Partition, Disaggregation, and Leasing of Spectrum, 57403-57421 [2022-17520]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 87, Number 181 (Tuesday, September 20, 2022)]
[Rules and Regulations]
[Pages 57403-57421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17520]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 19-38; FCC 22-53; FR ID 99881]


Partition, Disaggregation, and Leasing of Spectrum

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission modifies partitioning, 
disaggregation, and leasing rules to provide specific incentives for 
small carriers and Tribal Nations, and entities in rural areas, to 
voluntarily participate in the Enhanced Competition Incentive Program 
(ECIP). The ECIP proceeding is in response to Congressional direction 
in the Making Opportunities for Broadband Investment and Limiting 
Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act) to 
consider steps to increase the diversity of spectrum access and the 
availability of advanced telecommunications services in rural areas. 
The ECIP will promote greater competition in the provision of wireless 
services, facilitate increased availability of advanced wireless 
services in rural areas, facilitate new opportunities for small 
carriers and Tribal Nations to increase access to spectrum, and bring 
more advanced wireless service including 5G to underserved communities. 
This document also provides for reaggregation of previously partitioned 
and disaggregated licenses up to the original license size, while 
adopting appropriate safeguards, which will reduce regulatory and 
administrative burdens on licensees.

[[Page 57404]]


DATES: This final rule is effective October 20, 2022, except for 
amendatory instructions 2 (Sec.  1.929), 4 (Sec.  1.950), and 8 
(Sec. Sec.  1.60001 through 1.60007), which are delayed. The Commission 
will publish a document in the Federal Register announcing the 
effective date for the amendatory instructions.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in WT Docket No. 19-38, FCC 22-53, adopted on July 14, 2022 
and released on July 18, 2022. The full text of the Report and Order, 
including all Appendices, is available for inspection and viewing via 
the Commission's 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).

Final Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (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 a Final 
Regulatory Flexibility Analysis (FRFA) concerning the possible impact 
of the rule changes contained in this final rule on small entities. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 
an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in 
the Further Notice of Proposed Rulemaking (FNPRM) released in November 
2022 in this proceeding (86 FR 74024, Nov. 19, 2022). The Commission 
sought written public comment on the proposals in the FNPRM, including 
comments on the IRFA. No comments were filed addressing the IRFA. This 
present Final Regulatory Flexibility Analysis (FRFA) conforms to the 
RFA.

Paperwork Reduction Act

    The requirements in Sec. Sec.  1.929; 1.950; and 1.60001 through 
1.60007 may constitute new or modified collections subject the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. 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 will be invited to comment on the new or modified information 
collection requirements contained in this proceeding. In addition, the 
Commission notes that, pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission previously sought, but did not receive, specific comment on 
how the Commission might further reduce the information collection 
burden for small business concerns with fewer than 25 employees. The 
Commission describes impacts that might affect small businesses, which 
includes more businesses with fewer than 25 employees, in the Final 
Regulatory Flexibility Analysis.

Congressional Review Act

    The Commission will send a copy of the Report and Order to Congress 
and the Government Accountability Office pursuant to the Congressional 
Review Act. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission will 
send a copy of the Report and Order, including the FRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). A copy 
of the Report and Order and FRFA (or summaries thereof) will also be 
published in the Federal Register.

Synopsis

A. 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. 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. MOBILE NOW Act, section 616(b)(2)(A)-(D) (codified at 47 
U.S.C. 1506(b)(2)(A)-(D). Section 616 provided that the Commission may 
offer incentives or reduced performance requirements only if it finds 
that doing so would likely result in increased availability of advanced 
telecommunications services in a rural area and directed that if a 
party fails to meet any build out requirements 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. Id. section 616(b)(3)-(4) (codified at 47 U.S.C. 
1506(b)(3)-(4)).

B. Establishment of the Enhanced Competition Incentive Program

    In this final rule, we establish the ECIP largely as proposed in 
the FNPRM, as an initial measure to facilitate competition and increase 
spectrum access and rural service through transactions that meet the 
qualifying requirements.

C. Enhanced Competition Incentive Program Structure

    We establish ECIP eligibility through participation in a 
transaction involving partitioning and/or disaggregation, leasing, or 
full assignment of spectrum that meets the qualification requirements 
discussed below (Qualifying Transaction). Any covered geographic 
licensee may offer spectrum to an unaffiliated eligible entity through 
a partition and/or disaggregation, and any covered geographic licensee 
eligible to lease in an ``included service,'' as listed in 47 CFR 
1.9005 of our rules, may offer spectrum to an unaffiliated eligible 
entity through a long-term leasing arrangement. Covered geographic 
licensees consist of specified wireless radio services (WRS) for which 
the Commission has auctioned exclusive spectrum rights in defined 
geographic areas. See 47 CFR 1.907. To ensure that appropriate 
incentives and benefits are afforded consistently across a variety of 
transaction types, we permit a covered geographic licensee to assign 
its entire authorization.
    We note that in the FNPRM, we proposed that all WRS licensees in 
``included services'' would be permitted to lease spectrum and 
participate in ECIP. The MOBILE NOW Act, however, requires that we 
assess the administrative feasibility of adopting program features. We 
thus modify our proposed approach towards leasing eligibility for 
lessors to ensure that all ECIP participants can accept responsibility 
for program obligations and realize program benefits.

[[Page 57405]]

Accordingly, we do not include all WRS licensees in ``included 
services'' as eligible lessors within ECIP, as many of the program 
obligations and benefits are inapplicable to site-based wireless 
licensees that are generally permitted to lease; we do, however, permit 
any covered geographic licensees in ``included services'' to 
participate as lessors in the ECIP program. Similarly, we exclude 
light-touch leasing spectrum manager leases of 3.5 GHz Priority Access 
Licenses (PALs) in the Citizens Band Radio Service, because we do not 
believe the light-touch leasing model allows for the level of 
Commission oversight necessary to practically administer ECIP and avoid 
potential waste, fraud, and abuse. See 47 CFR 1.9046, 96.32(c), 96.66. 
We nonetheless permit prospective ECIP participants in the Citizens 
Band Radio Service to enter into de facto transfer leases or general 
21-day notification spectrum manager leases for PALs in order to access 
spectrum and fully receive the program's benefits.
    Some spectrum manager leases of these 3.5 GHz Priority Access 
Licenses (PALs) in the Citizen's Band Radio Service are governed by the 
Commission's ``light-touch leasing'' rules, a process that builds upon 
and incorporates our traditional spectrum manager leasing approval 
process. Lessees seeking to engage in light-touch leasing pre-certify 
with the FCC that they meet the non-lease-specific eligibility and 
qualification criteria for 3.5 GHz light-touch leasing. Rather than 
being approved for a lease by the Commission after an application is 
filed in the Universal Licensing System (ULS), light-touch leases are 
managed and monitored by a third-party automated frequency coordinator, 
known as a Spectrum Access System (SAS). The SAS administrator confirms 
the PALs and lessees meet the light-touch leasing criteria in their 
pre-certification filings and the lease-specific eligibility 
requirements. After SAS confirmation, the lessees may immediately begin 
exercising the leased spectrum usage rights under the light-touch 
leasing arrangements. On a daily basis, the SAS administrators provide 
the FCC with an electronic report of the light-touch leasing 
notifications. The light-touch leases appear on our regularly issued 
Accepted for Filing Public Notices. See 47 CFR 1.9046, 96.32(c), 96.66; 
Amendment of the Commission's Rules with Regard to Commercial 
Operations in the 3550-3650 MHz Band, GN Docket No. 12-354, Order on 
Reconsideration and Second Report and Order, 81 FR 49024 (July 26, 
2016), 31 FCC Rcd 5011, 5068-74, paras. 204-23 (2016) (2016 3.5 GHz 
Second R&O); see also Promoting Investment in the 3550-3700 MHz Band, 
GN Docket No. 17-258, Report and Order, 83 FR 63076 (Dec. 7, 2018), 33 
FCC Rcd 10598 (2018). The light-touch leasing process substituted only 
the immediate processing procedure of spectrum management leases under 
Sec.  1.9020(e)(2), allowing PAL licensees and lessees to enter into 
spectrum manager leases under the general 21-day notification procedure 
in Sec.  1.9020(e)(1) with a notification to the SAS prior to operation 
pursuant to Sec.  1.9046(c). See 2016 3.5 GHz Second R&O, 31 FCC Rcd at 
5071, para. 213 & n.485 and 5074, para. 220. The Commission adopted the 
light-touch leasing approach because the procedures under which we 
normally process spectrum manager leases in other exclusive-use 
wireless bands would be impractical in many cases for PALs, given that 
a significant percentage of these light-touch leases may cover a short 
period of time or perhaps a single event. See 47 CFR 1.9010, 
1.9020(e)(1), 1.9030, 1.9035, 96.32(a).
    As specified in the MOBILE NOW Act, we require that each party to a 
Qualifying Transaction be unaffiliated. We find it in the public 
interest to apply the Commission's current definition of affiliate from 
our designated entity rules, which is a person holding an attributable 
interest in an applicant if such individual or entity directly or 
indirectly controls or has the power to control the applicant; or is 
directly or indirectly controlled by the applicant; or is directly or 
indirectly controlled by a third party or parties that also controls or 
has the power to control the applicant; or has an ``identity of 
interest'' with the applicant. See 47 CFR 1.2110(c)(2), (5). We find 
this eligibility restriction necessary to meet the intent of Congress 
and ensure that the parties to a Qualifying Transaction, and therefore 
intended beneficiaries of ECIP benefits, are unaffiliated to prevent 
gaming of the program. As such, we require applicants to identify their 
affiliates as part of their ECIP application in a Qualifying 
Transaction through the filing of a new FCC Form 602, or the filing of 
an updated FCC Form 602 if the ownership information on a previously 
filed version is not current.
    We adopt two types of ECIP Qualifying Transactions: those that 
focus on small carriers and Tribal Nations gaining spectrum access to 
increase competition, in any location, whether urban, suburban or 
rural; and those that involve any interested party that commits to 
operating in, or providing service to, rural areas. In general, both 
assignments and leases will qualify for ECIP, if they satisfy the other 
program criteria.
    The FNPRM sought comment on whether we should permit full license 
assignments within the ECIP and, if so, how we should implement these 
types of transactions. Although many of the proposed ECIP benefits 
would be applicable to both parties to a transaction involving 
partition, disaggregation (or to the lessor, in the case of leasing 
arrangements), they would only be available to the assignee in a full 
license assignment scenario because the assignor would no longer be 
licensed for that spectrum after consummation of the assignment. We 
find it inequitable to bar these types of transactions from ECIP, 
particularly where transactions involving partitioning and/or 
disaggregation of the same license the parties might seek to fully 
assign would be eligible. To increase program flexibility, we therefore 
permit transactions for full assignments of covered geographic licenses 
where either of the below prongs are met. We also sought comment on 
whether the Commission's rules permitting the sharing of performance 
requirements in the partitioning and/or disaggregation context runs 
counter to the ECIP framework as proposed in the FNPRM. We find that 
the program benefits, obligations and penalties cannot be applied 
equitability in a shared construction obligation scenario, and that it 
would not be administratively feasible to implement. Therefore, we 
preclude any license with an existing shared performance obligation 
from participation in the program, and we will not accept in the ECIP 
any application with an election from the parties to share performance 
obligations.
1. Small Carrier or Tribal Nation Transaction Prong
a. Eligible Entities
    We determine that any covered geographic licensee is eligible to 
participate as an assignor and any covered geographic licensee in an 
``included service'' is eligible to participate as a lessor, and two 
types of entities are eligible as assignees or lessees in a Qualifying 
Transaction under this first prong: either small carriers or Tribal 
Nations. Consistent with the MOBILE NOW Act, each party to a Qualifying 
Transaction must be unaffiliated.
    Small Carriers. Section 616 of the MOBILE NOW Act defined ``Covered

