Goto Section: 1.2110 | 1.2112 | Table of Contents
FCC 1.2111
Revised as of October 1, 2011
Goto Year:2010 |
2012
§ 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 a 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 § 1.948). 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, or
for entry into a material relationship (see § § 1.2110, 1.2114)
(otherwise permitted under the Commission's rules) involving, a license
acquired by the applicant pursuant to a set-aside for eligible
designated entities under § 1.2110(c), or which proposes to take any
other action relating to ownership or control that will result in loss
of eligibility as a 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 § 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 or to enter
into a material relationship (see § 1.2110) 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 or to enter
into a material relationship (see § 1.2110) 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 or to enter into a material
relationship (see § 1.2110) 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 licensee would qualify after restructuring or entry into a material
relationship), 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 or of a reportable eligibility
event (see § 1.2114).
(2) Payment schedule . (i) For licenses initially granted after April
25, 2006, the amount of payments made pursuant to paragraph (d)(1) of
this section will be 100 percent of the value of the bidding credit
prior to the filing of the notification informing the Commission that
the construction requirements applicable at the end of the initial
license term have been met. If the notification informing the
Commission that the construction requirements applicable at the end of
the initial license term have been met, the amount of the payments will
be reduced over time as follows:
(A) A loss of eligibility in the first five 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 eligibility changing to qualify for a lower
bidding credit, 100 percent of the difference between the bidding
credit received and the bidding credit for which it is eligible);
(B) A loss of eligibility in years 6 and 7 of the license term will
result in a forfeiture of 75 percent of the value of the bidding credit
(or in the case of eligibility changing to qualify for a lower bidding
credit, 75 percent of the difference between the bidding credit
received and the bidding credit for which it is eligible);
(C) A loss of eligibility in years 8 and 9 of the license term will
result in a forfeiture of 50 percent of the value of the bidding credit
(or in the case of eligibility changing to qualify for a lower bidding
credit, 50 percent of the difference between the bidding credit
received and the bidding credit for which it is eligible); and
(D) A loss of eligibility in year 10 of the license term will result in
a forfeiture of 25 percent of the value of the bidding credit (or in
the case of eligibility changing to qualify for a lower bidding credit,
25 percent of the difference between the bidding credit received and
the bidding credit for which it is eligible).
(ii) For licenses initially granted before April 25, 2006, 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.
(iii) These payments will have to be paid to the United States Treasury
as a condition of approval of the assignment, transfer, ownership
change, or reportable eligibility event (see § 1.2114).
(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; 71 FR 26252 , May 4, 2006; 71 FR 34278 , June
14, 2006]
Goto Section: 1.2110 | 1.2112
Goto Year: 2010 |
2012
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