47 CFR 1.2111 - Assignment or transfer of control: unjust enrichment.

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§ 1.2111 Assignment or transfer of control: unjust enrichment.
(a) Reporting requirement. An applicant seeking approval for a transfer of control or assignment (otherwise permitted under the Commission's rules) of a license within three years of receiving a new license through a competitive bidding procedure must, together with its application for transfer of control or assignment, file with the Commission a statement indicating that its license was obtained through competitive bidding. Such applicant must also file with the Commission the associated contracts for sale, option agreements, management agreements, or other documents disclosing the local consideration that the applicant would receive in return for the transfer or assignment of its license (see § 1.948). This information should include not only a monetary purchase price, but also any future, contingent, in-kind, or other consideration (e.g., management or consulting contracts either with or without an option to purchase; below market financing).
(b) Unjust enrichment payment: set-aside. As specified in this paragraph an applicant seeking approval for a transfer of control or assignment (otherwise permitted under the Commission's rules) of, or for entry into a material relationship (see §§ 1.2110, 1.2114) (otherwise permitted under the Commission's rules) involving, a license acquired by the applicant pursuant to a set-aside for eligible designated entities under § 1.2110(c), or which proposes to take any other action relating to ownership or control that will result in loss of eligibility as a designated entity, must seek Commission approval and may be required to make an unjust enrichment payment (Payment) to the Commission by cashier's check or wire transfer before consent will be granted. The Payment will be based upon a schedule that will take account of the term of the license, any applicable construction benchmarks, and the estimated value of the set-aside benefit, which will be calculated as the difference between the amount paid by the designated entity for the license and the value of comparable non-set-aside license in the free market at the time of the auction. The Commission will establish the amount of the Payment and the burden will be on the applicants to disprove this amount. No Payment will be required if:
(1) The license is transferred or assigned more than five years after its initial issuance, unless otherwise specified; or
(2) The proposed transferee or assignee is an eligible designated entity under § 1.2110(c) or the service-specific competitive bidding rules of the particular service, and so certifies.
(c) Unjust enrichment payment: installment financing.
(1) If a licensee that utilizes installment financing under this section seeks to assign or transfer control of its license to an entity not meeting the eligibility standards for installment payments, the licensee must make full payment of the remaining unpaid principal and any unpaid interest accrued through the date of assignment or transfer as a condition of approval.
(2) If a licensee that utilizes installment financing under this section seeks to make any change in ownership structure or to enter into a material relationship (see § 1.2110) that would result in the licensee losing eligibility for installment payments, the licensee shall first seek Commission approval and must make full payment of the remaining unpaid principal and any unpaid interest accrued through the date of such change as a condition of approval. A licensee's (or other attributable entity's) increased gross revenues or increased total assets due to nonattributable equity investments, debt financing, revenue from operations or other investments, business development or expanded service shall not be considered to result in the licensee losing eligibility for installment payments.
(3) If a licensee seeks to make any change in ownership or to enter into a material relationship (see § 1.2110) that would result in the licensee qualifying for a less favorable installment plan under this section, the licensee shall seek Commission approval and must adjust its payment plan to reflect its new eligibility status. A licensee may not switch its payment plan to a more favorable plan.
(d) Unjust enrichment payment: bidding credits.
(1) A licensee that utilizes a bidding credit, and that during the initial term seeks to assign or transfer control of a license to an entity that does not meet the eligibility criteria for a bidding credit, will be required to reimburse the U.S. Government for the amount of the bidding credit, plus interest based on the rate for ten year U.S. Treasury obligations applicable on the date the license was granted, as a condition of Commission approval of the assignment or transfer. If, within the initial term of the license, a licensee that utilizes a bidding credit seeks to assign or transfer control of a license to an entity that is eligible for a lower bidding credit, the difference between the bidding credit obtained by the assigning party and the bidding credit for which the acquiring party would qualify, plus interest based on the rate for ten year U.S. treasury obligations applicable on the date the license is granted, must be paid to the U.S. Government as a condition of Commission approval of the assignment or transfer. If, within the initial term of the license, a licensee that utilizes a bidding credit seeks to make any ownership change or to enter into a material relationship (see § 1.2110) that would result in the licensee losing eligibility for a bidding credit (or qualifying for a lower bidding credit), the amount of the bidding credit (or the difference between the bidding credit originally obtained and the bidding credit for which the licensee would qualify after restructuring or entry into a material relationship), plus interest based on the rate for ten year U.S. treasury obligations applicable on the date the license is granted, must be paid to the U.S. Government as a condition of Commission approval of the assignment or transfer or of a reportable eligibility event (see § 1.2114).
(2) Payment schedule.
(i) The amount of payments made pursuant to paragraph (d)(1) of this section will be reduced over time as follows:
(A) A transfer in the first two years of the license term will result in a forfeiture of 100 percent of the value of the bidding credit (or in the case of very small businesses transferring to small businesses, 100 percent of the difference between the bidding credit received by the former and the bidding credit for which the latter is eligible);
(B) A transfer in year 3 of the license term will result in a forfeiture of 75 percent of the value of the bidding credit;
(C) A transfer in year 4 of the license term will result in a forfeiture of 50 percent of the value of the bidding credit;
(D) A transfer in year 5 of the license term will result in a forfeiture of 25 percent of the value of the bidding credit; and
(E) For a transfer in year 6 or thereafter, there will be no payment.
(ii) These payments will have to be paid to the United States Treasury as a condition of approval of the assignment, transfer, ownership change or reportable eligibility event (see § 1.2114).
(e) Unjust enrichment: partitioning and disaggregation—
(1) Installment payments. Licensees making installment payments, that partition their licenses or disaggregate their spectrum to entities not meeting the eligibility standards for installment payments, will be subject to the provisions concerning unjust enrichment as set forth in this section.
(2) Bidding credits. Licensees that received a bidding credit that partition their licenses or disaggregate their spectrum to entities not meeting the eligibility standards for such a bidding credit, will be subject to the provisions concerning unjust enrichment as set forth in this section.
(3) Apportioning unjust enrichment payments. Unjust enrichment payments for partitioned license areas shall be calculated based upon the ratio of the population of the partitioned license area to the overall population of the license area and by utilizing the most recent census data. Unjust enrichment payments for disaggregated spectrum shall be calculated based upon the ratio of the amount of spectrum disaggregated to the amount of spectrum held by the licensee.
[59 FR 44293, Aug. 26, 1994, as amended at 63 FR 2346, Jan. 15, 1998; 63 FR 68942, Dec. 14, 1998; 71 FR 26252, May 4, 2006; 71 FR 34278, June 14, 2006; 77 FR 16471, Mar. 21, 2012]

