Partitioning, Disaggregation, and Leasing of Spectrum, 74024-74036 [2021-27493]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Proposed Rules]
[Pages 74024-74036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27493]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 19-38; FCC 21-120; FR ID 62114]


Partitioning, Disaggregation, and Leasing of Spectrum

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission or FCC) proposed an Enhanced Competition Incentive Program 
to encourage licensees to offer opportunities for small carriers, 
Tribal Nations, and entities committing to serve rural areas to obtain 
spectrum via lease, partition, or disaggregation. The Further Notice of 
Proposed Rulemaking seeks comment on the proposed Enhanced Competition 
Incentive Program, its incentives, and waste, fraud, and abuse 
protections, as well as additional proposals including alternative 
construction benchmarks for all wireless radio service licensees and 
flexibility to reaggregate licenses.

DATES: Interested parties may file comments on or before February 28, 
2022, and reply comments on or before March 29, 2022.

ADDRESSES: You may submit comments, identified by WT Docket No. 19-38, 
by any of the following methods:
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://apps.fcc.gov/ecfs/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.

[[Page 74025]]

     Filings can be sent by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 45 L Street NE, Washington DC 20554.
     Effective March 19, 2020, and until further notice, the 
Commission no longer accepts any hand or messenger delivered filings. 
This is a temporary measure taken to help protect the health and safety 
of individuals, and to mitigate the transmission of COVID-19. See FCC 
Announces Closure of FCC Headquarters Open Window and Change in Hand-
Delivery Policy, Public Notice, DA 20-304 (March 19, 2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).

FOR FURTHER INFORMATION CONTACT: Katherine Nevitt of the Wireless 
Telecommunications Bureau, Mobility Division, at (202) 418-0638 or 
[email protected]. For information regarding the Paperwork 
Reduction Act of 1995 (PRA) information collection requirements 
contained in this document, contact Cathy Williams, Office of Managing 
Director, at (202) 418-2918 or [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking in WT Docket No. 19-38, FCC 21-
120 adopted November 18, 2021 and released November 19, 2021. The full 
text of this document, including all Appendices, is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 45 L Street NE, Washington, DC 20554, or available 
for viewing via the Commission's ECFS 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 [email protected] or calling the Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY).

Ex Parte Rules

    This proceeding shall continue to be treated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules (47 CFR 1.1200 et seq.). Persons making ex parte presentations 
must file a copy of any written presentation or a memorandum 
summarizing any oral presentation within two business days after the 
presentation (unless a different deadline applicable to the Sunshine 
period applies). Persons making oral ex parte presentations are 
reminded that memoranda summarizing the presentation must (1) list all 
persons attending or otherwise participating in the meeting at which 
the ex parte presentation was made, and (2) summarize all data 
presented and arguments made during the presentation. If the 
presentation consisted in whole or in part of the presentation of data 
or arguments already reflected in the presenter's written comments, 
memoranda or other filings in the proceeding, the presenter may provide 
citations to such data or arguments in his or her prior comments, 
memoranda, or other filings (specifying the relevant page and/or 
paragraph numbers where such data or arguments can be found) in lieu of 
summarizing them in the memorandum. Documents shown or given to 
Commission staff during ex parte meetings are deemed to be written ex 
parte presentations and must be filed consistent with rule 1.1206(b). 
In proceedings governed by rule 1.49(f) or for which the Commission has 
made available a method of electronic filing, written ex parte 
presentations and memoranda summarizing oral ex parte presentations, 
and all attachments thereto, must be filed through the electronic 
comment filing system available for that proceeding, and must be filed 
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.

Synopsis

I. Introduction

    1. With this Further Notice of Proposed Rulemaking, we take key 
steps towards closing the digital divide and we make further progress 
on the goals set forth by Congress in the Making Opportunities for 
Broadband Investment and Limiting Excessive and Needless Obstacles to 
Wireless Act (MOBILE NOW Act) regarding the diversity of spectrum 
access and the provision of service to rural areas. In particular, we 
propose an Enhanced Competition Incentive Program focused on increasing 
spectrum access for small carriers and Tribal Nations and on increasing 
the availability of advanced telecommunications services in rural areas 
with the goals of promoting greater competition in and expanded access 
to such services. To achieve these vital Commission goals, we propose 
to modify our existing partitioning, disaggregation, and leasing rules 
by providing specific incentives for stakeholders to participate in the 
program by engaging in qualifying transactions that make spectrum 
available to these entities and in these areas. Separate from the 
incentive program, we seek comment on potential alternatives to 
population-based performance requirements for a variety of 
stakeholders. Further, we propose to provide for reaggregation of 
partitioned and disaggregated licenses up to the original license size.

II. Background

    2. Partitioning and Disaggregation. The Commission first adopted 
rules permitting geographic partitioning, which is the assignment of a 
geographic portion of a geographic area licensee's license area, and 
spectrum disaggregation, which is the assignment of portions of blocks 
of a geographic area licensee's spectrum, for Broadband PCS licenses in 
1996. The Commission has since adopted partitioning and disaggregation 
rules on a service-by-service basis to provide licensees the 
``flexibility to determine the amount of spectrum they will occupy and 
the geographic area they will serve.''
    3. The Commission's partitioning and disaggregation rules apply to 
all ``Covered Geographic Licenses,'' which consist of specified 
``Wireless Radio Services'' (WRS) for which the Commission has 
auctioned exclusive spectrum rights in defined geographic areas. The 
license term for a partitioned license area or disaggregated spectrum 
license is the remainder of the original licensee's license term. 
Parties to a geographic partitioning, a spectrum disaggregation, or a 
combination of both have two options to satisfy service-specific 
performance requirements (i.e., construction and operation 
requirements). First, each party may certify that it will individually 
satisfy any service-specific performance requirements and, upon failure 
to do so, must individually face any service-specific performance 
penalties. Alternatively, both parties may agree to

[[Page 74026]]

share responsibility for compliance with performance requirements, and 
both parties are subject to any service-specific penalties.
    4. Spectrum Leasing. In 2003, the Commission adopted the first 
comprehensive set of rules to allow licensees in the WRS to enter into 
a variety of spectrum leasing arrangements. In so doing, the Commission 
recognized the public interest benefits of permitting ``additional 
spectrum users to gain ready access to spectrum,'' thus enabling the 
``provision of new and diverse services and applications to help meet 
the ever-changing needs of the public.'' The Commission's spectrum 
leasing rules apply to all ``included services,'' as set forth in 
section 1.9005 of the Commission's rules and which include WRS where 
commercial or private licensees hold exclusive use rights. A ``spectrum 
leasing arrangement'' is an arrangement between a licensed entity and a 
third-party entity in which the licensee (spectrum lessor) leases 
certain of its spectrum usage rights in the licensed spectrum to the 
third-party entity, the spectrum lessee. Commission rules provide for 
two different types of spectrum leasing arrangements: (1) Spectrum 
manager leasing arrangements, in which the licensee/lessor retains de 
facto control of the licensed spectrum leased to the spectrum lessee; 
and (2) de facto transfer leasing arrangements, in which the lessee is 
primarily responsible for ensuring that its operations comply with the 
Communications Act and Commission policies and rules.
    5. While the licensee/lessor remains responsible for compliance 
with any construction and performance requirements applicable to the 
leased spectrum, the licensee/lessor may attribute to itself the build-
out or performance activities of its spectrum lessee(s) for purposes of 
compliance with any such requirements.
    6. De facto transfer spectrum leasing arrangements can be either 
long-term (more than one year) or short-term (one year or less). In 
general, de facto transfer spectrum leasing arrangements are subject to 
the Commission's general approval procedures, under which the 
Commission must grant the application prior to the parties putting the 
proposed spectrum leasing arrangement into effect.
    7. 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. Congress also 
provided the Commission the flexibility to proceed if it found that 
such a program would promote the availability of advanced 
telecommunications services in rural areas or spectrum availability for 
covered small carriers.
    8. 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. First, would 
``reduced performance requirements with respect to the spectrum 
obtained through the program . . . facilitate deployment of advanced 
telecommunications services in areas covered by the program''? Second, 
``what conditions may be needed on transfers of spectrum under the 
program to allow covered small carriers that obtain spectrum under the 
program to build out the spectrum obtained under the program in a 
reasonable period of time''? Third, ``what incentives may be 
appropriate to encourage licensees to lease or sell spectrum, including 
(i) extending the term of a license . . . or (ii) modifying performance 
requirements of the license relating to the leased or sold spectrum''? 
And fourth, what is ``the administrative feasibility'' of those 
incentives and of ``other incentives considered by the Commission that 
further the goals of [section 616]''? Section 616 provided, however, 
that the Commission ``may offer a licensee incentives or reduced 
performance requirements under this section only if the Commission 
finds that doing so would likely result in increased availability of 
advanced telecommunications services in a rural area.'' Additionally, 
section 616 directs that, ``[i]f a party fails to meet any build out 
requirements set by the Commission 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 of the party.''

