Sec. 20.6  CMRS spectrum aggregation limit.

    (a) 45 MHz limitation. No licensee in the broadband PCS, cellular, 
or SMR services (including all parties under common control) regulated 
as CMRS (see Sec. 20.9) shall have an attributable interest in a total 
of more than 45 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 channels 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), except that no more than 10 
MHz of SMR spectrum in the 800 MHz SMR service 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 Sec. 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, as determined by the 1990 census figures for the counties 
contained therein, 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 is 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 Sec. 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) Stock interests held in trust shall be attributed to any person 
who holds or shares the power to vote such stock to any person who has 
the sole power to sell such stock, and, in the case of stock held in 
trust, to any person who has the right to revoke the trust at will or to 
replace the trustee at will. If the trustee has a familial, personal, or

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extra-trust business relationship to the grantor or the beneficiary, the 
grantor or beneficiary, as appropriate, will be attributed with the 
stock interests held in trust.
    (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 
conversion is effected, 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 Sec. 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.
    (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) Any party holding controlling or attributable 
ownership interests in broadband PCS, cellular, and/or SMR licensees 
regulated as CMRS providers that would exceed the spectrum aggregation 
limitation defined in paragraph (a) of this section, if granted 
additional licenses, may be a party to a broadband PCS, cellular, or SMR 
application (i.e., have a controlling or attributable interest in the 
applicant), and such applicant will be eligible for licenses amounting 
to more than 45 MHz of broadband PCS, cellular, and/or SMR spectrum 
regulated as CMRS in a geographical area, pursuant to the divestiture 
procedures set forth in paragraphs (e)(2) through (e)(4) of this 
section; provided, however, that in the case of parties holding 
controlling or attributable ownership interests in broadband PCS, 
cellular, and/or SMR licensees, these divestiture procedures shall be 
available only to:
    (i) Parties with 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;

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    (ii) Parties with attributable interests in broadband PCS, cellular, 
and/or SMR licenses solely due to management agreements or joint 
marketing agreements; and
    (iii) Parties with 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. 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.
    (2) The applicant for a license that, if granted, would exceed the 
45 MHz limitation shall certify on its application that it and all 
parties to the application will come into compliance with this 
limitation.
    (3) 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 45 
MHz spectrum 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) If such an applicant is otherwise qualified, its application 
will be granted subject to a condition that the licensee shall come into 
compliance with the 45 MHz spectrum limitation within ninety (90) days 
of final grant.
    (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 Secs. 24.839 of this chapter 
(PCS), 22.39 of this chapter (cellular), 90.158 of this chapter (SMR)) 
by which, if granted, such parties no longer would have an attributable 
interest in the conflicting license. If no such assignment or transfer 
application 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. 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.
    (ii) 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, within 
ninety (90) days of final grant, 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.


    Note 1 to Sec. 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 Sec. 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 Sec. 20.6: Waivers of Sec. 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

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the public of common ownership outweigh any potential anticompetitive 
harm to the market.

[ 59 FR 59953 , Nov. 21, 1994, as amended at  59 FR 61829 , Dec. 2, 1994;  60 FR 37795 , July 21, 1995;  61 FR 33867 , July 1, 1996;  61 FR 51234 , Oct. 1, 
1996]