§ 1.9030   Long-term de facto transfer leasing arrangements.

   Link to an amendment published at  80 FR 56816 , September 18, 2015.

   (a) Overview. Under the provisions of this section, a licensee (in any of
   the included services) and a spectrum lessee may enter into a long-term de
   facto transfer leasing arrangement in which the licensee retains de jure
   control of the license while de facto control of the leased spectrum is
   transferred to the spectrum lessee for the duration of the spectrum leasing
   arrangement, subject to prior Commission consent pursuant to the application
   procedures  set forth in this section. A “long-term” de facto transfer
   leasing arrangement has an individual term, or series of combined terms, of
   more  than one year. The term of a long-term de facto transfer leasing
   arrangement may be no longer than the term of the license authorization.

   (b) Rights and responsibilities of the licensee. (1) Except as provided in
   paragraph (b)(2) of this section, the licensee is relieved of primary and
   direct responsibility for ensuring that the spectrum lessee's operations
   comply with the Communications Act and Commission policies and rules.

   (2) The licensee is responsible for its own violations, including those
   related to its spectrum leasing arrangement with the spectrum lessee, and
   for  ongoing violations or other egregious behavior on the part of the
   spectrum  lessee about which the licensee has knowledge or should have
   knowledge.

   (3) The licensee must retain a copy of the spectrum leasing agreement and
   make it available upon request by the Commission.

   (c) Rights and responsibilities of the spectrum lessee. (1) The spectrum
   lessee assumes primary responsibility for complying with the Communications
   Act and applicable Commission policies and rules.

   (2) The spectrum lessee is granted an instrument of authorization pertaining
   to the de facto transfer leasing arrangement that brings it within the scope
   of the Commission's direct forfeiture provisions under section 503(b) of the
   Communications Act.

   (3) The spectrum lessee is responsible for interacting with the Commission
   regarding the leased spectrum and for making all related filings (e.g., all
   applications and notifications, submissions of any materials required to
   support  a  required Environmental Assessment, any reports required by
   Commission rules and applicable to the lessee, information necessary to
   facilitate international or Interdepartment Radio Advisory Committee (IRAC)
   coordination).

   (4) The spectrum lessee is required to maintain accurate information on file
   pursuant to Commission rules (see § 1.65 of subpart A of this part).

   (5) The spectrum lessee must retain a copy of the spectrum leasing agreement
   and make it available upon request by the Commission.

   (d)  Applicability  of  particular service rules and policies. Under a
   long-term de facto transfer leasing arrangement, the service rules and
   policies apply in the following manner to the licensee and spectrum lessee:

   (1) Interference-related rules. The interference and radiofrequency (RF)
   safety  rules  applicable  to use of the spectrum by the licensee as a
   condition of its license authorization also apply to the use of the spectrum
   leased by the spectrum lessee.

   (2) General eligibility rules. (i) The spectrum lessee must meet the same
   eligibility  and qualification requirements that are applicable to the
   licensee under its license authorization. A spectrum lessee entering into a
   spectrum  leasing  arrangement involving a licensee in the Educational
   Broadband Service (see § 27.1201 of this chapter) is not required to comply
   with the eligibility requirements pertaining to such a licensee so long as
   the  spectrum  lessee  meets  the  other eligibility and qualification
   requirements applicable to part 27 services (see § 27.12 of this chapter). A
   spectrum lessee entering into a spectrum leasing arrangement involving a
   licensee in the Public Safety Radio Services (see part 90, subpart B and
   § 90.311(a)(1)(i)  of  this chapter) is not required to comply with the
   eligibility  requirements pertaining to such a licensee so long as the
   spectrum lessee is an entity providing communications in support of public
   safety operations (see § 90.523(b) of this chapter).

   (ii) The spectrum lessee must meet applicable foreign ownership eligibility
   requirements (see sections 310(a), 310(b) of the Communications Act).

   (iii) The spectrum lessee must satisfy any qualification requirements,
   including character qualifications, applicable to the licensee under its
   license authorization.

