Sec.  1.2111   Assignment or transfer of control: unjust enrichment.

   (a) Reporting requirement. An applicant seeking approval for a transfer of
   control or assignment (otherwise permitted under the Commission's Rules) of
   a license within three years of receiving a new license through a
   competitive bidding procedure must, together with its application for
   transfer of control or assignment, file with the Commission's statement
   indicating that its license was obtained through competitive bidding. Such
   applicant must also file with the Commission the associated contracts for
   sale, option agreements, management agreements, or other documents
   disclosing the local consideration that the applicant would receive in
   return for the transfer or assignment of its license (see  Sec. 1.948 of this
   chapter). This information should include not only a monetary purchase
   price, but also any future, contingent, in-kind, or other consideration
   (e.g., management or consulting contracts either with or without an option
   to purchase; below market financing).

   (b) Unjust enrichment payment: set-aside. As specified in this paragraph an
   applicant seeking approval for a transfer of control or assignment
   (otherwise permitted under the Commission's Rules) of a license acquired by
   the transferor or assignor pursuant to a set-aside for eligible designated
   entities under  Sec. 1.2110(c), or who proposes to take any other action relating
   to ownership or control that will result in loss of status as an eligible
   designated entity, must seek Commission approval and may be required to make
   an unjust enrichment payment (Payment) to the Commission by cashier's check
   or wire transfer before consent will be granted. The Payment will be based
   upon a schedule that will take account of the term of the license, any
   applicable construction benchmarks, and the estimated value of the set-aside
   benefit, which will be calculated as the difference between the amount paid
   by the designated entity for the license and the value of comparable
   non-set-aside license in the free market at the time of the auction. The
   Commission will establish the amount of the Payment and the burden will be
   on the applicants to disprove this amount. No payment will be required if:

   (1) The license is transferred or assigned more than five years after its
   initial issuance, unless otherwise specified; or

   (2) The proposed transferee or assignee is an eligible designated entity
   under  Sec. 1.2110(c) or the service-specific competitive bidding rules of the
   particular service, and so certifies.

   (c) Unjust enrichment payment: installment financing. (1) If a licensee that
   utilizes installment financing under this section seeks to assign or
   transfer control of its license to an entity not meeting the eligibility
   standards for installment payments, the licensee must make full payment of
   the remaining unpaid principal and any unpaid interest accrued through the
   date of assignment or transfer as a condition of approval.

   (2) If a licensee that utilizes installment financing under this section
   seeks to make any change in ownership structure that would result in the
   licensee losing eligibility for installment payments, the licensee shall
   first seek Commission approval and must make full payment of the remaining
   unpaid principal and any unpaid interest accrued through the date of such
   change as a condition of approval. A licensee's (or other attributable
   entity's) increased gross revenues or increased total assets due to
   nonattributable equity investments, debt financing, revenue from operations
   or other investments, business development or expanded service shall not be
   considered to result in the licensee losing eligibility for installment
   payments.

   (3) If a licensee seeks to make any change in ownership that would result in
   the licensee qualifying for a less favorable installment plan under this
   section, the licensee shall seek Commission approval and must adjust its
   payment plan to reflect its new eligibility status. A licensee may not
   switch its payment plan to a more favorable plan.

   (d) Unjust enrichment payment: bidding credits. (1) A licensee that utilizes
   a bidding credit, and that during the initial term seeks to assign or
   transfer control of a license to an entity that does not meet the
   eligibility criteria for a bidding credit, will be required to reimburse the
   U.S. Government for the amount of the bidding credit, plus interest based on
   the rate for ten year U.S. Treasury obligations applicable on the date the
   license was granted, as a condition of Commission approval of the assignment
   or transfer. If, within the initial term of the license, a licensee that
   utilizes a bidding credit seeks to assign or transfer control of a license
   to an entity that is eligible for a lower bidding credit, the difference
   between the bidding credit obtained by the assigning party and the bidding
   credit for which the acquiring party would qualify, plus interest based on
   the rate for ten year U.S. treasury obligations applicable on the date the
   license is granted, must be paid to the U.S. Government as a condition of
   Commission approval of the assignment or transfer. If, within the initial
   term of the license, a licensee that utilizes a bidding credit seeks to make
   any ownership change that would result in the licensee losing eligibility
   for a bidding credit (or qualifying for a lower bidding credit), the amount
   of the bidding credit (or the difference between the bidding credit
   originally obtained and the bidding credit for which the restructured
   licensee would qualify), plus interest based on the rate for ten year U.S.
   treasury obligations applicable on the date the license is granted, must be
   paid to the U.S. Government as a condition of Commission approval of the
   assignment or transfer.

   (2) Payment schedule. (i) The amount of payments made pursuant to paragraph
   (d)(1) of this section will be reduced over time as follows:

   (A) A transfer in the first two years of the license term will result in a
   forfeiture of 100 percent of the value of the bidding credit (or in the case
   of very small businesses transferring to small businesses, 100 percent of
   the difference between the bidding credit received by the former and the
   bidding credit for which the latter is eligible);

   (B) A transfer in year 3 of the license term will result in a forfeiture of
   75 percent of the value of the bidding credit;

   (C) A transfer in year 4 of the license term will result in a forfeiture of
   50 percent of the value of the bidding credit;

   (D) A transfer in year 5 of the license term will result in a forfeiture of
   25 percent of the value of the bidding credit; and

   (E) for a transfer in year 6 or thereafter, there will be no payment.

   (ii) These payments will have to be paid to the United States Treasury as a
   condition of approval of the assignment, transfer, or ownership change.

   (e) Unjust enrichment: partitioning and disaggregation—(1) Installment
   payments. Licensees 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 this section.

   (2) Bidding credits. Licensees that received a bidding credit that 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 this section.

   (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 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.

   [ 59 FR 44293 , Aug. 26, 1994, as amended at  63 FR 2346 , Jan. 15, 1998;  63 FR 68942 , Dec. 14, 1998]