a license(s) for frequency block C shall, in an exhibit to its longform application: l:* * * * * (ii) List and summarize all agreements or other instruments (with appropriate references to specific provisions in the text of such agreements and instruments) that support the applicants eligibility for a license(s) for frequency Block C and its eligibility under   Y-24.711, 24.712 and 24.720, including the establishment of de facto and de jure control; such agreements and instruments include articles of incorporation and bylaws, shareholder agreements, voting or other trust agreements, partnership agreements, management agreements, joint marketing agreements, franchise agreements, and any other relevant agreements (including letters of intent), oral or written; and l:* * * * *  Y-(e) Definitions. The terms affiliate, business owned by members of minority groups and women, consortium of small businesses, control group, existing investor, gross revenues, institutional investor, members of minority groups, nonattributable equity, preexisting equity, publicly traded corporation with widely dispersed voting power, qualifying investor, small  Y!-business and total assets used in this section are defined in  24.720.  Y#-x4. Section 24.711 is amended by revising the heading and paragraphs (a) introductory text, (a)(1), (b) introductory text and (b)(3) to read as follows:  XJ&-  24.711 Upfront payments, down payments and installment payments for licenses for  X3'-frequency Block C. "3'F0*((P("Ԍ Y-ԙ (a) Upfront Payments and Down Payments. (1) Each eligible bidder for licenses on frequency Block C subject to auction shall pay an upfront payment of $0.015 per MHz per pop for the maximum number of licenses (in terms of MHzpops) on which it intends to bid pursuant to  1.2106 of this Chapter and procedures specified by Public Notice. l:* * * * *  Yx- (b) Installment Payments. Each eligible licensee of frequency Block C may pay the remaining 90 percent of the net auction price for the license in installment payments pursuant to  1.2110(e) of this Chapter and under the following terms: l:* * * * * x(3) For an eligible licensee that qualifies as a small business or as a consortium of small businesses, interest shall be imposed based on the rate for tenyear U.S. Treasury obligations applicable on the date the license is granted; payments shall include interest only for the first six years and payments of interest and principal amortized over the remaining four years of the license term. l:* * * * * x5. Section 24.712 is amended by revising the heading and paragraph (a), removing paragraphs (b) and (c), and redesignating paragraph (d) as paragraph (b) to read as follows:  X -  24.712 Bidding credits for licenses for frequency Block C. (a) A wining bidder that qualifies as a small business or a consortium of small businesses may use a bidding credit of twentyfive percent to lower the cost of its winning bid. :l* * * * * TP 6. Section 24.713 is removed and reserved. 7. A new Section 24.715 is added to Subpart H to read as follows:  X -  24.715 Eligibility for licenses for frequency Block F.  Y- (a) General Rule. (1) No application is acceptable for filing and no license shall be granted for frequency  Y!-block F, unless the applicant, together with its affiliates and persons or entities that hold  Y"-interests in the applicant and their affiliates, have gross revenues of less than $125 million in  Y#-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.  Y]%- (2) The gross revenues and total assets of the applicant (or licensee), and its affiliates, and (except as provided in paragraph (b) of this section) of persons or entities that hold interests  Y1'-in the applicant (or licensee), and their affiliates, shall be attributed to the applicant and"1'F0*((P(" considered on a cumulative basis and aggregated for purposes of determining whether the applicant (or licensee) is eligible for a license for frequency block F under this section. (3) Any licensee awarded a license pursuant to this section (or pursuant to  24.839(d)(2)) shall maintain its eligibility until at least five years from the date of initial license grant,  Y-except that a licensee's (or other attributable entity's) increased gross revenues or increased  Y-total assets due to nonattributable equity investments (i.e., from sources whose gross  Yz-revenues, and total assets are not considered under paragraph (b) of this section), debt financing, revenue from operations or other investments, business development or expanded service shall not be considered.  Y7- (b) Exceptions to General Rule.  Y" - (1) Small Business Consortia. Where an applicant (or licensee) is a consortium of small  Y -businesses, the gross revenues and total assets of each small business shall not be aggregated.  