Home/Federal/Federal Register/2022-17520

Rule2022-17520

Partition, Disaggregation, and Leasing of Spectrum

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published

September 20, 2022

Effective

October 20, 2022

Issuing agencies

Federal Communications Commission

Abstract

In this document, the Commission modifies partitioning, disaggregation, and leasing rules to provide specific incentives for small carriers and Tribal Nations, and entities in rural areas, to voluntarily participate in the Enhanced Competition Incentive Program (ECIP). The ECIP proceeding is in response to Congressional direction in the Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act) to consider steps to increase the diversity of spectrum access and the availability of advanced telecommunications services in rural areas. The ECIP will promote greater competition in the provision of wireless services, facilitate increased availability of advanced wireless services in rural areas, facilitate new opportunities for small carriers and Tribal Nations to increase access to spectrum, and bring more advanced wireless service including 5G to underserved communities. This document also provides for reaggregation of previously partitioned and disaggregated licenses up to the original license size, while adopting appropriate safeguards, which will reduce regulatory and administrative burdens on licensees.

Full Text

<html>
<head>
<title>Federal Register, Volume 87 Issue 181 (Tuesday, September 20, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 181 (Tuesday, September 20, 2022)]
[Rules and Regulations]
[Pages 57403-57421]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17520]

=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 19-38; FCC 22-53; FR ID 99881]

Partition, Disaggregation, and Leasing of Spectrum

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Commission modifies partitioning,
disaggregation, and leasing rules to provide specific incentives for
small carriers and Tribal Nations, and entities in rural areas, to
voluntarily participate in the Enhanced Competition Incentive Program
(ECIP). The ECIP proceeding is in response to Congressional direction
in the Making Opportunities for Broadband Investment and Limiting
Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act) to
consider steps to increase the diversity of spectrum access and the
availability of advanced telecommunications services in rural areas.
The ECIP will promote greater competition in the provision of wireless
services, facilitate increased availability of advanced wireless
services in rural areas, facilitate new opportunities for small
carriers and Tribal Nations to increase access to spectrum, and bring
more advanced wireless service including 5G to underserved communities.
This document also provides for reaggregation of previously partitioned
and disaggregated licenses up to the original license size, while
adopting appropriate safeguards, which will reduce regulatory and
administrative burdens on licensees.

[[Page 57404]]

DATES: This final rule is effective October 20, 2022, except for
amendatory instructions 2 (Sec. 1.929), 4 (Sec. 1.950), and 8
(Sec. Sec. 1.60001 through 1.60007), which are delayed. The Commission
will publish a document in the Federal Register announcing the
effective date for the amendatory instructions.

FOR FURTHER INFORMATION CONTACT: Katherine Patsas Nevitt of the
Wireless Telecommunications Bureau, Mobility Division, at (202) 418-
0638 or <a href="/cdn-cgi/l/email-protection#c68da7b2aea3b4afa8a3e888a3b0afb2b286a0a5a5e8a1a9b0"><span class="__cf_email__" data-cfemail="d59eb4a1bdb0a7bcbbb0fb9bb0a3bca1a195b3b6b6fbb2baa3">[email&#160;protected]</span></a>. For information concerning the
Paperwork Reduction Act of 1995 (PRA) information collection
requirements contained in this final rule, contact Cathy Williams,
Office of Managing Director, at (202) 418-2918 or
<a href="/cdn-cgi/l/email-protection#acefcdd8c4d582fbc5c0c0c5cdc1dfeccacfcf82cbc3da"><span class="__cf_email__" data-cfemail="367557425e4f18615f5a5a5f575b457650555518515940">[email&#160;protected]</span></a> or email <a href="/cdn-cgi/l/email-protection#b3e3e1f2f3d5d0d09dd4dcc5"><span class="__cf_email__" data-cfemail="eabab8abaa8c8989c48d859c">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order in WT Docket No. 19-38, FCC 22-53, adopted on July 14, 2022
and released on July 18, 2022. The full text of the Report and Order,
including all Appendices, is available for inspection and viewing via
the Commission's website by entering the docket number, WT Docket No.
19-38. Alternative formats are available for people with disabilities
(Braille, large print, electronic files, audio format), by sending an
email to <a href="/cdn-cgi/l/email-protection#682e2b2b5d585c280e0b0b460f071e"><span class="__cf_email__" data-cfemail="a7e1e4e4929793e7c1c4c489c0c8d1">[email&#160;protected]</span></a> or calling the Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Final Regulatory Flexibility Act Analysis

The Regulatory Flexibility Act (RFA) requires that an agency
prepare a regulatory flexibility analysis for notice and comment
rulemakings, unless the agency certifies that ``the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' Accordingly, the Commission has prepared a Final
Regulatory Flexibility Analysis (FRFA) concerning the possible impact
of the rule changes contained in this final rule on small entities. As
required by the Regulatory Flexibility Act of 1980, as amended (RFA),
an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in
the Further Notice of Proposed Rulemaking (FNPRM) released in November
2022 in this proceeding (86 FR 74024, Nov. 19, 2022). The Commission
sought written public comment on the proposals in the FNPRM, including
comments on the IRFA. No comments were filed addressing the IRFA. This
present Final Regulatory Flexibility Analysis (FRFA) conforms to the
RFA.

Paperwork Reduction Act

The requirements in Sec. Sec. 1.929; 1.950; and 1.60001 through
1.60007 may constitute new or modified collections subject the
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. They will be
submitted to the Office of Management and Budget (OMB) for review under
Section 3507(d) of the PRA. OMB, the general public, and other Federal
agencies will be invited to comment on the new or modified information
collection requirements contained in this proceeding. In addition, the
Commission notes that, pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the
Commission previously sought, but did not receive, specific comment on
how the Commission might further reduce the information collection
burden for small business concerns with fewer than 25 employees. The
Commission describes impacts that might affect small businesses, which
includes more businesses with fewer than 25 employees, in the Final
Regulatory Flexibility Analysis.

Congressional Review Act

The Commission will send a copy of the Report and Order to Congress
and the Government Accountability Office pursuant to the Congressional
Review Act. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission will
send a copy of the Report and Order, including the FRFA, to the Chief
Counsel for Advocacy of the Small Business Administration (SBA). A copy
of the Report and Order and FRFA (or summaries thereof) will also be
published in the Federal Register.

Synopsis

A. Statutory Requirement

Section 616 of the MOBILE NOW Act required that, within a year of
its enactment, the Commission initiate a rulemaking proceeding to
assess whether to establish a program, or modify an existing program,
under which a licensee that receives a license for exclusive use of
spectrum in a specific geographic area under section 301 of the
Communications Act of 1934 may partition or disaggregate the license by
sale or long-term lease in order to, inter alia, make unused spectrum
available to an unaffiliated covered small carrier or an unaffiliated
carrier to serve a rural area. Section 616 required the Commission to
consider four questions in conducting an assessment of whether to
establish a new program or modify an existing program to achieve the
stated goals. MOBILE NOW Act, section 616(b)(2)(A)-(D) (codified at 47
U.S.C. 1506(b)(2)(A)-(D). Section 616 provided that the Commission may
offer incentives or reduced performance requirements only if it finds
that doing so would likely result in increased availability of advanced
telecommunications services in a rural area and directed that if a
party fails to meet any build out requirements for any spectrum sold or
leased under this section, the right to the spectrum shall be forfeited
to the Commission unless the Commission finds that there is good cause
for the failure. Id. section 616(b)(3)-(4) (codified at 47 U.S.C.
1506(b)(3)-(4)).

B. Establishment of the Enhanced Competition Incentive Program

In this final rule, we establish the ECIP largely as proposed in
the FNPRM, as an initial measure to facilitate competition and increase
spectrum access and rural service through transactions that meet the
qualifying requirements.

C. Enhanced Competition Incentive Program Structure

We establish ECIP eligibility through participation in a
transaction involving partitioning and/or disaggregation, leasing, or
full assignment of spectrum that meets the qualification requirements
discussed below (Qualifying Transaction). Any covered geographic
licensee may offer spectrum to an unaffiliated eligible entity through
a partition and/or disaggregation, and any covered geographic licensee
eligible to lease in an ``included service,'' as listed in 47 CFR
1.9005 of our rules, may offer spectrum to an unaffiliated eligible
entity through a long-term leasing arrangement. Covered geographic
licensees consist of specified wireless radio services (WRS) for which
the Commission has auctioned exclusive spectrum rights in defined
geographic areas. See 47 CFR 1.907. To ensure that appropriate
incentives and benefits are afforded consistently across a variety of
transaction types, we permit a covered geographic licensee to assign
its entire authorization.
We note that in the FNPRM, we proposed that all WRS licensees in
``included services'' would be permitted to lease spectrum and
participate in ECIP. The MOBILE NOW Act, however, requires that we
assess the administrative feasibility of adopting program features. We
thus modify our proposed approach towards leasing eligibility for
lessors to ensure that all ECIP participants can accept responsibility
for program obligations and realize program benefits.

[[Page 57405]]

Accordingly, we do not include all WRS licensees in ``included
services'' as eligible lessors within ECIP, as many of the program
obligations and benefits are inapplicable to site-based wireless
licensees that are generally permitted to lease; we do, however, permit
any covered geographic licensees in ``included services'' to
participate as lessors in the ECIP program. Similarly, we exclude
light-touch leasing spectrum manager leases of 3.5 GHz Priority Access
Licenses (PALs) in the Citizens Band Radio Service, because we do not
believe the light-touch leasing model allows for the level of
Commission oversight necessary to practically administer ECIP and avoid
potential waste, fraud, and abuse. See 47 CFR 1.9046, 96.32(c), 96.66.
We nonetheless permit prospective ECIP participants in the Citizens
Band Radio Service to enter into de facto transfer leases or general
21-day notification spectrum manager leases for PALs in order to access
spectrum and fully receive the program's benefits.
Some spectrum manager leases of these 3.5 GHz Priority Access
Licenses (PALs) in the Citizen's Band Radio Service are governed by the
Commission's ``light-touch leasing'' rules, a process that builds upon
and incorporates our traditional spectrum manager leasing approval
process. Lessees seeking to engage in light-touch leasing pre-certify
with the FCC that they meet the non-lease-specific eligibility and
qualification criteria for 3.5 GHz light-touch leasing. Rather than
being approved for a lease by the Commission after an application is
filed in the Universal Licensing System (ULS), light-touch leases are
managed and monitored by a third-party automated frequency coordinator,
known as a Spectrum Access System (SAS). The SAS administrator confirms
the PALs and lessees meet the light-touch leasing criteria in their
pre-certification filings and the lease-specific eligibility
requirements. After SAS confirmation, the lessees may immediately begin
exercising the leased spectrum usage rights under the light-touch
leasing arrangements. On a daily basis, the SAS administrators provide
the FCC with an electronic report of the light-touch leasing
notifications. The light-touch leases appear on our regularly issued
Accepted for Filing Public Notices. See 47 CFR 1.9046, 96.32(c), 96.66;
Amendment of the Commission's Rules with Regard to Commercial
Operations in the 3550-3650 MHz Band, GN Docket No. 12-354, Order on
Reconsideration and Second Report and Order, 81 FR 49024 (July 26,
2016), 31 FCC Rcd 5011, 5068-74, paras. 204-23 (2016) (2016 3.5 GHz
Second R&O); see also Promoting Investment in the 3550-3700 MHz Band,
GN Docket No. 17-258, Report and Order, 83 FR 63076 (Dec. 7, 2018), 33
FCC Rcd 10598 (2018). The light-touch leasing process substituted only
the immediate processing procedure of spectrum management leases under
Sec. 1.9020(e)(2), allowing PAL licensees and lessees to enter into
spectrum manager leases under the general 21-day notification procedure
in Sec. 1.9020(e)(1) with a notification to the SAS prior to operation
pursuant to Sec. 1.9046(c). See 2016 3.5 GHz Second R&O, 31 FCC Rcd at
5071, para. 213 & n.485 and 5074, para. 220. The Commission adopted the
light-touch leasing approach because the procedures under which we
normally process spectrum manager leases in other exclusive-use
wireless bands would be impractical in many cases for PALs, given that
a significant percentage of these light-touch leases may cover a short
period of time or perhaps a single event. See 47 CFR 1.9010,
1.9020(e)(1), 1.9030, 1.9035, 96.32(a).
As specified in the MOBILE NOW Act, we require that each party to a
Qualifying Transaction be unaffiliated. We find it in the public
interest to apply the Commission's current definition of affiliate from
our designated entity rules, which is a person holding an attributable
interest in an applicant if such individual or entity directly or
indirectly controls or has the power to control the applicant; or is
directly or indirectly controlled by the applicant; or is directly or
indirectly controlled by a third party or parties that also controls or
has the power to control the applicant; or has an ``identity of
interest'' with the applicant. See 47 CFR 1.2110(c)(2), (5). We find
this eligibility restriction necessary to meet the intent of Congress
and ensure that the parties to a Qualifying Transaction, and therefore
intended beneficiaries of ECIP benefits, are unaffiliated to prevent
gaming of the program. As such, we require applicants to identify their
affiliates as part of their ECIP application in a Qualifying
Transaction through the filing of a new FCC Form 602, or the filing of
an updated FCC Form 602 if the ownership information on a previously
filed version is not current.
We adopt two types of ECIP Qualifying Transactions: those that
focus on small carriers and Tribal Nations gaining spectrum access to
increase competition, in any location, whether urban, suburban or
rural; and those that involve any interested party that commits to
operating in, or providing service to, rural areas. In general, both
assignments and leases will qualify for ECIP, if they satisfy the other
program criteria.
The FNPRM sought comment on whether we should permit full license
assignments within the ECIP and, if so, how we should implement these
types of transactions. Although many of the proposed ECIP benefits
would be applicable to both parties to a transaction involving
partition, disaggregation (or to the lessor, in the case of leasing
arrangements), they would only be available to the assignee in a full
license assignment scenario because the assignor would no longer be
licensed for that spectrum after consummation of the assignment. We
find it inequitable to bar these types of transactions from ECIP,
particularly where transactions involving partitioning and/or
disaggregation of the same license the parties might seek to fully
assign would be eligible. To increase program flexibility, we therefore
permit transactions for full assignments of covered geographic licenses
where either of the below prongs are met. We also sought comment on
whether the Commission's rules permitting the sharing of performance
requirements in the partitioning and/or disaggregation context runs
counter to the ECIP framework as proposed in the FNPRM. We find that
the program benefits, obligations and penalties cannot be applied
equitability in a shared construction obligation scenario, and that it
would not be administratively feasible to implement. Therefore, we
preclude any license with an existing shared performance obligation
from participation in the program, and we will not accept in the ECIP
any application with an election from the parties to share performance
obligations.
1. Small Carrier or Tribal Nation Transaction Prong
a. Eligible Entities
We determine that any covered geographic licensee is eligible to
participate as an assignor and any covered geographic licensee in an
``included service'' is eligible to participate as a lessor, and two
types of entities are eligible as assignees or lessees in a Qualifying
Transaction under this first prong: either small carriers or Tribal
Nations. Consistent with the MOBILE NOW Act, each party to a Qualifying
Transaction must be unaffiliated.
Small Carriers. Section 616 of the MOBILE NOW Act defined ``Covered

