§ 1.9030   Long-term de facto transfer leasing arrangements.

   (a) Overview. Under the provisions of this section, a licensee (in any
   of the included services) and a spectrum lessee may enter into a
   long-term de facto transfer leasing arrangement in which the licensee
   retains de jure control of the license while de facto control of the
   leased spectrum is transferred to the spectrum lessee for the duration
   of the spectrum leasing arrangement, subject to prior Commission
   consent pursuant to the application procedures set forth in this
   section. A "long-term" de facto transfer leasing arrangement has an
   individual term, or series of combined terms, of more than one year.
   The term of a long-term de facto transfer leasing arrangement may be no
   longer than the term of the license authorization.

   (b) Rights and responsibilities of the licensee. (1) Except as provided
   in paragraph (b)(2) of this section, the licensee is relieved of
   primary and direct responsibility for ensuring that the spectrum
   lessee's operations comply with the Communications Act and Commission
   policies and rules.

   (2) The licensee is responsible for its own violations, including those
   related to its spectrum leasing arrangement with the spectrum lessee,
   and for ongoing violations or other egregious behavior on the part of
   the spectrum lessee about which the licensee has knowledge or should
   have knowledge.

   (3) The licensee must retain a copy of the spectrum leasing agreement
   and make it available upon request by the Commission.

   (c) Rights and responsibilities of the spectrum lessee. (1) The
   spectrum lessee assumes primary responsibility for complying with the
   Communications Act and applicable Commission policies and rules.

   (2) The spectrum lessee is granted an instrument of authorization
   pertaining to the de facto transfer leasing arrangement that brings it
   within the scope of the Commission's direct forfeiture provisions under
   section 503(b) of the Communications Act.

   (3) The spectrum lessee is responsible for interacting with the
   Commission regarding the leased spectrum and for making all related
   filings (e.g., all applications and notifications, submissions of any
   materials required to support a required Environmental Assessment, any
   reports required by Commission rules and applicable to the lessee,
   information necessary to facilitate international or Interdepartment
   Radio Advisory Committee (IRAC) coordination).

   (4) The spectrum lessee is required to maintain accurate information on
   file pursuant to Commission rules (see § 1.65 of subpart A of this
   part).

   (5) The spectrum lessee must retain a copy of the spectrum leasing
   agreement and make it available upon request by the Commission.

   (d) Applicability of particular service rules and policies. Under a
   long-term de facto transfer leasing arrangement, the service rules and
   policies apply in the following manner to the licensee and spectrum
   lessee:

   (1) Interference-related rules. The interference and radiofrequency
   (RF) safety rules applicable to use of the spectrum by the licensee as
   a condition of its license authorization also apply to the use of the
   spectrum leased by the spectrum lessee.

   (2) General eligibility rules. (i) The spectrum lessee must meet the
   same eligibility and qualification requirements that are applicable to
   the licensee under its license authorization. A spectrum lessee
   entering into a spectrum leasing arrangement involving a licensee in
   the Educational Broadband Service (see § 27.1201 of this chapter) is
   not required to comply with the eligibility requirements pertaining to
   such a licensee so long as the spectrum lessee meets the other
   eligibility and qualification requirements applicable to part 27
   services (see § 27.12 of this chapter). A spectrum lessee entering into
   a spectrum leasing arrangement involving a licensee in the Public
   Safety Radio Services (see part 90, subpart B and § 90.311(a)(1)(i) of
   this chapter) is not required to comply with the eligibility
   requirements pertaining to such a licensee so long as the spectrum
   lessee is an entity providing communications in support of public
   safety operations (see § 90.523(b) of this chapter).

   (ii) The spectrum lessee must meet applicable foreign ownership
   eligibility requirements (see sections 310(a), 310(b) of the
   Communications Act).

   (iii) The spectrum lessee must satisfy any qualification requirements,
   including character qualifications, applicable to the licensee under
   its license authorization.