Y - (2) Publicly-Traded Corporations. Where an applicant (or licensee) is a publicly traded  Y -corporation with widely dispersed voting power, the gross revenues and total assets of a  Y -person or entity that holds an interest in the applicant (or licensee), and its affiliates, shall not be considered.  Y- (3) 25 Percent Equity Exception. The gross revenues and total assets of a person or entity  Y-that holds an interest in the applicant (or licensee), and its affiliates, shall not be considered so long as:  Ya- (i) Such person or entity, together with its affiliates, holds only nonattributable equity equaling no more than 25 percent of the applicant's (or licensee's) total equity; (ii) Except as provided in paragraph (b)(5) of this section, such person or entity is not a  Y-member of the applicant's (or licensee's) control group; and  Y - (iii) The applicant (or licensee) has a control group that complies with the minimum equity requirements of paragraph (b)(5) of this section, and, if the applicant (or licensee) is a corporation, owns at least 50.1 percent of the applicant's (or licensee's) voting interests, and, if the applicant (or licensee) is a partnership, holds all of its general partnership interests.  Y- (4) 49.9 Percent Equity Exception. The gross revenues and total assets of a person or entity that holds an interest in the applicant (or licensee), and its  Y- affiliates, shall not be considered so long as:  Yn- (i) Such person or entity, together with its affiliates, holds only nonattributable equity equaling no more than 49.9 percent of the applicant's (or licensee's) total equity; (ii) Except as provided in paragraph (b)(6) of this section, such person or entity is not a  Y+-member of the applicant's (or licensee's) control group; and  Y- (iii) The applicant (or licensee) has a control group that complies with the minimum equity requirements of paragraph (b)(6) of this section and, if the applicant (or licensee) is a corporation, owns at least 50.1 percent of the applicant's (or licensee's) voting interests, and, if the applicant (or licensee) is a partnership, holds all of its general partnership interests.  Y"- (5) Control Group Minimum 25 Percent Equity Requirement. In order to be eligible to  Y#-exclude gross revenues and total assets of persons or entities identified in paragraph (b)(3) of this section, and applicant (or licensee) must comply with the following requirements:  Yy%- (i) Except for an applicant (or licensee) whose sole control group member is a preexisting  Yd&-entity, as provided in paragraph (b)(5)(ii) of this section, at the time the applicant's short-form application (Form 175) is filed and until at least three years following the date of"O'F0*((P("  Y-initial license grant, the applicant's (or licensee's) control group must own at least 25 percent of the applicant's (or licensee's) total equity as follows: (A) At least 15 percent of the applicant's (or licensee's) total equity must be held by qualifying investors, either unconditionally or in the form of options exercisable, at the option of the holder, at any time and at any exercise price equal to or less than the market  Y-value at the time the applicant files its short-form application (Form 175);  Yx- (B) Such qualifying investors must hold 50.1 percent of the voting stock and all general  Yc-partnership interests within the control group, and must have de facto control of the control group and of the applicant; (C) The remaining 10 percent of the applicant's (or licensee's) total equity may be owned  Y -by qualifying investors, either unconditionally or in the form of stock options not subject to the restrictions of paragraph (b)(5)(i)(A) of this section, or by any of the following entities, which may not comply with section 24.720(n)(1):  Y -  (1) Institutional investors, either unconditionally or in the form of stock options;  Y - (2) Noncontrolling existing investors in any preexisting entity that is a member of the  Y -control group, either unconditionally or in the form of stock options; or  Y-  (3) Individuals that are members of the applicant's (or licensee's) management, either unconditionally or in the form of stock options. (D) Following termination of the three-year period specified in paragraph (b)(5)(i) of this  YW-section, qualifying investors must continue to own at least 10 percent of the applicant's (or licensee's) total equity, either unconditionally or in the form of stock options subject to the restrictions in paragraph (b)(5)(i)(A) of this section. The restrictions specified in paragraph  Y-(b)(5)(i)(C)(1) through (4) of this section no longer apply to the remaining equity after termination of such three-year period.  