§ 20.6   CMRS spectrum aggregation limit.

   (a) Spectrum limitation. No licensee in the broadband PCS, cellular, or SMR
   services (including all parties under common control) regulated as CMRS (see
   47 CFR 20.9) shall have an attributable interest in a total of more than 55
   MHz of licensed broadband PCS, cellular, and SMR spectrum regulated as CMRS
   with significant overlap in any geographic area.

   (b) SMR spectrum. To calculate the amount of attributable SMR spectrum for
   purposes of paragraph (a) of this section, an entity must count all 800 MHz
   and 900 MHz channels located at any SMR base station inside the geographic
   area (MTA or BTA) where there is significant overlap. All 800 MHz channels
   located on at least one of those identified base stations count as 50 kHz
   (25 kHz paired), and all 900 MHz channels located on at least one of those
   identified base stations count as 25 kHz (12.5 kHz paired); provided that
   any discrete 800 or 900 MHz channel shall be counted only once per licensee
   within the geographic area, even if the licensee in question utilizes the
   same channel at more than one location within the relevant geographic area.
   No more than 10 MHz of SMR spectrum in the 800 and 900 MHz SMR services will
   be attributed to an entity when determining compliance with the cap.

   (c) Significant overlap. (1) For purposes of paragraph (a) of this section,
   significant overlap of a PCS licensed service area and CGSA(s) (as defined
   in § 22.911 of this chapter) or SMR service area(s) occurs when at least 10
   percent of the population of the PCS licensed service area for the counties
   contained therein, as determined by the latest available decennial census
   figures as complied by the Bureau of the Census, is within the CGSA(s)
   and/or SMR service area(s).

   (2) The Commission shall presume that an SMR service area covers less than
   10 percent of the population of a PCS service area if none of the base
   stations of the SMR licensee are located within the PCS service area. For an
   SMR licensee's base stations that are located within a PCS service area, the
   channels licensed at those sites will be presumed to cover 10 percent of the
   population of the PCS service area, unless the licensee shows that its
   protected service contour for all of its base stations covers less than 10
   percent of the population of the PCS service area.

   (d) Ownership attribution. For purposes of paragraph (a) of this section,
   ownership  and  other  interests  in broadband PCS licensees, cellular
   licensees, or SMR licensees will be attributed to their holders pursuant to
   the following criteria:

   (1) Controlling interest shall be attributable. Controlling interest means
   majority voting equity ownership, any general partnership interest, or any
   means  of actual working control (including negative control) over the
   operation of the licensee, in whatever manner exercised.

   (2)  Partnership  and other ownership interests and any stock interest
   amounting to 20 percent or more of the equity, or outstanding stock, or
   outstanding voting stock of a broadband PCS, cellular or SMR licensee shall
   be attributed, except that ownership will not be attributed unless the
   partnership and other ownership interests and any stock interest amount to
   at least 40 percent of the equity, or outstanding stock, or outstanding
   voting stock of a broadband PCS, cellular or SMR licensee if the ownership
   interest is held by a small business or a rural telephone company, as these
   terms are defined in § 1.2110 of this chapter or other related provisions of
   the Commission's rules, or if the ownership interest is held by an entity
   with  a non-controlling equity interest in a broadband PCS licensee or
   applicant that is a small business.

   (3) Investment companies, as defined in 15 U.S.C. 80a-3, insurance companies
   and banks holding stock through their trust departments in trust accounts
   will be considered to have an attributable interest only if they hold 40
   percent or more of the outstanding voting stock of a corporate broadband
   PCS, cellular or SMR licensee, or if any of the officers or directors of the
   broadband  PCS,  cellular  or  SMR licensee are representatives of the
   investment company, insurance company or bank concerned. Holdings by a bank
   or insurance company will be aggregated if the bank or insurance company has
   any right to determine how the stock will be voted. Holdings by investment
   companies will be aggregated if under common management.

   (4) Non-voting stock shall be attributed as an interest in the issuing
   entity if in excess of the amounts set forth in paragraph (d)(2) of this
   section.

   (5) Debt and instruments such as warrants, convertible debentures, options,
   or other interests (except non-voting stock) with rights of conversion to
   voting interests shall not be attributed unless and until converted, except
   that this provision does not apply in determining whether an entity is a
   small business, a rural telephone company, or a business owned by minorities
   and/or women, as these terms are defined in § 1.2110 of this chapter or other
   related provisions of the Commission's rules.

   (6) Limited partnership interests shall be attributed to limited partners
   and shall be calculated according to both the percentage of equity paid in
   and the percentage of distribution of profits and losses.

   (7)  Officers  and directors of a broadband PCS licensee or applicant,
   cellular  licensee,  or  SMR  licensee  shall be considered to have an
   attributable interest in the entity with which they are so associated. The
   officers and directors of an entity that controls a broadband PCS licensee
   or applicant, a cellular licensee, or an SMR licensee shall be considered to
   have an attributable interest in the broadband PCS licensee or applicant,
   cellular licensee, or SMR licensee.

   (8) Ownership interests that are held indirectly by any party through one or
   more   intervening  corporations  will  be  determined  by  successive
   multiplication of the ownership percentages for each link in the vertical
   ownership chain and application of the relevant attribution benchmark to the
   resulting product, except that if the ownership percentage for an interest
   in any link in the chain exceeds 50 percent or represents actual control, it
   shall be treated as if it were a 100 percent interest. (For example, if A
   owns 20% of B, and B owns 40% of licensee C, then A's interest in licensee C
   would be 8%. If A owns 20% of B, and B owns 51% of licensee C, then A's
   interest in licensee C would be 20% because B's ownership of C exceeds 50%.)