[[Page 57406]]

small carrier'' as a carrier that ``has not more than 1,500 employees
(as determined under section 121.106 of title 13, Code of Federal
Regulations, or any successor thereto)'' and ``offers services using
the facilities of the carrier.'' MOBILE NOW Act section 616(a)(1),
(codified at 47 U.S.C. 1506(a)(1)). The MOBILE NOW Act also applied the
definition of ``carrier,'' as set forth in section 3 of the
Communications Act of 1934, as ``any person engaged as a common carrier
for hire, in interstate or foreign communication by wire or radio or
interstate or foreign radio transmission of energy.'' Id. In the FNPRM,
we proposed to apply the statutory definition of covered small carriers
and sought comment on alternatives. We decline at this time to expand
our proposed definition of covered small carriers in establishing
eligibility for this prong. We note that Congress' directive in the
MOBILE NOW Act focused specifically on making unused spectrum available
to covered small carriers and promoting service to rural areas, and the
current record in this proceeding has not been sufficiently developed
to determine whether to extend the additional incentives of the small
carrier prong of ECIP beyond those entities specifically contemplated
by Congress.
For purposes of this program, we therefore adopt the above
statutory definition of ``Covered Small Carrier'' and designate them as
an eligible beneficiary as a ``small carrier'' under this transaction
prong. For ease of reference, we use the term ``small carrier'' rather
than ``covered small carrier'' used in the MOBILE NOW Act, though we
incorporate into our rules the specific language of the statutory
definition.
Tribal Nations. We include Tribal Nations as an additional eligible
beneficiary in this transaction prong, independent of whether they
qualify as a small carrier. We recognize the acute connectivity
challenges that Tribal Nations face and believe that inclusion in the
ECIP program will facilitate spectrum access by Tribal Nations in both
rural and non-rural areas to help meet their communications needs. We
therefore adopt our proposed definition of Tribal Nation as any
federally-recognized American Indian Tribe and Alaska Native Village,
the consortia of federally recognized Tribes and/or Native Villages,
and other entities controlled and majority-owned by such Tribes or
consortia. In the FNPRM, we sought comment on how we should facilitate
transactions involving entities seeking to serve native Hawaiian
Homelands given there are no federally recognized Tribal Nations in
Hawaii. In the absence of responsive comments on this issue, we will
consider future waiver requests for ECIP program eligibility on behalf
of appropriate entities that manage or administer resources on behalf
of Native Hawaiians or Hawaiian Homelands. We believe the inclusion of
Tribal Nations in ECIP is an important step to facilitate increased
spectrum access, and the Commission is committed to working with Tribal
Nations to ensure that the benefits afforded through ECIP participation
are fully realized.
b. Minimum Spectrum Threshold
As proposed, we adopt a minimum spectrum threshold for a qualifying
transaction. Specifically, we require that, for licenses included in an
ECIP transaction involving a disaggregation, partition/disaggregation
in combination, or a lease, the assignor or lessor must include a
minimum of 50% of the licensed spectrum, and must demonstrate that it
meets the minimum spectrum threshold at every point in the transaction
area (where the percentage is calculated at any point as the amount of
spectrum being assigned/leased (in megahertz)/total spectrum held under
the license (in megahertz)). As an example, we will not permit an
assignor participating in ECIP to engage in a transaction whereby it
partitions an area and disaggregates spectrum in combination, but seeks
to include 75% of its spectrum in the western part of the partitioned
area, and 25% of its spectrum in the eastern part of the partitioned
area, in an attempt to meet the 50% minimum spectrum threshold through
some form of averaging. We believe that this minimum spectrum threshold
will provide stakeholders flexibility in structuring transactions to
facilitate sufficient spectrum availability for the underlying intended
service, while simultaneously preventing transactions involving de
minimis spectrum amounts that are potentially entered into solely to
obtain ECIP benefits.
We anticipate that secondary market transactions negotiated at
arm's length will result in parties acquiring sufficient spectrum to
meet their communications needs. We find that requiring minimum
spectrum amounts in megahertz to ensure that a current technology can
be successfully deployed reduces stakeholder flexibility. Such an
approach is not technologically neutral and may not adequately account
for future technological advances. By taking a technologically neutral
approach that requires a fixed percentage of spectrum relative to each
license included in an ECIP transaction, we provide sufficient
flexibility to allow a wide range of different WRS licensees the
opportunity to participate in, and benefit from, the ECIP. This
approach will likely increase the number of ECIP transactions, and
foster participation by not effectively barring licensees with smaller
spectrum amounts based on the original spectrum allocation in a
particular radio service.
Some commenters argued against a minimum threshold. We disagree.
The Commission must balance the goals and benefits conferred through
the program with the potential harms of abuse, and we find that
establishing a minimum spectrum threshold is necessary to prevent sham
transactions (e.g., disaggregation of de minimis spectrum amounts
simply to acquire program benefits). Accordingly, we adopt a 50%
minimum spectrum threshold as proposed in the FNPRM. Provided the
minimum spectrum threshold is met, parties to an ECIP Qualifying
Transaction are free to negotiate specific terms for additional amounts
of spectrum required to meet their operational or technological needs.
c. Minimum Geography Threshold
We adopt a minimum geography threshold for Qualifying Transactions
under this small carrier or Tribal Nation prong, whether a partition,
partition/disaggregation in combination, full assignment or a long-term
leasing arrangement. We also incorporate two-tiered geographic scaling
based on the overall size of the licensed area in the underlying
license from which the ECIP transaction originates to ensure equitable
treatment across differently-sized licensed areas. Specifically, for
licensed areas that contain 30,000 square miles or less, we require a
minimum geography threshold of 25% of the licensed area. For geographic
area licenses larger than 30,000 square miles in size, we require a
minimum geography threshold of 10% of the licensed area. We believe
this approach appropriately balances the size of the licensed area to
create incentives for program participation and ensure sufficient land
area for small carriers or Tribal Nations, while discouraging
transactions involving de minimis geography entered into solely to
obtain program benefits.
In the FNPRM, we proposed a 25% geography threshold to ensure
sufficient land area was made available for the provision of advanced
telecommunications services and to prevent fraud from transactions
involving de minimis amounts of geography entered into for the singular

[[Page 57407]]

purpose of receiving benefits. We are persuaded that the scaling
concepts advanced by commenters provide a practical solution towards
ensuring a fair and consistent application of the ECIP. We therefore
find it in the public interest to adopt the two-tiered hybrid approach
discussed above, based on the amount of square mileage within the
licensed area of the assignor or lessor, regardless of the license
type, to meet the required minimum geography threshold percentage. We
believe this approach appropriately balances the goal of ensuring
greater program participation, particularly for licensees with larger
licensed areas that offer spectrum to others, and that benefit from
program benefits applied to their entire license (e.g., extension of
renewal deadline and construction deadlines), while protecting against
potential abuse through transactions that include de minimis amounts of
geography. Assignors or lessors are permitted to include more of their
licensed area in a Qualifying Transaction than the minimum geography
threshold in this prong, up to their entire licensed area, potentially
resulting in a larger Transaction Geography in a Qualifying
Transaction. We believe this allows sufficient flexibility to structure
transactions based on the needs of the parties.
We clarify that under the small carrier or Tribal Nation
transaction prong, the geography assigned or leased can be from any
type or size of covered geographic license and can include rural and/or
suburban/urban areas, provided it meets the minimum geography threshold
percentage described above. An ECIP transaction between unaffiliated
parties, as required under this prong, may be either an assignment
(full, partition, and/or disaggregation) or a lease, but not both, for
each license. We impose this restriction to meet program goals,
including the equitable distribution of program benefits and
obligations, and therefore preclude an ECIP participant from, for
example, partitioning a percentage of its licensed area, and then
leasing another percentage of licensed area from the same license,
which when combined meet the minimum geography threshold. While an ECIP
application filed under this prong may include more than one license
for assignment or leasing to a single assignee/lessee, each included
license must independently meet the respective minimum geography
percentage threshold, and will be independently reviewed and acted
upon. Applications seeking ECIP benefits that do not satisfy the
minimum spectrum and geography thresholds for each license on a stand-
alone basis will be dismissed. We also clarify that parties
participating in ECIP through this small carrier or Tribal Nation
transaction prong remain subject to the substantive performance
requirements (e.g., covering a certain population percentage, in most
flexible use bands) as set forth in the underlying radio service(s)
rules of the license(s) involved in the Qualifying Transaction.
Finally, after review of the record, we find no basis to restrict the
program to census defined populations.
2. Rural-Focused Transaction Prong
To further the important Commission and Congressional goals of
facilitating the provision of advanced telecommunications service in
rural areas, we provide a second possible path for ECIP participants
through a rural-focused transaction approach. This prong expands the
scope of eligible entities beyond those specifically referenced in the
MOBILE NOW Act and is intended to facilitate coverage to rural areas by
tying ECIP benefits to construction and operation obligations. We
believe this second transaction prong will expand the class of eligible
participants, resulting in greater potential for increased spectrum
usage and competition in rural areas.
a. Eligible Entities
Any covered geographic licensee is eligible to participate as an
assignor and any covered geographic licensee in an ``included
service,'' 47 CFR 1.9005, is eligible to participate as a lessor.
Further, any entity is eligible to participate as an assignee or lessee
if able to meet the prong requirements described below, including, for
example, large or small carriers, common carriers, non-common carriers,
Tribal Nations, critical infrastructure entities, and other entities
(large or small) operating private wireless systems. We reiterate that,
consistent with the MOBILE NOW Act, each party to a Qualifying
Transaction must be unaffiliated.
Commenters unanimously supported the Commission's FNPRM proposal to
adopt a rural-focused transaction prong available to anyone able to
meet the requirements. We find it in the public interest to adopt our
proposal to expand on the MOBILE NOW Act's focus to incentivize
transactions involving a wide variety of stakeholders seeking to
provide services in rural areas that may currently face spectrum access
challenges.
b. Minimum Spectrum Threshold
Similar to our treatment of the small carrier or Tribal Nation
prong above and for the same rationale, we adopt the proposed 50%
minimum spectrum threshold for each license(s) included in the
Qualifying Transaction of the rural-focused transaction prong. For
licenses included in an ECIP transaction involving a disaggregation,
partition/disaggregation in combination, or a lease, the assignor or
lessor must include a minimum of 50% of the licensed spectrum, and must
demonstrate that it meets the minimum spectrum threshold at every point
in the transaction area (where the percentage is calculated at any
point as the amount of spectrum being assigned/leased (in megahertz)/
total spectrum held under the license (in megahertz). The minimum
spectrum threshold under this rural-focused transaction prong provides
stakeholders flexibility in structuring transactions to facilitate
sufficient spectrum availability for the provision of advanced
telecommunications services in rural areas, while simultaneously
preventing transactions involving de minimis spectrum amounts that are
potentially entered into solely to obtain ECIP benefits.
In the FNPRM, we proposed in the rural context that a Qualifying
Transaction must designate a minimum of 50% of the licensed spectrum,
for each license included in the transaction, consistent with the small
carrier or Tribal Nation transaction prong. We find that adopting the
minimum spectrum threshold is the best approach towards advancing the
Commission's goals of fostering the provision of advanced
telecommunications services and providing stakeholders flexibility in
structuring transactions, while preventing transactions involving de
minimis amounts of spectrum.
c. Minimum Qualifying Geography
To achieve the Commission's policy goals of facilitating bona fide
transactions that ensure rural service while providing substantial
program benefits, we require that a Qualifying Transaction under this
prong (e.g., a partition, partition/disaggregation in combination, full
assignment, or a long-term leasing arrangement) must include a minimum
amount of ``Qualifying Geography.'' All geography identified as
Qualifying Geography, for purposes of this rural-focused transaction
prong, must be in a rural area, as defined below. We adopt the
statutory definition of ``Rural Area,'' which is defined as any area
except (1) a city, town, or