Y- (ii) At the election of an applicant (or licensee) whose control group's sole member is a  Y-preexisting entity, the 25 percent minimum equity requirements set forth in paragraph (b)(5)(i) of this section shall apply, except that only 10 percent of the applicant's (or  Y-licensee's) total equity must be held by qualifying investors and that the remaining 15 percent  Y-of the applicant's (or licensee's) total equity may be held by qualifying investors or  Y{-noncontrolling existing investors in such control group member or individuals that are members of the applicant's (or licensee's) management. These restrictions on the identity of the holder(s) of the remaining 15 percent of the licensee's total equity no longer apply after termination of the three-year period specified in paragraph (b)(5)(i) of this section.  Y!- (6) Control Group Minimum 50.1 Percent Equity Requirement. In order to be eligible to  Y -exclude gross revenues and total assets of persons or entities identified in paragraph (b)(4) of this section, an applicant (or licensee) must comply with the following requirements:  Y - (i) Except for an applicant (or licensee) whose sole control group member is a preexisting  Y!-entity, as provided in paragraph (b)(6)(ii) of this section, at the time the applicant's short-form application (Form 175) is filed and until at least three years following the date of  Y#-initial license grant, the applicant's (or licensee's) control group must own at least 50.1 percent of the applicant's (or licensee's) total equity as follows: (A) at least 30 percent of the applicant's (or licensee's) total equity must be held by  Y\&-qualifying minority and/or women investors, either unconditionally or in the form of options exercisable, at the option of the holder, at any time and at any exercise price equal to or less"G'F0*((P(" than the market value at the time the applicant files its short-form application (Form 175);  Y- (B) Such qualifying minority and/or women investors must hold 50.1 percent of the voting  Y-stock and all general partnership interests within the control group and must have de facto control of the control group and of the applicant; (C) The remaining 20.1 percent of the applicant's (or licensee's) total equity may be owned  Y-by qualifying investors, either unconditionally or in the form of stock options not subject to the restrictions of paragraph (b)(5)(i)(A) of this section, or by any of the following entities, which may not comply with section 24.720(n)(1):  YN- (1) Institutional investors, either unconditionally or in the form of stock options;  Y9- (2) Noncontrolling existing investors in any preexisting entity that is a member of the  Y$ -control group, either unconditionally or in the form of stock options; or  Y - (3) Individuals that are members of the applicant's (or licensee's) management, either unconditionally or in the form of stock options. (D) Following termination of the three-year period specified in paragraph (b)(6)(i) of this  Y -section, qualifying minority and/or women investors must continue to own at least 20 percent of the applicant's (or licensee's) total equity, either unconditionally or in the form of stock options subject to the restrictions in paragraph (b)(6)(i)(A) of this section. The restrictions  Y-specified in paragraph (b)(6)(i)(C)(1) through (4) of this section no longer apply to the remaining equity after termination of such three-year period.  YY- (ii) At the election of an applicant (or licensee) whose control group's sole member is a  YD-preexisting entity, the 50.1 percent minimum equity requirements set forth in paragraph (b)(6)(i) of this section shall apply, except that only 20 percent of the applicant's (or  Y-licensee's) total equity must be held by qualifying minority and/or women investors, and that the remaining 30.1 percent of the applicant's (or licensee's) total equity may be held by  Y-qualifying minority and/or women investors, or noncontrolling existing investors in such  Y-control group member or individuals that are members of the applicant's (or licensee's) management. These restrictions on the identity of the holder(s) of the remaining 30.1 percent of the licensee's total equity no longer apply after termination of the three-year period specified in paragraph (b)(6)(i) of this section.  Y}- (7) Calculation of Certain Interests. Except as provided in paragraphs (b)(5) and (b)(6) of this section, 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, except that such agreements may not be used to appear to terminate or divest ownership interests before they actually do so, in order  Y -to comply with the nonattributable equity requirements in paragraphs (b)(3)(i) and (b)(4)(i) of this section.  Y - (8) Aggregation of Affiliate Interests. Persons or entities that hold interest in an applicant  Y!