   (9) Any person who manages the operations of a broadband PCS, cellular, or
   SMR licensee pursuant to a management agreement shall be considered to have
   an attributable interest in such licensee if such person, or its affiliate,
   has  authority  to  make decisions or otherwise engage in practices or
   activities that determine, or significantly influence,

   (i) The nature or types of services offered by such licensee;

   (ii) The terms upon which such services are offered; or

   (iii) The prices charged for such services.

   (10)  Any  licensee or its affiliate who enters into a joint marketing
   arrangements  with  a broadband PCS, cellular, or SMR licensee, or its
   affiliate shall be considered to have an attributable interest, if such
   licensee, or its affiliate, has authority to make decisions or otherwise
   engage  in  practices  or  activities that determine, or significantly
   influence,

   (i) The nature or types of services offered by such licensee;

   (ii) The terms upon which such services are offered; or

   (iii) The prices charged for such services.

   (e) Divestiture. (1) Divestiture of interests as a result of a transfer of
   control or assignment of authorization must occur prior to consummating the
   transfer or assignment, except that a licensee that meets the requirements
   set forth in paragraph (e)(2) of this section shall have 90 days from final
   grant to come into compliance with the spectrum aggregation limit.

   (2) An applicant with:

   (i)  Controlling or attributable ownership interests in broadband PCS,
   cellular, and/or SMR licenses where the geographic license areas cover 20
   percent or less of the applicant's service area population;

   (ii) Attributable interests in broadband PCS, cellular, and/or SMR licenses
   solely due to management agreements or joint marketing agreements; or

   (iii) Non-controlling attributable interests in broadband PCS, cellular,
   and/or  SMR licenses, regardless of the degree to which the geographic
   license  areas cover the applicant's service area population, shall be
   eligible to have its application granted subject to a condition that the
   licensee shall come into compliance with the spectrum limitation set out in
   paragraph (a) within ninety (90) days after final grant. For purposes of
   this paragraph, a “non-controlling attributable interest” is one in which
   the holder has less than a fifty (50) percent voting interest and there is
   an unaffiliated single holder of a fifty (50) percent or greater voting
   interest.

   (3) The applicant for a license that, if granted, would exceed the spectrum
   aggregation limitation in paragraph (a) of this section shall certify on its
   application  that it and all parties to the application will come into
   compliance with this limitation. If such an applicant is a successful bidder
   in  an auction, it must submit with its long-form application a signed
   statement describing its efforts to date and future plans to come into
   compliance with the spectrum aggregation limitation. A similar statement
   must also be included with any application for assignment of licenses or
   transfer of control that, if granted, would exceed the spectrum aggregation
   limit.

   (4)(i) Parties holding controlling interests in broadband PCS, cellular,
   and/or  SMR  licensees that conflict with the attribution threshold or
   geographic overlap limitations set forth in this section will be considered
   to have come into compliance if they have submitted to the Commission an
   application  for  assignment  of license or transfer of control of the
   conflicting licensee (see § 1.948 of this chapter; see also § 24.839 of this
   chapter (PCS)) by which, if granted, such parties no longer would have an
   attributable interest in the conflicting license. Divestiture may be to an
   interim trustee if a buyer has not been secured in the required period of
   time, as long as the applicant has no interest in or control of the trustee,
   and the trustee may dispose of the license as it sees fit. Where parties to
   broadband PCS, cellular, or SMR applications hold less than controlling (but
   still  attributable)  interests  in  broadband  PCS,  cellular, or SMR
   licensee(s), they shall submit a certification that the applicant and all
   parties to the application have come into compliance with the limitations on
   spectrum aggregation set forth in this section.

   (ii) Applicants that meet the requirements of paragraph (e)(2) of this
   section must tender to the Commission within ninety (90) days of final grant
   of the initial license, such an assignment or transfer application or, in
   the case of less than controlling (but still attributable) interests, a
   written certification that the applicant and all parties to the application
   have come into compliance with the limitations on spectrum aggregation set
   forth in this section. If no such transfer or assignment application or
   certification is tendered to the Commission within ninety (90) days of final
   grant of the initial license, the Commission may consider the certification
   and the divestiture statement to be material, bad faith misrepresentations
   and shall invoke the condition on the initial license or the assignment or
   transfer, cancelling or rescinding it automatically, shall retain all monies
   paid to the Commission, and, based on the facts presented, shall take any
   other action it may deem appropriate.

   (f) Sunset. This rule section shall cease to be effective January 1, 2003.

   Note  1 to § 20.6: For purposes of the ownership attribution limit, all
   ownership interests in operations that serve at least 10 percent of the
   population of the PCS service area should be included in determining the
   extent of a PCS applicant's cellular or SMR ownership.

   Note 2 to § 20.6: When a party owns an attributable interest in more than one
   cellular  or  SMR  system  that overlaps a PCS service area, the total
   population in the overlap area will apply on a cumulative basis.

   Note 3 to § 20.6: Waivers of § 20.6(d) may be granted upon an affirmative
   showing:

   (1) That the interest holder has less than a 50 percent voting interest in
   the licensee and there is an unaffiliated single holder of a 50 percent or
   greater voting interest;

   (2) That the interest holder is not likely to affect the local market in an
   anticompetitive manner;

   (3)  That the interest holder is not involved in the operations of the
   licensee  and does not have the ability to influence the licensee on a
   regular basis; and

   (4) That grant of a waiver is in the public interest because the benefits to
   the public of common ownership outweigh any potential anticompetitive harm
   to the market.

   [ 64 FR 54574 , Oct. 7, 1999, as amended at  67 FR 1642 , Jan. 14, 2002]

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