A. Notice of Proposed Rulemaking

    9. On March 15, 2019, the Commission released the Notice pursuant 
to the MOBILE NOW Act, which initiated this proceeding to assess 
whether potential changes to the Commission's partitioning, 
disaggregation, and leasing rules might provide spectrum access to 
covered small carriers or promote the availability of advanced 
telecommunications services in rural areas. The Notice sought comment 
on the specific questions and considerations posed in the MOBILE NOW 
Act, but also sought comment on whether the Commission should consider 
applying any rule revisions to an expanded class of licensees beyond 
those Congress required it to consider.
    10. The Commission received 15 comments and 10 reply comments in 
response to the Notice. Commenters generally supported rule revisions 
that would increase spectrum access for a variety of entities and 
increase the availability of advanced telecommunications in rural 
areas. As discussed below, many commenters also suggested that the 
Commission go beyond the MOBILE NOW Act statutory framework if 
necessary to serve the public interest and to achieve the stated goals.

III. Discussion

    11. This Further Notice builds upon the efforts initiated in the 
Notice by proposing incentives that are guided by the MOBILE NOW Act 
framework but expand upon this approach to advance important Commission 
goals. As discussed in more detail below, we propose an Enhanced 
Competition Incentive Program (ECIP) focused on increasing spectrum 
access for small carriers and Tribal Nations and promoting the 
availability of advanced telecommunications services in rural areas by 
creating incentives for competition-enhancing transactions. We propose 
a range of incentives to promote partitioning, disaggregation, and 
leasing, including extending license terms by five years, extending 
construction periods by one year, and creating alternate rural-focused 
construction requirements. Under this two-pronged proposal, parties to 
qualifying transactions would establish program eligibility by: (1) 
Providing spectrum to small carriers or Tribal Nations; or (2) 
committing to serve a certain minimum amount of rural area. We also 
propose measures necessary to ensure program goals are met and that the 
program is not abused.
    12. The ECIP that we propose here would establish specific 
incentives based on the record in the Notice, and would build upon 
Congress' goals in the MOBILE NOW Act. The ECIP also would further 
certain long-standing Commission goals by facilitating transactions 
that promote increased

[[Page 74027]]

spectrum access for stakeholders that will use this valuable resource 
efficiently and create meaningful service to rural communities. To 
develop a more workable solution for a variety of stakeholders, we seek 
comment on additional proposals on related issues that are consistent 
with the MOBILE NOW Act, but are based on our pre-existing authority 
under Title III of the Communications Act of 1934, as amended, pursuant 
to which the Commission adopted the original partitioning and 
disaggregation rules. After review of the record on the Notice and as 
discussed below, we find it in the public interest to explore benefits 
for Tribal Nations choosing to participate in the ECIP; benefits for an 
expanded group of stakeholders participating in ECIP through rural-
focused transactions; alternative performance requirements for all WRS 
licenses independent of the specific ECIP benefits; and a spectrum 
license reaggregation process. The proposals discussed below are 
intended to facilitate increased spectrum access, rural service, and 
innovative and next-generation wireless use cases, bringing increased 
competition to underserved areas, while also easing the administrative 
burden placed on both licensees and Commission staff.

a. Enhanced Competition Incentive Program

    13. To be eligible for ECIP benefits through a qualifying 
transaction, we propose that any covered geographic licensee may offer 
spectrum to an unaffiliated eligible entity through a partition and/or 
disaggregation, and any WRS licensee eligible to lease in an included 
service may offer spectrum to an unaffiliated eligible entity through a 
long-term leasing arrangement. As detailed below, we propose two types 
of ECIP qualifying transactions: Those that focus on small carriers and 
Tribal Nations gaining spectrum access, and those that involve any 
interested party that commits to operating in, or providing service to, 
rural areas. We recognize that stakeholders may be eligible for one or 
both paths. However, to achieve the goals of the program, maintain 
administrative feasibility as set forth in the MOBILE NOW Act, and 
reduce the potential for program abuse, we propose that each 
transaction be filed under either, but not both, prongs. This approach 
would result in consistent application of program benefits and 
safeguards to ensure program integrity.
i. Small Carrier or Tribal Nation Transactions
    14. One of the goals of the MOBILE NOW Act was to encourage 
Commission examination of a program(s) that would promote spectrum 
availability for small carriers. Through qualifying transactions under 
this ECIP prong, we would promote small carriers' access to unused 
spectrum in any market licensed to a covered geographic licensee. We 
also find it appropriate to propose a narrow expansion beyond the 
MOBILE NOW Act statutory framework to increase spectrum access for 
Tribal Nations.
    15. Eligible Entities. As indicated in the Notice, section 616 of 
the MOBILE NOW Act defined ``Covered small carrier'' as a carrier that 
``(A) 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 (B) offers services using the facilities of the 
carrier.'' Further, section 616 applies the definition of ``carrier'' 
as set forth in section 3 of the Communications Act of 1934, meaning 
``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.'' Consistent with Congressional intent, we 
propose to adopt these statutory definitions for use in the ECIP and to 
designate covered small carriers as an eligible beneficiary under this 
prong. We seek comment on whether these are the appropriate definitions 
for use in the program. In addition, section 616 restricts the 
partitioning or disaggregation to ``unaffiliated'' small carriers. 
Other than looking to the Commission's designated entity rules, we seek 
comment on how to determine whether a small carrier is affiliated.
    16. We note that most commenters supported an expansion of the 
covered small carrier definition in the Notice, and we seek comment on 
alternative definitions. While we propose below to adopt more expansive 
eligibility requirements for rural-focused ECIP transactions, for 
transactions specifically focused on spectrum access not limited to 
rural areas, we propose a limited expansion of the group of eligible 
beneficiaries beyond covered small carriers to include Tribal Nations. 
This would further facilitate Tribal spectrum access in both rural and 
non-rural areas as needed. We propose, in the public interest, to 
include these Tribal Nations and seek comment on this approach. We 
propose that Tribal Nations eligible under this prong would include any 
federally-recognized American Indian Tribes and Alaska Native Villages, 
as well as consortia of federally recognized Tribes and/or Native 
Villages, or other entities controlled and majority-owned by such 
Tribes or consortia. We seek comment on whether this is the appropriate 
definition of Tribal Nations. As of January 2021, there are 574 
federally-recognized Indian Tribes, but we note that there are no 
federally recognized Tribal Nations in Hawaii. We therefore seek 
comment on how we should facilitate transactions involving entities 
seeking to serve native Hawaiian Homelands.
    17. Minimum Spectrum and Geography. We propose that a qualifying 
transaction under this prong must include a minimum of 50% of the 
licensed spectrum for each license(s) that is part of the transaction 
in a geographic area. This approach is intended to provide stakeholders 
flexibility in structuring transactions, while: (1) Ensuring sufficient 
spectrum is available for the provision of advanced telecommunications 
services; and (2) preventing transactions involving de minimis spectrum 
amounts that are entered into solely to obtain ECIP benefits. We seek 
comment on whether the proposed 50% spectrum threshold makes enough 
spectrum available to small carriers or Tribal Nations. Should we 
consider a lower or higher threshold percentage? For licenses that 
authorize paired frequency bands, should an equal or minimum percentage 
of the spectrum be from each band? Are there any alternative approaches 
for ensuring sufficient spectrum is made available to small carriers or 
Tribal Nations, while requiring a sufficient percentage to preclude 
abuse of the program?
    18. We also propose that a qualifying transaction must include a 
minimum of 25% of the licensed market area for each license(s) that is 
part of the transaction, regardless of market size or market type. We 
seek comment on whether the 25% geographic threshold is the appropriate 
amount to balance incentives for program participation against concerns 
of sufficient land area for small carriers or Tribal Nations, and 
concerns related to preventing program gaming. Are there considerations 
that would warrant an increase or decrease in the minimum geography 
required for a qualifying transaction under this prong? For example, 
should the geographic thresholds be different based upon the varying 
size of the overall licensed market area (e.g., counties, CMAs, PEAs, 
BEAs, MTAs, REAGs)? Should parties be able to count multiple 
transactions involving partitions of the same license