-(or licensee) that are affiliates of each other or have an identify of interests identified in  24.720(1)(3) will be treated as though they were one person or entity and their ownership interests aggregated for purposes of determining an applicant's (or licensee's) compliance  Y$-with the nonattributable equity requirements in paragraphs (b)(3)(i) and (b)(4)(i) of this section.  Y\&- Example 1 for paragraph (b)(8). ABC Corp. is owned by individuals, A, B, and C, each having an equal one-third voting interest in ABC Corp. A and B together, with two-thirds of"G'F0*((P(" the stock have the power to control ABC Corp. and have an identity of interest. If A & B invest in DE Corp., a broadband PCS applicant for block C, A and B's separate interests in DE Corp. must be aggregated because A and B are to be treated as one person.  Y- Example 2 for paragraph (b)(8). ABC Corp. has subsidiary BC Corp., of which it holds a controlling 51 percent of the stock. If ABC Corp. and BC Corp., both invest in DE Corp., their separate interests in DE Corp. must be aggregated because ABC Corp. and BC Corp. are affiliates of each other.  Ya- (c) Short-Form and Long-Form Applications: Certifications and Disclosure. (1) Short-form Application. In addition to certifications and disclosures required by Part 1,  Y5-subpart Q of this Chapter and  24.813, each applicant for a license for frequency Block F shall certify on its short- form application (Form 175) that it is eligible to bid on and obtain such license(s), and (if applicable) that it is eligible for designated entity status pursuant to this section and  24.720, and shall append the following information as an exhibit to its Form 175:  Y - (i) For an applicant that is a publicly traded corporation with widely disbursed voting  Y -power: (A) A certified statement that such applicant complies with the requirements of the  Y-definition of publicly traded corporation with widely disbursed voting power set forth in  24.720(m);  YW- (B) The identify of each affiliate of the applicant if not disclosed pursuant to  24.813; and  YB- (C) The applicant's gross revenues and total assets, computed in accordance with paragraphs (a) and (b) of this section. (ii) For all other applicants:  Y- (A) The identity of each member of the applicant's control group, regardless of the size of each member's total interest in the applicant, and the percentage and type of interest held; (B) The citizenship and the gender or minority group classification for each member of the  Y-applicant's control group if the applicant is claiming status as a business owned by members  Y-of minority groups and/or women;  Y- (C) The status of each control group member that is an institutional investor, an existing  Y{-investor, and/or a member of the applicant's management;  Yf- (D) The identify of each affiliate of the applicant and each affiliate of individuals or entities identified pursuant to paragraphs (c)(1)(ii)(A) and (c)(1)(ii)(C) of this section if not disclosed pursuant to  24.813;  Y#- (E) A certification that the applicant's sole control group member is a preexisting entity, if the applicant makes the election in either paragraph (b)(5)(ii) or (b)(6)(ii) of this section; and  Y- (F) The applicant's gross revenues and total assets, computed in accordance with paragraphs (a) and (b) of this section.  Y!- (iii) for each applicant claiming status as a small business consortium, the information specified in paragraph (c)(1)(ii) of this section, for each member of such consortium.  Y#- (2) Long-form Application. In addition to the requirements in subpart I of this part and other applicable rules (e.g.,  24.204(f), 20.6(e) of this chapter, 20.9(b) of this chapter), each applicant submitting a long-form application for license(s) for frequency Block F shall, in an exhibit to its long-form application:  YE'- (i) Disclose separately and in the aggregate the gross revenues and total assets, computed in"E'F0*((P(" accordance with paragraphs (a) and (b) of this section, for each of the following: the  Y-applicant; the applicant's affiliates, the applicant's control group members; the applicant's  Y-attributable investors; and affiliates of its attributable investors; (ii) List and summarize all agreements or other instruments (with appropriate references to specific provisions in the text of such agreements and instruments) that support the applicant's eligibility for a license(s) for frequency Block F and its eligibility under   Yz-24.711 through 24.270, including the establishment of de facto and de jure control; such agreements and instruments include articles of incorporation and bylaws, shareholder agreements, voting or other trust agreements, partnership agreements, management agreements, joint marketing agreements, franchise agreements, and any other relevant agreements (including letters of intent), oral or written; and (iii) List and summarize any investor protection agreements and identify specifically any such provisions in those agreements identified pursuant to paragraph (c)(2)(ii) of this section, including rights of first refusal, supermajority clauses, options, veto rights, and rights to hire and fire employees and to appoint members to boards of directors or management committees.  