   (iv) The spectrum lessee must not be a person subject to denial of
   Federal benefits under the Anti-Drug Abuse Act of 1988 (see § 1.2001 et
   seq. of subpart P of this part).

   (3) Use restrictions. To the extent that the licensee is restricted
   from using the licensed spectrum to offer particular services under its
   license authorization, the use restrictions apply to the spectrum
   lessee as well.

   (4) Designated entity/entrepreneur rules. (i) A licensee that holds a
   license pursuant to small business and/or entrepreneur provisions (see
   § 1.2110 and § 24.709 of this chapter) and continues to be subject to
   unjust enrichment requirements (see § 1.2111 and § 24.714 of this
   chapter) and/or transfer restrictions (see § 24.839 of this chapter)
   may enter into a long-term de facto transfer leasing arrangement with
   any entity under the streamlined processing procedures described in
   this section, subject to any applicable unjust enrichment payment
   obligations and/or transfer restrictions (see § 1.2111 and § 24.839 of
   this chapter).

   (ii) A licensee holding a license won in closed bidding (see § 24.709
   of this chapter) may, during the first five years of the license term,
   enter into a spectrum leasing arrangement with an entity not eligible
   to hold such a license pursuant to the requirements of § 24.709(a) of
   this chapter so long as it has met its five-year construction
   requirement (see § § 24.203, 24.839(a)(6) of this chapter).

   (iii) The amount of any unjust enrichment payment will be determined by
   the Commission as part of its review of the application under the same
   rules that apply in the context of a license assignment or transfer of
   control (see § 1.2111 and § 24.714 of this chapter). If the spectrum
   leasing arrangement involves only part of the license area and/or part
   of the bandwidth covered by the license, the unjust enrichment
   obligation will be apportioned as though the license were being
   partitioned and/or disaggregated (see § 1.2111(e) and § 24.714(c) of
   this chapter). A licensee will receive no reduction in its unjust
   enrichment payment obligation for a spectrum leasing arrangement that
   ends prior to the end of the fifth year of the license term.

   (iv) A licensee that participates in the Commission's installment
   payment program (see § 1.2110(g) may enter into a long-term de facto
   transfer leasing arrangement without triggering unjust enrichment
   obligations provided that the lessee would qualify for as favorable a
   category of installment payments. A licensee using installment payment
   financing that seeks to lease to an entity not meeting the eligibility
   standards for as favorable a category of installment payments must make
   full payment of the remaining unpaid principal and any unpaid interest
   accrued through the effective date of the spectrum leasing arrangement
   (see § 1.2111(c)). This requirement applies regardless of whether the
   licensee is leasing all or a portion of its bandwidth and/or license
   area.

   (5) Construction/performance requirements. Any performance or build-out
   requirement applicable under a license authorization (e.g., a
   requirement that the licensee construct and operate one or more
   specific facilities, cover a certain percentage of geographic area,
   cover a certain percentage of population, or provide substantial
   service) always remains a condition of the license, and the legal
   responsibility for meeting such obligation is not delegable to the
   spectrum lessee(s).

   (i) The licensee may attribute to itself the build-out or performance
   activities of its spectrum lessee(s) for purposes of complying with any
   applicable build-out or performance requirement.

   (ii) If a licensee relies on the activities of a spectrum lessee to
   meet the licensee's performance or build-out obligation, and the
   spectrum lessee fails to engage in those activities, the Commission
   will enforce the applicable performance or build-out requirements
   against the licensee, consistent with the applicable rules.

   (iii) If there are rules applicable to the license concerning the
   discontinuance of operation, the licensee is accountable for any such
   discontinuance and the rules will be enforced against the licensee
   regardless of whether the licensee was relying on the activities of a
   lessee to meet particular performance requirements.

   (6) Regulatory classification. If the regulatory status of the licensee
   (e.g., common carrier or non-common carrier status) is prescribed by
   rule, the regulatory status of the spectrum lessee is prescribed in the
   same manner, except that § 20.9(a) of this chapter shall not preclude a
   licensee in the services covered by that rule from entering into a
   spectrum leasing arrangement with a spectrum lessee that chooses to
   operate on a PMRS, private, or non-commercial basis.