[[Page 57406]]

small carrier'' as a carrier that ``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 ``offers services using 
the facilities of the carrier.'' MOBILE NOW Act section 616(a)(1), 
(codified at 47 U.S.C. 1506(a)(1)). The MOBILE NOW Act also applied the 
definition of ``carrier,'' as set forth in section 3 of the 
Communications Act of 1934, as ``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.'' Id. In the FNPRM, 
we proposed to apply the statutory definition of covered small carriers 
and sought comment on alternatives. We decline at this time to expand 
our proposed definition of covered small carriers in establishing 
eligibility for this prong. We note that Congress' directive in the 
MOBILE NOW Act focused specifically on making unused spectrum available 
to covered small carriers and promoting service to rural areas, and the 
current record in this proceeding has not been sufficiently developed 
to determine whether to extend the additional incentives of the small 
carrier prong of ECIP beyond those entities specifically contemplated 
by Congress.
    For purposes of this program, we therefore adopt the above 
statutory definition of ``Covered Small Carrier'' and designate them as 
an eligible beneficiary as a ``small carrier'' under this transaction 
prong. For ease of reference, we use the term ``small carrier'' rather 
than ``covered small carrier'' used in the MOBILE NOW Act, though we 
incorporate into our rules the specific language of the statutory 
definition.
    Tribal Nations. We include Tribal Nations as an additional eligible 
beneficiary in this transaction prong, independent of whether they 
qualify as a small carrier. We recognize the acute connectivity 
challenges that Tribal Nations face and believe that inclusion in the 
ECIP program will facilitate spectrum access by Tribal Nations in both 
rural and non-rural areas to help meet their communications needs. We 
therefore adopt our proposed definition of Tribal Nation as any 
federally-recognized American Indian Tribe and Alaska Native Village, 
the consortia of federally recognized Tribes and/or Native Villages, 
and other entities controlled and majority-owned by such Tribes or 
consortia. In the FNPRM, we sought comment on how we should facilitate 
transactions involving entities seeking to serve native Hawaiian 
Homelands given there are no federally recognized Tribal Nations in 
Hawaii. In the absence of responsive comments on this issue, we will 
consider future waiver requests for ECIP program eligibility on behalf 
of appropriate entities that manage or administer resources on behalf 
of Native Hawaiians or Hawaiian Homelands. We believe the inclusion of 
Tribal Nations in ECIP is an important step to facilitate increased 
spectrum access, and the Commission is committed to working with Tribal 
Nations to ensure that the benefits afforded through ECIP participation 
are fully realized.
b. Minimum Spectrum Threshold
    As proposed, we adopt a minimum spectrum threshold for a qualifying 
transaction. Specifically, we require that, for licenses included in an 
ECIP transaction involving a disaggregation, partition/disaggregation 
in combination, or a lease, the assignor or lessor must include a 
minimum of 50% of the licensed spectrum, and must demonstrate that it 
meets the minimum spectrum threshold at every point in the transaction 
area (where the percentage is calculated at any point as the amount of 
spectrum being assigned/leased (in megahertz)/total spectrum held under 
the license (in megahertz)). As an example, we will not permit an 
assignor participating in ECIP to engage in a transaction whereby it 
partitions an area and disaggregates spectrum in combination, but seeks 
to include 75% of its spectrum in the western part of the partitioned 
area, and 25% of its spectrum in the eastern part of the partitioned 
area, in an attempt to meet the 50% minimum spectrum threshold through 
some form of averaging. We believe that this minimum spectrum threshold 
will provide stakeholders flexibility in structuring transactions to 
facilitate sufficient spectrum availability for the underlying intended 
service, while simultaneously preventing transactions involving de 
minimis spectrum amounts that are potentially entered into solely to 
obtain ECIP benefits.
    We anticipate that secondary market transactions negotiated at 
arm's length will result in parties acquiring sufficient spectrum to 
meet their communications needs. We find that requiring minimum 
spectrum amounts in megahertz to ensure that a current technology can 
be successfully deployed reduces stakeholder flexibility. Such an 
approach is not technologically neutral and may not adequately account 
for future technological advances. By taking a technologically neutral 
approach that requires a fixed percentage of spectrum relative to each 
license included in an ECIP transaction, we provide sufficient 
flexibility to allow a wide range of different WRS licensees the 
opportunity to participate in, and benefit from, the ECIP. This 
approach will likely increase the number of ECIP transactions, and 
foster participation by not effectively barring licensees with smaller 
spectrum amounts based on the original spectrum allocation in a 
particular radio service.
    Some commenters argued against a minimum threshold. We disagree. 
The Commission must balance the goals and benefits conferred through 
the program with the potential harms of abuse, and we find that 
establishing a minimum spectrum threshold is necessary to prevent sham 
transactions (e.g., disaggregation of de minimis spectrum amounts 
simply to acquire program benefits). Accordingly, we adopt a 50% 
minimum spectrum threshold as proposed in the FNPRM. Provided the 
minimum spectrum threshold is met, parties to an ECIP Qualifying 
Transaction are free to negotiate specific terms for additional amounts 
of spectrum required to meet their operational or technological needs.
c. Minimum Geography Threshold
    We adopt a minimum geography threshold for Qualifying Transactions 
under this small carrier or Tribal Nation prong, whether a partition, 
partition/disaggregation in combination, full assignment or a long-term 
leasing arrangement. We also incorporate two-tiered geographic scaling 
based on the overall size of the licensed area in the underlying 
license from which the ECIP transaction originates to ensure equitable 
treatment across differently-sized licensed areas. Specifically, for 
licensed areas that contain 30,000 square miles or less, we require a 
minimum geography threshold of 25% of the licensed area. For geographic 
area licenses larger than 30,000 square miles in size, we require a 
minimum geography threshold of 10% of the licensed area. We believe 
this approach appropriately balances the size of the licensed area to 
create incentives for program participation and ensure sufficient land 
area for small carriers or Tribal Nations, while discouraging 
transactions involving de minimis geography entered into solely to 
obtain program benefits.
    In the FNPRM, we proposed a 25% geography threshold to ensure 
sufficient land area was made available for the provision of advanced 
telecommunications services and to prevent fraud from transactions 
involving de minimis amounts of geography entered into for the singular

[[Page 57407]]

purpose of receiving benefits. We are persuaded that the scaling 
concepts advanced by commenters provide a practical solution towards 
ensuring a fair and consistent application of the ECIP. We therefore 
find it in the public interest to adopt the two-tiered hybrid approach 
discussed above, based on the amount of square mileage within the 
licensed area of the assignor or lessor, regardless of the license 
type, to meet the required minimum geography threshold percentage. We 
believe this approach appropriately balances the goal of ensuring 
greater program participation, particularly for licensees with larger 
licensed areas that offer spectrum to others, and that benefit from 
program benefits applied to their entire license (e.g., extension of 
renewal deadline and construction deadlines), while protecting against 
potential abuse through transactions that include de minimis amounts of 
geography. Assignors or lessors are permitted to include more of their 
licensed area in a Qualifying Transaction than the minimum geography 
threshold in this prong, up to their entire licensed area, potentially 
resulting in a larger Transaction Geography in a Qualifying 
Transaction. We believe this allows sufficient flexibility to structure 
transactions based on the needs of the parties.
    We clarify that under the small carrier or Tribal Nation 
transaction prong, the geography assigned or leased can be from any 
type or size of covered geographic license and can include rural and/or 
suburban/urban areas, provided it meets the minimum geography threshold 
percentage described above. An ECIP transaction between unaffiliated 
parties, as required under this prong, may be either an assignment 
(full, partition, and/or disaggregation) or a lease, but not both, for 
each license. We impose this restriction to meet program goals, 
including the equitable distribution of program benefits and 
obligations, and therefore preclude an ECIP participant from, for 
example, partitioning a percentage of its licensed area, and then 
leasing another percentage of licensed area from the same license, 
which when combined meet the minimum geography threshold. While an ECIP 
application filed under this prong may include more than one license 
for assignment or leasing to a single assignee/lessee, each included 
license must independently meet the respective minimum geography 
percentage threshold, and will be independently reviewed and acted 
upon. Applications seeking ECIP benefits that do not satisfy the 
minimum spectrum and geography thresholds for each license on a stand-
alone basis will be dismissed. We also clarify that parties 
participating in ECIP through this small carrier or Tribal Nation 
transaction prong remain subject to the substantive performance 
requirements (e.g., covering a certain population percentage, in most 
flexible use bands) as set forth in the underlying radio service(s) 
rules of the license(s) involved in the Qualifying Transaction. 
Finally, after review of the record, we find no basis to restrict the 
program to census defined populations.
2. Rural-Focused Transaction Prong
    To further the important Commission and Congressional goals of 
facilitating the provision of advanced telecommunications service in 
rural areas, we provide a second possible path for ECIP participants 
through a rural-focused transaction approach. This prong expands the 
scope of eligible entities beyond those specifically referenced in the 
MOBILE NOW Act and is intended to facilitate coverage to rural areas by 
tying ECIP benefits to construction and operation obligations. We 
believe this second transaction prong will expand the class of eligible 
participants, resulting in greater potential for increased spectrum 
usage and competition in rural areas.
a. Eligible Entities
    Any covered geographic licensee is eligible to participate as an 
assignor and any covered geographic licensee in an ``included 
service,'' 47 CFR 1.9005, is eligible to participate as a lessor. 
Further, any entity is eligible to participate as an assignee or lessee 
if able to meet the prong requirements described below, including, for 
example, large or small carriers, common carriers, non-common carriers, 
Tribal Nations, critical infrastructure entities, and other entities 
(large or small) operating private wireless systems. We reiterate that, 
consistent with the MOBILE NOW Act, each party to a Qualifying 
Transaction must be unaffiliated.
    Commenters unanimously supported the Commission's FNPRM proposal to 
adopt a rural-focused transaction prong available to anyone able to 
meet the requirements. We find it in the public interest to adopt our 
proposal to expand on the MOBILE NOW Act's focus to incentivize 
transactions involving a wide variety of stakeholders seeking to 
provide services in rural areas that may currently face spectrum access 
challenges.
b. Minimum Spectrum Threshold
    Similar to our treatment of the small carrier or Tribal Nation 
prong above and for the same rationale, we adopt the proposed 50% 
minimum spectrum threshold for each license(s) included in the 
Qualifying Transaction of the rural-focused transaction prong. For 
licenses included in an ECIP transaction involving a disaggregation, 
partition/disaggregation in combination, or a lease, the assignor or 
lessor must include a minimum of 50% of the licensed spectrum, and must 
demonstrate that it meets the minimum spectrum threshold at every point 
in the transaction area (where the percentage is calculated at any 
point as the amount of spectrum being assigned/leased (in megahertz)/
total spectrum held under the license (in megahertz). The minimum 
spectrum threshold under this rural-focused transaction prong provides 
stakeholders flexibility in structuring transactions to facilitate 
sufficient spectrum availability for the provision of advanced 
telecommunications services in rural areas, while simultaneously 
preventing transactions involving de minimis spectrum amounts that are 
potentially entered into solely to obtain ECIP benefits.
    In the FNPRM, we proposed in the rural context that a Qualifying 
Transaction must designate a minimum of 50% of the licensed spectrum, 
for each license included in the transaction, consistent with the small 
carrier or Tribal Nation transaction prong. We find that adopting the 
minimum spectrum threshold is the best approach towards advancing the 
Commission's goals of fostering the provision of advanced 
telecommunications services and providing stakeholders flexibility in 
structuring transactions, while preventing transactions involving de 
minimis amounts of spectrum.
c. Minimum Qualifying Geography
    To achieve the Commission's policy goals of facilitating bona fide 
transactions that ensure rural service while providing substantial 
program benefits, we require that a Qualifying Transaction under this 
prong (e.g., a partition, partition/disaggregation in combination, full 
assignment, or a long-term leasing arrangement) must include a minimum 
amount of ``Qualifying Geography.'' All geography identified as 
Qualifying Geography, for purposes of this rural-focused transaction 
prong, must be in a rural area, as defined below. We adopt the 
statutory definition of ``Rural Area,'' which is defined as any area 
except (1) a city, town, or

[[Page 57408]]