Y- (3) Records Maintenance. All applicants, including those that are winning bidders, shall maintain at their principal place of business an updated file of ownership, revenue and asset information, including those documents referenced in paragraphs (c)(2)(ii) and (c)(2)(iii) of this section and any other documents necessary to establish eligibility under this section or  Y<-under the definitions of small business and/or business owned by members of minority groups  Y'-and/or women. Licensees (and their successors in interest) shall maintain such files for the term of the license. Applicants that do not obtain the license(s) for which they applied shall maintain such files until the grant of such license(s) is final, or one year from the date of the filing of their short-form application (Form 175), whichever is earlier.  Y- (d) Audits. (1) Applicants and licensees claiming eligibility under this section or  24.711 through 24.720 shall be subject to audits by the Commission, using in- house and contract resources. Selection for audit may be random, on information, or on the basis of other factors. (2) Consent to such audits is part of the certification included in the short- form application (Form 175). Such consent shall include consent to the audit of the applicant's or licensee's books, documents and other material (including accounting procedures and practices) regardless of form or type, sufficient to confirm that such applicant's or licensee's representations are, and remain, accurate. Such consent shall include inspection at all reasonable times of the facilities, or parts thereof, engaged in providing and transacting business, or keeping records regarding licensed broadband PCS service and shall also include consent to the interview of principals, employees, customers and suppliers of the applicant or licensee.  Y"- (e) Definitions. The terms affiliate, business owned by members of minority groups and women, consortium of small businesses, control group, existing investor, gross revenues, institutional investor, members of minority groups, nonattributable equity, preexisting entity, publicly traded corporation with widely dispersed voting power, qualifying investor, qualifying minority and/or  Y3'- woman investor, small business and total assets used in this section are"3'F0*((P("Ԍ defined in  24.720.  Y- x8. A new Section 24.716 is added to Subpart H to read as follows:  X-  24.716 Upfront payments, down payments, and installment payments for licenses for  X-frequency Block F.  Y_- (a) Upfront Payments and Down Payments. (1) Each eligible bidder for licenses on frequency Block F subject to auction shall pay an upfront payment of $0.015 per MHz per pop for the maximum number of licenses (in terms of MHz-pops) on which it intends to bid pursuant to  1.2106 of this Chapter and procedures specified by Public Notice. (2) Each winning bidder shall make a down payment equal to ten percent of its winning bid (less applicable bidding credits); a winning bidder shall bring its total amount on deposit with the Commission (including upfront payment) to five percent of its net winning bid within five business days after the auction closes, and the remainder of the down payment (five percent) shall be paid within five business days after the application required by  24.809(b) is granted.  Yd- (b) Installment Payments. Each eligible licensee of frequency Block F may pay the remaining 90 percent of the net auction price for the license in installment payments pursuant to  1.2110(e) of this Chapter and under the following terms:  Y!- (1) For an eligible licensee with gross revenues exceeding $75 million (calculated in accordance with  24.709(a)(2) and (b)) in each of the two preceding years (calculated in accordance with 24.720(f)), interest shall be imposed based on the rate for ten-year U.S. Treasury obligations applicable on the date the license is granted, plus 3.5 percent; payments shall include both principal and interest amortized over the term of the license.  