[[Page 57408]]

incorporated area that has a population of more than 20,000
inhabitants; or (2) an urbanized area contiguous and adjacent to a city
or town that has a population of more than 50,000 inhabitants. MOBILE
NOW Act, section 616(a)(2) (codified at 47 U.S.C. 1506(a)(2)). Although
we understand concerns regarding areas adjacent to large cities/towns,
we note that the MOBILE NOW Act did not provide an exception for the
inclusion in the definition of ``rural'' those locations on the
periphery of urban areas that are arguably less populated, but
nonetheless are part of an urbanized area contiguous or adjacent to a
city or town with a population of more than 50,000. We therefore
recognize that parties may seek a waiver of the rule in certain unusual
circumstances, which we will review pursuant to the criteria set forth
in the Commission's rules. See 47 CFR 1.3, 1.925.
As applied to the ECIP rural-focused transaction prong, we define
Qualifying Geography as at least 300 contiguous square miles for those
licensed areas that are 30,000 square miles and smaller, with
appropriate upward scaling for larger licensed areas. After reviewing
the record and the varying geographic areas the Commission licenses in
greater detail, we find that our proposed scaling approach that focused
on license types (e.g., Partial Economic Area (PEA) or smaller)
potentially could create inequities. Commission staff reviewed data
regarding license types in Covered Geographic Services, and found that,
out of 410 PEAs, 399 (or 98%) were 30,000 square miles or less;
however, certain other licensed areas larger than PEAs also consisted
of 30,000 square miles or less. For example, 84% of BEAs, 26% of MTAs,
and 28% of MEAs, consisted of 30,000 square miles or less. (The license
area types reviewed include (from smallest to largest average area
size): Counties, Cellular Market Areas (CMAs), Interactive Video
Markets (IVMs), Basic Trading Areas (BTAs), Partial Economic Areas
(PEAs), Basic Economic Areas (BEAs), Major Trading Areas (MTAs), Major
Economic Areas (MEAs), VHF Public Coast (VPC), and Regional Economic
Area Groupings (REAGs). See What is Geographic Information Systems
(GIS)?, <a href="https://www.fcc.gov/wireless/gis-wtb">https://www.fcc.gov/wireless/gis-wtb</a> (last visited April
2022)). Accordingly, were we to adopt the ``PEA and smaller'' approach,
as proposed in the FNPRM, as the standard for the 300 square mile
minimum Qualifying Geography threshold, 141 out of 170 BEAs, 12 out of
46 MTAs, and 13 out of 46 MEAs, all geographic sizes larger than PEAs,
but also containing only 30,000 square miles or less, would have been
unnecessarily subject to higher minimum Qualifying Geography thresholds
(e.g., 900 square miles). We seek to remedy this potential inequity
through a more neutral approach that incentivizes transactions across
all licensed areas in covered geographic services.
We therefore adopt a Qualifying Geography minimum threshold based
on actual geographic license size in square miles and find that this
slight modification to our proposed approach ensures equal treatment
across similar sized licensed areas. Under the rural-focused
transaction prong we adopt, the geographic threshold approach scaled
for larger licensed areas in four categories is as follows: (1) Up to
30,000 square mile licensed areas--Qualifying Geography = 300 square
miles; (2) 30,001-90,000 square mile licensed areas--Qualifying
Geography = 900 square miles; (3) 90,001-500,000 square mile licensed
areas--Qualifying Geography = 5,000 square miles; and (4) 500,001
square mile licensed areas and above--Qualifying Geography = 15,000
square miles.
We believe this approach ensures fairness and equal treatment
across different license sizes and that scaling for larger licensed
areas will ensure sufficient financial commitment by ECIP participants
to yield more than nominal spectrum access. We also believe it achieves
the Commission's goal of facilitating rural buildout sufficient to
justify the ECIP benefits received, thus preventing windfall benefits.
To afford ECIP participants substantial flexibility in structuring
transactions and to incentivize participation under this rural-focused
transaction prong, we permit assignors/lessors in Qualifying
Transactions to include spectrum from multiple licenses, as long as the
Qualifying Geography intersects each contributing license included in
the underlying ECIP transaction application. To facilitate program
participation under this rural focused transaction prong, however, we
do not require a minimum square mileage of Qualifying Geography per
contributing license, provided the sum total of the Qualifying
Geography from the contributing licenses meets the required minimum
threshold.
To protect program integrity, in instances where a Qualifying
Transaction consists of multiple licenses with varying sized licensed
areas contributing to the Qualifying Geography, we require the
Qualifying Geography to be scaled to the minimum geographic threshold
of the largest licensed area included. For example, where the
Qualifying Geography intersects three contributing licenses and, based
on their smaller overall licensed area, two of the three contributing
licenses would require a minimum Qualifying Geography of 300 square
miles, and the third contributing license is a larger licensed area
that would require 900 square miles of minimum Qualifying Geography, we
require the Qualifying Geography for this ECIP Qualifying Transaction
to consist of a minimum of 900 square miles.
We do not mandate the maximum geographic scope of the parties'
overall transaction, and clarify that the total Transaction Geography
can be up to the entire licensed area of the contributing license(s),
but no smaller than the minimum Qualifying Geography in the appropriate
scaled category. This approach can potentially result in a larger
Transaction Geography than the Qualifying Geography and affords program
participants sufficient flexibility to structure transactions based on
the needs of the parties. In this regard, we strongly encourage all
parties to an ECIP transaction, and particularly assignees and lessees,
to include as part of the overall transaction sufficient Transaction
Geography to ensure that the Qualifying Geography will be 100% covered
as required. We reiterate that both the Qualifying Geography and
Transaction Geography is not determined by the Commission, but is
voluntarily identified by the parties. Both assignees and lessees are
required to cover 100% of the Qualifying Geography, and this
requirement becomes the assignee's substituted performance obligation
in lieu of the service rule obligation. We advise parties to perform
the proper due diligence in advance of filing an ECIP application to
ensure that site access and/or propagation issues will not prevent the
assignee or lessee from meeting its construction requirement. Failure
to do so, resulting in subsequent arguments that the 100% Qualifying
Geography coverage requirement cannot be met, is a consideration in the
Commission's evaluation as to whether the parties entered into a good
faith transaction with a bona fide intent to meet the program's
obligations. Finally, in any transaction involving licenses authorized
in mixed spectrum bands, we clarify that all end-user devices operating
throughout the Qualifying Geography must be capable of operation on all
spectrum bands for contributing licenses that are part of the
transaction.

[[Page 57409]]

D. Enhanced Competition Incentive Program Benefits

In this final rule, we adopt three ECIP benefits: where applicable,
we afford participants a five-year license term extension, a one year
construction extension, and alternative construction requirements for
rural-focused transactions.
1. License Term Extension
We adopt a five-year license term extension for the following: all
parties involved in a qualifying partition/disaggregation transaction;
the lessor entering into a qualifying spectrum leasing transaction,
given that the lessor retains the license renewal obligations; and the
assignee in full license assignments. We believe this benefit will
substantially reduce regulatory burdens associated with renewal
obligations and will properly incentivize secondary market
transactions, particularly spectrum leases that are subject to the
lessor's license term. ECIP is available to a wide variety of WRS
licenses, most of which have a renewal showing obligation requiring a
demonstration of continued service at or above that required to meet
the original construction obligation. We believe that the license term
extension benefit offers an incentive, consistent with Congressional
direction, to licensees that have yet to meet their construction
obligations or those that may not have maintained the required level of
service throughout the course of their license term.
2. Construction Extension
We adopt a one-year construction extension for all parties to a
Qualifying Transaction for both the interim and final construction
benchmarks, where applicable. This benefit applies to the following
parties in an ECIP transaction: both parties in a Qualifying
Transaction involving partition and/or disaggregation; to the lessor in
a qualifying spectrum lease arrangement, and to the assignee in a full
license assignment. We are not persuaded that additional time beyond a
one-year construction extension of the service rule benchmark is
warranted as an ECIP benefit. We seek to facilitate secondary market
transactions that will benefit those needing increased spectrum access,
as well as the provision of advanced telecommunications services to
rural areas. Although Congress specifically focused on the Commission
affording construction relief to help realize these policy goals, we
are mindful that providing additional time to construct, while
beneficial to the licensee recipient, correspondingly results in a
delay in the ultimate provision of services to the public. Further,
pursuant to the MOBILE NOW Act, the Commission is charged with
assessing the administrative feasibility of the program, and we believe
that substantially adding to the complexity of ECIP by adopting
commenter-suggested gradations of construction extension benefits would
not be in the public interest. MOBILE NOW Act section 616(b)(2)(D)
(codified at 47 U.S.C. 1506(b)(2)(D)). Therefore, we adopt a one-year
construction extension for both the interim and final construction
benchmarks, where applicable. We also note that the Commission's rules
are very clear with regard to circumstances that would not warrant an
extension of time, and specifically state that construction and
coverage deadline extension requests will not be granted due to
transfers of control or assignments of authorization. 47 CFR
1.946(e)(3). For the ECIP program, Congress directed the Commission to
consider incentives that we may deem appropriate to facilitate
transactions, and specifically included this type of relief as a
possible incentive. We find that application of this benefit serves the
public interest as an incentive to participate in ECIP. We also clarify
that construction deadlines previously extended through grant of a
waiver may not be automatically transferrable to the assignee, unless
specified by the waiver grant instrument. If transferrable, and where
such further transfer is predicated upon the recipient justifying the
waiver relief, ECIP assignees must separately justify any waiver relief
separate from, and prior to, grant of ECIP benefits.
3. Alternate Construction Benchmarks for Rural-Focused Transactions
For the rural-focused transaction prong, we substitute an
assignee's existing service rule-based performance requirement, if
applicable, for the entire Transaction Geography as reflected on the
assignee's new license created through ECIP, with the alternative
construction benchmark described below. This benefit is provided to
assignees in a Qualifying Transaction involving partition, partition
and disaggregation combination, or full license assignment.
Specifically, under ECIP, an assignee or lessee is required to provide
100% coverage to its Qualifying Geography, which is at least 300 square
miles for licensed areas up to 30,000 square miles, with upward scaling
by licensed area size. Although we require an assignee or lessee to
meet the 100% Qualifying Geography coverage requirement to provide
rural service in exchange for ECIP benefits, we do not substitute the
alternative construction benchmark to leasing arrangements, as the
lessee has no service-rule based performance benchmark requiring
substitution. Moreover, under the Commission's rules, the lessor has
the responsibility to meet underlying performance benchmarks for its
entire license and also retains the ability to count any lessee
construction towards lessor's buildout obligation. We also clarify that
where the Commission has previously modified the assignor's substantive
service-based performance requirement through conditions granted by
waiver and such requirements have not been met, the assignee will only
receive the substituted alternative construction requirement if the
assignee separately requests, and is granted, a waiver to receive this
ECIP benefit in lieu of the modified performance requirement applicable
to the assignor.
We reiterate that although we require 100% coverage of the
Qualifying Geography, parties to an ECIP transaction are free to
include significantly more geography than the minimum square mileage of
Qualifying Geography required to be constructed. In fact, under some
circumstances, the Qualifying Geography coverage requirement can likely
be met through construction of a single transmitter with approximately
a ten mile radius of operation, though we anticipate that assignees or
lessees may deploy multiple transmitters to ensure robust network
coverage and to provide sufficient buffer to ensure 100% coverage of
the Qualifying Geography. We find that substituting service rule
requirements with mandatory coverage of Qualifying Geography for those
assignees with remaining performance requirements represents a key
benefit and an incentive to participate in ECIP, while still requiring
a legitimate investment in network infrastructure that will result in
public interest benefits in rural areas.
In adopting the substitution of an alternative construction
requirement in lieu of service based requirements for rural-focused
transactions (for assignees involved in partitioning and/or
disaggregation or full license assignments), we clarify our treatment
of the interim and final construction deadline in two distinct
scenarios. First, where the interim performance requirement has not
been met at the time of the ECIP transaction, the assignee meets its
interim performance obligation for the entire Transaction Geography
specified in its new

[[Page 57410]]

authorization (if larger than the Qualifying Geography) by complying
with this alternative approach, and we remove the final performance
requirement set forth in the service rules for the particular license
acquired in the ECIP transaction. Second, where an assignor has
previously met the interim construction deadline, this alternative
construction benchmark will replace the final construction obligation
for the assignee's entire Transaction Geography. We believe this
flexible approach will facilitate rural-focused transactions and will
ensure a reasonable stakeholder investment in rural buildout sufficient
to warrant ECIP benefits. In the event an assignee has no performance
obligation because the respective interim and final benchmarks have
been satisfied, we do not confer the benefit of a substituted
performance obligation.