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. MOBILE 
NOW Act, section 616(a)(2) (codified at 47 U.S.C. 1506(a)(2)). Although 
we understand concerns regarding areas adjacent to large cities/towns, 
we note that the MOBILE NOW Act did not provide an exception for the 
inclusion in the definition of ``rural'' those locations on the 
periphery of urban areas that are arguably less populated, but 
nonetheless are part of an urbanized area contiguous or adjacent to a 
city or town with a population of more than 50,000. We therefore 
recognize that parties may seek a waiver of the rule in certain unusual 
circumstances, which we will review pursuant to the criteria set forth 
in the Commission's rules. See 47 CFR 1.3, 1.925.
    As applied to the ECIP rural-focused transaction prong, we define 
Qualifying Geography as at least 300 contiguous square miles for those 
licensed areas that are 30,000 square miles and smaller, with 
appropriate upward scaling for larger licensed areas. After reviewing 
the record and the varying geographic areas the Commission licenses in 
greater detail, we find that our proposed scaling approach that focused 
on license types (e.g., Partial Economic Area (PEA) or smaller) 
potentially could create inequities. Commission staff reviewed data 
regarding license types in Covered Geographic Services, and found that, 
out of 410 PEAs, 399 (or 98%) were 30,000 square miles or less; 
however, certain other licensed areas larger than PEAs also consisted 
of 30,000 square miles or less. For example, 84% of BEAs, 26% of MTAs, 
and 28% of MEAs, consisted of 30,000 square miles or less. (The license 
area types reviewed include (from smallest to largest average area 
size): Counties, Cellular Market Areas (CMAs), Interactive Video 
Markets (IVMs), Basic Trading Areas (BTAs), Partial Economic Areas 
(PEAs), Basic Economic Areas (BEAs), Major Trading Areas (MTAs), Major 
Economic Areas (MEAs), VHF Public Coast (VPC), and Regional Economic 
Area Groupings (REAGs). See What is Geographic Information Systems 
(GIS)?, https://www.fcc.gov/wireless/gis-wtb (last visited April 
2022)). Accordingly, were we to adopt the ``PEA and smaller'' approach, 
as proposed in the FNPRM, as the standard for the 300 square mile 
minimum Qualifying Geography threshold, 141 out of 170 BEAs, 12 out of 
46 MTAs, and 13 out of 46 MEAs, all geographic sizes larger than PEAs, 
but also containing only 30,000 square miles or less, would have been 
unnecessarily subject to higher minimum Qualifying Geography thresholds 
(e.g., 900 square miles). We seek to remedy this potential inequity 
through a more neutral approach that incentivizes transactions across 
all licensed areas in covered geographic services.
    We therefore adopt a Qualifying Geography minimum threshold based 
on actual geographic license size in square miles and find that this 
slight modification to our proposed approach ensures equal treatment 
across similar sized licensed areas. Under the rural-focused 
transaction prong we adopt, the geographic threshold approach scaled 
for larger licensed areas in four categories is as follows: (1) Up to 
30,000 square mile licensed areas--Qualifying Geography = 300 square 
miles; (2) 30,001-90,000 square mile licensed areas--Qualifying 
Geography = 900 square miles; (3) 90,001-500,000 square mile licensed 
areas--Qualifying Geography = 5,000 square miles; and (4) 500,001 
square mile licensed areas and above--Qualifying Geography = 15,000 
square miles.
    We believe this approach ensures fairness and equal treatment 
across different license sizes and that scaling for larger licensed 
areas will ensure sufficient financial commitment by ECIP participants 
to yield more than nominal spectrum access. We also believe it achieves 
the Commission's goal of facilitating rural buildout sufficient to 
justify the ECIP benefits received, thus preventing windfall benefits. 
To afford ECIP participants substantial flexibility in structuring 
transactions and to incentivize participation under this rural-focused 
transaction prong, we permit assignors/lessors in Qualifying 
Transactions to include spectrum from multiple licenses, as long as the 
Qualifying Geography intersects each contributing license included in 
the underlying ECIP transaction application. To facilitate program 
participation under this rural focused transaction prong, however, we 
do not require a minimum square mileage of Qualifying Geography per 
contributing license, provided the sum total of the Qualifying 
Geography from the contributing licenses meets the required minimum 
threshold.
    To protect program integrity, in instances where a Qualifying 
Transaction consists of multiple licenses with varying sized licensed 
areas contributing to the Qualifying Geography, we require the 
Qualifying Geography to be scaled to the minimum geographic threshold 
of the largest licensed area included. For example, where the 
Qualifying Geography intersects three contributing licenses and, based 
on their smaller overall licensed area, two of the three contributing 
licenses would require a minimum Qualifying Geography of 300 square 
miles, and the third contributing license is a larger licensed area 
that would require 900 square miles of minimum Qualifying Geography, we 
require the Qualifying Geography for this ECIP Qualifying Transaction 
to consist of a minimum of 900 square miles.
    We do not mandate the maximum geographic scope of the parties' 
overall transaction, and clarify that the total Transaction Geography 
can be up to the entire licensed area of the contributing license(s), 
but no smaller than the minimum Qualifying Geography in the appropriate 
scaled category. This approach can potentially result in a larger 
Transaction Geography than the Qualifying Geography and affords program 
participants sufficient flexibility to structure transactions based on 
the needs of the parties. In this regard, we strongly encourage all 
parties to an ECIP transaction, and particularly assignees and lessees, 
to include as part of the overall transaction sufficient Transaction 
Geography to ensure that the Qualifying Geography will be 100% covered 
as required. We reiterate that both the Qualifying Geography and 
Transaction Geography is not determined by the Commission, but is 
voluntarily identified by the parties. Both assignees and lessees are 
required to cover 100% of the Qualifying Geography, and this 
requirement becomes the assignee's substituted performance obligation 
in lieu of the service rule obligation. We advise parties to perform 
the proper due diligence in advance of filing an ECIP application to 
ensure that site access and/or propagation issues will not prevent the 
assignee or lessee from meeting its construction requirement. Failure 
to do so, resulting in subsequent arguments that the 100% Qualifying 
Geography coverage requirement cannot be met, is a consideration in the 
Commission's evaluation as to whether the parties entered into a good 
faith transaction with a bona fide intent to meet the program's 
obligations. Finally, in any transaction involving licenses authorized 
in mixed spectrum bands, we clarify that all end-user devices operating 
throughout the Qualifying Geography must be capable of operation on all 
spectrum bands for contributing licenses that are part of the 
transaction.

[[Page 57409]]

D. Enhanced Competition Incentive Program Benefits

    In this final rule, we adopt three ECIP benefits: where applicable, 
we afford participants a five-year license term extension, a one year 
construction extension, and alternative construction requirements for 
rural-focused transactions.
1. License Term Extension
    We adopt a five-year license term extension for the following: all 
parties involved in a qualifying partition/disaggregation transaction; 
the lessor entering into a qualifying spectrum leasing transaction, 
given that the lessor retains the license renewal obligations; and the 
assignee in full license assignments. We believe this benefit will 
substantially reduce regulatory burdens associated with renewal 
obligations and will properly incentivize secondary market 
transactions, particularly spectrum leases that are subject to the 
lessor's license term. ECIP is available to a wide variety of WRS 
licenses, most of which have a renewal showing obligation requiring a 
demonstration of continued service at or above that required to meet 
the original construction obligation. We believe that the license term 
extension benefit offers an incentive, consistent with Congressional 
direction, to licensees that have yet to meet their construction 
obligations or those that may not have maintained the required level of 
service throughout the course of their license term.
2. Construction Extension
    We adopt a one-year construction extension for all parties to a 
Qualifying Transaction for both the interim and final construction 
benchmarks, where applicable. This benefit applies to the following 
parties in an ECIP transaction: both parties in a Qualifying 
Transaction involving partition and/or disaggregation; to the lessor in 
a qualifying spectrum lease arrangement, and to the assignee in a full 
license assignment. We are not persuaded that additional time beyond a 
one-year construction extension of the service rule benchmark is 
warranted as an ECIP benefit. We seek to facilitate secondary market 
transactions that will benefit those needing increased spectrum access, 
as well as the provision of advanced telecommunications services to 
rural areas. Although Congress specifically focused on the Commission 
affording construction relief to help realize these policy goals, we 
are mindful that providing additional time to construct, while 
beneficial to the licensee recipient, correspondingly results in a 
delay in the ultimate provision of services to the public. Further, 
pursuant to the MOBILE NOW Act, the Commission is charged with 
assessing the administrative feasibility of the program, and we believe 
that substantially adding to the complexity of ECIP by adopting 
commenter-suggested gradations of construction extension benefits would 
not be in the public interest. MOBILE NOW Act section 616(b)(2)(D) 
(codified at 47 U.S.C. 1506(b)(2)(D)). Therefore, we adopt a one-year 
construction extension for both the interim and final construction 
benchmarks, where applicable. We also note that the Commission's rules 
are very clear with regard to circumstances that would not warrant an 
extension of time, and specifically state that construction and 
coverage deadline extension requests will not be granted due to 
transfers of control or assignments of authorization. 47 CFR 
1.946(e)(3). For the ECIP program, Congress directed the Commission to 
consider incentives that we may deem appropriate to facilitate 
transactions, and specifically included this type of relief as a 
possible incentive. We find that application of this benefit serves the 
public interest as an incentive to participate in ECIP. We also clarify 
that construction deadlines previously extended through grant of a 
waiver may not be automatically transferrable to the assignee, unless 
specified by the waiver grant instrument. If transferrable, and where 
such further transfer is predicated upon the recipient justifying the 
waiver relief, ECIP assignees must separately justify any waiver relief 
separate from, and prior to, grant of ECIP benefits.
3. Alternate Construction Benchmarks for Rural-Focused Transactions
    For the rural-focused transaction prong, we substitute an 
assignee's existing service rule-based performance requirement, if 
applicable, for the entire Transaction Geography as reflected on the 
assignee's new license created through ECIP, with the alternative 
construction benchmark described below. This benefit is provided to 
assignees in a Qualifying Transaction involving partition, partition 
and disaggregation combination, or full license assignment. 
Specifically, under ECIP, an assignee or lessee is required to provide 
100% coverage to its Qualifying Geography, which is at least 300 square 
miles for licensed areas up to 30,000 square miles, with upward scaling 
by licensed area size. Although we require an assignee or lessee to 
meet the 100% Qualifying Geography coverage requirement to provide 
rural service in exchange for ECIP benefits, we do not substitute the 
alternative construction benchmark to leasing arrangements, as the 
lessee has no service-rule based performance benchmark requiring 
substitution. Moreover, under the Commission's rules, the lessor has 
the responsibility to meet underlying performance benchmarks for its 
entire license and also retains the ability to count any lessee 
construction towards lessor's buildout obligation. We also clarify that 
where the Commission has previously modified the assignor's substantive 
service-based performance requirement through conditions granted by 
waiver and such requirements have not been met, the assignee will only 
receive the substituted alternative construction requirement if the 
assignee separately requests, and is granted, a waiver to receive this 
ECIP benefit in lieu of the modified performance requirement applicable 
to the assignor.
    We reiterate that although we require 100% coverage of the 
Qualifying Geography, parties to an ECIP transaction are free to 
include significantly more geography than the minimum square mileage of 
Qualifying Geography required to be constructed. In fact, under some 
circumstances, the Qualifying Geography coverage requirement can likely 
be met through construction of a single transmitter with approximately 
a ten mile radius of operation, though we anticipate that assignees or 
lessees may deploy multiple transmitters to ensure robust network 
coverage and to provide sufficient buffer to ensure 100% coverage of 
the Qualifying Geography. We find that substituting service rule 
requirements with mandatory coverage of Qualifying Geography for those 
assignees with remaining performance requirements represents a key 
benefit and an incentive to participate in ECIP, while still requiring 
a legitimate investment in network infrastructure that will result in 
public interest benefits in rural areas.
    In adopting the substitution of an alternative construction 
requirement in lieu of service based requirements for rural-focused 
transactions (for assignees involved in partitioning and/or 
disaggregation or full license assignments), we clarify our treatment 
of the interim and final construction deadline in two distinct 
scenarios. First, where the interim performance requirement has not 
been met at the time of the ECIP transaction, the assignee meets its 
interim performance obligation for the entire Transaction Geography 
specified in its new

[[Page 57410]]

authorization (if larger than the Qualifying Geography) by complying 
with this alternative approach, and we remove the final performance 
requirement set forth in the service rules for the particular license 
acquired in the ECIP transaction. Second, where an assignor has 
previously met the interim construction deadline, this alternative 
construction benchmark will replace the final construction obligation 
for the assignee's entire Transaction Geography. We believe this 
flexible approach will facilitate rural-focused transactions and will 
ensure a reasonable stakeholder investment in rural buildout sufficient 
to warrant ECIP benefits. In the event an assignee has no performance 
obligation because the respective interim and final benchmarks have 
been satisfied, we do not confer the benefit of a substituted 
performance obligation.