   (iv) The spectrum lessee must not be a person subject to denial of Federal
   benefits under the Anti-Drug Abuse Act of 1988 (see § 1.2001 et seq. of
   subpart P of this part).

   (3) Use restrictions. To the extent that the licensee is restricted from
   using the licensed spectrum to offer particular services under its license
   authorization, the use restrictions apply to the spectrum lessee as well.

   (4)  Designated entity/entrepreneur rules. (i) A licensee that holds a
   license pursuant to small business and/or entrepreneur provisions (see
   § 1.2110 and § 24.709 of this chapter) and continues to be subject to unjust
   enrichment requirements (see § 1.2111 and § 24.714 of this chapter) and/or
   transfer  restrictions  (see § 24.839 of this chapter) may enter into a
   long-term de facto transfer leasing arrangement with any entity under the
   streamlined processing procedures described in this section, subject to any
   applicable  unjust  enrichment  payment  obligations  and/or  transfer
   restrictions (see § 1.2111 and § 24.839 of this chapter).

   (ii) A licensee holding a license won in closed bidding (see § 24.709 of this
   chapter) may, during the first five years of the license term, enter into a
   spectrum leasing arrangement with an entity not eligible to hold such a
   license pursuant to the requirements of § 24.709(a) of this chapter so long
   as  it  has  met its five-year construction requirement (see § § 24.203,
   24.839(a)(6) of this chapter).

   (iii) The amount of any unjust enrichment payment will be determined by the
   Commission as part of its review of the application under the same rules
   that apply in the context of a license assignment or transfer of control
   (see  § 1.2111  and  § 24.714  of this chapter). If the spectrum leasing
   arrangement  involves only part of the license area and/or part of the
   bandwidth covered by the license, the unjust enrichment obligation will be
   apportioned  as  though  the  license  were  being  partitioned and/or
   disaggregated (see § 1.2111(e) and § 24.714(c) of this chapter). A licensee
   will receive no reduction in its unjust enrichment payment obligation for a
   spectrum leasing arrangement that ends prior to the end of the fifth year of
   the license term.

   (iv) A licensee that participates in the Commission's installment payment
   program (see § 1.2110(g) may enter into a long-term de facto transfer leasing
   arrangement without triggering unjust enrichment obligations provided that
   the  lessee  would  qualify for as favorable a category of installment
   payments. A licensee using installment payment financing that seeks to lease
   to  an entity not meeting the eligibility standards for as favorable a
   category of installment payments must make full payment of the remaining
   unpaid principal and any unpaid interest accrued through the effective date
   of the spectrum leasing arrangement (see § 1.2111(c)). This requirement
   applies regardless of whether the licensee is leasing all or a portion of
   its bandwidth and/or license area.

   (5) Construction/performance requirements. Any performance or build-out
   requirement applicable under a license authorization (e.g., a requirement
   that the licensee construct and operate one or more specific facilities,
   cover a certain percentage of geographic area, cover a certain percentage of
   population, or provide substantial service) always remains a condition of
   the license, and the legal responsibility for meeting such obligation is not
   delegable to the spectrum lessee(s).

   (i)  The licensee may attribute to itself the build-out or performance
   activities of its spectrum lessee(s) for purposes of complying with any
   applicable build-out or performance requirement.

   (ii) If a licensee relies on the activities of a spectrum lessee to meet the
   licensee's performance or build-out obligation, and the spectrum lessee
   fails  to  engage in those activities, the Commission will enforce the
   applicable performance or build-out requirements against the licensee,
   consistent with the applicable rules.

   (iii)  If  there  are  rules  applicable to the license concerning the
   discontinuance  of operation, the licensee is accountable for any such
   discontinuance  and  the  rules  will be enforced against the licensee
   regardless of whether the licensee was relying on the activities of a lessee
   to meet particular performance requirements.