E. Enhanced Competition Incentive Program Protections Against Waste,
Fraud, and Abuse

In this final rule, we adopt several measures to protect the
integrity of ECIP from potential waste, fraud, and abuse and to promote
the program's goals of increased spectrum access, rural service, and
competition. We also clarify that, unless specified herein,
participation in the ECIP does not relieve a licensee of the obligation
to comply with other Commission rules including, but not limited to,
the following: (1) designated entity eligibility requirements or the
obligation to make an unjust enrichment payment when required; (2)
competitive review of an ECIP transaction if needed; (3) the
application of a service-specific spectrum aggregation rule; or (4)
obligations required by the Tribal Lands Bidding Credit rule.
These protections include: (1) a requirement for applicants seeking
to participate in ECIP to select either the small carrier/Tribal Nation
prong or the rural-focused transaction prong, but not both, for each
ECIP transaction, without the option of changing prongs once selected;
(2) a five-year holding period on licenses assigned through
partitioning and/or disaggregation from an ECIP transaction, and a
five-year minimum term for leasing arrangements; (3) an operational
requirement of 100% coverage of the Qualifying Geography for three
consecutive years for rural-focused transactions; (4) automatic
termination of the relevant ECIP license and bar from future program
participation for a licensee's failure to comply with the five-year
holding period or to meet the applicable buildout and operational
requirements (as required for rural-focused transactions); and (5) a
one-time cap on ECIP benefits for each license subject to a Qualifying
Transaction (e.g., the original license and the subsequent license(s)
issued from a partition and/or disaggregation). In adopting these
program protections, we acknowledge that ECIP is in its nascency, and
that we will continue to fine-tune the program to enhance its
effectiveness and to better meet our objectives. We also direct the
Wireless Telecommunications Bureau to conduct an evaluation of the
program and prepare a report to the Commission no later than five years
after the effective date of this final rule.
As with any Commission program conferring a benefit and intended to
achieve results that serve the public interest, we find it imperative
to establish adequate protections to avoid the potential of waste,
fraud, and abuse. Indeed, some of the protections we adopt today were
specifically included in the MOBILE NOW Act and have been implemented
in prior Commission proceedings to guard against anti-competitive
behavior and abuse of Commission process. See, e.g., MOBILE NOW Act
section 616(b)(3) (codified at 47 U.S.C. 1506(b)(3)) (stating that
automatic license termination is the consequence of failure to
buildout); 47 CFR 20.22(c) (requiring a holding period for 600 MHz
reserve licenses); 47 CFR 1.946(c) (automatic termination for failure
to build-out wireless licenses in certain radio services). Based on our
experience administering wireless licenses to support the provision of
service to rural areas, we find that implementing the protections
discussed in more detail below aligns with our program goals and serves
the public interest to facilitate, as much as possible, intense
spectrum utilization in these underserved areas. We believe that our
approach addresses a major commenter concern (ensuring that the
assignor/lessor is not unduly punished for the failings of the
assignee/lessee) while also protecting ECIP from waste, fraud, and
abuse.
1. Single Prong Selection Required for ECIP Participation
To avoid gamesmanship and provide for administrative efficiency,
ECIP participant(s) must select either the small carrier/Tribal Nation
prong or the rural-focused transaction prong, even if the receiving
party is otherwise eligible for both options. We find it more efficient
and in the public interest to adopt a requirement that provides a clear
and distinct path to ECIP participation by mandating that parties to an
ECIP transaction may select either prong, but not both. This approach
results in consistent application of program benefits and ensures
program integrity by requiring applicants to follow through with their
stated commitment to provide certain public interest benefits, and also
reduces the potential for gamesmanship in ECIP prong selection.
Accordingly, parties to an ECIP transaction are required to make a
prong selection in the application filed with the Commission to approve
the ECIP transaction, i.e., an FCC Form 603 (for partitions and/or
disaggregation) or FCC Form 608 (for leases). Once the associated
application has been granted by the Commission, the parties (now ECIP
participants) are not permitted to change their selection.
This restriction ensures that no party changes its ECIP prong
selection, particularly towards the end of the period allotted for
completing construction obligations, thereby leveraging potentially
more favorable regulatory requirements. For example: Licensee A (the
assignor) and Licensee B (the assignee) both file an FCC Form 603
application, selecting the rural-focused transaction prong, with
Licensee B committing to provide service to a partitioned rural area of
at least 300 rural square miles of Qualifying Geography as a substitute
for an upcoming performance deadlines mandated under our service rules.
Under this prong, Licensee B must meet the applicable construction and
operational requirements for that area by the extended construction
deadline. Once the Commission grants the application, Licensee B is not
permitted to later elect, in lieu of meeting its obligation to provide
service throughout its chosen Qualifying Geography, to meet the
performance requirements applicable under the small carrier or Tribal
Nation prong, i.e., covering a percentage of the population within its
license area (as required in many flexible wireless radio services),
which may include more sub-urban and urban populations--even if
Licensee B could have originally qualified for that prong as a small
carrier. We clarify that, as with any transaction seeking Commission
approval to alienate licensed spectrum, and independent of ECIP, the
applicant(s) must otherwise meet the requirements to be Commission
licensees and the Commission must deem the transaction to be in the
public interest. See 47 U.S.C. 310(d).
We find that this approach aligns with the program's goals of
fostering increased accessed to spectrum and the provision of rural
service, ensures transparency by providing concrete criteria and
expectations to program

[[Page 57411]]

participants and the public, and is a less burdensome and a more
efficient way to administer the program.
2. Holding Period
With certain exceptions described below, we adopt a five-year
holding period during which licensees cannot further partition,
disaggregate, assign or lease licenses assigned through ECIP. We
similarly adopt a five-year minimum lease term for long-term spectrum
manager or long-term de facto transfer leasing arrangements under ECIP.
Specifically, assignees of licenses obtained through partitioning and/
or disaggregation or full license assignment pursuant to an ECIP-
related transaction may subsequently assign or lease, in whole or in
part, those licenses to other entities, regardless of whether the
entity receiving the license is ECIP-eligible, only after a five-year
holding period starting from the date of license issuance, and provided
that the assignee has met any relevant construction requirement
(interim and final) and operational requirement discussed below (for
rural-focused transactions) for those licenses. We also require lessors
and lessees participating in ECIP to commit to at least a five-year
lease term for long-term spectrum manager or long-term de facto
transfer leasing arrangements. We acknowledge that this five-year
restriction may not directly align with parties' immediate business
needs in all cases, but we believe that this approach, on balance, best
promotes the goals of the program, effectively deters unwanted
behavior, and serves the public interest.
Restriction on Leasing and Subleasing of Spectrum Rights Obtained
through ECIP. We adopt our proposed approach to prohibit the leasing or
subleasing of spectrum by ECIP assignees and lessees during the five-
year holding period or five-year minimum lease term, respectively. In
leasing/subleasing arrangements after the applicable five-year period,
the lessee or sublessee will not receive ECIP benefits, consistent with
the one-time ECIP benefit rule we discuss below. We remain concerned
about situations where, for example, an ECIP licensee (or lessee)
monetizes its benefits by further leasing its spectrums rights to a
third party, with no guarantee that the lessee/sublessee's activities
will yield the public interest benefits intended by ECIP. We therefore
decline to allow such leasing arrangements during the relevant five-
year period to help ensure program obligations are met by assignees and
lessees, given the benefits ECIP provides, and to avoid providing an
opportunity for program participants to circumvent our rules.
Exceptions to the Holding Period. Given the realities and
challenges of today's ever-growing wireless market, and our consistent
approach of providing flexibility to wireless radio service licensees
to foster competition, we adopt an exception to the requisite holding
period for pro forma transactions, including transfers and assignments.
We have previously found pro forma transactions to be in the public
interest because such transactions promote competition by allowing
service providers to change their ownership structure or to reorganize
without regulatory delay, increasing a provider's ability to compete in
today's marketplace--a goal repeatedly advocated by Congress and the
Commission.
We also adopt an exception to our holding period for lease
arrangements, including subleases, involving providers of Contraband
Interdiction Systems (CIS). We find that ECIP restrictions intended to
prevent waste, fraud, and abuse should not be applied to vital public
safety-related leasing or sub-leasing arrangements intended to deploy
systems that prevent contraband wireless device use in correctional
facilities. Specifically, to enable an ECIP assignee or lessee to
lease/sublease a license (or some portion thereof) to a CIS provider,
we will provide an exception to the: (1) five-year holding period or
five-year minimum lease term; (2) operational requirement for rural-
focused transactions (as applicable); (3) prohibition against leasing/
subleasing during the relevant five-year period; and (4) penalties for
failing to comply with certain program obligations. We find that this
approach is consistent with our ECIP program goals, and enables CIS
operation where needed to promote public safety. In adopting this
exception, we reiterate that CIS providers require access to all the
commercial spectrum bands covering the footprint of the correctional
facility to effectively operate, and that any gap in coverage could
render the system less effective. Because of these operating
parameters, a CIS provider will likely need to enter into multiple
spectrum leasing arrangements for the same geographic area covering the
correctional facility. Given the public safety importance of protecting
correctional facility staff and the public from the potential harms
associated with the use of contraband wireless devices, we find it in
the public interest to adopt narrow exceptions to the program
protections.
We decline to adopt an exception for licensees that are exiting the
wireless business. Given the various business models under which WRS
licensees operate, we find it impractical to apply a one-size-fits-all
standard to a proposed transaction involving an ECIP-participating
licensee intending to exit the wireless business. We also note that the
Commission does not generally permit a licensee to rely on business
decisions and related transactions to justify a request for extension
or waiver of performance requirements. See 47 CFR 1.946. Further,
applying such a rigid standard can also run counter to the goals of the
ECIP; if the standard is too lenient, it may be used by an ECIP entity
to circumvent the Commission's rules and, if the standard is too harsh,
it may prevent program participation and/or hinder competition. We
therefore elect to address these types of situations on a case-by-case
basis. As such, where an ECIP licensee intends to exit the
telecommunications industry prior to the end of the requisite holding
period or prior to the expiration of any applicable five-year lease
term, we will entertain waiver requests for review under the criteria
set forth in Sec. 1.925 of the Commission's rules. See 47 CFR 1.925.
We also decline to adopt an exception to the five-year minimum
lease term, or an alternative penalty scheme, for lessees that
prematurely terminate their lease due to an involuntary transaction,
such as bankruptcy. Based on our experience gained by administering
transactions involving wireless licenses, we believe that adopting an
exception for a lease termination resulting from involuntary
transactions is unnecessary as such circumstances are atypical. We
recognize, however, that a waiver of the five-year minimum lease term
may be sought in unusual circumstances.
3. Operational Requirement for Rural-Focused Transactions
For rural-focused transactions, we adopt an operational requirement
whereby the assignee or lessee must operate or provide service
throughout the entire Qualifying Geography for a minimum of three
consecutive years.
Operational Requirement--Coverage. Given the benefits afforded to
participating licensees through ECIP, we find that adopting the
operational requirement largely as proposed is in the public interest
as a targeted measure to ensure that operation or the provision of
service occurs throughout the entire Qualifying Geography for a
sustained period. To fulfill the operational requirement, an assignee
or lessee of an ECIP rural-focused transaction must, for a minimum of
three consecutive years, operate or provide service to 100% of the
Qualifying Geography. Specifically,