   (7) Regulatory fees. The licensee remains responsible for payment of
   the required regulatory fees that must be paid in advance of its
   license term (see § 1.1152). Where, however, regulatory fees are paid
   annually on a per-unit basis (such as for CMRS services pursuant to
   § 1.1152), the licensee and spectrum lessee each are required to pay
   fees for those units associated with its respective operations.

   (8) E911 requirements. To the extent the licensee is required to meet
   E911 obligations (see § 20.18 of this chapter), the spectrum lessee is
   required to meet those obligations with respect to the spectrum leased
   under the spectrum leasing arrangement insofar as the spectrum lessee's
   operations are encompassed within the E911 obligations.

   (e) Applications for long-term de facto transfer leasing arrangements.
   Applications for long-term de facto transfer leasing arrangements will
   be processed either pursuant to the general approval procedures or the
   immediate approval procedures, as discussed herein. Spectrum leasing
   parties must submit the application by electronic filing using ULS and
   FCC Form 608, and obtain Commission consent prior to consummating the
   transfer of de facto control of the leased spectrum, except that
   parties falling within the provisions of § 1.913(d) may file the
   application either electronically or manually.

   (1) General approval procedures. Applications for long-term de facto
   transfer leasing arrangements will be processed pursuant to the general
   approval procedures set forth in this paragraph unless they are
   submitted and qualify for the immediate approval procedures set forth
   in paragraph (e)(2) of this section.

   (i) To be accepted for filing under these general approval procedures,
   the application must be sufficiently complete and contain all
   information and certifications requested on the applicable form, FCC
   Form 608, including any information and certifications (including those
   of the spectrum lessee relating to eligibility, basic qualifications,
   and foreign ownership) required by the rules in this chapter and any
   rules pertaining to the specific service for which the application is
   filed. In addition, the spectrum leasing application must include
   payment of the required application fee(s); for purposes of determining
   the applicable application fee(s), the application will be treated as a
   transfer of control (see § 1.1102).

   (ii) Once accepted for filing, the application will be placed on public
   notice, except no prior public notice will be required for applications
   involving authorizations in the Private Wireless Services, as specified
   in § 1.933(d)(9).

   (iii) Petitions to deny filed in accordance with section 309(d) of the
   Communications Act must comply with the provisions of § 1.939, except
   that such petitions must be filed no later than 14 days following the
   date of the public notice listing the application as accepted for
   filing.

   (iv) No later than 21 days following the date of the public notice
   listing an application as accepted for filing, the Wireless
   Telecommunications Bureau (Bureau) will affirmatively consent to the
   application, deny the application, or determine to subject the
   application to further review. For applications for which no prior
   public notice is required, the Bureau will affirmatively consent to the
   application, deny the application, or determine to subject the
   application to further review no later than 21 days following the date
   on which the application has been filed and any required application
   fee has been paid (see § 1.1102).

   (v) If the Bureau determines to subject the application to further
   review, it will issue a public notice so indicating. Within 90 days
   following the date of that public notice, the Bureau will either take
   action upon the application or provide public notice that an additional
   90-day period for review is needed.

   (vi) Consent to the application is not deemed granted until the Bureau
   affirmatively acts upon the application.

   (vii) Grant of consent to the application will be reflected in a public
   notice (see § 1.933(a)) promptly issued after the grant, and is subject
   to reconsideration (see § § 1.106(f), 1.108, 1.113).

   (viii) If any petition to deny is filed, and the Bureau grants the
   application, the Bureau will deny the petition(s) and issue a concise
   statement of the reason(s) for denial, disposing of all substantive
   issues raised in the petition(s).

   (2) Immediate approval procedures. Applications that meet the
   requirements of paragraph (e)(2)(i) of this section qualify for the
   immediate approval procedures.