   (6) Regulatory classification. If the regulatory status of the licensee
   (e.g., common carrier or non-common carrier status) is prescribed by rule,
   the regulatory status of the spectrum lessee is prescribed in the same
   manner, except that § 20.9(a) of this chapter shall not preclude a licensee
   in the services covered by that rule from entering into a spectrum leasing
   arrangement  with a spectrum lessee that chooses to operate on a PMRS,
   private, or non-commercial basis.

   (7) Regulatory fees. The licensee remains responsible for payment of the
   required regulatory fees that must be paid in advance of its license term
   (see  § 1.1152). Where, however, regulatory fees are paid annually on a
   per-unit basis (such as for CMRS services pursuant to § 1.1152), the licensee
   and spectrum lessee each are required to pay fees for those units associated
   with its respective operations.

   (8) E911 requirements. To the extent the licensee is required to meet E911
   obligations (see § 20.18 of this chapter), the spectrum lessee is required to
   meet  those  obligations with respect to the spectrum leased under the
   spectrum leasing arrangement insofar as the spectrum lessee's operations are
   encompassed within the E911 obligations.

   (e) Applications for long-term de facto transfer leasing arrangements.
   Applications for long-term de facto transfer leasing arrangements will be
   processed  either  pursuant  to the general approval procedures or the
   immediate approval procedures, as discussed herein. Spectrum leasing parties
   must submit the application by electronic filing using ULS and FCC Form 608,
   and obtain Commission consent prior to consummating the transfer of de facto
   control of the leased spectrum, except that parties falling within the
   provisions of § 1.913(d) may file the application either electronically or
   manually.

   (1)  General  approval procedures. Applications for long-term de facto
   transfer leasing arrangements will be processed pursuant to the general
   approval procedures set forth in this paragraph unless they are submitted
   and qualify for the immediate approval procedures set forth in paragraph
   (e)(2) of this section.

   (i) To be accepted for filing under these general approval procedures, the
   application must be sufficiently complete and contain all information and
   certifications requested on the applicable form, FCC Form 608, including any
   information and certifications (including those of the spectrum lessee
   relating  to eligibility, basic qualifications, and foreign ownership)
   required  by the rules in this chapter and any rules pertaining to the
   specific  service for which the application is filed. In addition, the
   spectrum  leasing  application  must  include  payment of the required
   application fee(s); for purposes of determining the applicable application
   fee(s),  the application will be treated as a transfer of control (see
   § 1.1102).

   (ii) Once accepted for filing, the application will be placed on public
   notice, except no prior public notice will be required for applications
   involving authorizations in the Private Wireless Services, as specified in
   § 1.933(d)(9).

   (iii) Petitions to deny filed in accordance with section 309(d) of the
   Communications Act must comply with the provisions of § 1.939, except that
   such petitions must be filed no later than 14 days following the date of the
   public notice listing the application as accepted for filing.

   (iv) No later than 21 days following the date of the public notice listing
   an application as accepted for filing, the Wireless Telecommunications
   Bureau (Bureau) will affirmatively consent to the application, deny the
   application, or determine to subject the application to further review. For
   applications for which no prior public notice is required, the Bureau will
   affirmatively consent to the application, deny the application, or determine
   to subject the application to further review no later than 21 days following
   the  date  on  which  the  application has been filed and any required
   application fee has been paid (see § 1.1102).

   (v) If the Bureau determines to subject the application to further review,
   it will issue a public notice so indicating. Within 90 days following the
   date of that public notice, the Bureau will either take action upon the
   application or provide public notice that an additional 90-day period for
   review is needed.

   (vi) Consent to the application is not deemed granted until the Bureau
   affirmatively acts upon the application.

   (vii) Grant of consent to the application will be reflected in a public
   notice (see § 1.933(a)) promptly issued after the grant, and is subject to
   reconsideration (see § § 1.106(f), 1.108, 1.113).

   (viii)  If  any  petition  to deny is filed, and the Bureau grants the
   application,  the Bureau will deny the petition(s) and issue a concise
   statement of the reason(s) for denial, disposing of all substantive issues
   raised in the petition(s).

   (2) Immediate approval procedures. Applications that meet the requirements
   of paragraph (e)(2)(i) of this section qualify for the immediate approval
   procedures.

