Section 20.22 - Rules governing mobile spectrum holdings(a) Applicants for mobile wireless licenses for commercial use, for assignment or transfer of control of such licenses, or for long-term de facto transfer leasing arrangements as defined in § 1.9003 of this chapter and long-term spectrum manager leasing arrangements as identified in § 1.9020(e)(1)(ii) must demonstrate that the public interest, convenience, and necessity will be served thereby. The Commission will evaluate any such license application consistent with the policies set forth in Policies Regarding Mobile Spectrum Holdings, Report and Order, FCC 14-63, WT Docket No. 12-269, adopted May 15, 2014.(b)Attribution of interests.(1) The following criteria will apply to attribute partial ownership and other interests in spectrum holdings for purposes of: (i) Applying a mobile spectrum holding limit to the licensing of spectrum through competitive bidding; and(ii) Applying the initial spectrum screen to secondary market transactions.(2)Controlling interests 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.(3)Non-controlling interests of 10 percent or more in spectrum shall be attributable. Interests of less than 10 percent in spectrum shall be attributable if such interest confers de facto control, including but not limited to partnership and other ownership interests and any stock interest in a licensee.(4) The following interests in spectrum shall also be attributable to holders: (i) Officers and directors of a 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 licensee or applicant shall be considered to have an attributable interest in the licensee.(ii) 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%).(iii) Any person who manages the operations of a 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, the nature or types of services offered by such licensee, the terms upon which such services are offered, or the prices charged for such services.(iv) Any licensee or its affiliate who enters into a joint marketing arrangement with another licensee or its affiliate shall be considered to have an attributable interest in the other licensee's holdings if it has authority to make decisions or otherwise engage in practices or activities that determine or significantly influence the nature or types of services offered by the other licensee, the terms upon which such services are offered, or the prices charged for such services.(v) 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.(vi) 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 or unless the Commission determines that these interests confer de facto control.(5) The following interests shall be attributable to holders, except to lessees and sublessees for the purpose of qualifying to bid on reserved licenses offered in the Incentive Auction, discussed in paragraph (c) of this section, on the basis of status as a non-nationwide provider:(i) Long-term de facto transfer leasing arrangements as defined in § 1.9003 of this chapter and long-term spectrum manager leasing arrangements as identified in § 1.9020(e)(1)(ii) that enable commercial use shall be attributable to lessees, lessors, sublessees, and sublessors for purposes of this section.(c)600 MHz Band holdings.(1) The Commission will reserve licenses for up to 30 megahertz of the 600 MHz Band, offered in the Incentive Auction authorized by Congress pursuant to 47 U.S.C. 309(j)(8)(G) , for otherwise qualified bidders who do not hold an attributable interest in 45 megahertz or more of the total 134 megahertz of below-1-GHz spectrum which consists of the cellular (50 megahertz), the 700 MHz (70 megahertz), and the SMR (14 megahertz) spectrum in a Partial Economic Area (PEA), as calculated on a county by county population-weighted basis, utilizing 2010 U.S. Census data. The amount of reserved and unreserved 600 MHz Band licenses will be determined based on the market-based spectrum reserve set forth in Policies Regarding Mobile Spectrum Holdings, Report and Order, FCC 14-63, WT Docket No. 12-269, adopted May 15, 2014, as well as subsequent Public Notices. Nothing in this paragraph will limit, or may be construed to limit, an otherwise qualified bidder that is a non-nationwide provider of mobile wireless services from bidding on any reserved or unreserved license offered in the Incentive Auction.(2) For a period of six years, after initial licensing, no 600 MHz Band license, regardless of whether it is reserved or unreserved, may be transferred, assigned, partitioned, disaggregated, or long term leased to any entity that, after consummation of the transfer, assignment, or leased on a long term basis, would hold an attributable interest in one-third or more of the total suitable and available below-1-GHz spectrum as calculated on a county by county population-weighted basis in the relevant license area, utilizing 2010 U.S. Census data.(3) For a period of six years, after initial licensing, no 600 MHz Band reserved license may be transferred, assigned, partitioned, disaggregated, or leased on a long term basis to an entity that was not qualified to bid on that reserved spectrum license under paragraph (c)(1) of this section at the time of the Incentive Auction short-form application deadline. 79 FR 40002 , July 11, 2014, as amended at 80 FR 61970 , Oct. 14, 2015