Sec. 21.961  Definitions applicable to designated entity provisions.

    (a) Scope. The definitions in this section apply to Sec. 21.960, 
unless otherwise specified in that section.
    (b) Small business; consortium of small businesses.
    (1) A small business is an entity that together with its affiliates 
has average annual gross revenues that are not more than $40 million for 
the preceding three calendar years.
    (2) Aggregation of gross revenues.
    (i) Except as specified in paragraph (b)(2)(ii) of this section, the 
gross revenues of the applicant (or BTA authorization holder) and its 
affiliates shall be considered on a cumulative basis and aggregated for 
purposes of determining whether the applicant (or holder) is a small 
business.
    (ii) Where an applicant (or BTA authorization holder) is a 
consortium of small businesses, the gross revenues of each small 
business shall not be aggregated.
    (3) A small business consortium is a conglomerate organization 
formed as a

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joint venture between mutually-independent business firms, each of which 
individually satisfies the definition of a small business.
    (c) Gross revenues shall mean all income received by an entity, 
whether earned or passive, before any deductions are made for costs of 
doing business (e.g., cost of goods sold), as evidenced by audited 
financial statements for the preceding relevant number of calendar 
years, or, if audited financial statements were not prepared on a 
calendar-year basis, for the preceding relevant number of fiscal years. 
If an entity was not in existence for all or part of the relevant 
period, gross revenues shall be evidenced by the audited financial 
statements of the entity's predecessor-in-interest or, if there is no 
identifiable predecessor-in-interest, unaudited financial statements 
certified by the applicant as accurate.
    (d) The definition of an affiliate of an applicant is set forth in 
47 CFR 1.2110(b)(4).
[60 1997 FR 36562 , July 17, 1995, as amended at  60 FR 57368 , Nov. 15, 1995]