E. Enhanced Competition Incentive Program Protections Against Waste, 
Fraud, and Abuse

    In this final rule, we adopt several measures to protect the 
integrity of ECIP from potential waste, fraud, and abuse and to promote 
the program's goals of increased spectrum access, rural service, and 
competition. We also clarify that, unless specified herein, 
participation in the ECIP does not relieve a licensee of the obligation 
to comply with other Commission rules including, but not limited to, 
the following: (1) designated entity eligibility requirements or the 
obligation to make an unjust enrichment payment when required; (2) 
competitive review of an ECIP transaction if needed; (3) the 
application of a service-specific spectrum aggregation rule; or (4) 
obligations required by the Tribal Lands Bidding Credit rule.
    These protections include: (1) a requirement for applicants seeking 
to participate in ECIP to select either the small carrier/Tribal Nation 
prong or the rural-focused transaction prong, but not both, for each 
ECIP transaction, without the option of changing prongs once selected; 
(2) a five-year holding period on licenses assigned through 
partitioning and/or disaggregation from an ECIP transaction, and a 
five-year minimum term for leasing arrangements; (3) an operational 
requirement of 100% coverage of the Qualifying Geography for three 
consecutive years for rural-focused transactions; (4) automatic 
termination of the relevant ECIP license and bar from future program 
participation for a licensee's failure to comply with the five-year 
holding period or to meet the applicable buildout and operational 
requirements (as required for rural-focused transactions); and (5) a 
one-time cap on ECIP benefits for each license subject to a Qualifying 
Transaction (e.g., the original license and the subsequent license(s) 
issued from a partition and/or disaggregation). In adopting these 
program protections, we acknowledge that ECIP is in its nascency, and 
that we will continue to fine-tune the program to enhance its 
effectiveness and to better meet our objectives. We also direct the 
Wireless Telecommunications Bureau to conduct an evaluation of the 
program and prepare a report to the Commission no later than five years 
after the effective date of this final rule.
    As with any Commission program conferring a benefit and intended to 
achieve results that serve the public interest, we find it imperative 
to establish adequate protections to avoid the potential of waste, 
fraud, and abuse. Indeed, some of the protections we adopt today were 
specifically included in the MOBILE NOW Act and have been implemented 
in prior Commission proceedings to guard against anti-competitive 
behavior and abuse of Commission process. See, e.g., MOBILE NOW Act 
section 616(b)(3) (codified at 47 U.S.C. 1506(b)(3)) (stating that 
automatic license termination is the consequence of failure to 
buildout); 47 CFR 20.22(c) (requiring a holding period for 600 MHz 
reserve licenses); 47 CFR 1.946(c) (automatic termination for failure 
to build-out wireless licenses in certain radio services). Based on our 
experience administering wireless licenses to support the provision of 
service to rural areas, we find that implementing the protections 
discussed in more detail below aligns with our program goals and serves 
the public interest to facilitate, as much as possible, intense 
spectrum utilization in these underserved areas. We believe that our 
approach addresses a major commenter concern (ensuring that the 
assignor/lessor is not unduly punished for the failings of the 
assignee/lessee) while also protecting ECIP from waste, fraud, and 
abuse.
1. Single Prong Selection Required for ECIP Participation
    To avoid gamesmanship and provide for administrative efficiency, 
ECIP participant(s) must select either the small carrier/Tribal Nation 
prong or the rural-focused transaction prong, even if the receiving 
party is otherwise eligible for both options. We find it more efficient 
and in the public interest to adopt a requirement that provides a clear 
and distinct path to ECIP participation by mandating that parties to an 
ECIP transaction may select either prong, but not both. This approach 
results in consistent application of program benefits and ensures 
program integrity by requiring applicants to follow through with their 
stated commitment to provide certain public interest benefits, and also 
reduces the potential for gamesmanship in ECIP prong selection. 
Accordingly, parties to an ECIP transaction are required to make a 
prong selection in the application filed with the Commission to approve 
the ECIP transaction, i.e., an FCC Form 603 (for partitions and/or 
disaggregation) or FCC Form 608 (for leases). Once the associated 
application has been granted by the Commission, the parties (now ECIP 
participants) are not permitted to change their selection.
    This restriction ensures that no party changes its ECIP prong 
selection, particularly towards the end of the period allotted for 
completing construction obligations, thereby leveraging potentially 
more favorable regulatory requirements. For example: Licensee A (the 
assignor) and Licensee B (the assignee) both file an FCC Form 603 
application, selecting the rural-focused transaction prong, with 
Licensee B committing to provide service to a partitioned rural area of 
at least 300 rural square miles of Qualifying Geography as a substitute 
for an upcoming performance deadlines mandated under our service rules. 
Under this prong, Licensee B must meet the applicable construction and 
operational requirements for that area by the extended construction 
deadline. Once the Commission grants the application, Licensee B is not 
permitted to later elect, in lieu of meeting its obligation to provide 
service throughout its chosen Qualifying Geography, to meet the 
performance requirements applicable under the small carrier or Tribal 
Nation prong, i.e., covering a percentage of the population within its 
license area (as required in many flexible wireless radio services), 
which may include more sub-urban and urban populations--even if 
Licensee B could have originally qualified for that prong as a small 
carrier. We clarify that, as with any transaction seeking Commission 
approval to alienate licensed spectrum, and independent of ECIP, the 
applicant(s) must otherwise meet the requirements to be Commission 
licensees and the Commission must deem the transaction to be in the 
public interest. See 47 U.S.C. 310(d).
    We find that this approach aligns with the program's goals of 
fostering increased accessed to spectrum and the provision of rural 
service, ensures transparency by providing concrete criteria and 
expectations to program

[[Page 57411]]

participants and the public, and is a less burdensome and a more 
efficient way to administer the program.
2. Holding Period
    With certain exceptions described below, we adopt a five-year 
holding period during which licensees cannot further partition, 
disaggregate, assign or lease licenses assigned through ECIP. We 
similarly adopt a five-year minimum lease term for long-term spectrum 
manager or long-term de facto transfer leasing arrangements under ECIP. 
Specifically, assignees of licenses obtained through partitioning and/
or disaggregation or full license assignment pursuant to an ECIP-
related transaction may subsequently assign or lease, in whole or in 
part, those licenses to other entities, regardless of whether the 
entity receiving the license is ECIP-eligible, only after a five-year 
holding period starting from the date of license issuance, and provided 
that the assignee has met any relevant construction requirement 
(interim and final) and operational requirement discussed below (for 
rural-focused transactions) for those licenses. We also require lessors 
and lessees participating in ECIP to commit to at least a five-year 
lease term for long-term spectrum manager or long-term de facto 
transfer leasing arrangements. We acknowledge that this five-year 
restriction may not directly align with parties' immediate business 
needs in all cases, but we believe that this approach, on balance, best 
promotes the goals of the program, effectively deters unwanted 
behavior, and serves the public interest.
    Restriction on Leasing and Subleasing of Spectrum Rights Obtained 
through ECIP. We adopt our proposed approach to prohibit the leasing or 
subleasing of spectrum by ECIP assignees and lessees during the five-
year holding period or five-year minimum lease term, respectively. In 
leasing/subleasing arrangements after the applicable five-year period, 
the lessee or sublessee will not receive ECIP benefits, consistent with 
the one-time ECIP benefit rule we discuss below. We remain concerned 
about situations where, for example, an ECIP licensee (or lessee) 
monetizes its benefits by further leasing its spectrums rights to a 
third party, with no guarantee that the lessee/sublessee's activities 
will yield the public interest benefits intended by ECIP. We therefore 
decline to allow such leasing arrangements during the relevant five-
year period to help ensure program obligations are met by assignees and 
lessees, given the benefits ECIP provides, and to avoid providing an 
opportunity for program participants to circumvent our rules.
    Exceptions to the Holding Period. Given the realities and 
challenges of today's ever-growing wireless market, and our consistent 
approach of providing flexibility to wireless radio service licensees 
to foster competition, we adopt an exception to the requisite holding 
period for pro forma transactions, including transfers and assignments. 
We have previously found pro forma transactions to be in the public 
interest because such transactions promote competition by allowing 
service providers to change their ownership structure or to reorganize 
without regulatory delay, increasing a provider's ability to compete in 
today's marketplace--a goal repeatedly advocated by Congress and the 
Commission.
    We also adopt an exception to our holding period for lease 
arrangements, including subleases, involving providers of Contraband 
Interdiction Systems (CIS). We find that ECIP restrictions intended to 
prevent waste, fraud, and abuse should not be applied to vital public 
safety-related leasing or sub-leasing arrangements intended to deploy 
systems that prevent contraband wireless device use in correctional 
facilities. Specifically, to enable an ECIP assignee or lessee to 
lease/sublease a license (or some portion thereof) to a CIS provider, 
we will provide an exception to the: (1) five-year holding period or 
five-year minimum lease term; (2) operational requirement for rural-
focused transactions (as applicable); (3) prohibition against leasing/
subleasing during the relevant five-year period; and (4) penalties for 
failing to comply with certain program obligations. We find that this 
approach is consistent with our ECIP program goals, and enables CIS 
operation where needed to promote public safety. In adopting this 
exception, we reiterate that CIS providers require access to all the 
commercial spectrum bands covering the footprint of the correctional 
facility to effectively operate, and that any gap in coverage could 
render the system less effective. Because of these operating 
parameters, a CIS provider will likely need to enter into multiple 
spectrum leasing arrangements for the same geographic area covering the 
correctional facility. Given the public safety importance of protecting 
correctional facility staff and the public from the potential harms 
associated with the use of contraband wireless devices, we find it in 
the public interest to adopt narrow exceptions to the program 
protections.
    We decline to adopt an exception for licensees that are exiting the 
wireless business. Given the various business models under which WRS 
licensees operate, we find it impractical to apply a one-size-fits-all 
standard to a proposed transaction involving an ECIP-participating 
licensee intending to exit the wireless business. We also note that the 
Commission does not generally permit a licensee to rely on business 
decisions and related transactions to justify a request for extension 
or waiver of performance requirements. See 47 CFR 1.946. Further, 
applying such a rigid standard can also run counter to the goals of the 
ECIP; if the standard is too lenient, it may be used by an ECIP entity 
to circumvent the Commission's rules and, if the standard is too harsh, 
it may prevent program participation and/or hinder competition. We 
therefore elect to address these types of situations on a case-by-case 
basis. As such, where an ECIP licensee intends to exit the 
telecommunications industry prior to the end of the requisite holding 
period or prior to the expiration of any applicable five-year lease 
term, we will entertain waiver requests for review under the criteria 
set forth in Sec.  1.925 of the Commission's rules. See 47 CFR 1.925.
    We also decline to adopt an exception to the five-year minimum 
lease term, or an alternative penalty scheme, for lessees that 
prematurely terminate their lease due to an involuntary transaction, 
such as bankruptcy. Based on our experience gained by administering 
transactions involving wireless licenses, we believe that adopting an 
exception for a lease termination resulting from involuntary 
transactions is unnecessary as such circumstances are atypical. We 
recognize, however, that a waiver of the five-year minimum lease term 
may be sought in unusual circumstances.
3. Operational Requirement for Rural-Focused Transactions
    For rural-focused transactions, we adopt an operational requirement 
whereby the assignee or lessee must operate or provide service 
throughout the entire Qualifying Geography for a minimum of three 
consecutive years.
    Operational Requirement--Coverage. Given the benefits afforded to 
participating licensees through ECIP, we find that adopting the 
operational requirement largely as proposed is in the public interest 
as a targeted measure to ensure that operation or the provision of 
service occurs throughout the entire Qualifying Geography for a 
sustained period. To fulfill the operational requirement, an assignee 
or lessee of an ECIP rural-focused transaction must, for a minimum of 
three consecutive years, operate or provide service to 100% of the 
Qualifying Geography. Specifically,

[[Page 57412]]

a common carrier assignee/lessee must provide signal coverage for 100% 
of the Qualifying Geography and offer commercial service in that area. 
An assignee/lessee that intends to operate private, internal 
communications for business purposes, including, for example, 
utilities, must demonstrate that it has fulfilled the three-year 
operational requirement by providing 100% signal coverage to the entire 
Qualifying Geography, and certify that it has provided continuous 
private communications throughout that area for a minimum of three 
consecutive years. We also adopt our proposal to impose a minimum level 
service requirement during the three-year operational period. During 
this three year period, operation/service must not fall below that used 
(or intended to be used) to meet the relevant construction requirement 
for assignees and lessors, and lessees must continue to provide service 
(or operate, to meet private internal business needs) throughout the 
entire Qualifying Geography, irrespective of whether the lessor 
attributes any of the lessee's buildout for its performance benchmark 
compliance.
    For assignees, we note that the applicable Qualifying Geography of 
which 100% coverage must be met to fulfill the operational requirement 
could vary, depending on the size of the license(s) contributed. Where 
the parties in an ECIP transaction elect to contribute different 
license sizes to the Qualifying Geography, we will determine the size 
of the Qualifying Geography by using the minimum threshold applicable 
to the largest contributing license it intersects (e.g., if the 
Qualifying Geography intersects a contributing license whose licensed 
area size is 30,001 to 90,000 square miles, the assignee's 100% 
coverage requirement must be at least 900 square miles, even if the 
Qualifying Geography also intersects a contributing license with a 
licensed area of 30,000 square miles or less). In this scenario, where 
multiple licenses contribute to the Qualifying Geography, to meet the 
operational requirement, we will also require that all spectrum 
contributed (if from different spectrum bands) to the Qualifying 
Geography be accessible by end-user devices operating throughout the 
Qualifying Geography. By adopting such a requirement, we ensure that 
the alternative construction benchmark is not used in such a way to 
undermine an important ECIP goal, the enabling of diverse spectrum 
access and the provision of service to rural areas.
    Operational Requirement--Commencement of Three Year Period. We 
apply the operational requirement both to assignees (whether through 
partitioning, partitioning/disaggregation in combination, or full 
assignment) and lessees. We recognize, however, that the Commission's 
service rules regulate assignees and lessees differently, with varying 
rights and responsibilities applicable to each. For example, a lessee 
does not have service rule-based performance benchmarks or license 
renewal obligations independent of the licensee lessor, whereas an 
assignee is issued a separate license, may have independent performance 
requirements (if not previously met by the assignor), and has renewal 
obligations. Further, as discussed above, in the case of leasing 
arrangements under ECIP, we do not substitute the alternate geographic 
construction requirement for the service-based rule requirement, 
because the licensee lessor has the option of counting lessee 
construction towards compliance with lessor's performance benchmark. 
Given these distinctions in regulatory treatment, we find it in the 
public interest to adopt, with certain modifications, our proposal 
regarding the date by which operation or service must commence to 
ensure both timely construction and three continuous years of 
operation, and we clarify below the application of the rule in various 
scenarios that involve assignees versus lessees participating in ECIP.
    To not undermine the key ECIP benefit afforded through the 
extension of the interim and final performance benchmarks associated 
with an assigned license, we will require an assignee with an upcoming 
interim benchmark (or final benchmark, if the interim has passed) to 
commence the three year operational requirement no later than the date 
of the extended interim (or extended final, if no interim) construction 
deadline. However, where a license assigned through ECIP has no service 
rule-based performance requirement because the licensee has met both 
the interim and final benchmarks, we require the assignee to commence 
the three year continuous operation requirement no later than two years 
after consummation of the ECIP transaction. This approach ensures 
prompt service/operation within the entire Qualifying Geography, 
regardless of whether the underlying performance requirements of the 
assignor's license that was partitioned, partition/disaggregated, or 
fully assigned, have been met. This approach also recognizes that a 
reasonable period of time might be required to construct the entire 
Qualifying Geography, particularly where the assignee may have acquired 
the Qualifying Geography as part of a larger Transaction Geography with 
plans to operate or provide service beyond the Qualifying Geography as 
part of a larger network.
    With respect to lessees, we require the three year operational 
period to commence no later than two years following the commencement 
of the lease, regardless of whether the licensee lessor has an upcoming 
extended interim and/or final performance benchmark, or whether it has 
previously met both performance benchmarks. We seek to ensure that 
leased spectrum within the Qualifying Geography is timely put to use in 
the public interest, given the ECIP benefits conferred to the licensee/
lessor. This approach is therefore warranted, particularly where we do 
not substitute construction of the Qualifying Geography as an 
alternative performance requirement (unlike an assignee, where the 
service rule construction requirement has not yet been met) because a 
lessee has no independent performance obligation. Moreover, as noted, a 
licensee/lessor has the option, but is not required, to count lessee 
construction towards lessor's performance obligation, so lessee 
construction under the Commission's service rules is not mandatory. By 
requiring a lessee of spectrum through ECIP to operate or provide 
service no later than two years following lease commencement, we also 
ensure three years of continuous operation where ECIP parties enter 
into the minimum required five year lease term.
    We clarify that the date of construction that commences that start 
of the required three-year period of continuous operation is the date 
reflected on either: (1) the assignee's timely-filed construction 
notification required under our service rules, see 47 CFR 1.946(d), 
informing the Commission that the relevant buildout/coverage 
requirement has been met for the license at issue; or (2) its Initial 
Operational Requirement Notification, discussed below. Because lessees 
are not required under our service rules to file construction 
notifications, their date of actual construction will be the date 
indicated in its Initial Operational Requirement Notification. If the 
assignee or lessee files their Initial Operational Requirement 
Notification prior to the relevant construction deadline, we will count 
the date of construction certified to in that filing, as reflected in 
ULS, as the start date for the three-year operational period. For 
example, where the interim performance benchmark has not been met at 
the time of the ECIP transaction and the assignee does not fulfill its