[[Page 57412]]

a common carrier assignee/lessee must provide signal coverage for 100%
of the Qualifying Geography and offer commercial service in that area.
An assignee/lessee that intends to operate private, internal
communications for business purposes, including, for example,
utilities, must demonstrate that it has fulfilled the three-year
operational requirement by providing 100% signal coverage to the entire
Qualifying Geography, and certify that it has provided continuous
private communications throughout that area for a minimum of three
consecutive years. We also adopt our proposal to impose a minimum level
service requirement during the three-year operational period. During
this three year period, operation/service must not fall below that used
(or intended to be used) to meet the relevant construction requirement
for assignees and lessors, and lessees must continue to provide service
(or operate, to meet private internal business needs) throughout the
entire Qualifying Geography, irrespective of whether the lessor
attributes any of the lessee's buildout for its performance benchmark
compliance.
For assignees, we note that the applicable Qualifying Geography of
which 100% coverage must be met to fulfill the operational requirement
could vary, depending on the size of the license(s) contributed. Where
the parties in an ECIP transaction elect to contribute different
license sizes to the Qualifying Geography, we will determine the size
of the Qualifying Geography by using the minimum threshold applicable
to the largest contributing license it intersects (e.g., if the
Qualifying Geography intersects a contributing license whose licensed
area size is 30,001 to 90,000 square miles, the assignee's 100%
coverage requirement must be at least 900 square miles, even if the
Qualifying Geography also intersects a contributing license with a
licensed area of 30,000 square miles or less). In this scenario, where
multiple licenses contribute to the Qualifying Geography, to meet the
operational requirement, we will also require that all spectrum
contributed (if from different spectrum bands) to the Qualifying
Geography be accessible by end-user devices operating throughout the
Qualifying Geography. By adopting such a requirement, we ensure that
the alternative construction benchmark is not used in such a way to
undermine an important ECIP goal, the enabling of diverse spectrum
access and the provision of service to rural areas.
Operational Requirement--Commencement of Three Year Period. We
apply the operational requirement both to assignees (whether through
partitioning, partitioning/disaggregation in combination, or full
assignment) and lessees. We recognize, however, that the Commission's
service rules regulate assignees and lessees differently, with varying
rights and responsibilities applicable to each. For example, a lessee
does not have service rule-based performance benchmarks or license
renewal obligations independent of the licensee lessor, whereas an
assignee is issued a separate license, may have independent performance
requirements (if not previously met by the assignor), and has renewal
obligations. Further, as discussed above, in the case of leasing
arrangements under ECIP, we do not substitute the alternate geographic
construction requirement for the service-based rule requirement,
because the licensee lessor has the option of counting lessee
construction towards compliance with lessor's performance benchmark.
Given these distinctions in regulatory treatment, we find it in the
public interest to adopt, with certain modifications, our proposal
regarding the date by which operation or service must commence to
ensure both timely construction and three continuous years of
operation, and we clarify below the application of the rule in various
scenarios that involve assignees versus lessees participating in ECIP.
To not undermine the key ECIP benefit afforded through the
extension of the interim and final performance benchmarks associated
with an assigned license, we will require an assignee with an upcoming
interim benchmark (or final benchmark, if the interim has passed) to
commence the three year operational requirement no later than the date
of the extended interim (or extended final, if no interim) construction
deadline. However, where a license assigned through ECIP has no service
rule-based performance requirement because the licensee has met both
the interim and final benchmarks, we require the assignee to commence
the three year continuous operation requirement no later than two years
after consummation of the ECIP transaction. This approach ensures
prompt service/operation within the entire Qualifying Geography,
regardless of whether the underlying performance requirements of the
assignor's license that was partitioned, partition/disaggregated, or
fully assigned, have been met. This approach also recognizes that a
reasonable period of time might be required to construct the entire
Qualifying Geography, particularly where the assignee may have acquired
the Qualifying Geography as part of a larger Transaction Geography with
plans to operate or provide service beyond the Qualifying Geography as
part of a larger network.
With respect to lessees, we require the three year operational
period to commence no later than two years following the commencement
of the lease, regardless of whether the licensee lessor has an upcoming
extended interim and/or final performance benchmark, or whether it has
previously met both performance benchmarks. We seek to ensure that
leased spectrum within the Qualifying Geography is timely put to use in
the public interest, given the ECIP benefits conferred to the licensee/
lessor. This approach is therefore warranted, particularly where we do
not substitute construction of the Qualifying Geography as an
alternative performance requirement (unlike an assignee, where the
service rule construction requirement has not yet been met) because a
lessee has no independent performance obligation. Moreover, as noted, a
licensee/lessor has the option, but is not required, to count lessee
construction towards lessor's performance obligation, so lessee
construction under the Commission's service rules is not mandatory. By
requiring a lessee of spectrum through ECIP to operate or provide
service no later than two years following lease commencement, we also
ensure three years of continuous operation where ECIP parties enter
into the minimum required five year lease term.
We clarify that the date of construction that commences that start
of the required three-year period of continuous operation is the date
reflected on either: (1) the assignee's timely-filed construction
notification required under our service rules, see 47 CFR 1.946(d),
informing the Commission that the relevant buildout/coverage
requirement has been met for the license at issue; or (2) its Initial
Operational Requirement Notification, discussed below. Because lessees
are not required under our service rules to file construction
notifications, their date of actual construction will be the date
indicated in its Initial Operational Requirement Notification. If the
assignee or lessee files their Initial Operational Requirement
Notification prior to the relevant construction deadline, we will count
the date of construction certified to in that filing, as reflected in
ULS, as the start date for the three-year operational period. For
example, where the interim performance benchmark has not been met at
the time of the ECIP transaction and the assignee does not fulfill its

[[Page 57413]]

construction requirement until the extended interim construction
deadline, the date of the extended interim deadline would apply for
determining when the operational period commences. Alternatively, where
the assignee elects to construct and file a notification with the
Commission before the extended interim construction deadline, then the
filing date of the notification governs.
Initial and Final Operational Requirement Notifications. In order
to ensure that assignees and lessees of rural-focused prong ECIP
transactions comply with the operational requirement, we require the
filing of two notifications: (1) an Initial Operational Requirement
Notification, to be filed within 30 days of the commencement of
operations complying with the operational requirement; and (2) a Final
Operational Requirement Notification, to be filed within 30 days of
satisfaction of the three consecutive year operational requirement. The
Initial Operational Requirement Notification must include the
following: (1) the date the assignee/lessee began operations; (2) a
certification that the assignee/lessee satisfies the operational
requirement of 100% coverage of the Qualifying Geography for that
license or lease; and (3) technical data demonstrating such compliance.
The Final Operational Requirement Notification must also include the
following: (1) a certification that the network satisfied the
operational requirement of 100% coverage of the Qualifying Geography
for three consecutive years; (2) the date on which the three year
period was completed; and (3) technical data demonstrating the coverage
provided. The Initial Operational Requirement Notification and Final
Operational Requirement Notification are required in addition to any
construction notification required to be filed with the Commission
pursuant to rule Sec. 1.946. 47 CFR 1.946. We direct the Bureau to
release a public notice providing program participants with further
details regarding compliance with the Initial and Final Operational
Requirement Notification procedures including, for example, the filing
method and applicable fees. The data obtained from these filings will
be critical component part of the Bureau's ECIP Evaluation Report,
discussed below.
4. Prohibition on Bad-Faith Transactions
We find it unnecessary to penalize the assignor or lessor when the
assignee or lessee is solely at fault for failing to adhere to the
holding period, or meet the construction or operational requirement
(for rural-focused transactions). In taking this approach, we observe
that the assignee/lessee is an unaffiliated entity and that the
assignor/lessor is not typically a guarantor of assignee/lessee
performance, and therefore penalties should be applied to the party
responsible for the violation and its affiliates. Additionally, we are
aware that program participation may be hindered if we impose penalties
on an assignor/lessor for the failures of the assignee/lessee that are
beyond its control.
We remain committed, however, to preventing bad faith transactions
which bring no public benefits in return for the ECIP benefits
conferred. For instance, a licensee might actively seek an ECIP-
eligible entity to derive ECIP benefits through a lease of unused
spectrum rights without regard for whether that entity has the
financial or technical resources to meet program requirements. Such
agreements also might include compensating that recipient entity to
participate in a transaction.
Accordingly, we will not penalize assignors/lessors that enter into
good faith transactions with assignees/lessees for subsequent assignee/
lessee failure to meet program obligations. However, where the
assignor/lessor is found to have entered into a transaction solely to
reap program benefits, whereby it knew or should have known the
assignee/lessee could or would not meet program obligations, we will
bar the assignor/lessor entity and its affiliates from future
participation in ECIP (as discussed below), and may impose monetary
penalties if appropriate. In taking this approach, we strike a balance
between fostering spectrum access, increased competition, and
facilitating service to rural areas through program incentives, and
adopting appropriate protective measures that will not unduly hinder
program effectiveness.
To address this concern, we require two new certifications to be
included in the assignment and/or lease applications (FCC Forms 603 and
608, respectively). First, each party to the transaction must certify
either that: (1) the licensee or lessor did not confer any benefit
(monetary or otherwise) to the assignee/lessee as consideration for
entering into the proposed ECIP transaction; or (2) if the parties
cannot make this certification, provide a description of the benefit(s)
conferred. In some transactions, for example, the consideration to an
assignee or lessee might include roaming privileges or sharing of
infrastructure that would not be indicative of a bad faith transaction,
but which nonetheless merits Commission review to ensure program
integrity. Second, each party to the transaction must certify that it
has entered into the transaction in good faith and that the licensee/
lessor reasonably believes that the assignee/lessee has the resources
and a bona fide intent to meet the program's obligations. We caution
prospective ECIP participants that making a false certification or
providing false information in an assignment or lease application is a
violation of the Commission's rules, which may result in a forfeiture
or other penalties. See 47 CFR 1.17, 1.80. Additionally, as indicated
in FCC Form 603 and 608, making a willful false statement in the form
or attachment is punishable by fine and/or imprisonment (under 18
U.S.C. 1001) and/or revocation of any station license or construction
permit (under 47 U.S.C. 312(a)(1)), and/or forfeiture (47 U.S.C. 503).
Additionally, we direct the Bureau to refer suspected ECIP-related
fraud or misrepresentation to the Enforcement Bureau.
5. Automatic Termination and Future Bar From ECIP Participation for
Failing To Meet Certain ECIP Requirements
Consistent with the MOBILE NOW Act, we adopt our proposal to
automatically terminate any license(s) assigned as part of an ECIP
transaction where the assignee: (1) fails to comply with the five-year
holding period; (2) fails to meet the relevant buildout requirement(s);
and/or (3) fails to fully comply with the operational requirement (for
rural-focused transactions). We also bar from future program
participation the licensee that was the subject of the automatic
termination and/or any lessee that fails to comply with the holding
requirement (including by subleasing or prematurely terminating their
lease) or is found to have engaged in a bad faith transaction to obtain
ECIP benefits, as well as any affiliate of those entities. This bar
will also apply to lessors that prematurely terminate a qualifying
lease. In addition, to ensure program integrity, we clarify that the
bar will apply indefinitely to the licensee, lessor, and/or lessee,
including any of its affiliates. This means any officer, director, or
entity that directly or indirectly controls the licensee or is directly
or indirectly controlled by the licensee, may be within the scope of
persons subject to the bar. In order to maximize administrative
efficiency, while also minimizing gamesmanship of our prohibition on
barred entities participating in ECIP, a prospective ECIP participant
will be considered ``an