   (i) To qualify for the immediate approval procedures, the application
   must be sufficiently complete, contain all necessary information and
   certifications (including those relating to eligibility, basic
   qualifications, and foreign ownership), and include payment of the
   requisite application fee(s), as required for an application processed
   under the general approval procedures set forth in paragraph (e)(1)(i)
   of this section, and also must establish, through certifications, that
   the following additional qualifications are met:

   (A) The license does not involve spectrum licensed in a Wireless Radio
   Service that may be used to provide interconnected mobile voice and/or
   data services under the applicable service rules and that would, if the
   spectrum leasing arrangement were consummated, create a geographic
   overlap with spectrum in any licensed Wireless Service (including the
   same service) in which the proposed spectrum lessee already holds a
   direct or indirect interest of 10% or more (see § 1.2112), either as a
   licensee or a spectrum lessee, and that could be used by the spectrum
   lessee to provide interconnected mobile voice and/or data services;

   (B) The licensee is not a designated entity or entrepreneur subject to
   unjust enrichment requirements and/or transfer restrictions under
   applicable Commission rules (see § § 1.2110 and 1.2111, and § § 24.709,
   24.714, and 24.839 of this chapter); and,

   (C) The spectrum leasing arrangement does not require a waiver of, or
   declaratory ruling pertaining to, any applicable Commission rules.

   (ii) Provided that the application establishes that it meets all of the
   requisite elements to qualify for these immediate approval procedures,
   consent to the de facto transfer spectrum leasing arrangement will be
   reflected in ULS. If the application is filed electronically, consent
   will be reflected in ULS on the next business day after filing of the
   application; if filed manually, consent will be reflected in ULS on the
   next business day after the necessary data from the manually filed
   application is entered into ULS. Consent to the application is not
   deemed granted until the Bureau affirmatively acts upon the
   application, as reflected in ULS.

   (iii) Grant of consent to the application under these immediate
   approval procedures will be reflected in a public notice (see
   § 1.933(a)) promptly issued after grant, and is subject to
   reconsideration (see § § 1.106(f), 1.108, 1.113).

   (f) Effective date of a de facto transfer leasing arrangement. If the
   Commission consents to the de facto transfer leasing arrangement, the
   de facto transfer leasing arrangement will be deemed effective in the
   Commission's records, and for purposes of the application of the rules
   set forth in this section, on the date set forth in the application. If
   the Commission consents to the arrangement after that specified date,
   the spectrum leasing application will become effective on the date of
   the Commission affirmative consent.

   (g) Expiration, extension, or termination of spectrum leasing
   arrangement. (1) Except as provided in paragraph (g)(2) or (g)(3) of
   this section, a spectrum leasing arrangement entered into pursuant to
   this section will expire on the termination date set forth in the
   application. The Commission's consent to the de facto transfer leasing
   application includes consent to return the leased spectrum to the
   licensee at the end of the term of the spectrum leasing arrangement.

   (2) A spectrum leasing arrangement may be extended beyond the initial
   term set forth in the spectrum leasing application pursuant to the
   applicable application procedures set forth in § 1.9030(e). Where there
   is pending before the Commission at the date of termination of the
   spectrum leasing arrangement a proper and timely application seeking to
   extend the arrangement, the parties may continue to operate under the
   original spectrum leasing arrangement without further action by the
   Commission until such time as the Commission shall make a final
   determination with respect to the application.

   (3) If a spectrum leasing arrangement is terminated earlier than the
   termination date set forth in the notification, either by the licensee
   or by the parties' mutual agreement, the licensee must file a
   notification with the Commission, no later than ten (10) days after the
   early termination, indicating the date of the termination. If the
   parties fail to put the spectrum leasing arrangement into effect, they
   must so notify the Commission consistent with the provisions of this
   section.

   (4) The Commission will place information concerning an extension or an
   early termination of a spectrum leasing arrangement on public notice.

