§  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]

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