[Code of Federal Regulations]
[Title 47, Volume 2]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 47CFR20.6]

[Page 7-10]
 
                       TITLE 47--TELECOMMUNICATION
 
                    CHAPTER I--FEDERAL COMMUNICATIONS
                         COMMISSION (CONTINUED)
 
PART 20--COMMERCIAL MOBILE RADIO SERVICES--Table of Contents
 
Sec. 20.6  CMRS spectrum aggregation limit.

    (a) Spectrum limitation. No licensee in the broadband PCS, cellular, 
or SMR services (including all parties under common control) regulated 
as CMRS (see 47 CFR 20.9) shall have an attributable interest in a total 
of more than 55 MHz of licensed broadband PCS, cellular, and SMR 
spectrum regulated as CMRS with significant overlap in any geographic 
area.
    (b) SMR spectrum. To calculate the amount of attributable SMR 
spectrum for purposes of paragraph (a) of this section, an entity must 
count all 800 MHz and 900 MHz channels located at any SMR base station 
inside the geographic area (MTA or BTA) where there is significant 
overlap. All 800 MHz channels located on at least one of those 
identified base stations count as 50 kHz (25 kHz paired), and all 900 
MHz channels located on at least one of those identified base stations 
count as 25 kHz (12.5 kHz paired); provided that any discrete 800 or 900 
MHz channel shall be counted only once per licensee within the 
geographic area, even if the licensee in question utilizes the same 
channel at more than one location within the relevant geographic area. 
No more than 10 MHz of SMR spectrum in the 800 and 900 MHz SMR services 
will be attributed to an entity when determining compliance with the 
cap.
    (c) Significant overlap. (1) For purposes of paragraph (a) of this 
section, significant overlap of a PCS licensed service area and CGSA(s) 
(as defined in Sec. 22.911 of this chapter) or SMR service area(s) 
occurs when at least 10 percent of the population of the PCS licensed 
service area for the counties contained therein, as determined by the 
latest available decennial census figures as complied by the Bureau of 
the Census, is within the CGSA(s) and/or SMR service area(s).
    (2) The Commission shall presume that an SMR service area covers 
less than 10 percent of the population of a PCS service area if none of 
the base stations of the SMR licensee are located within the PCS service 
area. For an SMR licensee's base stations that are located within a PCS 
service area, the channels licensed at those sites will be presumed to 
cover 10 percent of the population of the PCS service area, unless the 
licensee shows that its protected service contour for all of its base 
stations covers less than 10 percent of the population of the PCS 
service area.