[[Page 57413]]

construction requirement until the extended interim construction 
deadline, the date of the extended interim deadline would apply for 
determining when the operational period commences. Alternatively, where 
the assignee elects to construct and file a notification with the 
Commission before the extended interim construction deadline, then the 
filing date of the notification governs.
    Initial and Final Operational Requirement Notifications. In order 
to ensure that assignees and lessees of rural-focused prong ECIP 
transactions comply with the operational requirement, we require the 
filing of two notifications: (1) an Initial Operational Requirement 
Notification, to be filed within 30 days of the commencement of 
operations complying with the operational requirement; and (2) a Final 
Operational Requirement Notification, to be filed within 30 days of 
satisfaction of the three consecutive year operational requirement. The 
Initial Operational Requirement Notification must include the 
following: (1) the date the assignee/lessee began operations; (2) a 
certification that the assignee/lessee satisfies the operational 
requirement of 100% coverage of the Qualifying Geography for that 
license or lease; and (3) technical data demonstrating such compliance. 
The Final Operational Requirement Notification must also include the 
following: (1) a certification that the network satisfied the 
operational requirement of 100% coverage of the Qualifying Geography 
for three consecutive years; (2) the date on which the three year 
period was completed; and (3) technical data demonstrating the coverage 
provided. The Initial Operational Requirement Notification and Final 
Operational Requirement Notification are required in addition to any 
construction notification required to be filed with the Commission 
pursuant to rule Sec.  1.946. 47 CFR 1.946. We direct the Bureau to 
release a public notice providing program participants with further 
details regarding compliance with the Initial and Final Operational 
Requirement Notification procedures including, for example, the filing 
method and applicable fees. The data obtained from these filings will 
be critical component part of the Bureau's ECIP Evaluation Report, 
discussed below.
4. Prohibition on Bad-Faith Transactions
    We find it unnecessary to penalize the assignor or lessor when the 
assignee or lessee is solely at fault for failing to adhere to the 
holding period, or meet the construction or operational requirement 
(for rural-focused transactions). In taking this approach, we observe 
that the assignee/lessee is an unaffiliated entity and that the 
assignor/lessor is not typically a guarantor of assignee/lessee 
performance, and therefore penalties should be applied to the party 
responsible for the violation and its affiliates. Additionally, we are 
aware that program participation may be hindered if we impose penalties 
on an assignor/lessor for the failures of the assignee/lessee that are 
beyond its control.
    We remain committed, however, to preventing bad faith transactions 
which bring no public benefits in return for the ECIP benefits 
conferred. For instance, a licensee might actively seek an ECIP-
eligible entity to derive ECIP benefits through a lease of unused 
spectrum rights without regard for whether that entity has the 
financial or technical resources to meet program requirements. Such 
agreements also might include compensating that recipient entity to 
participate in a transaction.
    Accordingly, we will not penalize assignors/lessors that enter into 
good faith transactions with assignees/lessees for subsequent assignee/
lessee failure to meet program obligations. However, where the 
assignor/lessor is found to have entered into a transaction solely to 
reap program benefits, whereby it knew or should have known the 
assignee/lessee could or would not meet program obligations, we will 
bar the assignor/lessor entity and its affiliates from future 
participation in ECIP (as discussed below), and may impose monetary 
penalties if appropriate. In taking this approach, we strike a balance 
between fostering spectrum access, increased competition, and 
facilitating service to rural areas through program incentives, and 
adopting appropriate protective measures that will not unduly hinder 
program effectiveness.
    To address this concern, we require two new certifications to be 
included in the assignment and/or lease applications (FCC Forms 603 and 
608, respectively). First, each party to the transaction must certify 
either that: (1) the licensee or lessor did not confer any benefit 
(monetary or otherwise) to the assignee/lessee as consideration for 
entering into the proposed ECIP transaction; or (2) if the parties 
cannot make this certification, provide a description of the benefit(s) 
conferred. In some transactions, for example, the consideration to an 
assignee or lessee might include roaming privileges or sharing of 
infrastructure that would not be indicative of a bad faith transaction, 
but which nonetheless merits Commission review to ensure program 
integrity. Second, each party to the transaction must certify that it 
has entered into the transaction in good faith and that the licensee/
lessor reasonably believes that the assignee/lessee has the resources 
and a bona fide intent to meet the program's obligations. We caution 
prospective ECIP participants that making a false certification or 
providing false information in an assignment or lease application is a 
violation of the Commission's rules, which may result in a forfeiture 
or other penalties. See 47 CFR 1.17, 1.80. Additionally, as indicated 
in FCC Form 603 and 608, making a willful false statement in the form 
or attachment is punishable by fine and/or imprisonment (under 18 
U.S.C. 1001) and/or revocation of any station license or construction 
permit (under 47 U.S.C. 312(a)(1)), and/or forfeiture (47 U.S.C. 503). 
Additionally, we direct the Bureau to refer suspected ECIP-related 
fraud or misrepresentation to the Enforcement Bureau.
5. Automatic Termination and Future Bar From ECIP Participation for 
Failing To Meet Certain ECIP Requirements
    Consistent with the MOBILE NOW Act, we adopt our proposal to 
automatically terminate any license(s) assigned as part of an ECIP 
transaction where the assignee: (1) fails to comply with the five-year 
holding period; (2) fails to meet the relevant buildout requirement(s); 
and/or (3) fails to fully comply with the operational requirement (for 
rural-focused transactions). We also bar from future program 
participation the licensee that was the subject of the automatic 
termination and/or any lessee that fails to comply with the holding 
requirement (including by subleasing or prematurely terminating their 
lease) or is found to have engaged in a bad faith transaction to obtain 
ECIP benefits, as well as any affiliate of those entities. This bar 
will also apply to lessors that prematurely terminate a qualifying 
lease. In addition, to ensure program integrity, we clarify that the 
bar will apply indefinitely to the licensee, lessor, and/or lessee, 
including any of its affiliates. This means any officer, director, or 
entity that directly or indirectly controls the licensee or is directly 
or indirectly controlled by the licensee, may be within the scope of 
persons subject to the bar. In order to maximize administrative 
efficiency, while also minimizing gamesmanship of our prohibition on 
barred entities participating in ECIP, a prospective ECIP participant 
will be considered ``an

[[Page 57414]]

affiliate of a barred entity'' if it was affiliated with that entity 
either when the barred entity applied for the program for the 
transaction for which it was barred or at the time the prospective ECIP 
applicant applied to participate in the program. Once a licensee/lessee 
has been barred from program participation, it will no longer be 
eligible for ECIP benefits for future transactions, even if it enters 
into transactions that would otherwise be eligible for such benefits.
    We find that the two consequences we adopt today, i.e., automatic 
license termination and a bar on future program participation, are 
necessary and appropriate measures to deter program waste, fraud, and 
abuse, given the substantial benefits being offered to ECIP 
participants. Based on our experience administering wireless licenses 
and programs that provide benefits in furtherance of the public 
interest, we find that these two penalties are appropriate measures to 
incentivize program participants to fulfill their core program 
requirements. Importantly, the automatic termination provision is 
consistent with section 616 of the MOBILE NOW Act, which provides that 
``the right to the spectrum shall be forfeited'' if a party ``fails to 
meet any build out requirements set by the Commission.'' MOBILE NOW Act 
section 616(b)(3), (codified at 47 U.S.C. 1506(b)(3)). We also adopt 
these penalties to impress upon program participants the importance of 
meeting the obligations associated with receiving ECIP benefits and the 
general need for program compliance to ensure the program operates 
effectively.
    At the same time, we seek to encourage ECIP participation by 
ensuring that the penalties are targeted and proportional to the 
gravity of the program participant's failure to meet its ECIP 
obligations. We therefore limit the scope of actions that would merit 
automatic license termination against the ECIP assignee to the 
following: (1) failure to meet the five-year holding period; (2) 
failure to meet the relevant construction requirement for all the 
license(s) at issue, either interim or final deadline; and (3) failure 
to meet the 100% coverage and three-year operational requirement for 
the Qualifying Geography. The actions that will result in a bar from 
future participation in ECIP by the culpable party, as applicable, and 
its affiliates, are: (1) prematurely terminating a lease within the 
minimum five-year term or entering into a sublease in violation of ECIP 
rules; (2) failure to meet the five-year holding period; (3) failure to 
meet the relevant construction requirement for the license(s) at issue, 
either interim or final deadline; (4) failure to meet the 100% coverage 
and three-year operational requirement for the Qualifying Geography; 
and (5) entering into a transaction in bad faith, solely for the 
purpose of obtaining program benefits.
    We clarify that, where appropriate, the automatic termination 
penalty will apply to the subject license regardless of whether the 
service rules for that license would yield a more lenient result. We 
also note that since an ECIP lessee does not hold the license subject 
to a qualifying lease, the automatic license termination penalty would 
not apply to it. With respect to an assignee failure identified above 
in a rural-focused transaction, the automatic termination penalty will 
apply to each license that makes up any part of the Qualifying 
Geography. For example, if an ECIP transaction results in two assigned 
licenses each consisting of Qualifying Geography of 150 square miles 
for a total of 300 square miles of Qualifying Geography, the assignee's 
failure to timely construct either license will result in the 
termination of both licenses, given our requirement that the entire 
Qualifying Geography must be constructed given the ECIP benefits 
conferred.
    Date on Which a Barred Licensee/Lessee Will Lose Eligibility to 
Participate in the ECIP and Contents of Notification. When an ECIP 
licensee/lessee has failed to meet one or more of the above criteria by 
the relevant deadline(s), the bar commences on the date the licensee/
lessee receives notice, which the Bureau will provide by letter. The 
letter will specify the reasons why the licensee/lessee will no longer 
be permitted to participate in ECIP and explain the scope and effect of 
the penalty. Additionally, we find that, consistent with the 
Commission's notice rules, notice has been provided once the Bureau 
sends such letter via electronic mail, using the last email address of 
record in ULS for that licensee/lessee. 47 CFR 1.5.
    Effect of Being Barred from Program Participation. Once an ECIP 
participant has been barred from future program participation, it, 
along with its affiliates, are no longer eligible to receive ECIP 
benefits for entering into subsequent Qualifying Transactions. This 
applies to all parties in a transaction which would otherwise be ECIP-
eligible; if a barred entity is a party to the transaction, it is not 
ECIP-eligible and no ECIP benefits will flow to any party to that 
transaction, even if the transaction meets all other ECIP criteria. 
Given that the established bar is from future program participation, a 
barred licensee/lessee will continue to receive existing ECIP benefits 
acquired through unrelated prior ECIP transactions, provided those 
benefits were conferred prior to the start date of the bar. We clarify 
that once an entity has been barred from participation in the program, 
the Commission will not process a pending application for ECIP 
participation to which it is a party, even where the application was 
initially accepted for filing prior to the date the bar commenced.
6. Limitations on Additional ECIP Benefits for Subsequent Transactions
    We will not provide additional ECIP benefits where a licensee has 
already received benefits for a license involved in a previous ECIP 
transaction. Specifically, if a license in a given transaction has 
previously been involved in any ECIP-related transaction and received 
ECIP benefits as a result, any party that holds that license (or some 
portion thereof) cannot subsequently receive ECIP benefits by including 
that license (including any sub-parts of the license, spectrally or 
geographically) in another ECIP transaction. This restriction applies 
to the original license in the ECIP transaction, as well as to the 
licenses issued through a partition and/or disaggregation. We adopt 
this limitation to prevent licensees from undermining our renewal and 
construction requirements by compounding ECIP-related extensions 
through multiple ECIP transactions.

