152. In the Competitive Bidding Second Memorandum Opinion and Order, the Commission stated that it would define eligibility requirements for small businesses on a service-specific basis, taking into account the capital requirements and other characteristics of each particular service in establishing the appropriate threshold. Further, in the Part 1 Third Report and Order, the Commission, while standardizing many auction rules, determined that it would continue a service-by-service approach to defining small businesses.
153. In the event that the Commission assigns geographic area licenses for spectrum in the 1695-1710 MHz, 1755-1780 MHz, 2020-2025 MHz, and 2155-2180 MHz bands, we believe that this spectrum would be employed for purposes similar to those for which spectrum in the AWS-1 band is used. We therefore propose to establish the same small business size standards and associated bidding credits for these bands as the Commission adopted for the AWS-1 band. These small business size standards and associated bidding credits were adopted for the AWS-1 band because of the similarities between the AWS-1 service and the broadband PCS service. The Commission also followed this approach when proposing small business size standards and associated bidding credits in the AWS-2 NPRM and H Block NPRM, and when adopting them in the AWS-4 Service Rules R&O. Thus, we propose to define a small business as an entity with average annual gross revenues for the preceding three years not exceeding
154. We propose to provide small businesses with a bidding credit of 15 percent and very small businesses with a bidding credit of 25 percent, as set forth in the standardized schedule in part 1 of our rules. We seek comment on the use of these standards and associated bidding credits, with particular focus on the appropriate definitions of small businesses and very small businesses as they may relate to the size of the geographic area to be served and the spectrum allocated to each license. Commenters should discuss and quantify any costs or benefits associated with these standards and associated bidding credits as they relate to the proposed geographic areas. In discussing these issues, commenters are requested to address and quantify the expected capital requirements for services in these bands and other characteristics of the service. Commenters are also invited to use comparisons with other frequency bands for which the Commission has already established service rules as a basis for their comments and any quantification of costs and benefits regarding the appropriate small business size standards.
155. In establishing the criteria for small business bidding credits, we acknowledge the difficulty in accurately predicting the technology and market conditions that will exist at the time these frequencies are licensed. Thus, our forecasts of types of services that will be offered over these bands may require adjustment depending upon ongoing technological developments and changes in market conditions.
156. We seek comment on whether the small business provisions we propose today are sufficient to promote participation by businesses owned by minorities and women, as well as rural telephone companies. To the extent that commenters propose additional provisions to ensure participation by minority-owned or women-owned businesses, they should address how such provisions should be crafted to meet the relevant standards of judicial review.
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