   (i) To qualify for the immediate approval procedures, the application must
   be  sufficiently  complete,  contain  all  necessary  information  and
   certifications   (including   those  relating  to  eligibility,  basic
   qualifications, and foreign ownership), and include payment of the requisite
   application fee(s), as required for an application processed under the
   general  approval  procedures set forth in paragraph (e)(1)(i) of this
   section, and also must establish, through certifications, that the following
   additional qualifications are met:

   (A) The license does not involve spectrum licensed in a Wireless Radio
   Service that may be used to provide interconnected mobile voice and/or data
   services under the applicable service rules and that would, if the spectrum
   leasing arrangement were consummated, create a geographic overlap with
   spectrum in any licensed Wireless Service (including the same service) in
   which  the proposed spectrum lessee already holds a direct or indirect
   interest of 10% or more (see § 1.2112), either as a licensee or a spectrum
   lessee,  and  that  could  be  used  by the spectrum lessee to provide
   interconnected mobile voice and/or data services;

   (B) The licensee is not a designated entity or entrepreneur subject to
   unjust enrichment requirements and/or transfer restrictions under applicable
   Commission rules (see § § 1.2110 and 1.2111, and § § 24.709, 24.714, and 24.839
   of this chapter); and,

   (C)  The spectrum leasing arrangement does not require a waiver of, or
   declaratory ruling pertaining to, any applicable Commission rules.

   (ii) Provided that the application establishes that it meets all of the
   requisite elements to qualify for these immediate approval procedures,
   consent  to the de facto transfer spectrum leasing arrangement will be
   reflected in ULS. If the application is filed electronically, consent will
   be  reflected  in  ULS  on  the  next business day after filing of the
   application; if filed manually, consent will be reflected in ULS on the next
   business day after the necessary data from the manually filed application is
   entered into ULS. Consent to the application is not deemed granted until the
   Bureau affirmatively acts upon the application, as reflected in ULS.

   (iii) Grant of consent to the application under these immediate approval
   procedures will be reflected in a public notice (see § 1.933(a)) promptly
   issued after grant, and is subject to reconsideration (see § § 1.106(f),
   1.108, 1.113).

   (f)  Effective date of a de facto transfer leasing arrangement. If the
   Commission consents to the de facto transfer leasing arrangement, the de
   facto  transfer  leasing  arrangement  will be deemed effective in the
   Commission's records, and for purposes of the application of the rules set
   forth in this section, on the date set forth in the application. If the
   Commission  consents to the arrangement after that specified date, the
   spectrum  leasing application will become effective on the date of the
   Commission affirmative consent.

   (g) Expiration, extension, or termination of spectrum leasing arrangement.
   (1) Except as provided in paragraph (g)(2) or (g)(3) of this section, a
   spectrum leasing arrangement entered into pursuant to this section will
   expire  on  the  termination  date  set  forth in the application. The
   Commission's consent to the de facto transfer leasing application includes
   consent to return the leased spectrum to the licensee at the end of the term
   of the spectrum leasing arrangement.

   (2) A spectrum leasing arrangement may be extended beyond the initial term
   set forth in the spectrum leasing application pursuant to the applicable
   application procedures set forth in § 1.9030(e). Where there is pending
   before the Commission at the date of termination of the spectrum leasing
   arrangement  a  proper  and  timely  application seeking to extend the
   arrangement, the parties may continue to operate under the original spectrum
   leasing arrangement without further action by the Commission until such time
   as the Commission shall make a final determination with respect to the
   application.

   (3)  If  a spectrum leasing arrangement is terminated earlier than the
   termination date set forth in the notification, either by the licensee or by
   the parties' mutual agreement, the licensee must file a notification with
   the Commission, no later than ten (10) days after the early termination,
   indicating the date of the termination. If the parties fail to put the
   spectrum leasing arrangement into effect, they must so notify the Commission
   consistent with the provisions of this section.

   (4) The Commission will place information concerning an extension or an
   early termination of a spectrum leasing arrangement on public notice.