F. ECIP Evaluation Report

    To ensure ECIP promotes competition and increases spectrum access 
for small carriers and Tribal Nations, as well as increases service to 
rural areas, we direct the Bureau to evaluate the progress and 
effectiveness of the ECIP program and submit a report to the 
Commission, no later than five years following the effective date of 
this final rule. Because the report could benefit from input from 
interested stakeholders, we also direct the Bureau and the Consumer and 
Governmental Affairs Bureau to conduct outreach, prior to the Bureau 
drafting the report, in order to yield meaningful evaluation and 
feedback of the ECIP from those interested stakeholders. As part of 
this outreach, we expect that both the Bureau and the Consumer and 
Governmental Affairs Bureau will monitor the program's effectiveness 
for Tribal Nations. The report should include information about ECIP 
participation by eligible stakeholders, including the number of ECIP

[[Page 57415]]

transactions since the inception of the program, as well as geographic 
areas and spectrum made available under each prong of the program. The 
report may include recommended rule and policy changes that would help 
improve the effectiveness of the program, including an assessment of 
whether the program is achieving benefits for Tribal Nations. Finally, 
the report should be made publicly available, although the Bureau may 
also prepare a non-public version with commercially sensitive 
information, if needed.

G. Reaggregation of Spectrum Licenses

    Independent of establishing ECIP, we adopt rules permitting license 
reaggregation up to the original geographic size and spectrum band(s) 
for the type of license, and also adopt accompanying proposed 
safeguards. We find that allowing reaggregation will ease the 
administrative burden on both licensees and Commission staff. Further, 
we find that allowing reaggregation will create more certainty 
regarding our secondary markets rules and procedures to encourage 
licensees to engage in these types of transactions in the first 
instance.
    Specifically, applicants seeking license reaggregation will be 
required to submit an application requesting a major modification 
pursuant to Commission rule Sec.  1.929, 47 CFR 1.929, as well as an 
attachment certifying compliance with three safeguards. The compliance 
certification must state 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; and (3) not violated the 
Commission's permanent discontinuance rules. These safeguards are 
intended to ensure that licensees seeking to reaggregate licenses are 
not doing so merely to avoid complying with the regulatory requirements 
(e.g. meeting performance benchmarks) associated with each license to 
be reaggregated.
    After review of the record, we agree with the majority of 
commenters that argue allowing reaggregation creates a certainty that a 
license holder could re-aggregate partitioned or disaggregated licenses 
in the future which would eliminate a potential reason not to partition 
or disaggregate in the first instance. We find that establishing a 
formal process for license reaggregation reduces regulatory and 
administrative burdens and could incentivize, not undermine, secondary 
market transactions consistent with the purposes of the ECIP and the 
goals of the MOBILE NOW Act. As the record reflects, we anticipate that 
requests for reaggregation will be submitted by licensees that, for 
business reasons, have reacquired licenses in their (or an affiliated 
party's) name potentially as part of a larger transaction, and now seek 
to reaggregate previously partitioned and/or disaggregated licenses 
into a single license largely for administrative purposes. We find that 
the substantial benefit of establishing a formal process for license 
reaggregation, coupled with our proposed safeguards to qualify for 
reaggregation, renders a five-year holding period unnecessary. 
Accordingly, we adopt our proposal to permit license reaggregation, up 
to the original geographic size and spectrum band(s) for the type of 
license, including the three safeguards described above to protect 
against potential abuses. We also clarify that in the event licenses 
identified in a voluntarily filed application for reaggregation have 
varying expiration dates, we will apply the earliest such date to the 
overall reaggregated license for reasons of administrative convenience, 
and to prevent the windfall of license term extensions achieved merely 
by seeking license reaggregation.
    Treatment of Existing Waivers Grants or Special Conditions. We find 
it in the public interest to apply a flexible approach to reaggregation 
requests that maintains previously granted relief where applicable. We 
also find, however, that an automatic application of the terms and 
conditions of an individual license, that may have been subject to 
waiver relief, to the entire reaggregated license is not warranted 
absent a separate justification. We will apply special conditions (to 
reflect prior grant of waiver of application or special conditions) to 
a reaggregated license as necessary to identify the appropriate type 
and scope of relief, both spectrally and geographically, applicable to 
subparts of that license (e.g., variations in transmit power levels, 
out-of-band emission limits or other technical parameters, or 
alternative interference protection criteria, for specific spectrum or 
geographic areas associated with the reaggregated license). Finally, we 
direct the Bureau to issue a public notice confirming the 
administrative details of required filings including, for example, the 
filing method, electronic map format, and applicable fees. See, e.g., 
Wireline Competition Bureau Provides Guidance to Carriers Receiving 
Connect America Fund Support Regarding Their Broadband Location 
Reporting Obligations, Docket No. 10-90, Public Notice, 31 FCC Rcd 
12900 (WCB 2016) (providing guidance Public Notice (PN) describing 
required information and filing parameters to enable carrier compliance 
with earlier Commission order); Wireless Telecommunications Bureau To 
Accept 900 MHz Broadband Segment Applications Beginning May 27, 2021, 
WT Docket No. 17-200, Public Notice, 36 FCC Rcd 7377 (WTB 2021).

List of Subjects in 47 CFR part 1

    Practice and procedure, Reporting and recordkeeping requirements, 
Telecommunications, Wireless radio services.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 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. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note, 
unless otherwise noted.


0
2. Delayed indefinitely, amend Sec.  1.929 by adding paragraph (a)(7) 
to read as follows:


Sec.  1.929  Classification of filings as major or minor.

* * * * *
    (a) * * *
    (7) Application or amendment requesting reaggregation of licenses 
pursuant to Sec.  1.950.
* * * * *

0
3. Amend Sec.  1.948 by revising paragraph (j) to read as follows:


Sec.  1.948  Assignment of authorization or transfer of control, 
notification of consummation.

* * * * *
    (j) Processing of applications. Applications for assignment of 
authorization or transfer of control relating to the Wireless Radio 
Services will be processed pursuant either to general approval 
procedures or the immediate approval procedures, as discussed in this 
paragraph (j).
    (1) General approval procedures. Applications will be processed 
pursuant to the general approval procedures set forth in this paragraph 
unless they are submitted and qualify for the immediate approval 
procedures set forth in paragraph (j)(2) of this section.
    (i) To be accepted for filing under these general approval 
procedures, the

[[Page 57416]]

application must be sufficiently complete and contain all necessary 
information and certifications requested on the applicable form, FCC 
Form 603, including any information and certifications (including those 
of the proposed assignee or transferee relating to eligibility, basic 
qualifications, and foreign ownership) required by the rules of this 
chapter and any rules pertaining to the specific service for which the 
application is filed, and must include payment of the required 
application fee(s) (see Sec.  1.1102).
    (ii) Once accepted for filing, the application will be placed on 
public notice, except no prior public notice will be required for 
applications involving authorizations in the Private Wireless Services, 
as specified in Sec.  1.933(d)(9).
    (iii) Petitions to deny filed in accordance with section 309(d) of 
the Communications Act must comply with the provisions of Sec.  1.939, 
except that such petitions must be filed no later than 14 days 
following the date of the public notice listing the application as 
accepted for filing.
    (iv) No later than 21 days following the date of the public notice 
listing an application as accepted for filing, the Wireless 
Telecommunications Bureau (Bureau) will affirmatively consent to the 
application, deny the application, or determine to subject the 
application to further review. For applications for which no prior 
public notice is required, the Bureau will affirmatively consent to the 
application, deny the application, or determine to subject the 
application to further review no later than 21 days following the date 
on which the application has been filed, if filed electronically, and 
any required application fee has been paid (see Sec.  1.1102); if filed 
manually, the Bureau will affirmatively consent to the application, 
deny the application, or determine to subject the application to 
further review no later than 21 days after the necessary data in the 
manually filed application is entered into ULS.
    (v) If the Bureau determines to subject the application to further 
review, it will issue a public notice so indicating. Within 90 days 
following the date of that public notice, the Bureau will either take 
action upon the application or provide public notice that an additional 
90-day period for review is needed.
    (vi) Consent to the application is not deemed granted until the 
Bureau affirmatively acts upon the application.
    (vii) Grant of consent to the application will be reflected in a 
public notice (see Sec.  1.933(a)) promptly issued after the grant.
    (viii) If any petition to deny is filed, and the Bureau grants the 
application, the Bureau will deny the petition(s) and issue a concise 
statement of the reason(s) for denial, disposing of all substantive 
issues raised in the petition(s).
    (2) Immediate approval procedures. Applications that meet the 
requirements of paragraph (j)(2)(i) of this section qualify for the 
immediate approval procedures.
    (i) To qualify for the immediate approval procedures, the 
application must be sufficiently complete, contain all necessary 
information and certifications (including those relating to 
eligibility, basic qualifications, and foreign ownership), and include 
payment of the requisite application fee(s), as required for an 
application processed under the general approval procedures set forth 
in paragraph (j)(1) 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 assigned or transferred, create a geographic overlap with spectrum 
in any licensed Wireless Radio Service (including the same service) in 
which the proposed assignee or transferee already holds a direct or 
indirect interest of 10% or more (see Sec.  1.2112), either as a 
licensee or a spectrum lessee, and that could be used by the assignee 
or transferee 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 Sec. Sec.  1.2110, and 1.2111 and 
Sec. Sec.  24.709, 24.714, and 24.839 of this chapter);
    (C) The assignment or transfer of control does not require a waiver 
of, or declaratory ruling pertaining to, any applicable Commission 
rules in this chapter, and there is no pending issue as to whether the 
license is subject to revocation, cancellation, or termination by the 
Commission; and
    (D) The assignment application does not involve a transaction in 
the Enhanced Competition Incentive Program (see subpart EE of this 
part).
    (ii) Provided that the application establishes that it meets all of 
the requisite elements to qualify for these immediate approval 
procedures, consent to the assignment or transfer of control will be 
reflected in ULS. If the application is filed electronically, consent 
will be reflected in ULS on the next business day after the filing of 
the application; if filed manually, consent will be reflected in ULS on 
the next business day after the necessary data in the manually filed 
application is entered into ULS. Consent to the application is not 
deemed granted until the Bureau affirmatively acts upon the 
application.
    (iii) Grant of consent to the application under these immediate 
approval procedures will be reflected in a public notice (see Sec.  
1.933(a)) promptly issued after the grant, and is subject to 
reconsideration (see Sec. Sec.  1.106(f), 1.108, and 1.113).

0
4. Delayed indefinitely, amend Sec.  1.950 as follows:
0
a. Revise the section heading;
0
b. Add paragraphs (a)(4) and (b)(3);
0
c. Revise the heading of paragraph (c) and paragraph (e); and
0
d. Add paragraph (i).
    The revisions and additions read as follows:


Sec.  1.950  Geographic partitioning, spectrum disaggregation, and 
reaggregation.