[[Page 57414]]

affiliate of a barred entity'' if it was affiliated with that entity
either when the barred entity applied for the program for the
transaction for which it was barred or at the time the prospective ECIP
applicant applied to participate in the program. Once a licensee/lessee
has been barred from program participation, it will no longer be
eligible for ECIP benefits for future transactions, even if it enters
into transactions that would otherwise be eligible for such benefits.
We find that the two consequences we adopt today, i.e., automatic
license termination and a bar on future program participation, are
necessary and appropriate measures to deter program waste, fraud, and
abuse, given the substantial benefits being offered to ECIP
participants. Based on our experience administering wireless licenses
and programs that provide benefits in furtherance of the public
interest, we find that these two penalties are appropriate measures to
incentivize program participants to fulfill their core program
requirements. Importantly, the automatic termination provision is
consistent with section 616 of the MOBILE NOW Act, which provides that
``the right to the spectrum shall be forfeited'' if a party ``fails to
meet any build out requirements set by the Commission.'' MOBILE NOW Act
section 616(b)(3), (codified at 47 U.S.C. 1506(b)(3)). We also adopt
these penalties to impress upon program participants the importance of
meeting the obligations associated with receiving ECIP benefits and the
general need for program compliance to ensure the program operates
effectively.
At the same time, we seek to encourage ECIP participation by
ensuring that the penalties are targeted and proportional to the
gravity of the program participant's failure to meet its ECIP
obligations. We therefore limit the scope of actions that would merit
automatic license termination against the ECIP assignee to the
following: (1) failure to meet the five-year holding period; (2)
failure to meet the relevant construction requirement for all the
license(s) at issue, either interim or final deadline; and (3) failure
to meet the 100% coverage and three-year operational requirement for
the Qualifying Geography. The actions that will result in a bar from
future participation in ECIP by the culpable party, as applicable, and
its affiliates, are: (1) prematurely terminating a lease within the
minimum five-year term or entering into a sublease in violation of ECIP
rules; (2) failure to meet the five-year holding period; (3) failure to
meet the relevant construction requirement for the license(s) at issue,
either interim or final deadline; (4) failure to meet the 100% coverage
and three-year operational requirement for the Qualifying Geography;
and (5) entering into a transaction in bad faith, solely for the
purpose of obtaining program benefits.
We clarify that, where appropriate, the automatic termination
penalty will apply to the subject license regardless of whether the
service rules for that license would yield a more lenient result. We
also note that since an ECIP lessee does not hold the license subject
to a qualifying lease, the automatic license termination penalty would
not apply to it. With respect to an assignee failure identified above
in a rural-focused transaction, the automatic termination penalty will
apply to each license that makes up any part of the Qualifying
Geography. For example, if an ECIP transaction results in two assigned
licenses each consisting of Qualifying Geography of 150 square miles
for a total of 300 square miles of Qualifying Geography, the assignee's
failure to timely construct either license will result in the
termination of both licenses, given our requirement that the entire
Qualifying Geography must be constructed given the ECIP benefits
conferred.
Date on Which a Barred Licensee/Lessee Will Lose Eligibility to
Participate in the ECIP and Contents of Notification. When an ECIP
licensee/lessee has failed to meet one or more of the above criteria by
the relevant deadline(s), the bar commences on the date the licensee/
lessee receives notice, which the Bureau will provide by letter. The
letter will specify the reasons why the licensee/lessee will no longer
be permitted to participate in ECIP and explain the scope and effect of
the penalty. Additionally, we find that, consistent with the
Commission's notice rules, notice has been provided once the Bureau
sends such letter via electronic mail, using the last email address of
record in ULS for that licensee/lessee. 47 CFR 1.5.
Effect of Being Barred from Program Participation. Once an ECIP
participant has been barred from future program participation, it,
along with its affiliates, are no longer eligible to receive ECIP
benefits for entering into subsequent Qualifying Transactions. This
applies to all parties in a transaction which would otherwise be ECIP-
eligible; if a barred entity is a party to the transaction, it is not
ECIP-eligible and no ECIP benefits will flow to any party to that
transaction, even if the transaction meets all other ECIP criteria.
Given that the established bar is from future program participation, a
barred licensee/lessee will continue to receive existing ECIP benefits
acquired through unrelated prior ECIP transactions, provided those
benefits were conferred prior to the start date of the bar. We clarify
that once an entity has been barred from participation in the program,
the Commission will not process a pending application for ECIP
participation to which it is a party, even where the application was
initially accepted for filing prior to the date the bar commenced.
6. Limitations on Additional ECIP Benefits for Subsequent Transactions
We will not provide additional ECIP benefits where a licensee has
already received benefits for a license involved in a previous ECIP
transaction. Specifically, if a license in a given transaction has
previously been involved in any ECIP-related transaction and received
ECIP benefits as a result, any party that holds that license (or some
portion thereof) cannot subsequently receive ECIP benefits by including
that license (including any sub-parts of the license, spectrally or
geographically) in another ECIP transaction. This restriction applies
to the original license in the ECIP transaction, as well as to the
licenses issued through a partition and/or disaggregation. We adopt
this limitation to prevent licensees from undermining our renewal and
construction requirements by compounding ECIP-related extensions
through multiple ECIP transactions.

F. ECIP Evaluation Report

To ensure ECIP promotes competition and increases spectrum access
for small carriers and Tribal Nations, as well as increases service to
rural areas, we direct the Bureau to evaluate the progress and
effectiveness of the ECIP program and submit a report to the
Commission, no later than five years following the effective date of
this final rule. Because the report could benefit from input from
interested stakeholders, we also direct the Bureau and the Consumer and
Governmental Affairs Bureau to conduct outreach, prior to the Bureau
drafting the report, in order to yield meaningful evaluation and
feedback of the ECIP from those interested stakeholders. As part of
this outreach, we expect that both the Bureau and the Consumer and
Governmental Affairs Bureau will monitor the program's effectiveness
for Tribal Nations. The report should include information about ECIP
participation by eligible stakeholders, including the number of ECIP

[[Page 57415]]

transactions since the inception of the program, as well as geographic
areas and spectrum made available under each prong of the program. The
report may include recommended rule and policy changes that would help
improve the effectiveness of the program, including an assessment of
whether the program is achieving benefits for Tribal Nations. Finally,
the report should be made publicly available, although the Bureau may
also prepare a non-public version with commercially sensitive
information, if needed.

G. Reaggregation of Spectrum Licenses

Independent of establishing ECIP, we adopt rules permitting license
reaggregation up to the original geographic size and spectrum band(s)
for the type of license, and also adopt accompanying proposed
safeguards. We find that allowing reaggregation will ease the
administrative burden on both licensees and Commission staff. Further,
we find that allowing reaggregation will create more certainty
regarding our secondary markets rules and procedures to encourage
licensees to engage in these types of transactions in the first
instance.
Specifically, applicants seeking license reaggregation will be
required to submit an application requesting a major modification
pursuant to Commission rule Sec. 1.929, 47 CFR 1.929, as well as an
attachment certifying compliance with three safeguards. The compliance
certification must state that each license to be reaggregated has: (1)
met all performance requirements (both interim and final benchmarks);
(2) been renewed at least once after meeting any relevant continuing
service or operational requirements; and (3) not violated the
Commission's permanent discontinuance rules. These safeguards are
intended to ensure that licensees seeking to reaggregate licenses are
not doing so merely to avoid complying with the regulatory requirements
(e.g. meeting performance benchmarks) associated with each license to
be reaggregated.
After review of the record, we agree with the majority of
commenters that argue allowing reaggregation creates a certainty that a
license holder could re-aggregate partitioned or disaggregated licenses
in the future which would eliminate a potential reason not to partition
or disaggregate in the first instance. We find that establishing a
formal process for license reaggregation reduces regulatory and
administrative burdens and could incentivize, not undermine, secondary
market transactions consistent with the purposes of the ECIP and the
goals of the MOBILE NOW Act. As the record reflects, we anticipate that
requests for reaggregation will be submitted by licensees that, for
business reasons, have reacquired licenses in their (or an affiliated
party's) name potentially as part of a larger transaction, and now seek
to reaggregate previously partitioned and/or disaggregated licenses
into a single license largely for administrative purposes. We find that
the substantial benefit of establishing a formal process for license
reaggregation, coupled with our proposed safeguards to qualify for
reaggregation, renders a five-year holding period unnecessary.
Accordingly, we adopt our proposal to permit license reaggregation, up
to the original geographic size and spectrum band(s) for the type of
license, including the three safeguards described above to protect
against potential abuses. We also clarify that in the event licenses
identified in a voluntarily filed application for reaggregation have
varying expiration dates, we will apply the earliest such date to the
overall reaggregated license for reasons of administrative convenience,
and to prevent the windfall of license term extensions achieved merely
by seeking license reaggregation.
Treatment of Existing Waivers Grants or Special Conditions. We find
it in the public interest to apply a flexible approach to reaggregation
requests that maintains previously granted relief where applicable. We
also find, however, that an automatic application of the terms and
conditions of an individual license, that may have been subject to
waiver relief, to the entire reaggregated license is not warranted
absent a separate justification. We will apply special conditions (to
reflect prior grant of waiver of application or special conditions) to
a reaggregated license as necessary to identify the appropriate type
and scope of relief, both spectrally and geographically, applicable to
subparts of that license (e.g., variations in transmit power levels,
out-of-band emission limits or other technical parameters, or
alternative interference protection criteria, for specific spectrum or
geographic areas associated with the reaggregated license). Finally, we
direct the Bureau to issue a public notice confirming the
administrative details of required filings including, for example, the
filing method, electronic map format, and applicable fees. See, e.g.,
Wireline Competition Bureau Provides Guidance to Carriers Receiving
Connect America Fund Support Regarding Their Broadband Location
Reporting Obligations, Docket No. 10-90, Public Notice, 31 FCC Rcd
12900 (WCB 2016) (providing guidance Public Notice (PN) describing
required information and filing parameters to enable carrier compliance
with earlier Commission order); Wireless Telecommunications Bureau To
Accept 900 MHz Broadband Segment Applications Beginning May 27, 2021,
WT Docket No. 17-200, Public Notice, 36 FCC Rcd 7377 (WTB 2021).

List of Subjects in 47 CFR part 1

Practice and procedure, Reporting and recordkeeping requirements,
Telecommunications, Wireless radio services.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 1 as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for part 1 continues to read as follows:

Authority: 47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note,
unless otherwise noted.

0
2. Delayed indefinitely, amend Sec. 1.929 by adding paragraph (a)(7)
to read as follows:

Sec. 1.929 Classification of filings as major or minor.

* * * * *
(a) * * *
(7) Application or amendment requesting reaggregation of licenses
pursuant to Sec. 1.950.
* * * * *

0
3. Amend Sec. 1.948 by revising paragraph (j) to read as follows:

Sec. 1.948 Assignment of authorization or transfer of control,
notification of consummation.

* * * * *
(j) Processing of applications. Applications for assignment of
authorization or transfer of control relating to the Wireless Radio
Services will be processed pursuant either to general approval
procedures or the immediate approval procedures, as discussed in this
paragraph (j).
(1) General approval procedures. Applications 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 (j)(2) of this section.
(i) To be accepted for filing under these general approval
procedures, the

[[Page 57416]]

application must be sufficiently complete and contain all necessary
information and certifications requested on the applicable form, FCC
Form 603, including any information and certifications (including those
of the proposed assignee or transferee relating to eligibility, basic
qualifications, and foreign ownership) required by the rules of this
chapter and any rules pertaining to the specific service for which the
application is filed, and must include payment of the required
application fee(s) (see Sec. 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 Sec. 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 Sec. 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, if filed electronically, and
any required application fee has been paid (see Sec. 1.1102); if filed
manually, 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 after the necessary data in the
manually filed application is entered into ULS.
(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 Sec. 1.933(a)) promptly issued after the grant.
(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 (j)(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 (j)(1) 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 assigned or transferred, create a geographic overlap with spectrum
in any licensed Wireless Radio Service (including the same service) in
which the proposed assignee or transferee already holds a direct or
indirect interest of 10% or more (see Sec. 1.2112), either as a
licensee or a spectrum lessee, and that could be used by the assignee
or transferee 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 Sec. Sec. 1.2110, and 1.2111 and
Sec. Sec. 24.709, 24.714, and 24.839 of this chapter);
(C) The assignment or transfer of control does not require a waiver
of, or declaratory ruling pertaining to, any applicable Commission
rules in this chapter, and there is no pending issue as to whether the
license is subject to revocation, cancellation, or termination by the
Commission; and
(D) The assignment application does not involve a transaction in
the Enhanced Competition Incentive Program (see subpart EE of this
part).
(ii) Provided that the application establishes that it meets all of
the requisite elements to qualify for these immediate approval
procedures, consent to the assignment or transfer of control will be
reflected in ULS. If the application is filed electronically, consent
will be reflected in ULS on the next business day after the filing of
the application; if filed manually, consent will be reflected in ULS on
the next business day after the necessary data in the manually filed
application is entered into ULS. Consent to the application is not
deemed granted until the Bureau affirmatively acts upon the
application.
(iii) Grant of consent to the application under these immediate
approval procedures will be reflected in a public notice (see Sec.
1.933(a)) promptly issued after the grant, and is subject to
reconsideration (see Sec. Sec. 1.106(f), 1.108, and 1.113).

0
4. Delayed indefinitely, amend Sec. 1.950 as follows:
0
a. Revise the section heading;
0
b. Add paragraphs (a)(4) and (b)(3);
0
c. Revise the heading of paragraph (c) and paragraph (e); and
0
d. Add paragraph (i).
The revisions and additions read as follows:

Sec. 1.950 Geographic partitioning, spectrum disaggregation, and
reaggregation.