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    (d) Ownership attribution. For purposes of paragraph (a) of this 
section, ownership and other interests in broadband PCS licensees, 
cellular licensees, or SMR licensees will be attributed to their holders 
pursuant to the following criteria:
    (1) Controlling interest shall be attributable. Controlling interest 
means majority voting equity ownership, any general partnership 
interest, or any means of actual working control (including negative 
control) over the operation of the licensee, in whatever manner 
exercised.
    (2) Partnership and other ownership interests and any stock interest 
amounting to 20 percent or more of the equity, or outstanding stock, or 
outstanding voting stock of a broadband PCS, cellular or SMR licensee 
shall be attributed, except that ownership will not be attributed unless 
the partnership and other ownership interests and any stock interest 
amount to at least 40 percent of the equity, or outstanding stock, or 
outstanding voting stock of a broadband PCS, cellular or SMR licensee if 
the ownership interest is held by a small business or a rural telephone 
company, as these terms are defined in Sec. 1.2110 of this chapter or 
other related provisions of the Commission's rules, or if the ownership 
interest is held by an entity with a non-controlling equity interest in 
a broadband PCS licensee or applicant that is a small business.
    (3) Investment companies, as defined in 15 U.S.C. 80a-3, insurance 
companies and banks holding stock through their trust departments in 
trust accounts will be considered to have an attributable interest only 
if they hold 40 percent or more of the outstanding voting stock of a 
corporate broadband PCS, cellular or SMR licensee, or if any of the 
officers or directors of the broadband PCS, cellular or SMR licensee are 
representatives of the investment company, insurance company or bank 
concerned. Holdings by a bank or insurance company will be aggregated if 
the bank or insurance company has any right to determine how the stock 
will be voted. Holdings by investment companies will be aggregated if 
under common management.
    (4) Non-voting stock shall be attributed as an interest in the 
issuing entity if in excess of the amounts set forth in paragraph (d)(2) 
of this section.
    (5) Debt and instruments such as warrants, convertible debentures, 
options, or other interests (except non-voting stock) with rights of 
conversion to voting interests shall not be attributed unless and until 
converted, except that this provision does not apply in determining 
whether an entity is a small business, a rural telephone company, or a 
business owned by minorities and/or women, as these terms are defined in 
Sec. 1.2110 of this chapter or other related provisions of the 
Commission's rules.
    (6) Limited partnership interests shall be attributed to limited 
partners and shall be calculated according to both the percentage of 
equity paid in and the percentage of distribution of profits and losses.
    (7) Officers and directors of a broadband PCS licensee or applicant, 
cellular licensee, or SMR licensee shall be considered to have an 
attributable interest in the entity with which they are so associated. 
The officers and directors of an entity that controls a broadband PCS 
licensee or applicant, a cellular licensee, or an SMR licensee shall be 
considered to have an attributable interest in the broadband PCS 
licensee or applicant, cellular licensee, or SMR licensee.
    (8) Ownership interests that are held indirectly by any party 
through one or more intervening corporations will be determined by 
successive multiplication of the ownership percentages for each link in 
the vertical ownership chain and application of the relevant attribution 
benchmark to the resulting product, except that if the ownership 
percentage for an interest in any link in the chain exceeds 50 percent 
or represents actual control, it shall be treated as if it were a 100 
percent interest. (For example, if A owns 20% of B, and B owns 40% of 
licensee C, then A's interest in licensee C would be 8%. If A owns 20% 
of B, and B owns 51% of licensee C, then A's interest in licensee C 
would be 20% because B's ownership of C exceeds 50%.)
    (9) Any person who manages the operations of a broadband PCS, 
cellular,

[[Page 9]]

