Sec. 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 Sec. 24.839.
    (2) Broadband PCS licensees in spectrum blocks A, B, D, and E 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 in spectrum blocks C and F may not 
partition their licensed geographic service area or disaggregate their 
licensed spectrum for the first five years of the license term unless it 
is to an entity that meets the eligibility criteria set forth in 
Sec. 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 Sec. 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, requests for authorization for partial assignment of a 
license must include, as attachments, a description of the partitioned 
service area and a calculation of the population of the partitioned 
service area and the licensed geographic service area. The partitioned 
service area shall be defined by coordinate points at every 3 seconds 
along the partitioned service area unless an FCC recognized service area 
is utilized (i.e., Major Trading Area, Basic Trading Area, Metropolitan 
Service Area, Rural Service Area or Economic Area) or county lines are 
followed. 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 1927 North American Datum (NAD27). Applicants may 
supply geographical coordinates based on 1983 North American Datum 
(NAD83) in addition to those required (NAD27). In the case where an FCC 
recognized service area or county lines are utilized, applicants need 
only list the specific area(s) (through use of FCC designations or 
county names) that constitute the partitioned area.
    (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) Unjust enrichment--(1) Installment payments. Licensees in 
frequency Blocks C and F making installment payments that partition 
their licenses or disaggregate their spectrum to entities not meeting 
the eligibility standards for installment payments, will be subject to 
the provisions concerning unjust enrichment as set forth in Secs. 1.2111 
of this chapter and 24.716(d).
    (2) Bidding credits. Licensees in frequency Blocks C and F that 
received a bidding credit and partition their licenses or disaggregate 
their spectrum to entities not meeting the eligibility standards for 
such a bidding credit, will be subject to the provisions concerning 
unjust enrichment as set forth in Secs. 1.2110(f) of this chapter and 
24.717(c).
    (3) Apportioning unjust enrichment payments. Unjust enrichment 
payments for partitioned license areas shall be calculated based upon 
the ratio of the population of the partitioned license

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area to the overall population of the license area and by utilizing the 
most recent census data. Unjust enrichment payments for disaggregated 
spectrum shall be calculated based upon the ratio of the amount of 
spectrum disaggregated to the amount of spectrum held by the licensee.
    (d) 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 Secs. 1.2110(e) 
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 for 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 
Sec. 24.714(d)(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 
Sec. 1.2110(e)(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. We 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 
obligation, as calculated according to Sec. 24.714(d)(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

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assignment application. The interest rate, established pursuant to 
Sec. 1.2110(e)(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.
    (e) 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 Sec. 24.15.
    (f) 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 Sec. 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 Sec. 24.203, for the entire 
license area. In that case, the partitionee must only satisfy the 
requirements for ``substantial service,'' as set forth in Sec. 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 
Sec. 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 Sec. 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]