Y- (2) For an eligible licensee with gross revenues not exceeding $75 million (calculated in accordance with  24.709(a)(2) and (b)) in each of the two preceding years, interest shall be imposed based on the rate for ten-year U.S. Treasury obligations applicable on the date the license is granted, plus 2.5 percent; payments shall include interest only for the first year and payments of interest and principal amortized over the remaining nine years of the license term. (3) For an eligible licensee that qualifies as a Small business or as a consortium of small businesses, interest shall be imposed based on the rate for ten-year U.S. Treasury obligations applicable on the date the license is granted, plus 2.5 percent; payments shall include interest only for the first two years and payments of interest and principal amortized over the remaining eight years of the license term. (4) For an eligible licensee that qualifies as a business owned by members of minority groups and/or women, interest shall be imposed based on the rate for ten-year U.S. Treasury obligations applicable on the date the license is granted; payments shall include interest only for the first three years and payments of interest and principal amortized over the remaining seven years of the license term. (5) For an eligible licensee that qualifies as a small business owned by members of minority groups and/or women or as a consortium of small business owned by members of"+'F0*((P(" minority groups and/or women, interest shall be imposed based on the rate for ten-year U.S. Treasury obligations applicable on the date the license is granted; payments shall include interest only for the first six years and payments of interest and principal amortized over the remaining four years of the license term.  Y- (c) Unjust Enrichment. (1) If a licensee that utilizes installment financing under this section seeks to assign or transfer control of its license to an entity not meeting the eligibility standards for installment payments, the licensee must make full payment of the remaining unpaid principal and any unpaid interest accrued through the date of assignment or transfer as a condition of approval. (2) If a licensee that utilizes installment financing under this section seeks to make any change in ownership structure that would result in the licensee losing eligibility for installment payments, the licensee shall first seek Commission approval and must make full payment of the remaining unpaid principal and any unpaid interest accrued through the date of such change as a condition of approval. A licensee's (or other attributable entity's) increased gross revenues or increased total assets due to nonattributable equity investments (i.e., from sources whose gross revenues and total assets are not considered under  24.709(b)), debt financing, revenue from operations or other investments, business development or expanded service shall not be considered to result in the licensee losing eligibility for installment payments. (3) If a licensee seeks to make any change in ownership that would result in the licensee qualifying for a less favorable installment plan under this section, the licensee shall seek Commission approval and must adjust its payment plan to reflect its new eligibility status. A licensee may not switch its payment plan to a more favorable plan.  Y- x9. A new Section 24.717 is added to Subpart H to read as follows:  X-  24.717 Bidding credits for licenses for frequency Block F.  Y-  Y|- (a) A winning bidder that qualifies as a small business or a consortium of small businesses may use a bidding credit of ten percent to lower the cost of its winning bid. (b) A winning bidder that qualifies as a business owned by members of minority groups and/or women may use a bidding credit of fifteen percent to lower the cost of its winning bid. (c) A winning bidder that qualifies as a small business owned by members of minority groups and/or women or a consortium of small business owned by members of minority groups and/or women may use a bidding credit of twentyfive percent to lower the cost of its winning bid.  Y!- (d) Unjust Enrichment.  Y"- (1) If during the term of the initial license grant (see  24.15), a licensee that utilizes a bidding credit under this section seeks to assign or transfer control of its license to an entity not meeting the eligibility standards for bidding credits or seeks to make any other change in ownership that would result in the licensee no longer qualifying for bidding credits under this section, the licensee must seek Commission approval and reimburse the government for the amount of the bidding credit as a condition of the approval of such assignment, transfer or"%'F0*((P(" other ownership change.  