[[Page 74028]]

in aggregate to meet the minimum geographic threshold? We seek comment 
on the costs and benefits of our proposed approach and any suggested 
alternatives. We also recognize there may be situations where licenses 
have been previously disaggregated and/or partitioned and a resulting 
license(s) consists of a small amount of spectrum or small geographic 
area. Although we propose in this Further Notice to prevent licenses 
that have previously benefited from ECIP from receiving benefits again 
for the same license(s), we seek comment on whether, from the outset, 
we should restrict the ECIP to only licenses of a certain minimum 
spectrum size and geography area. We seek to avoid inclusion in the 
ECIP of transactions that might potentially evade the purpose of the 
respective 50% and 25% thresholds.
    19. We note that the MOBILE NOW Act directed the Commission to 
examine potential changes to our partitioning, disaggregation, and 
leasing framework to offer incentives to meet specific goals. Such a 
focus would appear to exclude full license assignments, even those to 
small carriers and/or to rural licensees. We recognize that 
implementing the ECIP solely for transactions involving partition, 
disaggregation, or leasing, as Congress directed us to consider, may 
create a disincentive for stakeholders to engage in otherwise mutually 
beneficial transactions for full license assignments. Rather, these 
parties may instead negotiate transactions for smaller areas and/or 
less spectrum, solely to acquire ECIP benefits even where a full 
license assignment might be more appropriate given stakeholder needs. 
We therefore seek comment on whether we should permit full license 
assignments within the ECIP and, if so, how we should implement these 
types of transactions. We note that many of the ECIP benefits discussed 
below are applicable to both parties to a transaction involving 
partition, disaggregation, or lease of a license, but would only be 
available to the assignee in a full license assignment scenario, where 
the assignor is not licensed for that spectrum after consummation of 
the assignment. If we determine that the public interest would be 
served by including in the ECIP those transactions involving full 
license assignments, what safeguards should we put in place to ensure 
that these full license assignments achieve the intended benefits of 
the program?
ii. Rural-Focused Transactions
    20. We also propose a rural-focused transaction approach that is 
intended to facilitate coverage to rural areas by tying ECIP benefits 
to construction and operation obligations, as further detailed below, 
furthering the Commission's goal of promoting the availability of 
advanced telecommunications services in rural areas.
    21. Eligible Entities. In the Notice, the Commission sought comment 
on whether it should consider rule revisions to an expanded class of 
licensees beyond those Congress required the Commission to consider. 
The record reflects considerable support for expanding the scope of 
eligible entities. We agree with commenters that restricting program 
availability, and therefore program benefits and build-out incentives, 
to only small carriers, as defined in section 616 of the MOBILE NOW 
Act, would exclude numerous important spectrum users and provide fewer 
options for larger carrier licensees that seek to disaggregate, 
partition, or lease their unused spectrum.
    22. Accordingly, we propose to include, by relying on our general 
Title III powers, any unaffiliated interested party that commits to 
serve a minimum amount of rural area under the proposed ECIP rural-
focused transactions prong, if they meet the proposed requirements. 
This would expand upon the focus of the MOBILE NOW Act and include a 
substantial variety of stakeholders seeking to engage in transactions 
that we anticipate could result in increased spectrum usage and 
competition in rural areas, such as large or small carriers, common 
carriers, non-common carriers, Tribal Nations, critical infrastructure, 
and other entities (large or small) operating private wireless systems 
in rural areas. This expanded scope could incentivize transactions that 
accommodate a wide variety of spectrum users in rural areas facing 
challenges in accessing spectrum and result in more efficient and 
intensive spectrum use in rural areas. We seek comment on this flexible 
approach, including whether there is any reason we should restrict the 
types of licensees eligible for the ECIP benefits under this rural-
focused prong of the program. Similar to our approach in small carrier 
and Tribal Nation transactions, we also seek comment on whether we 
should permit full license assignments within the rural-focused prong 
of the ECIP and, if so, how we should implement these types of 
transactions. We seek comment on the appropriate definition of 
affiliated in the context of rural-focused transactions.
    23. For purposes of the rural-focused transaction approach and 
consistent with Congressional intent, we propose to adopt the MOBILE 
NOW Act definition of ``rural area,'' which 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.'' 
We seek comment on this approach and any alternatives that might be 
more appropriate to achieve ECIP goals.
    24. Minimum Spectrum. Consistent with our proposed approach to 
transactions involving covered small carriers and Tribal Nations 
described above, we also propose in the rural context that a qualifying 
transaction must designate a minimum of 50% of the licensed spectrum, 
for each license(s) included in the transaction. We seek comment on 
whether the 50% spectrum threshold makes enough spectrum available for 
the actual provision of rural-focused service. Would a lower or higher 
threshold percentage be more appropriate, particularly considering the 
increased scope of eligible entities seeking to deploy the spectrum? 
Are there alternative ways to ensure that there is sufficient spectrum 
to meet stakeholder needs? Further, is there a need to also specify a 
minimum threshold in terms of megahertz (in case the license has 
previously been disaggregated)? For licenses that authorize paired 
frequency bands, should an equal or minimum percentage of the spectrum 
be from each band?
    25. Minimum Qualifying Geography. We propose that a qualifying 
transaction under this rural-focused prong must include a minimum 
amount of ``Qualifying Geography'' sufficient to cover at least 300 
contiguous square miles of rural area, for market sizes of Partial 
Economic Areas (PEA) or smaller. We seek to incentivize transactions 
that will result in rural operation/service where most needed. We 
recognize that these underserved rural areas in many cases may not 
directly align with the Commission's licensed market areas, and may be 
near the edge, or even overlap, a market boundary. We therefore propose 
for this prong a required minimum square mileage of rural area, rather 
than a percentage of an assignor's market, which could unnecessarily 
mandate a substantially larger area than intended. The square mileage 
approach to establish Qualifying Geography provides flexibility for 
stakeholders to enter a transaction tailored to individual needs, which 
might involve rural area from more than one license. We propose 300 
square miles as the most appropriate figure to ensure that

[[Page 74029]]

stakeholders include sufficient area in a transaction to warrant the 
substantial benefits afforded through the ECIP. Where a single 
transaction involving multiple licenses is needed to obtain the 
specific rural area sought, we propose to provide ECIP benefits to each 
license that contains some portion of the 300 square mile area. We seek 
comment on this approach, including the costs and benefits, and on any 
suggested alternatives. We understand that rural area could include 
unpopulated areas, which may otherwise be used for recreation, travel, 
commercial or business purposes. Should we limit eligibility to areas 
that have a census defined population? Does our proposed approach 
provide sufficient flexibility to structure transactions to meet 
stakeholder needs in rural areas? Conversely, would such a flexible 
approach result in gaming, for example, the inclusion of license(s) in 
a transaction solely to receive ECIP benefits that offer a de minimis 
amount of land as a percentage of the 300 square miles of Qualifying 
Geography? To discourage this potential outcome, should we require a 
minimum percentage of land within each license involved in a single 
transaction to meet the Qualifying Geography requirement? 
Alternatively, should parties be able to count multiple transactions 
with different parties involving partitions of the same license in 
aggregate to meet the Qualifying Geography threshold?
    26. We also find it appropriate, given the Commission's current 
market sizes and goal of incentivizing meaningful service and operation 
in rural areas, to propose a minimum geography of 300 square miles of 
rural area for PEA markets and smaller markets. However, given the wide 
range in size of available markets subject to geographic area 
licensing, we seek comment on whether it would be appropriate to scale 
the amount of Qualifying Geography on a proportional basis in two ways. 
First, we recognize that there are variations in market sizes even for 
PEAs and smaller markets. For example, in approximately 3% of PEA 
markets (located in large Western states, including some in Alaska), 
300 square miles represents less than 1% of the market land area. We 
seek comment on whether we should proportionally scale the minimum 
required Qualifying Geography upwards in these PEA markets to account 
for their larger size. Second, we seek comment on whether we should 
proportionally scale the minimum required Qualifying Geography upwards 
for all markets larger than PEAs. We note that the next largest market 
area size in relation to PEAs are Basic Economic Areas (BEA), where the 
average land area is almost twice the size of the average PEA. For 
Regional Economic Area Grouping (REAG) market areas, which can be 
comprised of several states, the market size on average is 
approximately 45 times larger than the average PEA. Would scaling in 
the large PEA context and/or for markets larger than PEAs prevent 
windfall benefits for transactions yielding nominal spectrum access and 
minimal rural buildout relative to the geographic size of the license 
receiving ECIP benefits? We seek comment on what the costs and benefits 
are with respect to any such proportional scaling and any suggested 
alternatives.
    27. In addition, we seek comment on whether we should consider 
coverage on Tribal lands as an alternative to coverage of rural areas. 
We understand many Tribal lands are located in rural areas and to that 
extent might already qualify for ECIP benefits under this rural prong, 
but note that such lands may not be located in all instances in a 
contiguous 300 square mile area, or might be at least partially located 
in suburban or urban areas. Should we deem non-contiguous blocks of 
Tribal land that collectively reach the Qualifying Geography threshold 
sufficient to warrant ECIP benefits? In addition, we seek comment on 
the appropriate definition of Tribal lands for purposes of the ECIP.