   (h) Assignment of spectrum leasing arrangement. The spectrum lessee may
   assign its lease to another entity provided that the licensee has agreed to
   such an assignment, there is privity between the licensee and the assignee,
   and  the assignment is approved by the Commission pursuant to the same
   application and approval procedures set forth in this section. In the case
   of a non-substantial (pro forma) assignment that falls within the class of
   pro forma transactions for which prior Commission approval would not be
   required under § 1.948(c)(1), the parties involved in the assignment must
   file notification of the assignment with the Commission, using FCC Form 608
   and providing any necessary updates of ownership information, within 30 days
   of its completion. The Commission will place information related to the
   assignment, whether substantial or pro forma, on public notice.

   (i) Transfer of control of a spectrum lessee. A spectrum lessee seeking the
   transfer  of  control  must  obtain  Commission consent using the same
   application and Commission consent procedures set forth in this section. In
   the case of a non-substantial (pro forma) transfer of control that falls
   within  the class of pro forma transactions for which prior Commission
   approval would not be required under § 1.948(c)(1), the parties involved in
   the transfer of control must file notification of the transfer of control
   with the Commission, using FCC Form 608 and providing any necessary updates
   of ownership information, within 30 days of its completion. The Commission
   will  place  information  related  to the transfer of control, whether
   substantial or pro forma, on public notice.

   (j)  Revocation or automatic cancellation of a license or the spectrum
   lessee's operating authority. (1) In the event an authorization held by a
   licensee that has entered into a spectrum leasing arrangement is revoked or
   cancelled, the spectrum lessee will be required to terminate its operations
   no later than the date on which the licensee ceases to have authority to
   operate under the license, except as provided in paragraph (i)(2) of this
   section.

   (2) In the event of a license revocation or cancellation, the Commission
   will  consider  a request by the spectrum lessee for special temporary
   authority (see § 1.931) to provide the spectrum lessee with an opportunity to
   transition its users in order to minimize service disruption to business and
   other activities.

   (3) In the event of a license revocation or cancellation, and the required
   termination of the spectrum lessee's operations, the former spectrum lessee
   does not, as a result of its former status, receive any preference over any
   other  party  should the spectrum lessee seek to obtain the revoked or
   cancelled license.

   (k) Subleasing. A spectrum lessee may sublease spectrum usage rights subject
   to the following conditions. Parties entering into a spectrum subleasing
   arrangement are required to comply with the Commission's rules for obtaining
   approval for spectrum leasing arrangements provided in this subpart and are
   governed by those same policies. The application filed by parties to a
   spectrum  subleasing arrangement must include written consent from the
   licensee to the proposed arrangement. Once a spectrum subleasing arrangement
   has  been  approved by the Commission, the sublessee becomes the party
   primarily responsible for compliance with Commission rules and policies.

   (l) Renewal. Although the term of a long-term de facto transfer spectrum
   leasing  arrangement  may  not  be  longer  than the term of a license
   authorization, a licensee and spectrum lessee that have entered into an
   arrangement whose term continues to the end of the current term of the
   license authorization may, contingent on the Commission's grant of the
   license renewal, extend the spectrum leasing arrangement into the term of
   the renewed license authorization. The Commission must be notified of the
   renewal  of the spectrum leasing arrangement at the same time that the
   licensee submits its application for license renewal (see § 1.949). The
   spectrum lessee may operate under the extended term, without further action
   by the Commission, until such time as the Commission shall make a final
   determination with respect to the renewal of the license authorization and
   the extension of the spectrum leasing arrangement into the term of the
   renewed license authorization.

   [ 68 FR 66277 , Nov. 25, 2003, as amended at  69 FR 72027 , Dec. 10, 2004;  69 FR 77554 , Dec. 27, 2004]

   Effective Date Note: At  69 FR 77554 , Dec. 27, 2004, § 1.9030(e) was revised.
   This  paragraph  contains  information  collection  and  recordkeeping
   requirements and will not become effective until approval has been given by
   the Office of Management and Budget.

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