   (h) Assignment of spectrum leasing arrangement. The spectrum lessee may
   assign its lease to another entity provided that the licensee has
   agreed to such an assignment, there is privity between the licensee and
   the assignee, and the assignment is approved by the Commission pursuant
   to the same application and approval procedures set forth in this
   section. In the case of a non-substantial (pro forma) assignment that
   falls within the class of pro forma transactions for which prior
   Commission approval would not be required under § 1.948(c)(1), the
   parties involved in the assignment must file notification of the
   assignment with the Commission, using FCC Form 608 and providing any
   necessary updates of ownership information, within 30 days of its
   completion. The Commission will place information related to the
   assignment, whether substantial or pro forma, on public notice.

   (i) Transfer of control of a spectrum lessee. A spectrum lessee seeking
   the transfer of control must obtain Commission consent using the same
   application and Commission consent procedures set forth in this
   section. In the case of a non-substantial (pro forma) transfer of
   control that falls within the class of pro forma transactions for which
   prior Commission approval would not be required under § 1.948(c)(1),
   the parties involved in the transfer of control must file notification
   of the transfer of control with the Commission, using FCC Form 608 and
   providing any necessary updates of ownership information, within 30
   days of its completion. The Commission will place information related
   to the transfer of control, whether substantial or pro forma, on public
   notice.

   (j) Revocation or automatic cancellation of a license or the spectrum
   lessee's operating authority. (1) In the event an authorization held by
   a licensee that has entered into a spectrum leasing arrangement is
   revoked or cancelled, the spectrum lessee will be required to terminate
   its operations no later than the date on which the licensee ceases to
   have authority to operate under the license, except as provided in
   paragraph (i)(2) of this section.

   (2) In the event of a license revocation or cancellation, the
   Commission will consider a request by the spectrum lessee for special
   temporary authority (see § 1.931) to provide the spectrum lessee with
   an opportunity to transition its users in order to minimize service
   disruption to business and other activities.

   (3) In the event of a license revocation or cancellation, and the
   required termination of the spectrum lessee's operations, the former
   spectrum lessee does not, as a result of its former status, receive any
   preference over any other party should the spectrum lessee seek to
   obtain the revoked or cancelled license.

   (k) Subleasing. A spectrum lessee may sublease spectrum usage rights
   subject to the following conditions. Parties entering into a spectrum
   subleasing arrangement are required to comply with the Commission's
   rules for obtaining approval for spectrum leasing arrangements provided
   in this subpart and are governed by those same policies. The
   application filed by parties to a spectrum subleasing arrangement must
   include written consent from the licensee to the proposed arrangement.
   Once a spectrum subleasing arrangement has been approved by the
   Commission, the sublessee becomes the party primarily responsible for
   compliance with Commission rules and policies.

   (l) Renewal. Although the term of a long-term de facto transfer
   spectrum leasing arrangement may not be longer than the term of a
   license authorization, a licensee and spectrum lessee that have entered
   into an arrangement whose term continues to the end of the current term
   of the license authorization may, contingent on the Commission's grant
   of the license renewal, extend the spectrum leasing arrangement into
   the term of the renewed license authorization. The Commission must be
   notified of the renewal of the spectrum leasing arrangement at the same
   time that the licensee submits its application for license renewal (see
   § 1.949). The spectrum lessee may operate under the extended term,
   without further action by the Commission, until such time as the
   Commission shall make a final determination with respect to the renewal
   of the license authorization and the extension of the spectrum leasing
   arrangement into the term of the renewed license authorization.

   [ 68 FR 66277 , Nov. 25, 2003, as amended at  69 FR 72027 , Dec. 10, 2004;
    69 FR 77554 , Dec. 27, 2004]

   Effective Date Note: At  69 FR 77554 , Dec. 27, 2004, § 1.9030(e) was
   revised. This paragraph contains information collection and
   recordkeeping requirements and will not become effective until approval
   has been given by the Office of Management and Budget.

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