*Pages 1--9 from Microsoft Word - 59071.doc* Federal Communications Commission Washington, D. C. 20554 August 9, 2006 Small Entity Compliance Guide Advanced Wireless Services Spectrum (AWS- 1 Auction) DA 06- 1612 WT Docket No. 02- 353, ET Docket No. 00- 258 This Guide is prepared in accordance with the requirements of Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It is intended to help small entities— small businesses, small organizations (non- profits), and small governmental jurisdictions— to comply with the new rules adopted in the above- referenced FCC rulemaking docket( s). This Guide is not intended to replace the rules and, therefore, final authority rests solely with the rules. Although we have attempted to cover all parts of the rules that might be especially important to small entities, the coverage may not be exhaustive. As a result, in any civil or administrative action against a small entity for a violation of rules, the content of the Small Entity Compliance Guide may be considered only as evidence of the reasonableness or appropriateness of proposed fines, penalties or damages. This Guide may, perhaps, not apply in a particular situation based upon the circumstances, and the FCC retains the discretion to adopt approaches on a case- by- case basis that may differ from this Guide, where appropriate. Any decisions regarding a particular small entity will be based on the statute and regulations. Interested parties are free to file comments regarding this Guide and the appropriateness of its application to a particular situation; the FCC will consider whether the recommendations or interpretations in the Guide are appropriate in that situation. The FCC may decide to revise this Guide without public notice to reflect changes in the FCC’s approach to implementing a rule, or to clarify or update the text of the Guide. Direct your comments and recommendations, or calls for further assistance, to the FCC’s Consumer Center: 1- 888- CALL- FCC (1- 888- 225- 5322) TTY: 1- 888- TELL- FCC (1- 888- 835- 5322) Fax: 202- 418- 0232 fccinfo@ fcc. gov 1 2 TABLE OF CONTENTS I. OBJECTIVES OF THE PROCEEDINGS ........................................................................................ 2 II. REGULATIONS AND POLICIES THAT THE COMMISSION ADOPTED OR MODIFIED, INCLUDING COMPLIANCE REQUIREMENTS ................................................... 3 A. AWS- 1 Band Plan .......................................................................................................................... 3 B. Application and Auction Regulations .......................................................................................... 3 1. Incorporation by Reference of the Part 1 Standardized Auction Rules............................. 4 2. Provisions for Designated Entities ......................................................................................... 4 3. Provisions for Tribal Lands Bidding Credits ....................................................................... 4 4. Wireless Telecommunications Services— Applications and Proceedings (Universal Licensing System) ................................................................................................. 4 C. Operating and Technical Requirements ...................................................................................... 5 1. License Period and Substantial Service Requirement ......................................................... 5 2. Relocation of Incumbents ....................................................................................................... 5 3. Cost Sharing............................................................................................................................. 5 4. Technical Requirements ......................................................................................................... 6 III. WEBLINKS .......................................................................................................................................... 7 I. OBJECTIVES OF THE PROCEEDINGS In the AWS- 1 Report and Order, the FCC adopted service rules for Advanced Wireless Services (AWS) in the 1710- 1755 and 2110- 2155 MHz bands (AWS- 1), including provisions for application, licensing, operating and technical rules, and for competitive bidding. In the AWS- 1 Order on Reconsideration, the Commission modified the AWS- 1 band plan and made minor revisions to the AWS- 1 service rules in order to provide additional opportunities for smaller and rural wireless carriers and to enhance flexibility for potential licensees. Because Section 309( j) of the Communications Act, 47 U. S. C. § 309( j), requires that mutually exclusive applications for these licenses must be resolved by competitive bidding, the Commission brought AWS- 1 under the standardized auction rules. In addition, the Commission adopted small business bidding credits for AWS- 1 applicants in an effort to help small entities attract capital. In the AWS Relocation and Cost Sharing Report and Order, the