(a) * * *
(4) Reaggregation. Reaggregation is the consolidation into a single
license of two or more licenses previously disaggregated and/or
partitioned.
(b) * * *
(3) Reaggregation. An eligible licensee may reaggregate its covered
geographic license(s), provided the requirements of paragraph (i) of
this section are met, and subject to the following exceptions:
(i) 220 MHz Service licensees must comply with Sec. 90.1019 of
this chapter.
(ii) Cellular Radiotelephone Service licensees must comply with
Sec. 22.948 of this chapter.
(c) Partitioning and disaggregation filing requirements. * * *
* * * * *
(e) License term. The license term for a partitioned license or a
disaggregated spectrum license is the remainder of the original
licensee's license term. The license term for a reaggregated license is
the remainder of the license term of the license with the earliest
expiration date of those included in the underlying reaggregation
application.
* * * * *
(i) Reaggregation of licenses. A licensee may apply to reaggregate
two or more licenses that were previously disaggregated or partitioned
pursuant to this section. Licenses may be reaggregated in any
combination up to, but not exceeding, the original geographic size and/
or spectrum band(s) for the type of Wireless Radio Service license at
issue (i.e., a licensee may, but

[[Page 57417]]

is not required, to reaggregate all licenses which were once part of
the original license).
(1) Prerequisites for reaggregation. Licenses will only be eligible
for reaggregation if they meet the following requirements:
(i) All licenses to be reaggregated must be of the same radio
service, and have the same market and channel block;
(ii) Each license to be reaggregated must have met all applicable
performance requirements, including any interim and final requirements,
prior to the filing of the reaggregation application;
(iii) Each license to be reaggregated must have been renewed for at
least one license term since the applicable performance requirements
were met; and
(iv) None of the licenses for which an applicant seeks
reaggregation have violated the Commission's permanent discontinuance
rules, as applicable to that license.
(2) Filing requirements for reaggregation. Parties seeking approval
for reaggregation must apply by filing a major modification application
using FCC Form 601 that complies with the filing requirements described
in Sec. Sec. 1.913, 1.929, and 1.947, and that includes the following
attachments:
(i) A certification that the licenses meet the requirements of
paragraphs (i)(1)(i) through (iv) of this section;
(ii) An electronic map and table that together identify all
licenses and spectrum to be aggregated and identify the composite
license requested;
(iii) A certification that all licenses in the reaggregation
request are active under the same FCC Registration Number at the time
of filing;
(iv) A per-license list of all special conditions and a statement
acknowledging that the listed special conditions will continue to apply
only to that portion of the reaggregated license with respect to the
spectrum and/or geography at issue, as if the license had not been
reaggregated; and
(v) A per-license list of all waivers granted and a statement of
understanding that the listed waiver(s) do not automatically convey to
any other portion of the reaggregated license. If applicable, the
applicant shall include a statement indicating that it is seeking
waiver relief through a separately filed waiver request seeking to
expand the scope of previously granted relief.

0
5. Amend Sec. 1.9020 as follows:
0
a. Remove ``and,'' at the end of paragraph (e)(2)(i)(B);
0
b. Remove the period at the end of paragraph (e)(2)(i)(C) and add ``;
and'' in its place; and
0
c. Add paragraph (e)(2)(i)(D).
The addition reads as follows:

Sec. 1.9020 Spectrum manager leasing arrangements.

* * * * *
(e) * * *
(2) * * *
(i) * * *
(D) The application does not involve a transaction in the Enhanced
Competition Incentive Program (see subpart EE of this part).
* * * * *

0
6. Amend Sec. 1.9030 as follows:
0
a. Remove ``and,'' at the end of paragraph (e)(2)(i)(B);
0
b. Remove the period at the end of paragraph (e)(2)(i)(C) and add ``;
and'' in its place; and
0
c. Add paragraph (e)(2)(i)(D).
The addition reads as follows:

Sec. 1.9030 Long-term de facto transfer leasing arrangements.

* * * * *
(e) * * *
(2) * * *
(i) * * *
(D) The application does not involve a transaction in the Enhanced
Competition Incentive Program (see subpart EE of this part).
* * * * *

0
7. Add subpart EE, consisting of Sec. Sec. 1.60000 through 1.60007, to
read as follows:

Subpart EE--Enhanced Competition Incentive Program

Sec.
1.60000 Purpose.
1.60001-1.60007 [Reserved]

Sec. 1.60000 Purpose.

The purpose of this subpart is to implement the Enhanced
Competition Incentive Program (ECIP), a program designed to incentivize
Qualifying Transactions in the Wireless Radio Services to increase
spectrum access for small carriers and Tribal Nations and to increase
competition, and also facilitate the provision of advanced
telecommunications services in rural areas by eligible entities.

Sec. Sec. 1.60001-1.60007 [Reserved]

0
8. Delayed indefinitely, add Sec. Sec. 1.60001 through 1.60007 to read
as follows:
Sec.
1.60001 Definitions.
1.60002 Application requirements for program participation.
1.60003 Small carrier or tribal nation transaction prong.
1.60004 Rural-focused transaction prong.
1.60005 Program benefits.
1.60006 Program obligations.
1.60007 Penalties.

Sec. 1.60001 Definitions.

The following definitions are applicable to the ECIP.
(a) Affiliate. A person holding an attributable interest in an
applicant if such individual or entity:
(1) Directly or indirectly controls or has the power to control the
applicant; or
(2) Is directly or indirectly controlled by the applicant; or
(3) Is directly or indirectly controlled by a third party or
parties that also controls or has the power to control the applicant;
or
(4) Has an ``identity of interest'' with the applicant.

Note 1 to paragraph (a). See Sec. Sec. 1.2110 and 1.2112(a)(1)
through (7) for further clarification on determining affiliation.

(b) Qualifying transaction. A transaction between unaffiliated
parties involving a partition and/or disaggregation, long-term leasing
arrangement, or full assignment that meets the requirements of either
the small carrier or Tribal Nation transaction prong pursuant to Sec.
1.60002 or the rural-focused transaction prong pursuant to Sec.
1.60003.
(c) Qualifying geography. Qualifying Geography is the minimum
geography threshold required for the rural-focused transaction prong.
(d) Rural area. Rural area is any area except:
(1) A city, town, or incorporated area that has a population of
more than 20,000 inhabitants; or
(2) An urbanized area contiguous and adjacent to a city or town
that has a population of more than 50,000 inhabitants.
(e) Small carrier. A small carrier is a carrier, defined as any
person engaged as a common carrier for hire, in interstate or foreign
communication by wire or radio or interstate or foreign radio
transmission of energy in section 3 of the Communications Act of 1934
(47 U.S.C. 153), that:
(1) Has not more than 1,500 employees (as determined under 13 CFR
121.106); and
(2) Offers services using the facilities of the carrier.
(f) Transaction geography. Transaction Geography is the total
geography included in a Qualifying Transaction.
(g) Tribal nation. A Tribal Nation is any federally-recognized
American Indian Tribe and Alaska Native Village, the consortia of
federally recognized

[[Page 57418]]

Tribes and/or Native Villages, and other entities controlled and
majority-owned by such Tribes or consortia.

Sec. 1.60002 Application requirements for program participation.

Applicants seeking to participate in the ECIP must submit an
application on FCC Form 603 or 608, as applicable, to the Wireless
Telecommunications Bureau for review and approval that details a
Qualifying Transaction through a partition and/or disaggregation
pursuant to Sec. 1.950, a full assignment pursuant to Sec. 1.948, a
long-term spectrum manager lease arrangement pursuant to Sec. 1.9020,
or a long-term de facto transfer lease arrangement pursuant to Sec.
1.9030, and that:
(a) Designates that the Qualifying Transaction identified in the
application seeks consideration under the ECIP;
(b) Selects the prong applicable to its Qualifying Transaction,
either Sec. 1.60003 or Sec. 1.60004, but not both, even if a party to
the transaction is eligible under both prongs, and demonstrates that
the applicants meet each requirement under Sec. 1.60003 or Sec.
1.60004;
(c) Demonstrates that the applicants to the Qualifying Transaction
are unaffiliated by providing a list of all affiliated entities for
each party to the transaction through the filing of a new FCC Form 602,
or the filing of an updated FCC Form 602 if the ownership information
is not current;
(d) Includes a certification that the applicants to the Qualifying
Transaction are not barred from the ECIP pursuant to Sec. 1.60007;
(e) Includes a certification that the license(s) included in the
application have not previously received benefits under the ECIP
pursuant to Sec. 1.60005(e);
(f) Includes a certification that the applicants entered into the
Qualifying Transaction in good faith and that the licensee/lessor
reasonably believes the assignee/lessee has the resources and a bona
fide intent to meet the program's obligations;
(g) Includes a certification that the assignor or lessor either did
not confer any benefit (monetary or otherwise) to the assignee or
lessee as consideration for entering into the proposed ECIP transaction
or, if benefits were conferred to the assignee or lessee, the
application must include a narrative with a detailed description of any
benefits so conferred by the assignor or lessor to the assignee or
lessee, respectively; and
(h) Includes a certification that any lease arrangement entered
into for purposes of ECIP participation is for a minimum term of five
(5) years, whether a long-term de facto transfer lease arrangement or a
long-term spectrum manager lease arrangement.

Sec. 1.60003 Small carrier or tribal nation transaction prong.

(a) Eligibility. The following parties are eligible to participate
through a Qualifying Transaction under the small carrier or Tribal
Nation transaction prong of the ECIP: an assignor that is a covered
geographic licensee as defined under Sec. 1.907; a lessor in an
included service as set forth in Sec. 1.9005 that is also a covered
geographic licensee as defined under Sec. 1.907; and an unaffiliated
assignee or unaffiliated lessee that is a small carrier or a Tribal
Nation as defined in this subpart, except that a transaction shall not
be eligible for participation in the ECIP under this prong if it
includes either:
(1) A license(s) with existing shared construction obligations
pursuant to Sec. 1.950(g);
(2) An application to participate in ECIP that includes an election
from the parties to share construction obligations pursuant to Sec.
1.950(g);
(3) A light-touch leasing spectrum manager lease arrangement(s) of
3.5 GHz Priority Access Licenses in the Citizens Band Radio Service; or
(4) An application to participate in ECIP that includes a barred
party pursuant to Sec. 1.60007.
(b) Qualification requirements. An applicant in a Qualifying
Transaction under the small carrier or Tribal Nation transaction prong
must demonstrate that:
(1) The ECIP transaction involving a disaggregation, partition/
disaggregation in combination, full license assignment, or a lease,
includes a minimum of 50% of the licensed spectrum, and meets the
minimum spectrum threshold at every point in the Transaction Geography
(where the percentage is calculated at any point as the amount of
spectrum being assigned/leased (in megahertz)/total spectrum held under
the license (in megahertz);
(2) The ECIP transaction involving a partition, partition/
disaggregation in combination, full license assignment, or a lease,
includes a minimum Transaction Geography of 25% of the total licensed
area for licenses with a licensed area that contains 30,000 square
miles or less, or a minimum Transaction Geography of 10% of the total
licensed area for licenses with a licensed area 30,001 square miles or
larger;
(3) If a lease arrangement, the minimum term of a long-term
spectrum manager lease or de facto transfer lease is at least five (5)
years; and
(4) The ECIP transaction was entered into in good faith with a bona
fide intent by all parties to meet the program's obligations.
(c) Qualifying Transaction limitations. Multiple licenses may be
included in a Qualifying Transaction between unaffiliated parties under
this prong, however, spectrum and geography cannot be aggregated across
multiple licenses to meet the respective minimum thresholds; each
license in a Qualifying Transaction shall be considered separately and
must independently meet the respective minimum spectrum and geography
thresholds in paragraph (b) of this section. Each license included in a
Qualifying Transaction under this prong shall either be the subject of
an assignment (full, partition and/or disaggregation) or a lease
arrangement, but not both. A party to a Qualifying Transaction under
this prong is not permitted to assign a part of a license and lease a
different part of the same license to meet the respective minimum
spectrum and geographic thresholds.

Sec. 1.60004 Rural-focused transaction prong.

