§  20.6   CMRS spectrum aggregation limit.

   (a) Spectrum limitation. No licensee in the broadband PCS, cellular, or
   SMR services (including all parties under common control) regulated as
   CMRS ( see 47 CFR 20.9) shall have an attributable interest in a total
   of more than 55 MHz of licensed broadband PCS, cellular, and SMR
   spectrum regulated as CMRS with significant overlap in any geographic
   area.

   (b) SMR spectrum. To calculate the amount of attributable SMR spectrum
   for purposes of paragraph (a) of this section, an entity must count all
   800 MHz and 900 MHz channels located at any SMR base station inside the
   geographic area (MTA or BTA) where there is significant overlap. All
   800 MHz channels located on at least one of those identified base
   stations count as 50 kHz (25 kHz paired), and all 900 MHz channels
   located on at least one of those identified base stations count as 25
   kHz (12.5 kHz paired); provided that any discrete 800 or 900 MHz
   channel shall be counted only once per licensee within the geographic
   area, even if the licensee in question utilizes the same channel at
   more than one location within the relevant geographic area. No more
   than 10 MHz of SMR spectrum in the 800 and 900 MHz SMR services will be
   attributed to an entity when determining compliance with the cap.

   (c) Significant overlap. (1) For purposes of paragraph (a) of this
   section, significant overlap of a PCS licensed service area and CGSA(s)
   (as defined in §  22.911 of this chapter) or SMR service area(s) occurs
   when at least 10 percent of the population of the PCS licensed service
   area for the counties contained therein, as determined by the latest
   available decennial census figures as complied by the Bureau of the
   Census, is within the CGSA(s) and/or SMR service area(s).

   (2) The Commission shall presume that an SMR service area covers less
   than 10 percent of the population of a PCS service area if none of the
   base stations of the SMR licensee are located within the PCS service
   area. For an SMR licensee's base stations that are located within a PCS
   service area, the channels licensed at those sites will be presumed to
   cover 10 percent of the population of the PCS service area, unless the
   licensee shows that its protected service contour for all of its base
   stations covers less than 10 percent of the population of the PCS
   service area.

   (d) Ownership attribution. For purposes of paragraph (a) of this
   section, ownership and other interests in broadband PCS licensees,
   cellular licensees, or SMR licensees will be attributed to their
   holders pursuant to the following criteria:

   (1) Controlling interest shall be attributable. Controlling interest
   means majority voting equity ownership, any general partnership
   interest, or any means of actual working control (including negative
   control) over the operation of the licensee, in whatever manner
   exercised.

   (2) Partnership and other ownership interests and any stock interest
   amounting to 20 percent or more of the equity, or outstanding stock, or
   outstanding voting stock of a broadband PCS, cellular or SMR licensee
   shall be attributed, except that ownership will not be attributed
   unless the partnership and other ownership interests and any stock
   interest amount to at least 40 percent of the equity, or outstanding
   stock, or outstanding voting stock of a broadband PCS, cellular or SMR
   licensee if the ownership interest is held by a small business or a
   rural telephone company, as these terms are defined in §  1.2110 of
   this chapter or other related provisions of the Commission's rules, or
   if the ownership interest is held by an entity with a non-controlling
   equity interest in a broadband PCS licensee or applicant that is a
   small business.

   (3) Investment companies, as defined in 15 U.S.C. 80a-3, insurance
   companies and banks holding stock through their trust departments in
   trust accounts will be considered to have an attributable interest only
   if they hold 40 percent or more of the outstanding voting stock of a
   corporate broadband PCS, cellular or SMR licensee, or if any of the
   officers or directors of the broadband PCS, cellular or SMR licensee
   are representatives of the investment company, insurance company or
   bank concerned. Holdings by a bank or insurance company will be
   aggregated if the bank or insurance company has any right to determine
   how the stock will be voted. Holdings by investment companies will be
   aggregated if under common management.

   (4) Non-voting stock shall be attributed as an interest in the issuing
   entity if in excess of the amounts set forth in paragraph (d)(2) of
   this section.

   (5) Debt and instruments such as warrants, convertible debentures,
   options, or other interests (except non-voting stock) with rights of
   conversion to voting interests shall not be attributed unless and until
   converted, except that this provision does not apply in determining
   whether an entity is a small business, a rural telephone company, or a
   business owned by minorities and/or women, as these terms are defined
   in §  1.2110 of this chapter or other related provisions of the
   Commission's rules.

   (6) Limited partnership interests shall be attributed to limited
   partners and shall be calculated according to both the percentage of
   equity paid in and the percentage of distribution of profits and
   losses.

   (7) Officers and directors of a broadband PCS licensee or applicant,
   cellular licensee, or SMR licensee shall be considered to have an
   attributable interest in the entity with which they are so associated.
   The officers and directors of an entity that controls a broadband PCS
   licensee or applicant, a cellular licensee, or an SMR licensee shall be
   considered to have an attributable interest in the broadband PCS
   licensee or applicant, cellular licensee, or SMR licensee.

   (8) Ownership interests that are held indirectly by any party through
   one or more intervening corporations will be determined by successive
   multiplication of the ownership percentages for each link in the
   vertical ownership chain and application of the relevant attribution
   benchmark to the resulting product, except that if the ownership
   percentage for an interest in any link in the chain exceeds 50 percent
   or represents actual control, it shall be treated as if it were a 100
   percent interest. (For example, if A owns 20% of B, and B owns 40% of
   licensee C, then A's interest in licensee C would be 8%. If A owns 20%
   of B, and B owns 51% of licensee C, then A's interest in licensee C
   would be 20% because B's ownership of C exceeds 50%.)

