§  1.9020   Spectrum manager leasing arrangements.

   (a) Overview. Under the provisions of this section, a licensee (in any
   of the included services) and a spectrum lessee may enter into a
   spectrum manager leasing arrangement, without the need for prior
   Commission approval, provided that the licensee retains de jure control
   of the license and de facto control, as defined and explained in this
   subpart, of the leased spectrum. The licensee must notify the
   Commission of the spectrum leasing arrangement pursuant to the rules
   set forth in this section. The term of a spectrum manager leasing
   arrangement may be no longer than the term of the license
   authorization.

   (b) Rights and responsibilities of the licensee. (1) The licensee is
   directly and primarily responsible for ensuring the spectrum lessee's
   compliance with the Communications Act and applicable Commission
   policies and rules.

   (2) The licensee retains responsibility for maintaining its compliance
   with applicable eligibility and ownership requirements imposed on it
   pursuant to the license authorization.

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

   (c) Rights and responsibilities of the spectrum lessee. (1) The
   spectrum lessee must comply with the Communications Act and with
   Commission requirements associated with the license.

   (2) The spectrum lessee is responsible for establishing that it meets
   the eligibility and qualification requirements applicable to spectrum
   lessees under the rules set forth in this section.

   (3) The spectrum lessee must comply with any obligations that apply
   directly to it as a result of its own status as a service provider
   (e.g., Title II obligations if the spectrum lessee acts as a
   telecommunications carrier or acts as a common carrier).

   (4) In addition to the licensee being directly accountable to the
   Commission for ensuring the spectrum lessee's compliance with the
   Commission's operational rules and policies (as discussed in this
   subpart), the spectrum lessee is independently accountable to the
   Commission for complying with the Communications Act and Commission
   policies and rules, including those that apply directly to the spectrum
   lessee as a result of its own status as a service provider.

   (5) In leasing spectrum from a licensee, the spectrum lessee must
   accept Commission oversight and enforcement consistent with the license
   authorization. The spectrum lessee must cooperate fully with any
   investigation or inquiry conducted by either the Commission or the
   licensee, allow the Commission or the licensee to conduct on-site
   inspections of transmission facilities, and suspend operations at the
   direction of the Commission or the licensee and to the extent that such
   suspension would be consistent with the Commission's suspension
   policies.

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

   (d) Applicability of particular service rules and policies. Under a
   spectrum manager leasing arrangement, the service rules and policies
   apply in the following manner to the licensee and spectrum lessee:

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

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

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

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

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

   (v) The licensee may reasonably rely on the spectrum lessee's
   certifications that it meets the requisite eligibility and
   qualification requirements contained in the notification required by
   this section.

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

   (4) Designated entity/entrepreneur rules. A licensee that holds a
   license pursuant to small business and/or entrepreneur provisions ( see
   § 1.2110 and § 24.709 of this chapter) and continues to be subject to
   unjust enrichment requirements ( see § 1.2111 and § 24.714 of this
   chapter) and/or transfer restrictions ( see § 24.839 of this chapter)
   may enter into a spectrum manager leasing arrangement with a spectrum
   lessee, regardless of whether the spectrum lessee meets the
   Commission's designated entity eligibility requirements ( see § 1.2110)
   or its entrepreneur eligibility requirements to hold certain C and F
   block licenses in the broadband personal communications services ( see
   § 1.2110 and § 24.709 of this chapter), so long as the spectrum manager
   leasing arrangement does not result in the spectrum lessee's becoming a
   “controlling interest” or “affiliate” ( see § 1.2110) of the licensee
   such that the licensee would lose its eligibility as a designated
   entity or entrepreneur. To the extent there is any conflict between the
   revised de facto control standard for spectrum leasing arrangements, as
   set forth in this subpart, and the definition of controlling interest
   (including its de facto control standard) set forth in § 1.2110, the
   latter definition governs for determining whether the licensee has
   maintained the requisite degree of ownership and control to allow it to
   remain eligible for the license or for other benefits such as bidding
   credits and installment payments.

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

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

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

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

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

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

   (8) E911 requirements. If E911 obligations apply to the licensee ( see
   § 20.18 of this chapter), the licensee retains the obligations with
   respect to leased spectrum.

   (e) Notifications regarding spectrum manager leasing arrangements. A
   licensee that seeks to enter into a spectrum manager leasing
   arrangement must notify the Commission of the arrangement in advance of
   the spectrum lessee's commencement of operations. The spectrum manager
   lease notification will be processed pursuant either to the general
   notification procedures or the immediate processing procedures, as set
   forth herein. The licensee must submit the notification to the
   Commission by electronic filing using the Universal Licensing System
   (ULS) and FCC Form 608, except that a licensee falling within the
   provisions of § 1.913(d) may file the notification either electronically
   or manually.

   (1) General notification procedures. Notifications of spectrum manager
   leasing arrangements will be processed pursuant the general
   notification procedures set forth in this paragraph unless they are
   submitted and qualify for the immediate processing procedures set forth
   in paragraph (e)(2) of this section.