FCC adopted relocation procedures to govern the relocation of: (1) Broadband Radio Service (BRS) licensees in the 2150- 2160/ 62 MHz band; and (2) Fixed Microwave Service (FS) licensees in the 2110- 2150 MHz and 2160- 2180 MHz bands. The FCC also adopted cost sharing rules that identify the reimbursement obligations for AWS and Mobile Satellite Service (MSS) entrants benefiting from the relocation of FS operations in the 2110- 2150 MHz band and the 2160- 2200 MHz band and AWS entrants benefiting from the relocation of BRS operations in the 2150- 2160/ 62 MHz band. These relocation policies are designed to allow early entry for new technology providers by allowing providers of new services to negotiate financial arrangements for reaccommodation of incumbent licensees while ensuring an orderly and expeditious transition of, with minimal disruption to, incumbent BRS operations from the 2150- 2160/ 62 MHz band and FS operations from the 2110- 2150 MHz and 2160- 2180 MHz bands. 2 4 applicants in Advanced Wireless Services, they are substantially consistent with the application requirements the Commission has applied to other auctionable services for several years. The requirement of filing applications on appropriate forms is necessary in order to ensure that applicants are qualified to participate in auctions and hold licenses. Certain information required on FCC Form 175 is also necessary to ensure that only applicants that qualify as small businesses or very small businesses receive the bidding credits offered to such entities. 1. Incorporation by Reference of the Part 1 Standardized Auction Rules As noted above, the Commission decided in the AWS- 1 Report and Order to conduct an auction of the AWS- 1 licenses in conformity with the general competitive bidding rules in Part 1, Subpart Q, of the Commission's Rules, 47 C. F. R. §§ 1. 2101- 1.2114. Procedures and requirements regarding electronic filing in the FCC Auction System, including application deadlines, are presented in public notices issued by the Commission or the Wireless Telecommunications Bureau. These public notices are set forth on the Bureau’s Auctions website, at http:// wireless. fcc. gov/ auctions. 2. Provisions for Designated Entities Also, as noted above, the Commission determined that bidding credits should be made available to small business AWS- 1 applicants to assist them with attracting capital. For AWS- 1, a small business is defined as an entity with average annual gross revenues for the three preceding years not exceeding $40 million, and a very small business is defined as an entity with average annual gross revenues for the three preceding years not exceeding $15 million. The Commission will make available bidding credits of 15 percent for small businesses and 25 percent for very small businesses. These bidding credits are consistent with the Commission’s standardized schedule of bidding credits at 47 C. F. R. § 1.2110( f)( 2). The Commission recently revised its designated entity rules to ensure that the recipients of small business bidding credits are bona fide small businesses that use their licenses directly to provide facilities- based telecommunications services for the benefit of the public. The new rules both limit the award of designated entity benefits if any applicant or licensee has a "material relationship” created by certain agreements with one or more entities for the lease or resale of its spectrum capacity, and set out new standards for the payment of unjust enrichment. See 47 C. F. R. §§ 1.2110( b)( 3)( iv)( A) – (B) (designated entities) and 1.2111 (unjust enrichment). 3. Provisions for Tribal Lands Bidding Credits In addition to the small business bidding credits described above, a tribal land bidding credit is available to any winning bidder when it commits to deploying facilities and providing wireless services to qualifying tribal lands. For this purpose, qualifying tribal lands are defined as federally- recognized tribal areas that are either unserved by any telecommunications carrier or that have a telephone service penetration rate of 85% or less. The tribal lands bidding credit is in addition to any other bidding credit for which the applicant qualifies, such as the small business bidding credit. Further information on tribal lands bidding credits can be found on the Commission’s website, at http:// wireless. fcc. gov/ auctions/ tribal. 4. Wireless Telecommunications Services— Applications and Proceedings (Universal Licensing System) In the AWS- 1 Report and Order, the Commission noted that AWS- 1 long- form applicants and licensees will be subject to the application filing procedures for the Universal Licensing System (ULS), as set forth in Part 1, Subpart F of the Commission’s Rules, 47 C. F. R. §§ 1.901- 1.981. The ULS is the Commission’s consolidated database, application filing system and processing system for all wireless radio services. It supports electronic filing of all applications and related documents by applicants and licensees, and 4