Sec. 24.101  Multiple ownership restrictions.

    (a) Narrowband PCS licensees shall not have an ownership interest in 
more than three of the 26 channels listed in Sec. 24.129 in any 
geographic area. For purposes of this restriction, a narrowband PCS 
licensee is:
    (1) Any institutional investor, as defined in Sec. 24.720(h), with 
an ownership interest of ten or more percent in a narrowband PCS 
license; and
    (2) Any other person or entity with an ownership interest of five or 
more percent in a narrowband PCS license.
    (b) In cases where a party applies for a license after August 16, 
1994 or has a license transferred to it after that date, and the party 
has indirect ownership, through an interest in an interving entity (or 
entities) that has ownership in the narrowband license, that indirect 
ownership shall be attributable if the percentages of ownership at each 
level, multiplied together, equal five or more percent ownership of the 
narrowband PCS license, 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.

    Example: Party X has a non-controlling ownership interest of 25 
percent in Company Y, which in turn has a non-controlling ownership 
interest of 10 percent in Company Z, the narrowband PCS licensee. Party 
X's effective ownership interest in Company Z is Party X's ownership 
interest in Company Y

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(25 percent) times Company Y's ownership interest in Company Z (10 
percent). Therefore, Party X's effective ownership interest in Company Z 
is 2.5 percent, and is not attributable.

    (c) Notwithstanding paragraph (b) of this section, the following 
interests shall not constitute attributable ownership interests for 
purposes of paragraph (a) of this section:
    (1) A limited partnership interest held by an institutional investor 
(as defined Sec. 24.720(h)) where the limited partner is not materially 
involved, directly or indirectly, in the management or operation of the 
PCS holdings of the partnership, and the licensee so certifies. The 
criteria which would assure adequate insulation for the purposes of this 
certification require:
    (i) Prohibiting limited partners from acting as employees of the 
limited partnership if responsibilities relate to the carrier activities 
of the licensee;
    (ii) Barring the limited partners from serving as independent 
contractors;
    (iii) Restricting communication among limited partners and the 
general partner regarding day-to-day activities of the licensee;
    (iv) Empowering the general partner to veto admissions of new 
general partners;
    (v) Restricting the circumstances in which the limited partners can 
remove the general partner;
    (vi) Prohibiting the limited partners from providing services to the 
partnership relating to the PCS holdings of the licensee; and
    (vii) Stating that the limited partners may not become involved in 
the management or operation of the licensee. See 47 CFR 73.3555 Note 
2(g)(2); Memorandum of Opinion and Order in MM Docket 83-46, FCC 85-252 
(released June 24, 1985), as modified on reconsideration in the 
Memorandum of Opinion and Order in MM Docket No. 83-46, FCC 86-410 
(released November 28, 1986).
    (2) Institutional investors who held limited partnership interests 
prior to March 2, 1995 shall be granted one year from that date to amend 
their limited partnership agreements to comply with the insulation rules 
and so certify to the Commission. During this transition period, the 
licensee in which an institutional investor holds an interest shall also 
certify to the Commission that the institutional investor limited 
partner(s) are not materially involved, directly or indirectly, in the 
management or operation of the licensee.
[ 60 FR 13917 , Mar. 15, 1995;  60 FR 26375 , May 17. 1995]