   (i) To be accepted under these general notification procedures, the
   notification must be sufficiently complete and contain all information
   and certifications requested on the applicable form, FCC Form 608,
   including any information and certifications (including those of the
   spectrum lessee relating to eligibility, basic qualifications, and
   foreign ownership) required by the rules in this chapter and any rules
   pertaining to the specific service for which the notification is filed.
   No application fees are required for the filing of a spectrum manager
   leasing notification.

   (ii) The licensee must submit such notification at least 21 days in
   advance of commencing operations unless the arrangement is for a term
   of one year or less, in which case the licensee must provide
   notification to the Commission at least ten (10) days in advance of
   operation. If the licensee and spectrum lessee thereafter seek to
   extend this leasing arrangement for an additional term beyond the
   initial term, the licensee must provide the Commission with
   notification of the new spectrum leasing arrangement at least 21 days
   in advance of operation under the extended term.

   (iii) A notification filed pursuant to these general notification
   procedures will be placed on an informational public notice on a weekly
   basis ( see § 1.933(a)) once accepted, and is subject to reconsideration
   ( see § § 1.106(f), 1.108, 1.113).

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

   (i) To qualify for these immediate processing procedures, the
   notification must be sufficiently complete and contain all necessary
   information and certifications (including those relating to
   eligibility, basic qualifications, and foreign ownership) required for
   notifications processed under the general notification procedures set
   forth in paragraph (e)(1)(i) of this section, and also must establish,
   through certifications, that the following additional qualifications
   are met:

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

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

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

   (ii) Provided that the notification establishes that the proposed
   spectrum manager leasing arrangement meets all of the requisite
   elements to qualify for these immediate processing procedures, ULS will
   reflect that the notification has been accepted. If a qualifying
   notification is filed electronically, the acceptance will be reflected
   in ULS on the next business day after filing of the notification; if
   filed manually, the acceptance will be reflected in ULS on the next
   business day after the necessary data from the manually filed
   notification is entered into ULS. Once the notification has been
   accepted, as reflected in ULS, the spectrum lessee may commence
   operations under the spectrum leasing arrangement, consistent with the
   term of the arrangement.

   (iii) A notification filed pursuant to these immediate processing
   procedures will be placed on an informational public notice on a weekly
   basis ( see § 1.933(a)) once accepted, and is subject to reconsideration
   ( see § § 1.106(f), 1.108, 1.113).

   (f) Effective date of a spectrum manager leasing arrangement. The
   spectrum manager leasing arrangement will be deemed effective in the
   Commission's records, and for purposes of the application of the rules
   set forth in this section, as of the beginning date of the term as
   specified in the spectrum leasing notification.

   (g) Commission termination of a spectrum manager leasing arrangement.
   The Commission retains the right to investigate and terminate any
   spectrum manager leasing arrangement if it determines,
   post-notification, that the arrangement constitutes an unauthorized
   transfer of de facto control of the leased spectrum, is otherwise in
   violation of the rules in this chapter, or raises foreign ownership,
   competitive, or other public interest concerns. Information concerning
   any such termination will be placed on public notice.

   (h) Expiration, extension, or termination of a spectrum leasing
   arrangement. (1) Absent Commission termination or except as provided in
   paragraph (h)(2) or (h)(3) of this section, a spectrum leasing
   arrangement entered into pursuant to this section will expire on the
   termination date set forth in the spectrum leasing notification.

   (2) A spectrum leasing arrangement may be extended beyond the initial
   term set forth in the spectrum leasing notification provided that the
   licensee notifies the Commission of the extension in advance of
   operation under the extended term and does so pursuant to the general
   notification procedures or immediate processing procedures set forth in
   this section, whichever is applicable. If the general notification
   procedures are applicable, the licensee must notify the Commission at
   least 21 days in advance of operation under the extended term.

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

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

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

   (j) Transfer of control of a spectrum lessee. The licensee must notify
   the Commission of any transfer of control of a spectrum lessee before
   the consummation of the transfer of control, pursuant to the applicable
   notification procedures of this section. In the case of a
   non-substantial ( pro forma ) transfer of control that falls within the
   class of pro forma transactions for which prior Commission approval
   would not be required under § 1.948(c)(1), the licensee must file
   notification of the transfer of control with the Commission, using FCC
   Form 608 and providing any necessary updates of ownership information,
   within 30 days of its completion. The Commission will place information
   related to the transfer of control, whether substantial or pro forma,
   on public notice.

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

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

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

   (l) Subleasing. A spectrum lessee may sublease the leased spectrum
   usage rights subject to the licensee's consent and the licensee's
   establishment of privity with the spectrum sublessee. The licensee must
   submit a notification regarding the spectrum subleasing arrangement in
   accordance with the applicable notification procedures set forth in
   this section.

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

   [ 68 FR 66277 , Nov. 25, 2003, as amended at  69 FR 72027 , Dec. 10, 2004;
    69 FR 77551 , Dec. 27, 2004]

   Effective Date Note:   At  69 FR 77551 , Dec. 27, 2004, § 1.9020(e)(2) was
   revised. This paragraph contains information collection and
   recordkeeping requirements and will not become effective until approval
   has been given by the Office of Management and Budget.