    (a) * * *
    (4) Reaggregation. Reaggregation is the consolidation into a single 
license of two or more licenses previously disaggregated and/or 
partitioned.
    (b) * * *
    (3) Reaggregation. An eligible licensee may reaggregate its covered 
geographic license(s), provided the requirements of paragraph (i) of 
this section are met, and subject to the following exceptions:
    (i) 220 MHz Service licensees must comply with Sec.  90.1019 of 
this chapter.
    (ii) Cellular Radiotelephone Service licensees must comply with 
Sec.  22.948 of this chapter.
    (c) Partitioning and disaggregation filing requirements. * * *
* * * * *
    (e) License term. The license term for a partitioned license or a 
disaggregated spectrum license is the remainder of the original 
licensee's license term. The license term for a reaggregated license is 
the remainder of the license term of the license with the earliest 
expiration date of those included in the underlying reaggregation 
application.
* * * * *
    (i) Reaggregation of licenses. A licensee may apply to reaggregate 
two or more licenses that were previously disaggregated or partitioned 
pursuant to this section. Licenses may be reaggregated in any 
combination up to, but not exceeding, the original geographic size and/
or spectrum band(s) for the type of Wireless Radio Service license at 
issue (i.e., a licensee may, but

[[Page 57417]]

is not required, to reaggregate all licenses which were once part of 
the original license).
    (1) Prerequisites for reaggregation. Licenses will only be eligible 
for reaggregation if they meet the following requirements:
    (i) All licenses to be reaggregated must be of the same radio 
service, and have the same market and channel block;
    (ii) Each license to be reaggregated must have met all applicable 
performance requirements, including any interim and final requirements, 
prior to the filing of the reaggregation application;
    (iii) Each license to be reaggregated must have been renewed for at 
least one license term since the applicable performance requirements 
were met; and
    (iv) None of the licenses for which an applicant seeks 
reaggregation have violated the Commission's permanent discontinuance 
rules, as applicable to that license.
    (2) Filing requirements for reaggregation. Parties seeking approval 
for reaggregation must apply by filing a major modification application 
using FCC Form 601 that complies with the filing requirements described 
in Sec. Sec.  1.913, 1.929, and 1.947, and that includes the following 
attachments:
    (i) A certification that the licenses meet the requirements of 
paragraphs (i)(1)(i) through (iv) of this section;
    (ii) An electronic map and table that together identify all 
licenses and spectrum to be aggregated and identify the composite 
license requested;
    (iii) A certification that all licenses in the reaggregation 
request are active under the same FCC Registration Number at the time 
of filing;
    (iv) A per-license list of all special conditions and a statement 
acknowledging that the listed special conditions will continue to apply 
only to that portion of the reaggregated license with respect to the 
spectrum and/or geography at issue, as if the license had not been 
reaggregated; and
    (v) A per-license list of all waivers granted and a statement of 
understanding that the listed waiver(s) do not automatically convey to 
any other portion of the reaggregated license. If applicable, the 
applicant shall include a statement indicating that it is seeking 
waiver relief through a separately filed waiver request seeking to 
expand the scope of previously granted relief.

0
5. Amend Sec.  1.9020 as follows:
0
a. Remove ``and,'' at the end of paragraph (e)(2)(i)(B);
0
b. Remove the period at the end of paragraph (e)(2)(i)(C) and add ``; 
and'' in its place; and
0
c. Add paragraph (e)(2)(i)(D).
    The addition reads as follows:


Sec.  1.9020  Spectrum manager leasing arrangements.

* * * * *
    (e) * * *
    (2) * * *
    (i) * * *
    (D) The application does not involve a transaction in the Enhanced 
Competition Incentive Program (see subpart EE of this part).
* * * * *

0
6. Amend Sec.  1.9030 as follows:
0
a. Remove ``and,'' at the end of paragraph (e)(2)(i)(B);
0
b. Remove the period at the end of paragraph (e)(2)(i)(C) and add ``; 
and'' in its place; and
0
c. Add paragraph (e)(2)(i)(D).
    The addition reads as follows:


Sec.  1.9030  Long-term de facto transfer leasing arrangements.

* * * * *
    (e) * * *
    (2) * * *
    (i) * * *
    (D) The application does not involve a transaction in the Enhanced 
Competition Incentive Program (see subpart EE of this part).
* * * * *

0
7. Add subpart EE, consisting of Sec. Sec.  1.60000 through 1.60007, to 
read as follows:

Subpart EE--Enhanced Competition Incentive Program

Sec.
1.60000 Purpose.
1.60001-1.60007 [Reserved]


Sec.  1.60000  Purpose.

    The purpose of this subpart is to implement the Enhanced 
Competition Incentive Program (ECIP), a program designed to incentivize 
Qualifying Transactions in the Wireless Radio Services to increase 
spectrum access for small carriers and Tribal Nations and to increase 
competition, and also facilitate the provision of advanced 
telecommunications services in rural areas by eligible entities.


Sec.  Sec.  1.60001-1.60007  [Reserved]

0
8. Delayed indefinitely, add Sec. Sec.  1.60001 through 1.60007 to read 
as follows:
Sec.
1.60001 Definitions.
1.60002 Application requirements for program participation.
1.60003 Small carrier or tribal nation transaction prong.
1.60004 Rural-focused transaction prong.
1.60005 Program benefits.
1.60006 Program obligations.
1.60007 Penalties.


Sec.  1.60001  Definitions.

    The following definitions are applicable to the ECIP.
    (a) Affiliate. A person holding an attributable interest in an 
applicant if such individual or entity:
    (1) Directly or indirectly controls or has the power to control the 
applicant; or
    (2) Is directly or indirectly controlled by the applicant; or
    (3) Is directly or indirectly controlled by a third party or 
parties that also controls or has the power to control the applicant; 
or
    (4) Has an ``identity of interest'' with the applicant.

    Note 1 to paragraph (a).  See Sec. Sec.  1.2110 and 1.2112(a)(1) 
through (7) for further clarification on determining affiliation.

    (b) Qualifying transaction. A transaction between unaffiliated 
parties involving a partition and/or disaggregation, long-term leasing 
arrangement, or full assignment that meets the requirements of either 
the small carrier or Tribal Nation transaction prong pursuant to Sec.  
1.60002 or the rural-focused transaction prong pursuant to Sec.  
1.60003.
    (c) Qualifying geography. Qualifying Geography is the minimum 
geography threshold required for the rural-focused transaction prong.
    (d) Rural area. Rural area 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.
    (e) Small carrier. A small carrier is a carrier, defined as 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 in section 3 of the Communications Act of 1934 
(47 U.S.C. 153), that:
    (1) Has not more than 1,500 employees (as determined under 13 CFR 
121.106); and
    (2) Offers services using the facilities of the carrier.
    (f) Transaction geography. Transaction Geography is the total 
geography included in a Qualifying Transaction.
    (g) Tribal nation. A Tribal Nation is any federally-recognized 
American Indian Tribe and Alaska Native Village, the consortia of 
federally recognized

[[Page 57418]]

Tribes and/or Native Villages, and other entities controlled and 
majority-owned by such Tribes or consortia.


Sec.  1.60002   Application requirements for program participation.

    Applicants seeking to participate in the ECIP must submit an 
application on FCC Form 603 or 608, as applicable, to the Wireless 
Telecommunications Bureau for review and approval that details a 
Qualifying Transaction through a partition and/or disaggregation 
pursuant to Sec.  1.950, a full assignment pursuant to Sec.  1.948, a 
long-term spectrum manager lease arrangement pursuant to Sec.  1.9020, 
or a long-term de facto transfer lease arrangement pursuant to Sec.  
1.9030, and that:
    (a) Designates that the Qualifying Transaction identified in the 
application seeks consideration under the ECIP;
    (b) Selects the prong applicable to its Qualifying Transaction, 
either Sec.  1.60003 or Sec.  1.60004, but not both, even if a party to 
the transaction is eligible under both prongs, and demonstrates that 
the applicants meet each requirement under Sec.  1.60003 or Sec.  
1.60004;
    (c) Demonstrates that the applicants to the Qualifying Transaction 
are unaffiliated by providing a list of all affiliated entities for 
each party to the transaction through the filing of a new FCC Form 602, 
or the filing of an updated FCC Form 602 if the ownership information 
is not current;
    (d) Includes a certification that the applicants to the Qualifying 
Transaction are not barred from the ECIP pursuant to Sec.  1.60007;
    (e) Includes a certification that the license(s) included in the 
application have not previously received benefits under the ECIP 
pursuant to Sec.  1.60005(e);
    (f) Includes a certification that the applicants entered into the 
Qualifying Transaction in good faith and that the licensee/lessor 
reasonably believes the assignee/lessee has the resources and a bona 
fide intent to meet the program's obligations;
    (g) Includes a certification that the assignor or lessor either did 
not confer any benefit (monetary or otherwise) to the assignee or 
lessee as consideration for entering into the proposed ECIP transaction 
or, if benefits were conferred to the assignee or lessee, the 
application must include a narrative with a detailed description of any 
benefits so conferred by the assignor or lessor to the assignee or 
lessee, respectively; and
    (h) Includes a certification that any lease arrangement entered 
into for purposes of ECIP participation is for a minimum term of five 
(5) years, whether a long-term de facto transfer lease arrangement or a 
long-term spectrum manager lease arrangement.


Sec.  1.60003  Small carrier or tribal nation transaction prong.

    (a) Eligibility. The following parties are eligible to participate 
through a Qualifying Transaction under the small carrier or Tribal 
Nation transaction prong of the ECIP: an assignor that is a covered 
geographic licensee as defined under Sec.  1.907; a lessor in an 
included service as set forth in Sec.  1.9005 that is also a covered 
geographic licensee as defined under Sec.  1.907; and an unaffiliated 
assignee or unaffiliated lessee that is a small carrier or a Tribal 
Nation as defined in this subpart, except that a transaction shall not 
be eligible for participation in the ECIP under this prong if it 
includes either:
    (1) A license(s) with existing shared construction obligations 
pursuant to Sec.  1.950(g);
    (2) An application to participate in ECIP that includes an election 
from the parties to share construction obligations pursuant to Sec.  
1.950(g);
    (3) A light-touch leasing spectrum manager lease arrangement(s) of 
3.5 GHz Priority Access Licenses in the Citizens Band Radio Service; or
    (4) An application to participate in ECIP that includes a barred 
party pursuant to Sec.  1.60007.
    (b) Qualification requirements. An applicant in a Qualifying 
Transaction under the small carrier or Tribal Nation transaction prong 
must demonstrate that:
    (1) The ECIP transaction involving a disaggregation, partition/
disaggregation in combination, full license assignment, or a lease, 
includes a minimum of 50% of the licensed spectrum, and meets the 
minimum spectrum threshold at every point in the Transaction Geography 
(where the percentage is calculated at any point as the amount of 
spectrum being assigned/leased (in megahertz)/total spectrum held under 
the license (in megahertz);
    (2) The ECIP transaction involving a partition, partition/
disaggregation in combination, full license assignment, or a lease, 
includes a minimum Transaction Geography of 25% of the total licensed 
area for licenses with a licensed area that contains 30,000 square 
miles or less, or a minimum Transaction Geography of 10% of the total 
licensed area for licenses with a licensed area 30,001 square miles or 
larger;
    (3) If a lease arrangement, the minimum term of a long-term 
spectrum manager lease or de facto transfer lease is at least five (5) 
years; and
    (4) The ECIP transaction was entered into in good faith with a bona 
fide intent by all parties to meet the program's obligations.
    (c) Qualifying Transaction limitations. Multiple licenses may be 
included in a Qualifying Transaction between unaffiliated parties under 
this prong, however, spectrum and geography cannot be aggregated across 
multiple licenses to meet the respective minimum thresholds; each 
license in a Qualifying Transaction shall be considered separately and 
must independently meet the respective minimum spectrum and geography 
thresholds in paragraph (b) of this section. Each license included in a 
Qualifying Transaction under this prong shall either be the subject of 
an assignment (full, partition and/or disaggregation) or a lease 
arrangement, but not both. A party to a Qualifying Transaction under 
this prong is not permitted to assign a part of a license and lease a 
different part of the same license to meet the respective minimum 
spectrum and geographic thresholds.


Sec.  1.60004  Rural-focused transaction prong.

    (a) Eligibility. The following parties are eligible to participate 
through a Qualifying Transaction under the rural-focused transaction 
prong of the ECIP: an assignor that is a covered geographic licensee as 
defined by Sec.  1.907; a lessor in an included service as set forth in 
Sec.  1.9005 that is also a covered geographic licensee as defined by 
Sec.  1.907; and an unaffiliated assignee or lessee that commits to 
meeting the requirements of the rural-focused transaction prong, except 
that a transaction shall not be eligible for participation in the ECIP 
under this prong if it includes either:
    (1) A license(s) with existing shared construction obligations 
pursuant to Sec.  1.950(g);
    (2) An application to participate in ECIP that includes an election 
from the parties to share construction obligations pursuant to Sec.  
1.950(g);
    (3) A light-touch leasing spectrum manager lease arrangement(s) of 
3.5 GHz Priority Access Licenses in the Citizens Band Radio Service; or
    (4) An application to participate in ECIP that includes a barred 
party pursuant to Sec.  1.60007.
    (b) Qualification requirements. An applicant in a Qualifying 
Transaction under the rural-focused transaction prong must demonstrate 
that:
    (1) The ECIP transaction involving a disaggregation, partition/
disaggregation in combination, or a lease, includes a minimum of 50% of 
the licensed

[[Page 57419]]

spectrum, and meets the minimum spectrum threshold at every point in 
the Transaction Geography (where the percentage is calculated at any 
point as the amount of spectrum being assigned/leased (in megahertz)/
total spectrum held under the license (in megahertz));
    (2) The minimum Qualifying Geography threshold of exclusively rural 
area is included in the application based on the following scaled 
categories:
    (i) 300 contiguous square miles for contributing licenses with 
licensed area containing up to 30,000 square miles;
    (ii) 900 contiguous square miles for contributing licenses with 
licensed area containing between 30,001-90,000 square miles;
    (iii) 5,000 contiguous square miles for contributing licenses with 
licensed area containing between 90,001-500,000 square miles; or
    (iv) 15,000 contiguous square miles for contributing licenses with 
licensed area containing 500,001 square miles or more;
    (3) If a lease arrangement, the minimum term of a long-term 
spectrum manager lease or de facto transfer lease is at least five (5) 
years; and
    (4) The ECIP transaction was entered into in good faith with a bona 
fide intent by all parties to meet the program's obligations.
    (c) Multiple contributing licenses. Qualifying Transactions between 
unaffiliated parties under the rural-focused transaction prong must 
specify at least one area of Qualifying Geography, and one or more 
licenses may contribute, via any combination of full assignment, 
partitioning and/or disaggregation, and/or lease(s), provided the 
Qualifying Geography intersects each contributing license included in 
the underlying application. Where multiple licenses with different size 
licensed areas are included in the Qualifying Transaction and each 
contributes to the Qualifying Geography, the Qualifying Geography must 
consist of the minimum geographic threshold applicable to the 
contributing license with the greatest square mileage in its licensed 
area.