b. Enhanced Competition Incentive Program Benefits

    28. To properly incentivize licensees to make spectrum available to 
small carriers or Tribal Nations, and to engage in other rural-focused 
transactions, we propose three specific benefits for ECIP 
participation. Specifically, we propose to: Extend license terms for 
all parties to a qualifying transaction by five years; extend 
construction deadlines (both interim and final) by one year for all 
parties to a qualifying partition/disaggregation transaction and for 
lessors in a qualifying spectrum lease arrangement; and establish an 
alternate rural-focused construction requirement for certain 
transactions. We seek comment on these proposals, any alternative 
approaches, and associated issues, including whether there are 
appropriate incentives to encourage licensee participation in the 
program earlier in the term of the license.
i. License Term Extensions
    29. The Notice sought comment on the appropriate incentives to 
achieve the MOBILE NOW Act's goal of encouraging licensees to 
partition, disaggregate or lease spectrum, including the incentive of 
license term extensions. Most commenters addressing the issue of 
incentives generally supported an extended license term benefit, with 
one commentor cautioning against conferring outsized benefits. We find 
it appropriate to propose a five-year license term extension for all 
parties involved in a qualifying partition/disaggregation transaction, 
and for all lessors entering into a qualifying spectrum leasing 
transaction, given that the lessor retains the renewal obligations. We 
believe this proposal will reduce regulatory burdens with less frequent 
renewal obligations and will properly incentivize secondary market 
transactions, particularly spectrum leases that are subject to the 
lessor's license term. We also propose recommended controls to avoid 
waste, fraud, and abuse as detailed below.
ii. Construction Extensions
    30. The Notice also sought comment on whether modifications to the 
Commission's performance requirements, including a one-year extension 
in certain circumstances, would be likely to increase service to rural 
areas. Commenters expressed significant support for the temporal 
benefit of additional time to construct facilities, with some arguing 
that the difficulty and expense associated with building rural areas 
justifies the benefit. In addition, one commenter acknowledges the 
potential timing constraints for meeting construction requirements when 
spectrum is received in the middle of a license term. After review of 
the record, we propose that all parties to a qualifying transaction 
receive a one-year construction extension for both the interim and 
final construction benchmarks where applicable. We believe this 
approach strikes the right balance between incentivizing small carrier, 
Tribal Nation, and rural-focused transactions, while ensuring that 
assignees have adequate time to meet their construction milestones. We 
propose that this benefit would apply to both parties in a qualifying 
transaction involving partition or disaggregation. We also propose that 
this benefit would apply to the lessor in a qualifying spectrum lease 
arrangement, given that the lessor retains the obligations to comply 
with buildout and renewal requirements. We seek comment on these 
proposals and any associated costs and benefits. We recognize that the 
Notice sought comment on whether the Commission should limit any 
construction extension benefits to transactions filed no later

[[Page 74030]]

than six months prior to the construction deadline. After review of the 
record, and in the interest of promoting even late-term transactions 
that will ensure increased spectrum access and actual spectrum usage in 
rural areas, we propose not to establish a timeframe prior to a 
construction deadline within which an ECIP qualifying transaction must 
be filed. We seek comment on whether this flexible approach will 
incentivize parties to enter qualifying transactions, or whether an 
ECIP transaction filing cut-off date prior to relevant construction 
deadlines is necessary to prevent unintended results.
iii. Alternate Construction Benchmark for Rural-Focused Transactions
    31. In response to the Notice, nearly all commentors supported 
modified performance requirements, noting that existing licenses that 
include significant portions of rural area are typically for large 
market areas, often leaving rural and remote areas underserved. Many 
commenters stated that modification of performance requirements would 
appropriately reflect the realities of deploying spectrum in rural, 
underserved, and unserved areas, and would incentivize the efficient 
allocation of spectrum.
    32. To facilitate rural-focused transactions that achieve rural 
buildout, we propose to substitute an assignee's existing performance 
requirement with an alternative construction benchmark for those 
licenses acquired in an ECIP transaction qualifying under the rural-
focused transaction approach described above. Specifically, the 
alternate construction benchmark would require 100% coverage of the 
Qualifying Geography (coverage to at least 300 contiguous square miles 
of rural area, for market sizes of PEA or smaller) that was the basis 
for the qualifying transaction, as well as the provision of service to 
the public, or operation addressing private internal business needs 
over that area. We clarify that our proposal for an alternate benchmark 
does not modify the timeframe for meeting the benchmark, which would 
remain the current deadline of the partitioned/disaggregated license, 
plus the one-year extension proposed in the above construction 
extension benefit section. As previously discussed, the proposed 
minimum geography seeks to ensure a reasonable investment in 
construction of facilities in rural areas to warrant the substantial 
ECIP benefits, while furthering the Commission's long-held goal of 
providing licensees with flexibility to determine the amount of 
spectrum licensees will occupy and the geographic area they will serve, 
and permitting stakeholders to build networks suited to the particular 
community needs. We seek comment on this approach, including the 
proposed benchmark, and the associated costs and benefits. Does this 
approach adequately ensure that an assignor does not enter into 
partitioning transactions solely for the purpose of reducing the area 
or population required to be covered under its service-specific 
performance requirements? In cases where the assignee ultimately fails 
to construct, should we require the assignor in a partition to meet its 
obligations consistent with the entire license area, by including in 
the relevant denominator the population/land of the partitioned-off 
area? Finally, we also seek comment on whether we should consider an 
alternative approach specifically tailored to the needs of Tribal 
Nations. What should the appropriate benchmarks include and what 
additional factors should be considered to facilitate the provision of 
service to Tribal Nations?
    33. For assignees involved in partitioning and/or disaggregation 
where the interim performance requirement has not been met, we propose 
that this alternative construction benchmark would replace the existing 
interim performance requirement, and remove the final performance 
requirement, contained in the service rules for the particular license 
acquired in the ECIP transaction. Where the assignor has previously met 
the interim construction deadline, this alternative construction 
benchmark would replace the final construction obligation for the 
assignee. We propose that the assignor remain bound by the existing 
substantive coverage requirements for its license(s) (extended by one-
year) involved in a qualifying ECIP transaction. We note, however, that 
this approach provides an additional incentive to the assignor that 
arguably will meet its performance requirements more easily following a 
partitioning/disaggregation transaction that reduces the geographic 
area/population it must cover. We seek comment on this approach, as 
well as the associated costs and benefits.
    34. While our alternate construction benchmark proposal under ECIP 
focuses on parties individually satisfying performance requirements, 
the Commission's rules currently permit parties in a partition or 
disaggregation transaction to share responsibility for any service-
specific requirements, and therefore share the penalties associated 
with failure to meet those performance requirements. We seek comment on 
whether the construct of a shared buildout requirement runs counter to 
the ECIP framework proposed herein and, if so, whether, we should 
afford this particular ECIP benefit solely to those parties that opt to 
separately meet their construction obligations. Do the ECIP benefits, 
as well as waste, fraud, and abuse protections, negate the need for the 
protections that shared responsibility provides? In the context of 
rural-focused transactions, does a shared responsibility unfairly 
burden one party over the other?
    35. We do not propose an alternate construction benchmark for 
spectrum lease arrangements. For spectrum lease arrangements that 
qualify under ECIP, consistent with existing rules, we propose that a 
lessor would be able to attribute the construction and operation of its 
lessee's Qualifying Geography to its underlying performance obligations 
on its license. We believe that retaining this current pass-through 
benefit is sufficient (given the additional ECIP benefits conferred) to 
incentivize lessors to lease unused spectrum, particularly in uncovered 
rural areas. However, consistent with our approach to an assignor in 
the partition and/or disaggregation context, the lessor is nonetheless 
bound by the existing performance requirements set forth in the 
applicable service-specific rules. We seek comment on these tentative 
conclusions.

c. Enhanced Competition Incentive Program Waste, Fraud, and Abuse 
Protections

    36. Given the substantial benefits being proposed for ECIP 
participants, and to ensure that stakeholders enter into transactions 
that will further our goals of increased spectrum access, rural 
service, and competition, we propose certain measures to protect 
against waste, fraud, and abuse of the program. We note that applicant 
character qualifications are part of our review of whether a 
transaction can be approved in the public interest, and we seek comment 
on the specific measures proposed below. We invite commenters to 
suggest alternative or additional measures that would ensure that the 
benefits we propose for ECIP participants are targeted and appropriate. 
For example, most of the measures we propose focus on assignees or 
lessees participating in ECIP transactions, but we welcome suggestions 
on whether additional restrictions should be imposed on ECIP 
participant assignors and lessors.
    37. As stated above, we recognize that parties to an ECIP 
transaction are likely in many instances to meet the eligibility

