§ 24.720   Definitions.

   (a) Scope. The definitions in this section apply to § § 24.709 through 24.717,
   unless otherwise specified in those sections.

   (b) Small and very small business. (1) A small business is an entity that,
   together with its affiliates and persons or entities that hold interest in
   such entity and their affiliates, has average annual gross revenues that are
   not more than $40 million for the preceding three years.

   (2) A very small business is an entity that, together with its affiliates
   and  persons  or entities that hold interests in such entity and their
   affiliates, has average annual gross revenues that are not more than $15
   million for the preceding three years.

   (c)  Institutional Investor. An institutional investor is an insurance
   company,  a  bank  holding  stock  in trust accounts through its trust
   department, or an investment company as defined in 15 U.S.C. 80a-3(a),
   including within such definition any entity that would otherwise meet the
   definition of investment company under 15 U.S.C. 80a-3(a) but is excluded by
   the exemptions set forth in 15 U.S.C. 80a-3(b) and (c), without regard to
   whether such entity is an issuer of securities; provided that, if such
   investment company is owned, in whole or in part, by other entities, such
   investment company, such other entities and the affiliates of such other
   entities, taken as a whole, must be primarily engaged in the business of
   investing,  reinvesting or trading in securities or in distributing or
   providing investment management services for securities.

   (d) Nonattributable Equity—(1) Nonattributable equity shall mean:

   (i) For corporations, voting stock or non-voting stock that includes no more
   than twenty-five percent of the total voting equity, including the right to
   vote such stock through a voting trust or other arrangement;

   (ii) For partnerships, joint ventures and other non-corporate entities,
   limited partnership interests and similar interests that do not afford the
   power to exercise control of the entity.

   (2) For purposes of assessing compliance with the equity limits in § 24.709
   (b)(1)(iii)(A) and (b)(1)(iv)(A), where such interests are not held directly
   in the applicant, the total equity held by a person or entity shall be
   determined by successive multiplication of the ownership percentages for
   each link in the vertical ownership chain.

   (e) Control Group. A control group is an entity, or a group of individuals
   or entities, that possesses de jure control and de facto control of an
   applicant  or  licensee, and as to which the applicant's or licensee's
   charters,  bylaws,  agreements  and  any other relevant documents (and
   amendments thereto) provide:

   (1) That the entity and/or its members own unconditionally at least 50.1
   percent of the total voting interests of a corporation;

   (2) That the entity and/or its members receive at least 50.1 percent of the
   annual  distribution  or  any  dividends paid on the voting stock of a
   corporation;

   (3) That, in the event of dissolution or liquidation of a corporation, the
   entity and/or its members are entitled to receive 100 percent of the value
   of each share of stock in its possession and a percentage of the retained
   earnings of the concern that is equivalent to the amount of equity held in
   the corporation; and

   (4) That, for other types of businesses, the entity and/or its members have
   the  right  to  receive dividends, profits and regular and liquidating
   distributions from the business in proportion to the amount of equity held
   in the business.

   Note  to paragraph (e): Voting control does not always assure de facto
   control, such as for example, when the voting stock of the control group is
   widely dispersed (see e.g., § 1.2110(c)(5)(ii)(C) of this chapter).

   (f)  Publicly Traded Corporation with Widely Dispersed Voting Power. A
   publicly traded corporation with widely dispersed voting power is a business
   entity organized under the laws of the United States:

   (1)  Whose shares, debt, or other ownership interests are traded on an
   organized securities exchange within the United States;

   (2) In which no person:

   (i) Owns more than 15 percent of the equity; or

   (ii) Possesses, directly or indirectly, through the ownership of voting
   securities, by contract or otherwise, the power to control the election of
   more than 15 percent of the members of the board of directors or other
   governing body of such publicly traded corporation; and

   (3) Over which no person other than the management and members of the board
   of directors or other governing body of such publicly traded corporation, in
   their capacities as such, has de facto control.

   (4) The term person shall be defined as in section 13(d) of the Securities
   and Exchange Act of 1934, as amended (15 U.S.C. 78(m)), and shall also
   include investors that are commonly controlled under the indicia of control
   set  forth  in  the  definition  of  affiliate in § 1.2110(c)(5) of the
   Commission's rules.

   (g) Qualifying investor. (1) A qualifying investor is a person who is (or
   holds an interest in) a member of the applicant's (or licensee's) control
   group and whose gross revenues and total assets, when aggregated with those
   of all other attributable investors and affiliates, do not exceed the gross
   revenues and total assets limits specified in § 24.709(a), or, in the case of
   an applicant (or licensee) that is a small business, do not exceed the gross
   revenues limit specified in paragraph (b) of this section.

   (2)  For  purposes  of  assessing  compliance  with the minimum equity
   requirements of § 24.709(b)(1)(v) and (b)(1)(vi), where such equity interests
   are  not  held directly in the applicant, interests held by qualifying
   investors shall be determined by successive multiplication of the ownership
   percentages for each link in the vertical ownership chain.

   (3)  For  purposes  of  § 24.709(b)(1)(v)(A)(3) and (b)(1)(vi)(A)(3), a
   qualifying investor is a person who is (or holds an interest in) a member of
   the applicant's (or licensee's) control group and whose gross revenues and
   total  assets do not exceed the gross revenues and total assets limits
   specified in § 24.709(a).

   (h) Preexisting entity; Existing investor. A preexisting entity is an entity
   that was operating and earning revenues for at least two years prior to
   December 31, 1994. An existing investor is a person or entity that was an
   owner of record of a preexisting entity's equity as of November 10, 1994,
   and  any  person  or  entity acquiring de minimis equity holdings in a
   preexisting entity after that date.

   Note to paragraph (h): In applying the term existing investor to de minimis
   interests in preexisting entities obtained or increased after November 10,
   1994, the Commission will scrutinize any significant restructuring of the
   preexisting entity that occurs after that date and will presume that any
   change of equity that is five percent or less of the preexisting entity's
   total equity is de minimis. The burden is on the applicant (or licensee) to
   demonstrate that changes that exceed five percent are not significant.

   [ 67 FR 45372 , July 9, 2002, as amended at  68 FR 42999 , July 21, 2003;  68 FR 57829 , Oct. 7, 2003]

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Subpart I—Interim Application, Licensing, and Processing Rules for Broadband
PCS

   Source:  59 FR 37610 , July 22, 1994, unless otherwise noted.

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