(a) Eligibility. The following parties are eligible to participate
through a Qualifying Transaction under the rural-focused transaction
prong of the ECIP: an assignor that is a covered geographic licensee as
defined by Sec. 1.907; a lessor in an included service as set forth in
Sec. 1.9005 that is also a covered geographic licensee as defined by
Sec. 1.907; and an unaffiliated assignee or lessee that commits to
meeting the requirements of the rural-focused transaction prong, except
that a transaction shall not be eligible for participation in the ECIP
under this prong if it includes either:
(1) A license(s) with existing shared construction obligations
pursuant to Sec. 1.950(g);
(2) An application to participate in ECIP that includes an election
from the parties to share construction obligations pursuant to Sec.
1.950(g);
(3) A light-touch leasing spectrum manager lease arrangement(s) of
3.5 GHz Priority Access Licenses in the Citizens Band Radio Service; or
(4) An application to participate in ECIP that includes a barred
party pursuant to Sec. 1.60007.
(b) Qualification requirements. An applicant in a Qualifying
Transaction under the rural-focused transaction prong must demonstrate
that:
(1) The ECIP transaction involving a disaggregation, partition/
disaggregation in combination, or a lease, includes a minimum of 50% of
the licensed

[[Page 57419]]

spectrum, and meets the minimum spectrum threshold at every point in
the Transaction Geography (where the percentage is calculated at any
point as the amount of spectrum being assigned/leased (in megahertz)/
total spectrum held under the license (in megahertz));
(2) The minimum Qualifying Geography threshold of exclusively rural
area is included in the application based on the following scaled
categories:
(i) 300 contiguous square miles for contributing licenses with
licensed area containing up to 30,000 square miles;
(ii) 900 contiguous square miles for contributing licenses with
licensed area containing between 30,001-90,000 square miles;
(iii) 5,000 contiguous square miles for contributing licenses with
licensed area containing between 90,001-500,000 square miles; or
(iv) 15,000 contiguous square miles for contributing licenses with
licensed area containing 500,001 square miles or more;
(3) If a lease arrangement, the minimum term of a long-term
spectrum manager lease or de facto transfer lease is at least five (5)
years; and
(4) The ECIP transaction was entered into in good faith with a bona
fide intent by all parties to meet the program's obligations.
(c) Multiple contributing licenses. Qualifying Transactions between
unaffiliated parties under the rural-focused transaction prong must
specify at least one area of Qualifying Geography, and one or more
licenses may contribute, via any combination of full assignment,
partitioning and/or disaggregation, and/or lease(s), provided the
Qualifying Geography intersects each contributing license included in
the underlying application. Where multiple licenses with different size
licensed areas are included in the Qualifying Transaction and each
contributes to the Qualifying Geography, the Qualifying Geography must
consist of the minimum geographic threshold applicable to the
contributing license with the greatest square mileage in its licensed
area.

Sec. 1.60005 Program benefits.

(a) Program benefits. The following benefits for license(s)
included in an ECIP Qualifying Transaction filed pursuant to Sec.
1.60002, shall be conferred upon consummation of a Commission approved
assignment application, grant of a de facto transfer lease application,
or acceptance of a spectrum manager lease application, as specified:
(1) License term extension. All parties to a partition and/or
disaggregation Qualifying Transaction; the lessor entering into a
spectrum lease arrangement Qualifying Transaction; and the assignee in
a full license assignment Qualifying Transaction, shall receive a five-
year license term extension on the license(s) subject to the
application.
(2) Construction extension. All parties to a partition and/or
disaggregation Qualifying Transaction; the lessor entering into a
spectrum lease arrangement Qualifying Transaction; and the assignee in
a full license assignment Qualifying Transaction, shall receive a one-
year construction extension of both the interim and final performance
requirement deadline, where applicable, on the license(s) subject to
the application. Where the Commission has previously extended a
performance requirement deadline on the license(s) and that deadline
has not passed, the one year extension conferred through ECIP is in
addition to the prior extension, provided the extension that was
previously granted, whether by rule or through waiver, is
transferrable, and the assignee separately justifies such relief if
required.
(3) Substitution of alternative construction requirement. The
assignee in a qualifying partition, combination partition
disaggregation transaction, or full license assignment filed under the
rural focused-transaction prong in Sec. 1.60004, shall be subject to
the alternative construction requirement set forth in Sec. 1.60006 in
lieu of any applicable service-based performance requirement for the
license(s) resulting from an ECIP transaction. Where the Commission has
previously modified the assignor's substantive service-based
performance requirement through conditions granted by waiver and such
requirements have not been met, the assignee will receive the
substituted alternative construction requirement benefit if the
assignee separately requests, and is granted, a waiver.
(b) Limitation on duplicative benefits. (1) A license included in a
Commission approved Qualifying Transaction in the ECIP shall be
eligible for program benefits a single time per license for the license
term and all subsequent renewal terms.
(2) A license, including a license resulting from a partition and/
or disaggregation, previously included in a Qualifying Transaction
approved by the Commission in the ECIP, shall be ineligible to receive
benefits in any subsequent ECIP transaction, regardless of whether the
current licensee was the beneficiary in the original or a subsequent
Qualifying Transaction.

Sec. 1.60006 Program obligations.

(a) Compliance with requirements under selected prong. An assignee
or lessee must comply with the requirements of either the small carrier
or Tribal Nation transaction prong in Sec. 1.60003 or the rural-
focused transaction prong in Sec. 1.60004, as selected in its ECIP
application, and is not permitted to change prongs after the
consummation of the Commission approved assignment application, grant
of a de facto transfer lease application, or acceptance of a spectrum
manager lease application for a Qualifying Transaction in ECIP.
(b) Construction requirement for rural-focused transaction prong
assignees. Assignees shall be subject to the following construction
requirements for any resulting license(s) granted in a Commission
approved Qualifying Transaction through partition, a combination
partition/disaggregation, or full license assignment filed under the
rural-focused transaction prong in ECIP, which supersedes any service-
based requirement:
(1) The assignee must construct and operate, or provide signal
coverage and offer service to, 100% of the Qualifying Geography
identified in the Commission approved Qualifying Transaction.
(2) The construction period is the applicable construction deadline
identified on the respective license(s), as extended by Sec. 1.60005.
If no such deadline remains for the license(s), the assignee must
construct and operate, or provide signal coverage and offer service to,
100% of the Qualifying Geography no later than two (2) years after the
consummation of the Commission approved application.
(3) Where the assignee is subject to both an interim and final
performance benchmark, the performance requirements in this paragraph
(b) shall replace the interim performance benchmark and the assignee
shall not be subject to a final performance requirement. Where the
assignee has only a remaining final performance requirement, the
performance requirements in this paragraph (b) shall replace the final
benchmark.
(4) All end user devices throughout the Qualifying Geography must
be capable of operation on all spectrum bands associated with
license(s) that contribute to the Qualifying Geography.
(5) Consistent with Sec. 1.946(d), notification of completion of
construction must be provided to the Commission through the filing of
FCC Form 601, no later than 15 days after the applicable construction
deadline or the expiration of the two (2) year period in paragraph
(b)(2) of this section.

[[Page 57420]]

(c) Operational requirement for rural-focused transaction prong
assignees. Assignees in a Commission approved rural-focused transaction
pursuant to Sec. 1.60004 are subject to the following operational
requirements:
(1) Assignees must construct and operate in, or provide signal
coverage and offer service to, 100% of the Qualifying Geography
identified in the Commission approved Qualifying Transaction for a
period of at least three (3) consecutive years;
(2) Operation or service must not fall below that used to meet the
construction requirement in paragraph (b) of this section for the
entire three (3) year period; and
(3) Assignees must construct and operate, or provide signal
coverage and offer service, as required pursuant to paragraph (b) of
this section, by the applicable construction deadline identified on the
license(s), as extended by Sec. 1.60005. Where no such deadline
remains for the license(s), the three (3) year continuous operational
requirement must commence no later than two (2) years after the
consummation of the Commission approved application filed pursuant to
Sec. 1.60002.
(d) Construction and operational requirements for rural-focused
transaction prong leases. Lessees must construct and operate, or
provide signal coverage and offer service to, 100% of the Qualifying
Geography identified in the underlying Qualifying Transaction that was
the basis for Commission approval in the ECIP. Lessees must meet this
requirement no later than two (2) years after grant of the underlying
de facto transfer lease application or acceptance of the underlying
spectrum manager lease application, and must maintain operation for a
period of at least three (3) consecutive years during any period within
the initial minimum required five (5) year lease term.
(e) Operational requirement notifications. Assignees and/or lessees
of rural-focused transactions subject to Sec. 1.60004 must file the
following notifications to demonstrate compliance with the requirements
in paragraphs (a) through (c) of this section:
(1) Initial operational requirement notification. Assignees and/or
lessees must file an initial operational notification with the
Commission within 30 days of the commencement of operations that:
(i) Provides the date operations began;
(ii) Certifies that the operational requirement of 100% coverage of
the Qualifying Geography for that assigned license or lease has been
satisfied; and
(iii) Provides technical data demonstrating such compliance.
(2) Final operational requirement notification. Assignees and/or
lessees must file a final operational notification requirement with the
Commission within 30 days of completion of the three consecutive year
operational requirement that:
(i) Certifies that the operational requirement of 100% coverage of
the Qualifying Geography for three (3) consecutive years has been
satisfied;
(ii) Provides the date the three (3) year period was completed; and
(iii) Provides technical data demonstrating the coverage provided
during the three (3) year period.
(f) Holding period. Assignees and/or lessees participating in ECIP
under either the small carrier or Tribal Nation transaction prong set
forth in Sec. 1.60003, or the rural-focused transaction prong set
forth in Sec. 1.60004, must comply with the following obligations:
(1) Assignees. An assignee of a license(s) granted in a Qualifying
Transaction involving a partition and/or disaggregation or full
assignment is required to hold any such license(s) for a period of at
least five (5) years, commencing upon the consummation date of the
Commission approved application filed pursuant to Sec. 1.60002. During
this holding period, except as provided in paragraph (g) of this
section, the license(s) received through ECIP is not permitted to be
further partitioned, disaggregated, assigned, or leased.
(2) Lessees. Lease arrangements subject to the ECIP shall not be
terminated by either lessor or lessee prior to the expiration of the
five (5) year term required by Sec. 1.60003(b)(3) or Sec.
1.60004(b)(3), where applicable, and, except as provided in paragraph
(g) of this section, may not be transferred or subleased to another
party during the five (5) year term.
(3) Rural-focused transaction prong assignees. Any license(s)
resulting from a Qualifying Transaction under the rural-focused
transaction prong pursuant to Sec. 1.60004 may not be subsequently
assigned (partition and/or disaggregation or full assignment), leased
or transferred until the following conditions have been met:
(i) The license(s) has been held by the assignee of the Qualifying
Transaction for a period of at least five (5) years commencing on the
date of consummation of the Commission approved application filed
pursuant to Sec. 1.60002; and
(ii) The construction and operational requirements pursuant to
paragraphs (a) through (d) of this section, where applicable, have been
satisfied.
(g) Exceptions. The requirements in paragraphs (a) through (e) of
this section do not apply to pro forma transfers pursuant to Sec.
1.948(c)(1), and do not apply to any area of the Transaction Geography
and/or Qualifying Geography, which is covered by a lease or sublease
entered into for the purpose of enabling a Contraband Interdiction
System (as defined in Sec. 20.30 of this chapter).

Sec. 1.60007 Penalties.

(a) Automatic termination. A license(s) resulting from a Qualifying
Transaction in the ECIP shall be automatically terminated without
specific Commission action or further notice to the licensee,
superseding any service-based penalty, if the assignee fails to comply
with any of the following:
(1) The five (5) year holding period pursuant to Sec. 1.60006(e);
(2) The construction requirement pursuant to Sec. 1.60006(a) or
(c), or any remaining service-based performance requirement, where
applicable; or
(3) The operational requirements pursuant to Sec. 1.60006(b) or
(c), where applicable.
(b) Bar from future program participation. A party participating in
a Commission approved Qualifying Transaction in the ECIP shall be
prohibited from future participation in the ECIP where it is found that
it:
(1) Violated the five (5) year holding period requirements of Sec.
1.60006(e), including premature termination of a lease or entering into
a sublease in violation of Sec. 1.60006(f)(2), if applicable;
(2) Failed to meet the construction requirement of Sec. 1.60006(a)
or (c), or any remaining service-based performance requirement, where
applicable;
(3) Failed to meet the operational requirements of Sec. 1.60006(b)
or (c), where applicable; or
(4) Entered into a bad faith transaction in violation of Sec.
1.60003(b)(4) or Sec. 1.60004(b)(4).
(c) Effect of program bar. A bar from ECIP is applied as follows:
(1) A program bar shall commence upon the date the assignee or
lessee receives notice from the Commission via electronic mail finding
a violation pursuant to paragraph (b) of this section. A barred party
shall be eligible to continue to receive benefits from Qualifying
Transactions in ECIP that are unrelated to the Qualifying Transaction
that resulted in the program bar, provided that those benefits were
conferred prior to the commencement of the program bar, as a result of
the

[[Page 57421]]

Commission accepting a consummation of an approved assignment
application, granting a de facto transfer lease application, or
accepting a spectrum manager lease application, as applicable.
(2) A program bar shall also apply to affiliates of barred parties.
Third-parties shall be considered affiliates of a barred party if they
qualify as an affiliate under Sec. 1.60001. A prospective ECIP
participant will be considered a barred affiliate when either:
(i) The third-party was identified, or should have been identified,
as an affiliate on the initial Commission approved application for the
Qualifying Transaction resulting in the bar; or
(ii) The third-party identifies, or should have identified, a
barred affiliate in a subsequent application to participate in the
ECIP, regardless of whether they were affiliates at the time of the
filing of the initial application for a Qualifying Transaction
resulting in the bar.
(3) Transactions that include a barred party shall not be eligible
for ECIP benefits, even if all other qualifications are satisfied.

[FR Doc. 2022-17520 Filed 9-19-22; 8:45 am]
BILLING CODE 6712-01-P

</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on September 20, 2022.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.