§ 1.2111   Assignment or transfer of control: unjust enrichment.

   Link to an amendment published at  80 FR 56809 , September 18, 2015.

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

   (b) Unjust enrichment payment: set-aside. As specified in this paragraph an
   applicant  seeking  approval  for  a transfer of control or assignment
   (otherwise permitted under the Commission's rules) of, or for entry into a
   material relationship (see § § 1.2110, 1.2114) (otherwise permitted under the
   Commission's rules) involving, a license acquired by the applicant pursuant
   to a set-aside for eligible designated entities under § 1.2110(c), or which
   proposes to take any other action relating to ownership or control that will
   result in loss of eligibility as a designated entity, must seek Commission
   approval and may be required to make an unjust enrichment payment (Payment)
   to the Commission by cashier's check or wire transfer before consent will be
   granted. The Payment will be based upon a schedule that will take account of
   the term of the license, any applicable construction benchmarks, and the
   estimated value of the set-aside benefit, which will be calculated as the
   difference between the amount paid by the designated entity for the license
   and the value of comparable non-set-aside license in the free market at the
   time of the auction. The Commission will establish the amount of the Payment
   and the burden will be on the applicants to disprove this amount. No Payment
   will be required if:

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

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

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

   (2) If a licensee that utilizes installment financing under this section
   seeks to make any change in ownership structure or to enter into a material
   relationship  (see  § 1.2110)  that would result in the licensee losing
   eligibility  for  installment  payments, the licensee shall first seek
   Commission approval and must make full payment of the remaining unpaid
   principal and any unpaid interest accrued through the date of such change as
   a condition of approval. A licensee's (or other attributable entity's)
   increased gross revenues or increased total assets due to nonattributable
   equity  investments,  debt financing, revenue from operations or other
   investments,  business  development  or  expanded service shall not be
   considered to result in the licensee losing eligibility for installment
   payments.

   (3) If a licensee seeks to make any change in ownership or to enter into a
   material  relationship (see § 1.2110) that would result in the licensee
   qualifying for a less favorable installment plan under this section, the
   licensee shall seek Commission approval and must adjust its payment plan to
   reflect its new eligibility status. A licensee may not switch its payment
   plan to a more favorable plan.

   (d) Unjust enrichment payment: bidding credits. (1) A licensee that utilizes
   a  bidding credit, and that during the initial term seeks to assign or
   transfer  control  of  a  license  to an entity that does not meet the
   eligibility criteria for a bidding credit, will be required to reimburse the
   U.S. Government for the amount of the bidding credit, plus interest based on
   the rate for ten year U.S. Treasury obligations applicable on the date the
   license was granted, as a condition of Commission approval of the assignment
   or transfer. If, within the initial term of the license, a licensee that
   utilizes a bidding credit seeks to assign or transfer control of a license
   to an entity that is eligible for a lower bidding credit, the difference
   between the bidding credit obtained by the assigning party and the bidding
   credit for which the acquiring party would qualify, plus interest based on
   the rate for ten year U.S. treasury obligations applicable on the date the
   license is granted, must be paid to the U.S. Government as a condition of
   Commission approval of the assignment or transfer. If, within the initial
   term of the license, a licensee that utilizes a bidding credit seeks to make
   any ownership change or to enter into a material relationship (see § 1.2110)
   that would result in the licensee losing eligibility for a bidding credit
   (or qualifying for a lower bidding credit), the amount of the bidding credit
   (or the difference between the bidding credit originally obtained and the
   bidding credit for which the licensee would qualify after restructuring or
   entry into a material relationship), plus interest based on the rate for ten
   year  U.S.  treasury obligations applicable on the date the license is
   granted, must be paid to the U.S. Government as a condition of Commission
   approval of the assignment or transfer or of a reportable eligibility event
   (see § 1.2114).

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

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

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

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

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

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

   (ii) These payments will have to be paid to the United States Treasury as a
   condition of approval of the assignment, transfer, ownership change or
   reportable eligibility event (see § 1.2114).

   (e) Unjust enrichment: partitioning and disaggregation—(1) Installment
   payments.  Licensees making installment payments, that partition their
   licenses  or  disaggregate  their spectrum to entities not meeting the
   eligibility standards for installment payments, will be subject to the
   provisions concerning unjust enrichment as set forth in this section.

   (2) Bidding credits. Licensees that received a bidding credit that partition
   their licenses or disaggregate their spectrum to entities not meeting the
   eligibility standards for such a bidding credit, will be subject to the
   provisions concerning unjust enrichment as set forth in this section.

   (3) Apportioning unjust enrichment payments. Unjust enrichment payments for
   partitioned license areas shall be calculated based upon the ratio of the
   population of the partitioned license area to the overall population of the
   license area and by utilizing the most recent census data. Unjust enrichment
   payments for disaggregated spectrum shall be calculated based upon the ratio
   of the amount of spectrum disaggregated to the amount of spectrum held by
   the licensee.

   [ 59 FR 44293 , Aug. 26, 1994, as amended at  63 FR 2346 , Jan. 15, 1998;  63 FR 68942 , Dec. 14, 1998;  71 FR 26252 , May 4, 2006;  71 FR 34278 , June 14, 2006;
    77 FR 16471 , Mar. 21, 2012]

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