Title 47 published on 2013-10-01

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For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-02-20; vol. 79 # 34 - Thursday, February 20, 2014
    1. 79 FR 9622 - An Inquiry Into the Commission's Policies and Rules Regarding AM Radio Service Directional Antenna Performance Verification
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      FEDERAL COMMUNICATIONS COMMISSION
      Final rule; announcement of effective date.
      47 CFR 1.30002, 1.30003, 1.30004, 73.875, 73.1675, and 73.1690, are effective February 20, 2014. Applicability date: The applicability date of the amendments to 47 CFR 1.30000, 1.30001, 22.371, 27.63, 73.45, 73.316, 73.685, 73.1692, 73.6025, and 74.1237 published November 5, 2013 (78 FR 66288) is February 20, 2014.
      47 CFR Parts 1, 22, 27, 73, and 74

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Executive Order ... 12107

Title 47 published on 2013-10-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 47 CFR 1 after this date.

  • 2014-02-20; vol. 79 # 34 - Thursday, February 20, 2014
    1. 79 FR 9622 - An Inquiry Into the Commission's Policies and Rules Regarding AM Radio Service Directional Antenna Performance Verification
      GPO FDSys XML | Text
      FEDERAL COMMUNICATIONS COMMISSION
      Final rule; announcement of effective date.
      47 CFR 1.30002, 1.30003, 1.30004, 73.875, 73.1675, and 73.1690, are effective February 20, 2014. Applicability date: The applicability date of the amendments to 47 CFR 1.30000, 1.30001, 22.371, 27.63, 73.45, 73.316, 73.685, 73.1692, 73.6025, and 74.1237 published November 5, 2013 (78 FR 66288) is February 20, 2014.
      47 CFR Parts 1, 22, 27, 73, and 74