or SMR licensee pursuant to a management agreement shall be considered 
to have an attributable interest in such licensee if such person, or its 
affiliate, has authority to make decisions or otherwise engage in 
practices or activities that determine, or significantly influence,
    (i) The nature or types of services offered by such licensee;
    (ii) The terms upon which such services are offered; or
    (iii) The prices charged for such services.
    (10) Any licensee or its affiliate who enters into a joint marketing 
arrangements with a broadband PCS, cellular, or SMR licensee, or its 
affiliate shall be considered to have an attributable interest, if such 
licensee, or its affiliate, has authority to make decisions or otherwise 
engage in practices or activities that determine, or significantly 
influence,
    (i) The nature or types of services offered by such licensee;
    (ii) The terms upon which such services are offered; or
    (iii) The prices charged for such services.
    (e) Divestiture. (1) Divestiture of interests as a result of a 
transfer of control or assignment of authorization must occur prior to 
consummating the transfer or assignment, except that a licensee that 
meets the requirements set forth in paragraph (e)(2) of this section 
shall have 90 days from final grant to come into compliance with the 
spectrum aggregation limit.
    (2) An applicant with:
    (i) Controlling or attributable ownership interests in broadband 
PCS, cellular, and/or SMR licenses where the geographic license areas 
cover 20 percent or less of the applicant's service area population;
    (ii) Attributable interests in broadband PCS, cellular, and/or SMR 
licenses solely due to management agreements or joint marketing 
agreements; or
    (iii) Non-controlling attributable interests in broadband PCS, 
cellular, and/or SMR licenses, regardless of the degree to which the 
geographic license areas cover the applicant's service area population, 
shall be eligible to have its application granted subject to a condition 
that the licensee shall come into compliance with the spectrum 
limitation set out in paragraph (a) within ninety (90) days after final 
grant. For purposes of this paragraph, a ``non-controlling attributable 
interest'' is one in which the holder has less than a fifty (50) percent 
voting interest and there is an unaffiliated single holder of a fifty 
(50) percent or greater voting interest.
    (3) The applicant for a license that, if granted, would exceed the 
spectrum aggregation limitation in paragraph (a) of this section shall 
certify on its application that it and all parties to the application 
will come into compliance with this limitation. If such an applicant is 
a successful bidder in an auction, it must submit with its long-form 
application a signed statement describing its efforts to date and future 
plans to come into compliance with the spectrum aggregation limitation. 
A similar statement must also be included with any application for 
assignment of licenses or transfer of control that, if granted, would 
exceed the spectrum aggregation limit.
    (4)(i) Parties holding controlling interests in broadband PCS, 
cellular, and/or SMR licensees that conflict with the attribution 
threshold or geographic overlap limitations set forth in this section 
will be considered to have come into compliance if they have submitted 
to the Commission an application for assignment of license or transfer 
of control of the conflicting licensee (see Sec. 1.948 of this chapter; 
see also Sec. 24.839 of this chapter (PCS)) by which, if granted, such 
parties no longer would have an attributable interest in the conflicting 
license. Divestiture may be to an interim trustee if a buyer has not 
been secured in the required period of time, as long as the applicant 
has no interest in or control of the trustee, and the trustee may 
dispose of the license as it sees fit. Where parties to broadband PCS, 
cellular, or SMR applications hold less than controlling (but still 
attributable) interests in broadband PCS, cellular, or SMR licensee(s), 
they shall submit a certification that the applicant and all parties to 
the application have come into compliance with the limitations on 
spectrum aggregation set forth in this section.

[[Page 10]]

    (ii) Applicants that meet the requirements of paragraph (e)(2) of 
this section must tender to the Commission within ninety (90) days of 
final grant of the initial license, such an assignment or transfer 
application or, in the case of less than controlling (but still 
attributable) interests, a written certification that the applicant and 
all parties to the application have come into compliance with the 
limitations on spectrum aggregation set forth in this section. If no 
such transfer or assignment application or certification is tendered to 
the Commission within ninety (90) days of final grant of the initial 
license, the Commission may consider the certification and the 
divestiture statement to be material, bad faith misrepresentations and 
shall invoke the condition on the initial license or the assignment or 
transfer, cancelling or rescinding it automatically, shall retain all 
monies paid to the Commission, and, based on the facts presented, shall 
take any other action it may deem appropriate.
    (f) Sunset. This rule section shall cease to be effective January 1, 
2003.

    Note 1 to Sec. 20.6: For purposes of the ownership attribution 
limit, all ownership interests in operations that serve at least 10 
percent of the population of the PCS service area should be included in 
determining the extent of a PCS applicant's cellular or SMR ownership.
    Note 2 to Sec. 20.6: When a party owns an attributable interest in 
more than one cellular or SMR system that overlaps a PCS service area, 
the total population in the overlap area will apply on a cumulative 
basis.
    Note 3 to Sec. 20.6: Waivers of Sec. 20.6(d) may be granted upon an 
affirmative showing:
    (1) That the interest holder has less than a 50 percent voting 
interest in the licensee and there is an unaffiliated single holder of a 
50 percent or greater voting interest;
    (2) That the interest holder is not likely to affect the local 
market in an anticompetitive manner;
    (3) That the interest holder is not involved in the operations of 
the licensee and does not have the ability to influence the licensee on 
a regular basis; and
    (4) That grant of a waiver is in the public interest because the 
benefits to the public of common ownership outweigh any potential 
anticompetitive harm to the market.

[64 FR 54574, Oct. 7, 1999, as amended at 67 FR 1642, Jan. 14, 2002]