[[Page 74031]]

requirements for both the small carrier/Tribal Nation transaction prong 
and the rural-focused transaction prong (e.g., a covered small carrier 
might be interested in obtaining spectrum access to serve an area 
consisting of at least 300 rural square miles). Nonetheless, we 
recognize that open-ended program flexibility might have significant 
drawbacks. We therefore propose distinct paths to ECIP participation to 
meet the program's policy goals, to make program administration more 
feasible, and to afford targeted benefits while reducing instances of 
program abuse. We clarify our proposal that for each ECIP transaction, 
applicants must elect either prong 1 or prong 2, not both, and they may 
not, subsequent to application grant, modify the selected path. As a 
specific example, under our ECIP proposal, an assignee in a rural-
focused transaction proposing to provide service to a partitioned area 
of at least 300 rural square miles under prong 2 is required to provide 
service or operate over that entire area by the extended construction 
deadline. Although that assignee may also be a covered small carrier by 
definition under prong 1, to ensure provision of the rural service to 
the Qualifying Geography for which ECIP benefits were granted, we do 
not propose to permit that assignee to later elect to provide service, 
in the alternative, to a percentage of population within its licensed 
area that might include more urban populations, as it might have had it 
elected to file its ECIP transaction under prong 1. We seek comment on 
this approach and potential costs and benefits.
    38. Holding Period. First, we propose to impose a five-year holding 
period on licenses assigned through partitioning and/or disaggregation 
as part of ECIP transactions. Specifically, assignees of licenses 
obtained through ECIP transactions may further assign or lease, in 
whole or in part, those licenses to other entities only after the 
expiration of a five-year period commencing from the date of license 
issuance, and provided the assignee has met both the construction 
requirement and the three-year operational requirement proposed below 
(which also satisfies its interim performance benchmark). We seek 
comment on whether an alternative length of time is more appropriate 
for this holding period, considering the ECIP benefits conferred.
    39. We also propose to apply a parallel ``holding period'' 
safeguard in the leasing context. Specifically, for spectrum leases 
subject to receiving ECIP benefits, we propose to require a mandatory 
five-year minimum lease term. We believe that this approach fosters 
transaction parity by not improperly incentivizing leases over other 
potential transactions. We seek comment on this proposal and the costs 
and benefits associated with this approach. In particular, we seek 
comment on how we should address leases terminated after less than five 
years. We recognize that the realities of the market often result in 
early termination of such agreements, but also that the benefits we 
propose for ECIP transactions could pose a significant risk of program 
abuse through leasing. Under what circumstances, if any, should such an 
early termination result in the lessor losing the benefits already 
applied to its license? Should such benefits be prorated based on how 
prematurely the lease was terminated? For example, if a lease is 
terminated after only two years, we could reduce by three years the 
lessor's license term, but maintain the performance requirement 
extension. What are the advantages and disadvantages of such an 
approach? Are there alternative methods of preventing sham leasing? On 
a related note, we seek comment on whether we should prohibit subleases 
or otherwise limit subleases to prevent program abuses.
    40. To facilitate routine transfers, we propose to allow a pro 
forma transfer exception (such as pursuant to corporate 
reorganizations). We seek comment on whether we should allow further 
exceptions to the holding period restriction. For example, are there 
additional types of transactions, other than pro forma transfers, which 
should be permitted? Should we allow assignees or lessees under the 
ECIP to assign their licenses or leases to other ECIP-eligible parties 
that agree to be bound by the ECIP requirements? Are there any 
additional requirements or protections we should impose on such 
transactions? Commenters should discuss the costs and benefits of our 
proposed approach and any alternatives.
    41. Operational Requirement. To ensure that spectrum is efficiently 
used in underserved rural areas, we propose an operational requirement 
on certain ECIP transactions. Specifically, we propose that the 
assignee or lessee of any transaction that qualifies as an ECIP rural-
focused transaction would be required, for a minimum of three 
consecutive years, to either (1) provide and continue to provide 
service to the public; or (2) operate and continue to operate to 
address the licensee's private, internal communications needs. We 
propose that the level of service during this three-year operational 
period must not fall below that used (or intended to be used) to meet 
its construction requirement (for assignees) and ECIP eligibility (for 
lessees). This approach provides a uniform measure of operational 
status and verifiable service for a sustained period. We seek comment 
on this proposal, including the associated costs and benefits.
    42. For assignees acquiring an ECIP license through partition and/
or disaggregation, we propose that this operational period begin the 
earlier of the date of actual construction or the date of the interim 
construction deadline for that license, as modified by the ECIP. We 
propose that ECIP lessees must operate or provide service for three 
consecutive years during any period within the five-year minimum lease 
term. We seek comment on this proposal and any alternative structures 
for operational requirements, including the associated costs and 
benefits. Specifically, we seek comment on the interplay of this 
requirement with our concerns discussed above regarding early 
termination of leases. We also note that there is no current Commission 
requirement for lessees to independently certify construction of leased 
spectrum, as the lessor is responsible for meeting performance 
requirements and may include in its showing, at its option, any 
construction by its lessee. Considering the construction and 
operational requirements proposed in the ECIP, should we also impose a 
construction notification requirement on lessees that would allow us to 
verify that lessees have complied with ECIP construction and 
operational requirements, thereby increasing program accountability?
    43. Automatic Termination. We also propose, consistent with the 
MOBILE NOW Act, automatic termination for any licenses assigned as part 
of an ECIP transaction where the licensee fails to meet the program 
requirements or construction requirements. Further, we propose that any 
licensee which was subject to such termination, or any lessee which 
fails to meet the program requirements, or affiliate of such an entity, 
would not be eligible to participate in the ECIP in the future. We seek 
comment on the appropriate definition of affiliate. We seek comment on 
our proposal, including the costs and benefits. We also seek comment on 
what measures could be implemented to prevent instances of program 
abuse, particularly with respect to lessors and assignors participating 
in the program. How should we address instances where we believe the 
assignor or lessor is potentially abusing the ECIP to obtain the 
program's benefits through assignments or leases to entities it

[[Page 74032]]