   (9) Any person who manages the operations of a broadband PCS, cellular,
   or SMR licensee pursuant to a management agreement shall be considered
   to have an attributable interest in such licensee if such person, or
   its affiliate, has authority to make decisions or otherwise engage in
   practices or activities that determine, or significantly influence,

   (i) The nature or types of services offered by such licensee;

   (ii) The terms upon which such services are offered; or

   (iii) The prices charged for such services.

   (10) Any licensee or its affiliate who enters into a joint marketing
   arrangements with a broadband PCS, cellular, or SMR licensee, or its
   affiliate shall be considered to have an attributable interest, if such
   licensee, or its affiliate, has authority to make decisions or
   otherwise engage in practices or activities that determine, or
   significantly influence,

   (i) The nature or types of services offered by such licensee;

   (ii) The terms upon which such services are offered; or

   (iii) The prices charged for such services.

   (e) Divestiture. (1) Divestiture of interests as a result of a transfer
   of control or assignment of authorization must occur prior to
   consummating the transfer or assignment, except that a licensee that
   meets the requirements set forth in paragraph (e)(2) of this section
   shall have 90 days from final grant to come into compliance with the
   spectrum aggregation limit.

   (2) An applicant with:

   (i) Controlling or attributable ownership interests in broadband PCS,
   cellular, and/or SMR licenses where the geographic license areas cover
   20 percent or less of the applicant's service area population;

   (ii) Attributable interests in broadband PCS, cellular, and/or SMR
   licenses solely due to management agreements or joint marketing
   agreements; or

   (iii) Non-controlling attributable interests in broadband PCS,
   cellular, and/or SMR licenses, regardless of the degree to which the
   geographic license areas cover the applicant's service area population,
   shall be eligible to have its application granted subject to a
   condition that the licensee shall come into compliance with the
   spectrum limitation set out in paragraph (a) within ninety (90) days
   after final grant. For purposes of this paragraph, a "non-controlling
   attributable interest" is one in which the holder has less than a fifty
   (50) percent voting interest and there is an unaffiliated single holder
   of a fifty (50) percent or greater voting interest.

   (3) The applicant for a license that, if granted, would exceed the
   spectrum aggregation limitation in paragraph (a) of this section shall
   certify on its application that it and all parties to the application
   will come into compliance with this limitation. If such an applicant is
   a successful bidder in an auction, it must submit with its long-form
   application a signed statement describing its efforts to date and
   future plans to come into compliance with the spectrum aggregation
   limitation. A similar statement must also be included with any
   application for assignment of licenses or transfer of control that, if
   granted, would exceed the spectrum aggregation limit.

   (4)(i) Parties holding controlling interests in broadband PCS,
   cellular, and/or SMR licensees that conflict with the attribution
   threshold or geographic overlap limitations set forth in this section
   will be considered to have come into compliance if they have submitted
   to the Commission an application for assignment of license or transfer
   of control of the conflicting licensee ( see §  1.948 of this chapter;
   see also §  24.839 of this chapter (PCS)) by which, if granted, such
   parties no longer would have an attributable interest in the
   conflicting license. Divestiture may be to an interim trustee if a
   buyer has not been secured in the required period of time, as long as
   the applicant has no interest in or control of the trustee, and the
   trustee may dispose of the license as it sees fit. Where parties to
   broadband PCS, cellular, or SMR applications hold less than controlling
   (but still attributable) interests in broadband PCS, cellular, or SMR
   licensee(s), they shall submit a certification that the applicant and
   all parties to the application have come into compliance with the
   limitations on spectrum aggregation set forth in this section.

   (ii) Applicants that meet the requirements of paragraph (e)(2) of this
   section must tender to the Commission within ninety (90) days of final
   grant of the initial license, such an assignment or transfer
   application or, in the case of less than controlling (but still
   attributable) interests, a written certification that the applicant and
   all parties to the application have come into compliance with the
   limitations on spectrum aggregation set forth in this section. If no
   such transfer or assignment application or certification is tendered to
   the Commission within ninety (90) days of final grant of the initial
   license, the Commission may consider the certification and the
   divestiture statement to be material, bad faith misrepresentations and
   shall invoke the condition on the initial license or the assignment or
   transfer, cancelling or rescinding it automatically, shall retain all
   monies paid to the Commission, and, based on the facts presented, shall
   take any other action it may deem appropriate.

   (f) Sunset. This rule section shall cease to be effective January 1,
   2003.

   Note 1 to §  20.6: For purposes of the ownership attribution limit, all
   ownership interests in operations that serve at least 10 percent of the
   population of the PCS service area should be included in determining
   the extent of a PCS applicant's cellular or SMR ownership.

   Note 2 to §  20.6: When a party owns an attributable interest in more
   than one cellular or SMR system that overlaps a PCS service area, the
   total population in the overlap area will apply on a cumulative basis.

   Note 3 to §  20.6: Waivers of §  20.6(d) may be granted upon an
   affirmative showing:

   (1) That the interest holder has less than a 50 percent voting interest
   in the licensee and there is an unaffiliated single holder of a 50
   percent or greater voting interest;

   (2) That the interest holder is not likely to affect the local market
   in an anticompetitive manner;

   (3) That the interest holder is not involved in the operations of the
   licensee and does not have the ability to influence the licensee on a
   regular basis; and

   (4) That grant of a waiver is in the public interest because the
   benefits to the public of common ownership outweigh any potential
   anticompetitive harm to the market.

   [ 64 FR 54574 , Oct. 7, 1999, as amended at  67 FR 1642 , Jan. 14, 2002]

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