§  24.714   Partitioned licenses and disaggregated spectrum.

   (a) Eligibility. (1) Parties seeking approval for partitioning and
   disaggregation shall request an authorization for partial assignment of
   a license pursuant to §  24.839.

   (2) Broadband PCS licensees in spectrum blocks A, B, D, and E and
   broadband PCS C and F block licenses not subject to the eligibility
   requirements of §  24.709 may apply to partition their licensed
   geographic service area or disaggregate their licensed spectrum at any
   time following the grant of their licenses.

   (3) Broadband PCS licensees that acquired C or F block licenses in
   closed bidding subject to the eligibility requirements of §  24.709 may
   partition their licensed geographic service area or disaggregate their
   licensed spectrum at any time to an entity that meets the eligibility
   criteria set forth in §  24.709 at the time the request for partial
   assignment of license is filed or to an entity that holds license(s)
   for frequency blocks C and F that met the eligibility criteria set
   forth in §  24.709 at the time of receipt of such license(s). Partial
   assignment applications seeking partitioning or disaggregation of
   broadband PCS licenses in spectrum blocks C and F must include an
   attachment demonstrating compliance with this section.

   (b) Technical standards —(1) Partitioning. In the case of partitioning,
   applicants and licensees must file FCC Form 603 pursuant to §  1.948 of
   this chapter and list the partitioned service area on a schedule to the
   application. The geographic coordinates must be specified in degrees,
   minutes, and seconds to the nearest second of latitude and longitude
   and must be based upon the 1983 North American Datum (NAD83).

   (2) Disaggregation. Spectrum may be disaggregated in any amount.

   (3) Combined partitioning and disaggregation. The Commission will
   consider requests for partial assignment of licenses that propose
   combinations of partitioning and disaggregation.

   (c) Installment payments —(1) Apportioning the balance on installment
   payment plans. When a winning bidder elects to pay for its license
   through an installment payment plan pursuant to § §  1.2110(g) of this
   chapter or 24.716, and partitions its licensed area or disaggregates
   spectrum to another party, the outstanding balance owed by the licensee
   on its installment payment plan (including accrued and unpaid interest)
   shall be apportioned between the licensee and partitionee or
   disaggregatee. Both parties will be responsible for paying their
   proportionate share of the outstanding balance to the U.S. Treasury. In
   the case of partitioning, the balance shall be apportioned based upon
   the ratio of the population of the partitioned area to the population
   of the entire original license area calculated based upon the most
   recent census data. In the case of disaggregation, the balance shall be
   apportioned based upon the ratio of the amount of spectrum
   disaggregated to the amount of spectrum allocated to the licensed area.

   (2) Parties not qualified for installment payment plans. (i) When a
   winning bidder elects to pay for its license through an installment
   payment plan, and partitions its license or disaggregates spectrum to
   another party that would not qualify for an installment payment plan or
   elects not to pay its share of the license through installment
   payments, the outstanding balance owed by the licensee (including
   accrued and unpaid interest shall be apportioned according to
   §  24.714(c)(1)).

   (ii) The partitionee or disaggregatee shall, as a condition of the
   approval of the partial assignment application, pay its entire pro rata
   amount within 30 days of Public Notice conditionally granting the
   partial assignment application. Failure to meet this condition will
   result in a rescission of the grant of the partial assignment
   application.

   (iii) The licensee shall be permitted to continue to pay its pro rata
   share of the outstanding balance and shall receive new financing
   documents (promissory note, security agreement) with a revised payment
   obligation, based on the remaining amount of time on the original
   installment payment schedule. These financing documents will replace
   the licensee's existing financing documents, which shall be marked
   “superseded” and returned to the licensee upon receipt of the new
   financing documents. The original interest rate, established pursuant
   to §  1.2110(g)(3)(i) of this chapter at the time of the grant of the
   initial license in the market, shall continue to be applied to the
   licensee's portion of the remaining government obligation. The
   Commission will require, as a further condition to approval of the
   partial assignment application, that the licensee execute and return to
   the U.S. Treasury the new financing documents within 30 days of the
   Public Notice conditionally granting the partial assignment
   application. Failure to meet this condition will result in the
   automatic cancellation of the grant of the partial assignment
   application.

   (iv) A default on the licensee's payment obligation will only affect
   the licensee's portion of the market.

   (3) Parties qualified for installment payment plans. (i) Where both
   parties to a partitioning or disaggregation agreement qualify for
   installment payments, the partitionee or disaggregatee will be
   permitted to make installment payments on its portion of the remaining
   government obligations, as calculated according to §  24.714(c)(1).

   (ii) Each party will be required, as a condition to approval of the
   partial assignment application, to execute separate financing documents
   (promissory note, security agreement) agreeing to pay their pro rata
   portion of the balance due (including accrued and unpaid interest)
   based upon the installment payment terms for which they qualify under
   the rules. The financing documents must be returned to the U.S.
   Treasury within thirty (30) days of the Public Notice conditionally
   granting the partial assignment application. Failure by either party to
   meet this condition will result in the automatic cancellation of the
   grant of the partial assignment application. The interest rate,
   established pursuant to §  1.2110(g)(3)(i) of this chapter at the time
   of the grant of the initial license in the market, shall continue to be
   applied to both parties' portion of the balance due. Each party will
   receive a license for their portion of the partitioned market or
   disaggregated spectrum.

   (iii) A default on an obligation will only affect that portion of the
   market area held by the defaulting party.

   (iv) Partitionees and disaggregatees that qualify for installment
   payment plans may elect to pay some of their pro rata portion of the
   balance due in a lump sum payment to the U.S. Treasury and to pay the
   remaining portion of the balance due pursuant to an installment payment
   plan.

   (d) License term. The license term for a partitioned license area and
   for disaggregated spectrum shall be the remainder of the original
   licensee's license term as provided for in §  24.15.

   (e) Construction requirements —(1) Requirements for partitioning.
   Parties seeking authority to partition must meet one of the following
   construction requirements:

   (i) The partitionee may certify that it will satisfy the applicable
   construction requirements set forth in §  24.203 for the partitioned
   license area; or

   (ii) The original licensee may certify that it has or will meet its
   five-year construction requirement and will meet the ten-year
   construction requirement, as set forth in §  24.203, for the entire
   license area. In that case, the partitionee must only satisfy the
   requirements for “substantial service,” as set forth in §  24.16(a), for
   the partitioned license area by the end of the original ten-year
   license term of the licensee.

   (iii) Applications requesting partial assignments of license for
   partitioning must include a certification by each party as to which of
   the above construction options they select.

   (iv) Partitionees must submit supporting documents showing compliance
   with the respective construction requirements within the appropriate
   five- and ten-year construction benchmarks set forth in §  24.203.

   (v) Failure by any partitionee to meet its respective construction
   requirements will result in the automatic cancellation of the
   partitioned or disaggregated license without further Commission action.

   (2) Requirements for disaggregation. Parties seeking authority to
   disaggregate must submit with their partial assignment application a
   certification signed by both parties stating which of the parties will
   be responsible for meeting the five- and ten-year construction
   requirements for the PCS market as set forth in §  24.203. Parties may
   agree to share responsibility for meeting the construction
   requirements. Parties that accept responsibility for meeting the
   construction requirements and later fail to do so will be subject to
   license forfeiture without further Commission action.

   [ 62 FR 661 , Jan. 6, 1997, as amended at  63 FR 68953 , Dec. 14, 1998;  65 FR 53638 , Sept. 5, 2000;  67 FR 45371 , July 9, 2002;  68 FR 42999 , July
   21, 2003]

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