knows or should know cannot satisfy the program's obligations?
    44. For example, should we extend program ineligibility and/or 
automatic license termination penalties to the assignor or lessor and 
its affiliates in situations where its assignee(s) or lessee(s) does 
not meet program requirements, including construction and operation 
obligations for which both parties to an ECIP transaction received 
benefits? Should we condition assignor/lessor program benefits on 
assignee/lessee performance of construction and continuity of service 
obligations, particularly in the rural-focused transactions context, to 
ensure that benefits do not accrue without provision of service or 
operation in these potentially underserved areas? For example, one 
approach is to not apply the five-year license term extension to an 
assignor's license where its assignee/lessee fails to timely construct 
or operate in the identified Qualifying Geography. We seek comment on 
the costs and benefits of such an approach. We also seek comment on 
whether, in the rural-focused transactions context to ensure service or 
operation, we should condition the assignor/lessor's one-year 
construction extension on an assignee/lessee's timely compliance with 
its construction deadline(s). We note that an assignor/lessor and 
assignee/lessee may have the same extended interim or final 
construction deadline under the ECIP, and therefore the Commission may 
not be aware of an assignee/lessee's failure to timely construct until 
after the expiration of the assignor/lessor's construction deadline, 
which the assignor/lessor may have relied upon in the construction of 
its license. How should we address this situation to strike the 
appropriate balance between properly incentivizing transactions and 
attempting to eliminate instances of program abuse?
    45. Limitations on Additional Benefits for Subsequent Transactions. 
To prevent the benefits of the ECIP from undermining our renewal and 
construction policies through compounding extensions, we propose that 
once a license is the subject of a qualifying transaction and has 
received the benefits associated with the ECIP, that license, and any 
license created from it, will be ineligible to receive additional ECIP 
benefits. We propose to apply this restriction to the original license, 
as well as to licenses issued pursuant to a partition or 
disaggregation. In other words, if the license at issue in a given 
transaction has previously been involved in an ECIP transaction, it is 
not eligible for any more ECIP benefits. We believe this will prevent 
abuse resulting from leveraging the same spectrum or geography to gain 
repeated license term or construction extensions. We seek comment, in 
the alternative, on whether a licensee should instead be eligible for 
ECIP benefits once per license term.
    46. We recognize that this proposal does not provide incentives for 
licensees to enter into subsequent assignments or leases of their 
unused spectrum rights, and that there may be situations where such 
subsequent transactions can provide public interest benefits without 
undermining our proposed program policies. For example, Licensee A may 
wish to partition an area to Licensee B (receiving benefits under the 
ECIP) and also partition another area to Licensee C; are there 
circumstances in which Licensee C should receive ECIP benefits beyond 
those already afforded to the license to be partitioned? We seek 
comment on whether we should permit these types of subsequent 
transactions, what benefits are appropriate, and how we might ensure 
that our renewal and construction policies are not frustrated through 
multiple transactions.
    47. Restrictions on Leasing and Subleasing of Spectrum Rights 
Obtained Through the ECIP. Finally, we seek comment on how to approach 
leasing and subleasing of spectrum rights obtained through ECIP 
transactions. We recognize that subsequent leases by ECIP assignees and 
lessees could be used to circumvent our eligibility rules and holding 
period protections. For example, an assignee of an ECIP transaction 
could lease its spectrum rights to a third party, including the 
assignor in the ECIP transaction, extending the license term and 
construction deadlines, but not resulting in the public interest 
benefits intended by the ECIP. However, leasing is also an important 
tool in facilitating spectrum being put to use. How should we prevent 
this kind of abuse while still permitting leasing where it is in the 
public interest? Should we only permit leases (and subleases) of such 
rights to other ECIP-eligible entities? What are the costs and benefits 
of this approach or alternatives?
    48. Report. The ECIP seeks to promote competition and increased 
spectrum access for small carriers and Tribal Nations and to increase 
the availability of advanced telecommunications services in rural 
areas. These are critical Commission goals, and we have proposed 
substantial incentives to encourage participation by our licensees. 
Because of the importance of these goals and the nature of these 
incentives, we propose to direct the Wireless Telecommunications Bureau 
(Bureau) to conduct a review of the ECIP, with an opportunity for 
interested stakeholders to provide input, so that we may assess the 
program's effectiveness. We propose that, after an appropriate period 
of time not to exceed five years from the effective date of the final 
order adopting the program, the Bureau would submit a public report on 
the ECIP to the Commission. We propose that the report would include 
data about ECIP participation by eligible stakeholders, including the 
number of secondary market transactions, as well as the geographic 
areas and spectrum made available, under each prong of the program. We 
further propose that the report would include recommendations about 
rule or policy changes to increase the effectiveness of the program. In 
addition, we propose that the report would be publicly available, and 
that the Bureau could also prepare a non-public version with 
commercially sensitive information, if included. We seek comment on our 
proposals. We also seek comment on any other information that 
stakeholders advocate for inclusion in this report.

d. Alternative to Population-Based Construction Requirements

    49. The Notice sought comment on a range of issues related to 
facilitating increased spectrum access and increased availability of 
telecommunications service in rural areas. As discussed above, 
commenters generally were supportive of Commission action to 
incentivize transactions to meet these key goals, including the MOBILE 
NOW Act's focus on possible benefits of modified construction 
requirements. In addition, commenters expressed additional concerns 
that our current performance rules across virtually all WRS are based 
on providing coverage and offering service to a percentage of the 
population in the licensed geographic area, which typically results in 
more urban-focused service and a lack of service to rural areas. 
Commenters urge the Commission to provide an alternative to population-
based performance benchmarks that will better meet the business needs 
of a variety of stakeholders, including those providing service to 
rural subscribers, or that operate telecommunications systems in 
conjunction with businesses located in less populated rural areas. As 
WISPA explains, ``standards based on population coverage encourage 
licensees to satisfy the requirement for a large-footprint license by 
covering only the most populated areas,'' often to the exclusion of 
less populated areas like rural America. This approach to

[[Page 74033]]

build-out requirements can incentivize licensees to focus their 
deployment efforts on densely populated areas to quickly satisfy their 
construction requirements, which can leave rural Americans underserved 
or unserved entirely and can result in a ``surplus of unused spectrum, 
usually in less densely populated areas.'' Further, commenters argue 
that having pre-approved construction requirements offers a greater 
level of certainty for licensees, which would reduce concerns about the 
risks involved in leasing and/or partitioning arrangements in 
particular.
    50. We recognize that providing alternatives to construction 
requirements to a wide range of stakeholders can incentivize 
acquisition of licenses by entities that will deploy innovative 
spectrum use models and reach underserved areas. We believe that such 
an alternative option also can serve the public interest by providing 
all licensees more certainty as to regulatory requirements when 
planning to deploy networks, even for licensees acquiring spectrum 
directly from the Commission. We therefore seek comment on providing 
all WRS flexible use licensees an alternative construction requirement 
to population-based construction requirements, including for licenses 
acquired through a transaction (qualifying for ECIP benefits or not) or 
licenses newly issued to an auction winner. We seek to develop a robust 
record on the most beneficial alternatives to achieve more efficient 
use of spectrum, particularly in underserved rural areas.
    51. As noted, the Commission has adopted population-based 
performance requirements in most flexible use radio services. In so 
doing, the Commission largely departed from providing the ``substantial 
service'' option that was available to many licensees in certain 
services. This option allowed licensees to provide an alternate 
demonstration as to how its spectrum was used in the public interest 
where population benchmarks either could not be met or were an 
inaccurate measure of actual spectrum usage. We therefore seek comment 
on whether to provide a ``substantial service'' type alternative as has 
previously been used in many different services. We recognize that use 
of the subjective term ``substantial'' provides flexibility to 
licensees, but it can also create uncertainty over how to meet the 
standard and how to enforce the standard. We therefore seek comment on 
the appropriate definition of substantial service or an appropriate 
variation of this concept more tailored to individual licensee needs.
    52. We seek detailed comment on how we can best accommodate 
particular use cases that are less suited to meeting population 
coverage requirements, for example, critical infrastructure, Internet 
of Things applications, and other private internal uses (e.g., oil and 
gas, agricultural, industrial, railroads). How should we tailor 
performance requirements to these types of spectrum uses that do not 
directly serve the public through ubiquitous mobile service to 
subscribers in a manner that nonetheless facilitates enforcement of 
buildout obligations in the public interest? Should we establish 
specific safe harbors to provide more certainty to stakeholders, as 
some commenters in this record suggest? What is an appropriate safe 
harbor for these types of use cases? Should we only apply (or modify) a 
safe harbor in rural areas, recognizing that the Commission adopted a 
rural safe harbor for certain radio services in 2004? Would 
establishing band-specific alternative metrics or safe harbors aid in 
incentivizing partitioning, disaggregation, or leasing with a range of 
diverse use cases and in particular, rural providers? How should we 
accommodate licensees seeking either to provide services or to meet 
internal connectivity needs through fixed, rather than mobile, 
operations? Commenters addressing these issues should provide specific 
examples and also address the costs and benefits of any recommended 
approach.
    53. If the Commission determined that the public interest would not 
be served by adopting the substantial service concept on a more 
widespread basis, we also seek comment on whether there are more 
suitable alternative metrics for flexible use licenses in lieu of 
population coverage. What are the appropriate alternative performance 
benchmarks for these types of spectrum use cases, whether fixed or 
mobile or both? Should we apply a specific geographic area coverage 
benchmark to these market areas? How could performance requirements be 
tailored to meet stakeholder business needs, while ensuring that 
business decisions do not result in spectrum lying fallow in 
potentially large areas of a market?

e. Reaggregation of Spectrum Licenses

    54. Under our current rules, while licensees may partition and 
disaggregate their licenses through spectrum transactions, there is no 
provision for reaggregating spectrum, even when the partitioned or 
disaggregated portions of an original market area are acquired by a 
single entity. In the Notice, the Commission sought comment on whether 
to permit flexible use licensees to reaggregate licenses that have been 
partitioned and/or disaggregated up to a maximum of the original 
market/channel block size, provided certain regulatory requirements 
have been fulfilled. The Commission asked whether such an approach 
would increase the incentives of parties to lease or sell spectrum, 
thereby furthering the Congressional and Commission policy goals of 
increased spectrum access for small carriers and increased rural 
service. Many commenters acknowledge the public interest benefits of 
permitting partitioning/disaggregation, but also note that business 
circumstances may subsequently necessitate license reaggregation, which 
they argue should therefore be permitted by rule with a clear licensing 
path for doing so. For example, R Street suggests that ``[a]llowing 
reaggregation is essential to well-functioning markets,'' and that 
``[p]ermitting free reaggregation alongside disaggregation would not 
only allow more flexibility in the use of spectrum over time, it would 
also incentivize initial licensees to participate in the secondary 
market in the first place.'' CTIA and Google also support this flexible 
approach. Google agrees that the reaggregation cap should be the 
original size of the market area, while RS Access suggests that ``the 
Commission's rules should not restrict aggregation to instances where 
the licensee is merely reaggregating previously disaggregated or 
partitioned spectrum . . . the rules should permit the aggregation of 
licenses that were not previously disaggregated or partitioned, 
provided a licensee has satisfied the substantial service requirements 
for each of the licenses.''
    55. Some commenters, however, oppose a reaggregation process on the 
grounds that it would create the ``potential for abuse by large 
carriers'' because it would ``encourage . . . licensees to use 
partitioning to avoid their buildout obligations by partitioning non-
desirable or hard-to-serve spectrum'' followed by a later reaggregation 
and consequent spectrum warehousing. Similarly, GeoLink and WISPA argue 
that allowing reaggregation would undermine the goal of increasing 
spectrum access by small and rural carriers.
    56. The Notice sought comment on the costs and benefits of 
permitting reaggregation, as well as whether measures were necessary to 
prevent abuse, particularly evasion of any performance requirements 
associated with partitioned or disaggregated licenses subject to a 
request for

