§  73.5007   Designated entity provisions.

   (a) New entrant bidding credit. A winning bidder that qualifies as a
   “new entrant” may use a bidding credit to lower the cost of its winning
   bid on any broadcast construction permit. Any winning bidder claiming
   new entrant status must have de facto, as well as de jure, control of
   the entity utilizing the bidding credit. A thirty-five (35) percent
   bidding credit will be given to a winning bidder if it, and/or any
   individual or entity with an attributable interest in the winning
   bidder, have no attributable interest in any other media of mass
   communications, as defined in § 73.5008. A twenty-five (25) percent
   bidding credit will be given to a winning bidder if it, and/or any
   individual or entity with an attributable interest in the winning
   bidder, have an attributable interest in no more than three mass media
   facilities. No bidding credit will be given if any of the commonly
   owned mass media facilities serve the same area as the proposed
   broadcast or secondary broadcast station, or if the winning bidder,
   and/or any individual or entity with an attributable interest in the
   winning bidder, have attributable interests in more than three mass
   media facilities. Attributable interests held by a winning bidder in
   existing low power television, television translator or FM translator
   facilities will not be counted among the bidder's other mass media
   interests in determining eligibility for a bidding credit.

   (b) The new entrant bidding credit is not available to a winning bidder
   if it, and/or any individual or entity with an attributable interest in
   the winning bidder, have an attributable interest in any existing media
   of mass communications in the same area as the proposed broadcast or
   secondary broadcast facility.

   (1) Any existing media of mass communications will be considered in the
   “same area” as a proposed broadcast or secondary broadcast facility if
   the relevant defined service areas of the existing mass media
   facilities partially overlap, or are partially overlapped by, the
   proposed broadcast or secondary broadcast facility's relevant contour.

   (2) For purposes of determining whether any existing media of mass
   communications is in the “same area” as a proposed broadcast or
   secondary broadcast facility, the relevant defined service areas of the
   existing mass media facilities shall be as follows:

   (i) AM broadcast station—principal community contour ( see § 73.24(i));

   (ii) FM Broadcast station—principal community contour ( see
   § 73.315(a));

   (iii) Television broadcast station—television Grade B or equivalent
   contour ( see § 73.683(a) for analog TV and § 73.622(e) for DTV);

   (iv) Cable television system—the franchised community of a cable
   system; and

   (v) Daily newspaper—community of publication.

   (3) For purposes of determining whether a proposed broadcast or
   secondary broadcast facility is in the “same area” as an existing mass
   media facility, the relevant contours of the proposed broadcast or
   secondary broadcast facility shall be as follows:

   (i) AM broadcast station—principal community contour ( see § 73.24(i));

   (ii) FM broadcast station—principal community contour ( see
   § 73.315(a));

   (iii) FM translator station—predicted, protected contour (see
   § 74.1204(a) of this chapter);

   (iv) Television broadcast station—television Grade B or equivalent
   contour ( see § 73.683(a) for analog TV and § 73.622(e) for DTV).

   (v) Low power television or television translator station—predicted,
   protected contour (see § 74.707(a) of this chapter).

   (c) Unjust enrichment. If a licensee or permittee that utilizes a new
   entrant bidding credit under this subsection seeks to assign or
   transfer control of its license or construction permit to an entity not
   meeting the eligibility criteria for the bidding credit, the licensee
   or permittee must reimburse the U.S. Government for the amount of the
   bidding credit, plus interest based on the rate for ten-year U.S.
   Treasury obligations applicable on the date the construction permit was
   originally granted, as a condition of Commission approval of the
   assignment or transfer. If a licensee or permittee that utilizes a new
   entrant bidding credit seeks to assign or transfer control of a license
   or construction permit to an entity that is eligible for a lower
   bidding credit, the difference between the bidding credit obtained by
   the assigning party and the bidding credit for which the acquiring
   party would qualify, plus interest based on the rate for ten-year U.S.
   Treasury obligations applicable on the date the construction permit was
   originally granted, must be paid to the U.S. Government as a condition
   of Commission approval of the assignment or transfer. The amount of the
   reimbursement payments will be reduced over time. An assignment or
   transfer in the first two years after issuance of the construction
   permit to the winning bidder will result in a forfeiture of one hundred
   (100) percent of the value of the bidding credit; during year three, of
   seventy-five (75) percent of the value of the bidding credit; in year
   four, of fifty (50) percent; in year five, twenty-five (25) percent;
   and thereafter, no payment. If a licensee or permittee who utilized a
   new entrant bidding credit in obtaining a broadcast license or
   construction permit acquires within this five-year reimbursement period
   an additional broadcast facility or facilities, such that the licensee
   or permittee would not have been eligible for the new entrant credit,
   the licensee or permittee will generally not be required to reimburse
   the U.S. Government for the amount of the bidding credit.

   [ 64 FR 24526 , May 7, 1999, as amended at  68 FR 46358 , Aug. 5, 2003;  69 FR 72045 , Dec. 10, 2004]