Sec.  1.60005  Program benefits.

    (a) Program benefits. The following benefits for license(s) 
included in an ECIP Qualifying Transaction filed pursuant to Sec.  
1.60002, shall be conferred upon consummation of a Commission approved 
assignment application, grant of a de facto transfer lease application, 
or acceptance of a spectrum manager lease application, as specified:
    (1) License term extension. All parties to a partition and/or 
disaggregation Qualifying Transaction; the lessor entering into a 
spectrum lease arrangement Qualifying Transaction; and the assignee in 
a full license assignment Qualifying Transaction, shall receive a five-
year license term extension on the license(s) subject to the 
application.
    (2) Construction extension. All parties to a partition and/or 
disaggregation Qualifying Transaction; the lessor entering into a 
spectrum lease arrangement Qualifying Transaction; and the assignee in 
a full license assignment Qualifying Transaction, shall receive a one-
year construction extension of both the interim and final performance 
requirement deadline, where applicable, on the license(s) subject to 
the application. Where the Commission has previously extended a 
performance requirement deadline on the license(s) and that deadline 
has not passed, the one year extension conferred through ECIP is in 
addition to the prior extension, provided the extension that was 
previously granted, whether by rule or through waiver, is 
transferrable, and the assignee separately justifies such relief if 
required.
    (3) Substitution of alternative construction requirement. The 
assignee in a qualifying partition, combination partition 
disaggregation transaction, or full license assignment filed under the 
rural focused-transaction prong in Sec.  1.60004, shall be subject to 
the alternative construction requirement set forth in Sec.  1.60006 in 
lieu of any applicable service-based performance requirement for the 
license(s) resulting from an ECIP transaction. Where the Commission has 
previously modified the assignor's substantive service-based 
performance requirement through conditions granted by waiver and such 
requirements have not been met, the assignee will receive the 
substituted alternative construction requirement benefit if the 
assignee separately requests, and is granted, a waiver.
    (b) Limitation on duplicative benefits. (1) A license included in a 
Commission approved Qualifying Transaction in the ECIP shall be 
eligible for program benefits a single time per license for the license 
term and all subsequent renewal terms.
    (2) A license, including a license resulting from a partition and/
or disaggregation, previously included in a Qualifying Transaction 
approved by the Commission in the ECIP, shall be ineligible to receive 
benefits in any subsequent ECIP transaction, regardless of whether the 
current licensee was the beneficiary in the original or a subsequent 
Qualifying Transaction.


Sec.  1.60006  Program obligations.

    (a) Compliance with requirements under selected prong. An assignee 
or lessee must comply with the requirements of either the small carrier 
or Tribal Nation transaction prong in Sec.  1.60003 or the rural-
focused transaction prong in Sec.  1.60004, as selected in its ECIP 
application, and is not permitted to change prongs after the 
consummation of the Commission approved assignment application, grant 
of a de facto transfer lease application, or acceptance of a spectrum 
manager lease application for a Qualifying Transaction in ECIP.
    (b) Construction requirement for rural-focused transaction prong 
assignees. Assignees shall be subject to the following construction 
requirements for any resulting license(s) granted in a Commission 
approved Qualifying Transaction through partition, a combination 
partition/disaggregation, or full license assignment filed under the 
rural-focused transaction prong in ECIP, which supersedes any service-
based requirement:
    (1) The assignee must construct and operate, or provide signal 
coverage and offer service to, 100% of the Qualifying Geography 
identified in the Commission approved Qualifying Transaction.
    (2) The construction period is the applicable construction deadline 
identified on the respective license(s), as extended by Sec.  1.60005. 
If no such deadline remains for the license(s), the assignee must 
construct and operate, or provide signal coverage and offer service to, 
100% of the Qualifying Geography no later than two (2) years after the 
consummation of the Commission approved application.
    (3) Where the assignee is subject to both an interim and final 
performance benchmark, the performance requirements in this paragraph 
(b) shall replace the interim performance benchmark and the assignee 
shall not be subject to a final performance requirement. Where the 
assignee has only a remaining final performance requirement, the 
performance requirements in this paragraph (b) shall replace the final 
benchmark.
    (4) All end user devices throughout the Qualifying Geography must 
be capable of operation on all spectrum bands associated with 
license(s) that contribute to the Qualifying Geography.
    (5) Consistent with Sec.  1.946(d), notification of completion of 
construction must be provided to the Commission through the filing of 
FCC Form 601, no later than 15 days after the applicable construction 
deadline or the expiration of the two (2) year period in paragraph 
(b)(2) of this section.

[[Page 57420]]

    (c) Operational requirement for rural-focused transaction prong 
assignees. Assignees in a Commission approved rural-focused transaction 
pursuant to Sec.  1.60004 are subject to the following operational 
requirements:
    (1) Assignees must construct and operate in, or provide signal 
coverage and offer service to, 100% of the Qualifying Geography 
identified in the Commission approved Qualifying Transaction for a 
period of at least three (3) consecutive years;
    (2) Operation or service must not fall below that used to meet the 
construction requirement in paragraph (b) of this section for the 
entire three (3) year period; and
    (3) Assignees must construct and operate, or provide signal 
coverage and offer service, as required pursuant to paragraph (b) of 
this section, by the applicable construction deadline identified on the 
license(s), as extended by Sec.  1.60005. Where no such deadline 
remains for the license(s), the three (3) year continuous operational 
requirement must commence no later than two (2) years after the 
consummation of the Commission approved application filed pursuant to 
Sec.  1.60002.
    (d) Construction and operational requirements for rural-focused 
transaction prong leases. Lessees must construct and operate, or 
provide signal coverage and offer service to, 100% of the Qualifying 
Geography identified in the underlying Qualifying Transaction that was 
the basis for Commission approval in the ECIP. Lessees must meet this 
requirement no later than two (2) years after grant of the underlying 
de facto transfer lease application or acceptance of the underlying 
spectrum manager lease application, and must maintain operation for a 
period of at least three (3) consecutive years during any period within 
the initial minimum required five (5) year lease term.
    (e) Operational requirement notifications. Assignees and/or lessees 
of rural-focused transactions subject to Sec.  1.60004 must file the 
following notifications to demonstrate compliance with the requirements 
in paragraphs (a) through (c) of this section:
    (1) Initial operational requirement notification. Assignees and/or 
lessees must file an initial operational notification with the 
Commission within 30 days of the commencement of operations that:
    (i) Provides the date operations began;
    (ii) Certifies that the operational requirement of 100% coverage of 
the Qualifying Geography for that assigned license or lease has been 
satisfied; and
    (iii) Provides technical data demonstrating such compliance.
    (2) Final operational requirement notification. Assignees and/or 
lessees must file a final operational notification requirement with the 
Commission within 30 days of completion of the three consecutive year 
operational requirement that:
    (i) Certifies that the operational requirement of 100% coverage of 
the Qualifying Geography for three (3) consecutive years has been 
satisfied;
    (ii) Provides the date the three (3) year period was completed; and
    (iii) Provides technical data demonstrating the coverage provided 
during the three (3) year period.
    (f) Holding period. Assignees and/or lessees participating in ECIP 
under either the small carrier or Tribal Nation transaction prong set 
forth in Sec.  1.60003, or the rural-focused transaction prong set 
forth in Sec.  1.60004, must comply with the following obligations:
    (1) Assignees. An assignee of a license(s) granted in a Qualifying 
Transaction involving a partition and/or disaggregation or full 
assignment is required to hold any such license(s) for a period of at 
least five (5) years, commencing upon the consummation date of the 
Commission approved application filed pursuant to Sec.  1.60002. During 
this holding period, except as provided in paragraph (g) of this 
section, the license(s) received through ECIP is not permitted to be 
further partitioned, disaggregated, assigned, or leased.
    (2) Lessees. Lease arrangements subject to the ECIP shall not be 
terminated by either lessor or lessee prior to the expiration of the 
five (5) year term required by Sec.  1.60003(b)(3) or Sec.  
1.60004(b)(3), where applicable, and, except as provided in paragraph 
(g) of this section, may not be transferred or subleased to another 
party during the five (5) year term.
    (3) Rural-focused transaction prong assignees. Any license(s) 
resulting from a Qualifying Transaction under the rural-focused 
transaction prong pursuant to Sec.  1.60004 may not be subsequently 
assigned (partition and/or disaggregation or full assignment), leased 
or transferred until the following conditions have been met:
    (i) The license(s) has been held by the assignee of the Qualifying 
Transaction for a period of at least five (5) years commencing on the 
date of consummation of the Commission approved application filed 
pursuant to Sec.  1.60002; and
    (ii) The construction and operational requirements pursuant to 
paragraphs (a) through (d) of this section, where applicable, have been 
satisfied.
    (g) Exceptions. The requirements in paragraphs (a) through (e) of 
this section do not apply to pro forma transfers pursuant to Sec.  
1.948(c)(1), and do not apply to any area of the Transaction Geography 
and/or Qualifying Geography, which is covered by a lease or sublease 
entered into for the purpose of enabling a Contraband Interdiction 
System (as defined in Sec.  20.30 of this chapter).


Sec.  1.60007  Penalties.

    (a) Automatic termination. A license(s) resulting from a Qualifying 
Transaction in the ECIP shall be automatically terminated without 
specific Commission action or further notice to the licensee, 
superseding any service-based penalty, if the assignee fails to comply 
with any of the following:
    (1) The five (5) year holding period pursuant to Sec.  1.60006(e);
    (2) The construction requirement pursuant to Sec.  1.60006(a) or 
(c), or any remaining service-based performance requirement, where 
applicable; or
    (3) The operational requirements pursuant to Sec.  1.60006(b) or 
(c), where applicable.
    (b) Bar from future program participation. A party participating in 
a Commission approved Qualifying Transaction in the ECIP shall be 
prohibited from future participation in the ECIP where it is found that 
it:
    (1) Violated the five (5) year holding period requirements of Sec.  
1.60006(e), including premature termination of a lease or entering into 
a sublease in violation of Sec.  1.60006(f)(2), if applicable;
    (2) Failed to meet the construction requirement of Sec.  1.60006(a) 
or (c), or any remaining service-based performance requirement, where 
applicable;
    (3) Failed to meet the operational requirements of Sec.  1.60006(b) 
or (c), where applicable; or
    (4) Entered into a bad faith transaction in violation of Sec.  
1.60003(b)(4) or Sec.  1.60004(b)(4).
    (c) Effect of program bar. A bar from ECIP is applied as follows:
    (1) A program bar shall commence upon the date the assignee or 
lessee receives notice from the Commission via electronic mail finding 
a violation pursuant to paragraph (b) of this section. A barred party 
shall be eligible to continue to receive benefits from Qualifying 
Transactions in ECIP that are unrelated to the Qualifying Transaction 
that resulted in the program bar, provided that those benefits were 
conferred prior to the commencement of the program bar, as a result of 
the

[[Page 57421]]

Commission accepting a consummation of an approved assignment 
application, granting a de facto transfer lease application, or 
accepting a spectrum manager lease application, as applicable.
    (2) A program bar shall also apply to affiliates of barred parties. 
Third-parties shall be considered affiliates of a barred party if they 
qualify as an affiliate under Sec.  1.60001. A prospective ECIP 
participant will be considered a barred affiliate when either:
    (i) The third-party was identified, or should have been identified, 
as an affiliate on the initial Commission approved application for the 
Qualifying Transaction resulting in the bar; or
    (ii) The third-party identifies, or should have identified, a 
barred affiliate in a subsequent application to participate in the 
ECIP, regardless of whether they were affiliates at the time of the 
filing of the initial application for a Qualifying Transaction 
resulting in the bar.
    (3) Transactions that include a barred party shall not be eligible 
for ECIP benefits, even if all other qualifications are satisfied.

[FR Doc. 2022-17520 Filed 9-19-22; 8:45 am]
BILLING CODE 6712-01-P