[[Page 74034]]

reaggregation. Stakeholders largely agree that there were substantial 
administrative benefits associated with permitting reaggregation, 
including those related to construction requirements, renewal showings, 
continuous service requirements, and the need to maintain up-to-date 
information in the Commission's Universal Licensing System. Commenters 
also discuss the added costs associated with maintaining multiple 
licenses that were formerly a single license and the extent to which 
this could discourage disaggregation in the first place. R Street does 
not favor construction requirements, but comments that ``[i]f the 
Commission is committed to keeping construction requirements, it could 
avoid this difficulty by allowing reaggregation only after the original 
construction requirements for the aggregate license area have been 
met.'' Google suggests that, ``[t]o the extent that possible 
manipulation of disaggregation and reaggregation to evade regulatory 
construction deadlines is a concern, the Commission could condition 
reaggregation on building out the entire reaggregated service area.''
    57. After review of the record, we propose to permit license 
reaggregation with appropriate safeguards. Our goal is to further the 
public interest by providing a path to removing unnecessary regulatory 
barriers to facilitate secondary market transactions and easing 
administrative burdens for stakeholders and the Commission. Permitting 
reaggregation can make our licensing information easier to use through 
a more flexible, yet accountable, data policy for geographic spectrum 
licenses. The reaggregation proposal described below, however, is not 
intended as an overall reexamination of the Commission's adopted 
approaches on key licensing issues related to WRS licenses, including 
performance requirements, renewal and associated continuing service 
obligations, and permanent discontinuance of operations.
    58. Accordingly, we propose to permit licensees to seek 
reaggregation of partitioned and/or disaggregated portions of licenses 
up to the original geographic size and spectrum band(s) for the type of 
license. We believe that this approach is the appropriate scope for 
reaggregation requests and that expanding this proposal to permit 
consolidation of market licenses not previously partitioned or 
disaggregated, as one commenter suggests, would unnecessarily undermine 
the established WRS licensing framework and complicate our attempt to 
ease administrative burdens. As a safeguard against potential abuses, 
we propose to require that, prior to seeking license reaggregation, the 
entity requesting reaggregation must ensure 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, if applicable; 
and (3) not violated the Commission's permanent discontinuance rules. 
We seek comment on our proposed approach to preventing potential abuses 
of our essential licensing requirements, including whether we should 
consider further safeguards such as requiring any additional 
certifications from applicants seeking license reaggregation.
    59. To implement our proposed reaggregation approach, we propose 
that a licensee holding multiple active licenses in the same radio 
service and for the same channel block may seek reaggregation by: 
Filing FCC Form 601, identifying the licenses to be reaggregated, and 
certifying that the performance requirements, renewal requirement, and 
lack of permanent discontinuance conditions have been met. Under this 
proposal, the licenses must be active and held under the same FCC 
registration number (FRN). To simplify the administrative process 
associated with this effort, we propose to treat this as a separate 
filing from any transactions that may be necessary to transfer the 
licenses under the same FRN and to prohibit combining a proposed 
reaggregation with any other transaction in the same FCC 601 
application. We recognize that the subdivided licenses within a 
partitioned/disaggregated market may, over the course of license 
term(s), be the subject of additional license conditions, rights (such 
as granted waivers), and other parameters that make them dissimilar. We 
seek comment on this approach and on how best to reflect those unique 
parameters on the reaggregated license. For example, if one of the 
licenses (but not the others) authorizes operation at higher power 
levels through a granted waiver, should the waiver rights and 
conditions be transferred to the reaggregated license (but only for the 
geographic area and spectrum associated with the license subject to 
waiver)? Alternatively, to simplify the process, should we prevent 
reaggregation in cases where the licenses do not have identical rights 
and conditions? We seek comment on how we should address these types of 
circumstances, as well as the costs and benefits of any suggested 
alternatives.

f. Other Considerations

    60. Open Radio Access Networks. Over the last several years, the 
Commission has worked closely with federal partners, equipment 
manufacturers, carriers, and other parties on the important issue of 
securing the United States' communications networks, in particular in 
the area of supply chain risk management. In March, 2021, the 
Commission issued a Notice of Inquiry into one potential method of 
promoting secure communications networks: Open Radio Access Networks 
(Open RAN). Open RAN has the potential to allow carriers to promote the 
security of their networks while driving innovation, in particular in 
next-generation technologies like 5G, lowering costs, increasing vendor 
diversity, and enabling more flexible network architecture. Comments 
received in response to that Notice of Inquiry, as well as discussions 
enabled by the Commission's Open RAN Solutions Showcase, held on July 
14-15, 2021, show that these technologies have great promise.
    61. To that end, we seek comment on whether and how we should 
factor the use of Open RAN technologies into the ECIP. For example, 
should we tie ECIP benefits to the use of Open RAN in network 
deployment? If so, what level of use should we require, and how would 
parties demonstrate their use in their application? Should this 
requirement apply to assignors and lessors, and assignees and lessees, 
or only to some parties? Alternatively, how could we further 
incentivize ECIP participants to explore Open RAN deployments? Should 
we retain our proposed ECIP eligibility requirements, and provide 
additional benefits to parties which use Open RAN in their networks? If 
so, what should those additional benefits be? Should we make these 
benefits available to both assignors/lessors and assignees/lessees, if 
both sides of the transaction demonstrate their use of these 
technologies?
    62. Use or Share Spectrum Access Models. Many commenters proposed 
adoption of varying spectrum rights models with the ``use or share'' 
model emerging prominently in the record. This spectrum rights model 
typically involves enabling temporary or opportunistic shared access to 
unused portions of a licensed band in which a licensee has not begun 
operations.
    63. The Open Technology Institute at New America and Public 
Knowledge's joint comment references various implementations of the use 
or share

[[Page 74035]]

model, in particular noting how this model is employed at 3.5 GHz (via 
Spectrum Access Systems) and 600 MHz (via white spaces databases). We 
seek comment on ``use or share'' models generally, and in particular on 
whether there are voluntary mechanisms or incentives that we could put 
into place to promote sharing, whether as part of the ECIP or more 
widely. We seek comment on whether such an approach could increase 
spectrum access and/or promote competition, and how these mechanisms 
could be implemented. We also seek comment on incentives to promote 
sharing by licensees with opportunistic users on a secondary basis. We 
recognize that dynamic sharing has been managed effectively through 
spectrum access systems and databases in some bands, and we seek 
comment on the suitability for these systems to facilitate sharing in 
other bands. We seek comment also on whether there are particular 
scenarios in which licensees and sharing proponents might self-
coordinate without an access system or database, how that would 
function, and how we might encourage such arrangements. We seek comment 
on the costs and benefits of such approaches to sharing.
    64. Digital Equity and Inclusion. Finally, the Commission, as part 
of its continuing effort to advance digital equity for all, including 
people of color, persons with disabilities, persons who live in rural 
or Tribal areas, and others who are or have been historically 
underserved, marginalized, or adversely affected by persistent poverty 
or inequality, invites comment on any equity-related considerations and 
benefits (if any) that may be associated with the proposals and issues 
discussed herein. Specifically, we seek comment on how our proposals 
may promote or inhibit advances in diversity, equity, inclusion, and 
accessibility, as well the scope of the Commission's relevant legal 
authority.

IV. Procedural Matters

    65. Paperwork Reduction Act Analysis. This Further Notice of 
Proposed Rulemaking may contain new or modified information 
collection(s) subject to the Paperwork Reduction Act of 1995. If the 
Commission adopts any new or modified information collection 
requirements, 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 are invited to comment on 
the new or modified information collection requirements contained in 
this proceeding. In addition, pursuant to the Small Business Paperwork 
Relief Act of 2002, we seek specific comment on how we might ``further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.''
    66. Regulatory Flexibility Act. The Regulatory Flexibility Act of 
1980, as amended (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 an Initial 
Regulatory Flexibility Analysis (IRFA) concerning potential rule and 
policy changes contained in this Further Notice of Proposed Rulemaking. 
The IRFA is contained in Appendix B to the Further Notice of Proposed 
Rulemaking.