Y- (2) If during the term of the initial license grant (see  24.15), a licensee that utilizes a bidding credit under this section seeks to assign or transfer control of its license to an entity meeting the eligibility standards for lower bidding credits or seeks to make any other change in ownership that would result in the licensee qualifying for a lower bidding credit under this section, the licensee must seek Commission approval and reimburse the government for the difference between the amount of the bidding credit obtained by the licensee and the bidding credit for which the assignee, transferee or licensee is eligible under this section as a condition of the approval of such assignment, transfer or other ownership change. x10. Section 24.720 is amended by revising paragraphs (1)(11)(ii) and (n)X01Í ÍX0Í Í(3) and adding paragraph (n)(4) to read as follows:  X -  24.720 Definitions. l:* * * * * (1)* * * (11) * * * (ii) For purposes of  24.715(a)(2) and paragraph (b)(2) of this section, an entity controlled  Y-by members of minority groups is not considered an affiliate of an applicant (or licensee) that  Y-qualify as a business owned by members of minority groups and/or women if affiliation would arise solely from control of such entity by members of the applicant's (or licensee's) control  Y-group who are members of minority groups. For purposes of this subparagraph, the term minoritycontrolled entity shall mean, in the case of a corporation, an entity in which 50.1  Y-percent of the voting interests is owned by members of minority groups or, in the case of a  Ym-partnership, all of the general partners are members of minority groups or entities controlled  YX-by members of minority groups; and, in all cases, one in which members of minority groups  YC-have both de jure and de facto control of the entity.  Y-l:* * * * *ă  Y- (n) * * * T  Y -  (3) For purposes of assessing compliance with the minimum equity requirements of  24.709(b)(5) and (6), where such equity interests are not held directly in the applicant,  Y"-interests held by qualifying investors shall be determined by successive multiplication of the ownership percentages for each link in the vertical ownership chain. (4) For purposes of assessing compliance with the minimum equity requirements of  24.715(b)(5) and (6), where such equity interests are not held directly in the applicant,  YN&-interests held by qualifying investors and qualifying minority and/or woman investors shall be  Y9'-determined by successive multiplication of the ownership percentages for each link in the"9'F0*((P(" vertical ownership chain. 4 * * * * *"F0*(("  X-' APPENDIX B TP  X- Regulatory Flexibility Act xAs require by Section 603 of the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small  Y-entities of the policies and rules proposed in this Further Notice of Proposed Rule Making. Written public comments are requested on the IRFA. Comments must have a separate and distinct heading designating them as responses to the IRFA and must be filed by the comment deadlines provided above.  Y - x1. Reason for Action: This rule making proceeding was initiated to secure comment on proposals to eliminate all race and genderbased provisions in our competitive bidding  Y -rules for our C block auction only. The proposals advanced in the Further Notice of  Y -Proposed Rule Making are also designed to implement Congress's goal of giving small businesses, rural telephone companies, and businesses owned by members of minority groups and women the opportunity to participate in the provision of spectrumbased services in accordance with 47 U.S.C.  309(j)(4)(D).  Yc- x2. Objectives: The Commission proposes changes to its rules for the C block that are intended to be the least disruptive to bidders who were in an advanced stage of planning to participate in the C block auction. Specifically, the Commission seeks to ensure competition and ownership diversity by avoiding a lengthy delay in the conduct of the auction caused by probable legal challenges to our rules. The Commission proposes to amend its rules to offer favorable bidding credits and installment payment terms to small businesses. The Commission also proposes to permit all C block applicants to avail themselves of the 50.1/49.9 percent equity structure. The Commission proposes to eliminate the minority investor exception to the affiliation rules. Finally, the Commission proposes to make revisions to the PCSCellular CrossOwnership rule and the Commercial Mobile Radio Services (CMRS) Spectrum Cap for purposes of the C block auction only.  YP- x3. Legal Basis: The proposed action is authorized under Sections 4(i), 303(r) and 309(j) of the Communications Act of 1934, 47 U.S.C.  154(i), 303(r) and 309(j), as amended.  Y- x4. Reporting, Recordkeeping, and Other Compliance Requirements: The  Y-proposals under consideration in this Further Notice of Proposed Rule Making do not include the possibility of new reporting and recordkeeping requirements for small business entities.  X"- x5. Federal Rules Which Overlap, Duplicate or Conflict With These Rules: xNone.  