V. Ordering Clauses

    67. Accordingly, it is ordered, pursuant to sections 1, 4(i), 303, 
and 310(d) of the Communications Act of 1934, as amended, and section 
616 of the Making Opportunities for Broadband Investment and Limiting 
Excessive and Needless Obstacles to Wireless Act, 47 U.S.C. 151, 
154(i), 303, 310(d), 1506, that this Further Notice of Proposed 
Rulemaking is hereby adopted.
    68. It is further ordered that, pursuant to applicable procedures 
set forth in Sec. Sec.  1.415 and 1.419 of the Commission's Rules, 47 
CFR 1.415 and 1.419, interested parties may file comments on the 
Further Notice of Proposed Rulemaking on or before 60 days after 
publication in the Federal Register, and reply comments on or before 90 
days after publication in the Federal Register.
    69. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 1

    Practice and procedure, Wireless radio services Applications and 
proceedings, Spectrum leasing.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

    The Federal Communications Commission proposes to amend 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. ch. 2, 5, 9, 13; 28 U.S.C. 2461, unless 
otherwise noted.

0
i. Amend Sec.  1.950 by revising the heading of paragraph (c) and 
adding paragraph (i) to read as follows:


Sec.  1.950  Geographic partitioning and spectrum disaggregation.

* * * * *
    (c) Filing requirements for partitioning and disaggregation. * * *
* * * * *
    (i) Reaggregation of licenses. (1) A licensee of multiple licenses 
which were disaggregated or partitioned, pursuant to Sec.  1.950, from 
the same Wireless Radio Service License may apply to reaggregate those 
licenses into one new license.
    (i) Parties may not reaggregate licenses unless all licenses to be 
aggregated were once part of the same Wireless Radio Service license.
    (ii) All performance requirements for the licenses to be combined 
through reaggregation must have been completed and certified as 
required prior to the filing of the application.
    (iii) Each of the licenses to be combined through reaggregation 
must have been renewed at least once since the completion and 
certification of all performance requirements.
    (iv) None of the licenses being combined may have violated the 
Commission's permanent discontinuance rules, as applicable to that 
license.
    (2) A licensee does not need to reaggregate all licenses which were 
once part of the original Wireless Radio Service license in order to 
qualify for reaggregation.
    (3) Licensees seeking approval for reaggregation of licenses must 
apply by filing FCC Form 601. Each request which involves geographic 
area aggregation must include an attachment defining the boundaries of 
the licenses being aggregated by geographic coordinates to the nearest 
second of latitude and longitude, based upon the 1983 North American 
Datum (NAD83). The licenses must all be active in the Commission's 
licensing system, and held by the same licensee under the same FCC 
Registration Number.
0
2. Add Sec.  1.961 to read as follows:


Sec.  1.961  Enhanced competition incentive program.

    (a) Definitions--(1) Covered small carrier. A covered small carrier 
is a carrier (as defined in section 3 of the

[[Page 74036]]

Communications Act of 1934 (47 U.S.C. 153)) that has not more than 1500 
employees (as determined under Sec.  121.106 of title 13, Code of 
Federal regulations, or any successor thereto) and offers services 
using the facilities of the carrier.
    (2) Enhanced Competition Incentive Program. The Enhanced 
Competition Incentive Program allows licensees to assign or lease some 
of their spectrum rights pursuant to a given Wireless Radio Service 
license as part of a qualifying transaction, as defined in paragraph 
(b) of this section, and in return receive certain benefits, as defined 
in paragraph (c) of this section.
    (3) Qualifying transaction. A qualifying transaction under the 
Enhanced Competition Incentive Program, as defined in paragraph (b) of 
this section.
    (4) Rural area. A rural area is any area other than:
    (i) A city, town, or incorporated area that has a population of 
more than 20,000 inhabitants; or
    (ii) An urbanized area contiguous and adjacent to a city or town 
that has a population of more than 50,000 inhabitants.
    (5) Tribal Entity. A Tribal entity is any federally-recognized 
American Indian Tribe or Alaska Native Village, as well as consortia of 
federally recognized Tribes and/or Native Villages, or other entities 
controlled and majority-owned by such Tribes or consortia.
    (b) Eligibility. (1) In order to qualify for benefits under the 
Enhanced Competition Incentive Program, a qualifying transaction must 
partition or disaggregate (pursuant to Sec.  1.950) or lease (pursuant 
to Subpart X of this part) a minimum of 50% of the frequencies 
authorized by a Wireless Radio Service license to an unaffiliated 
entity.
    (2) That transaction must also involve either:
    (i) An assignee or lessee which is a covered small carrier or 
Tribal Nation which receives rights to a minimum of 25% of the Wireless 
Radio Service license area; or
    (ii) Any assignee or lessee that proposes to cover at least 300 
contiguous square miles of rural area for license areas consisting of a 
Partial Economic Area or smaller, as defined in Sec.  27.6(a) of this 
chapter. The transaction may not involve a party which has been 
previously found to have failed to comply with the requirements of the 
Enhanced Competition Incentive Program, whether as an assignee or a 
lessee.
    (3) The transaction may not involve any license which has 
previously been included in a qualifying transaction and received 
benefits under the Enhanced Competition Incentive Program.
    (c) Incentives. Parties to a qualifying transaction will be 
eligible to receive the following benefits.
    (1) License term extension. The license term for all licenses 
involved in a qualifying transaction will be extended by five (5) 
years. If other Commission action, whether by Order or by rule, would 
otherwise have modified the license term for the party's license, this 
increase would be in addition to that modification.
    (2) Construction extension. The period in which each party is 
required to demonstrate compliance with the relevant interim and/or 
final performance requirements of the license will be extended by one 
(1) year. This will apply to all relevant performance deadlines 
applicable to this license but will have no impact on any license not 
covered by the qualifying transaction.
    (3) Alternative construction requirements. The assignee of a 
disaggregated or partitioned license in a qualifying transaction under 
clause (b)(2)(ii) of this section which involves the assignment of, and 
commitment to cover and serve, a qualifying geography of rural area 
will substitute the construction requirements which apply to this 
license with actual coverage over the entirety of the qualifying 
geography that was the basis for the qualifying transaction, as well as 
the provision of service to the public, or operation addressing private 
internal business needs over that area. The assignor of such license 
remains subject to its original construction requirements, as modified 
in this section.
    (d) Filing requirements. Parties seeking to participate in the 
Enhanced Competition Incentive Program must file for a partition or 
disaggregation pursuant to Sec.  1.950 or a spectrum lease pursuant to 
subpart X of our rules. As part of the application, the parties should 
state whether the transaction qualifies under clause (b)(2)(i) or (ii) 
of this section, show their satisfaction with all relevant eligibility 
requirements, and request participation in the program.
    (e) Protections against waste, fraud, and abuse.
    (1) Operating requirements. Licenses assigned through the Enhanced 
Competition Incentive Program pursuant to paragraph (b)(2) of this 
section must provide service for a period of at least three (3) years, 
commencing no later than the next construction deadline for the license 
(as modified by this program). Lessees of Enhanced Competition 
Incentive Program transactions must provide service for a period of at 
least three (3) years during any period within the five (5) years of 
that lease. The service for licensees and lessees must not fall below 
the level of service used (or which will be used) to meet its 
construction requirement or by which it qualifies for participation in 
the program.
    (2) Holding period. (i) Licenses assigned through the Enhanced 
Competition Incentive Program must be held for a period of at least 
five (5) years following grant of the assignment application. Leases 
made through the Enhanced Competition Incentive Program must be for a 
minimum of five years and remain in effect for the entire term of the 
lease and may not be assigned to another party.
    (ii) Licenses assigned through the Enhanced Competition Incentive 
Program may not be assigned, even after five (5) years following the 
grant of the assignment application, unless the underlying construction 
and operating requirements imposed, either through the Enhanced 
Competition Incentive Program or by other rule, have been satisfied.
    (iii) These assignment restrictions do not apply to pro forma 
transfers pursuant to Sec.  1.948(c)(1).
    (5) Automatic termination. If the licensee of a license assigned 
pursuant to the Enhanced Competition Incentive Program fails to meet 
performance requirements, including requirements imposed by this 
paragraph and those imposed by other Commission rules, that license 
shall be automatically terminated without further notice to the 
licensee.

[FR Doc. 2021-27493 Filed 12-28-21; 8:45 am]
BILLING CODE 6712-01-P