XU%- x6. Description, Potential Impact, and Number of Small Entities Involved: xThe rule changes proposed in this proceeding will affect all small businesses regardless of whether each small business avails itself of the favorable rule changes."'' F0*((P("Ԍ X-ԙ x7. Any Significant Alternative Minimizing the Impact on Small Entities  Y-Consistent with the Stated Objectives: This Further Notice of Proposed Rule Making proposes certain mechanisms of preferential treatment for small businesses, among other  ua  entities, to ensure economic opportunity, such as favorable financing and bidding credits.a)  ua  x"!F0*(("  ua #Xw PE37XP#`(#(#X x` `  #Xw PE37XP#hh@hpp  Y-(2 Before the  X-x` ` FEDERAL COMMUNICATIONS COMMISSION  Xw-Washington, D.C. 20554 ă  YI-In the Matter of  hh @)  Y2- hh@)  Y -Implementation of Section 309(j) hh@)  Y -of the Communications Act hh@) hpp PP Docket No. 93253  Y -Competitive Bidding hh @) x` `  hh@)  Y -Amendment of the Commission'shh@)  Y -Cellular PCS CrossOwnership Rule@)hppGN Docket No. 90314 x` `  hh@)  Yz-Implementation of Sections 3(n) and 332@)  Yc-of the Communications Acthh@)hppGN Docket No. 93252 0(#(#X YL-Regulatory Treatment of Mobile Services@)  Y5-x` `  hh@)hpp    Y-/ ERRATUM  ă  Y- x` `  hh@h Released: June 26, 1995  Y- xThis Erratum corrects the Notice of Proposed Rule Making in the abovecaptioned proceeding, FCC 95263 (rel. June 23, 1995), by adding the Initial Regulatory Flexibility Act (IRFA) analysis as Appendix B. The IRFA analysis, contained in Appendix B, was inadvertently omitted from the final released document. This correction was made before publication in the FCC Record and Federal Register and thus will be incorporated into the published document. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton x` `  hhActing Secretary "#"F0*(($"  X- APPENDIX B   X- Regulatory Flexibility Act xAs require by Section 603 of the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small  Y-entities of the policies and rules proposed in this Further Notice of Proposed Rule Making. Written public comments are requested on the IRFA. Comments must have a separate and distinct heading designating them as responses to the IRFA and must be filed by the comment deadlines provided above.  Y - x1. Reason for Action: This rule making proceeding was initiated to secure comment on proposals to eliminate all race and genderbased provisions in our competitive bidding  Y -rules for our C block auction only. The proposals advanced in the Further Notice of  Y -Proposed Rule Making are also designed to implement Congress's goal of giving small businesses, rural telephone companies, and businesses owned by members of minority groups and women the opportunity to participate in the provision of spectrumbased services in accordance with 47 U.S.C.  309(j)(4)(D).  Yc- x2. Objectives: The Commission proposes changes to its rules for the C block that are intended to be the least disruptive to bidders who were in an advanced stage of planning to participate in the C block auction. Specifically, the Commission seeks to ensure competition and ownership diversity by avoiding a lengthy delay in the conduct of the auction caused by probable legal challenges to our rules. The Commission proposes to amend its rules to offer favorable bidding credits and installment payment terms to small businesses. The Commission also proposes to permit all C block applicants to avail themselves of the 50.1/49.9 percent equity structure. The Commission proposes to eliminate the minority investor exception to the affiliation rules. Finally, the Commission proposes to make revisions to the PCSCellular CrossOwnership rule and the Commercial Mobile Radio Services (CMRS) Spectrum Cap for purposes of the C block auction only.  YP- x3. Legal Basis: The proposed action is authorized under Sections 4(i), 303(r) and 309(j) of the Communications Act of 1934, 47 U.S.C.  154(i), 303(r) and 309(j), as amended.  Y- x4. Reporting, Recordkeeping, and Other Compliance Requirements: The  Y-proposals under consideration in this Further Notice of Proposed Rule Making do not include the possibility of new reporting and recordkeeping requirements for small business entities.  X"- x5. Federal Rules Which Overlap, Duplicate or Conflict With These Rules: xNone.  XU%- x6. Description, Potential Impact, and Number of Small Entities Involved: xThe rule changes proposed in this proceeding will affect all small businesses regardless of whether each small business avails itself of the favorable rule changes.  X(- x7. Any Significant Alternative Minimizing the Impact on Small Entities"(0*0*0*0*"  Y-Consistent with the Stated Objectives: This Further Notice of Proposed Rule Making proposes certain mechanisms of preferential treatment for small businesses, among other entities, to ensure economic opportunity, such as favorable financing and bidding credits. ua