Christine M. Crowe, Esq.

Paul, Hastings, Janofsky & Walker LLP

1299 Pennsylvania Avenue, N.W.

Tenth Floor

Washington, DC 20004

Re: Petition for Declaratory Ruling Regarding Application of 47. C.F.R.
§ 24.714

Dear Ms. Crowe:

This letter responds to your petition for a declaratory ruling pursuant
to Section 1.2 of the Commission's rules[^1], filed on behalf of
Carolina PCS I Limited Partnership ("Carolina PCS").[^2] Carolina PCS
asks the Commission to clarify that, prior to the five-year anniversary
of the grant of the license, a licensee may partition or disaggregate a
broadband personal communication services ("PCS") license won in closed
bidding to an entity not qualifying for closed bidding if the licensee
has met the associated five-year construction benchmark and has so
notified the Commission.

Carolina PCS won nine 30 MHz C block PCS licenses in the state of South
Carolina through closed bidding (bidding restricted to those qualifying
as an "entrepreneur") in Auction No. 5.[^3] Carolina PCS subsequently
completed *pro forma* assignments of the nine C block licenses to
subsidiary limited liability companies it controls.[^4] Each of these
operating subsidiaries has met the five-year construction requirements
for its respective licenses and has so notified the Commission.[^5]
Carolina PCS and its subsidiaries have applied to disaggregate each of
these C block PCS licenses in 10 MHz blocks to Lafayette Communications
Company, L.L.C. ("Lafayette"), VoiceStream PCS BTA I License Corporation
("VoiceStream"), and Cellco Partnership d/b/a Verizon Wireless ("Verizon
Wireless").[^6] Because neither VoiceStream nor Verizon Wireless
qualifies as an entrepreneur,[^7] Carolina PCS and its operating
subsidiaries now seek to apply the Commission's recently revised
policies and rules permitting entrepreneurs to assign to
non-entrepreneurs, prior to the fifth year anniversary of the licenses,
built out spectrum acquired in closed bidding as established in the
Commission's *C/F Block* *Sixth Report and Order*.[^8]

Prior to the *C/F Block Sixth Report and Order*, the Commission
prohibited entrepreneurs from assigning C and F block PCS licenses won
in closed bidding to non-entrepreneurs before the end of a five-year
holding period to ensure that C and/or F block PCS licensees did not
take advantage of the eligibility set-aside by immediately assigning or
transferring control of their licenses to entities not meeting the
eligibility requirements.[^9] The Commission set the holding period at
five years to guarantee that a C or F block PCS licensee would hold and
build out its license until the first construction benchmark,[^10] which
occurs five years after the date of licensing.[^11] In the *C/F Block
Sixth Report and Order*, the Commission carved out an exception to the
holding requirement by allowing a C or F block PCS licensee to assign or
transfer licenses won in closed bidding to any qualified entity,
entrepreneur or not, as soon as the licensee has satisfied its first
construction benchmark.[^12] The Commission stated that permitting such
assignments and transfers would encourage rapid build-out and service to
the public, two objectives of Section 309(j) of the Communications Act
of 1934, as amended,[^13] while at the same time providing C and F block
PCS licensees with the ability to access capital.[^14]

Carolina PCS points out that, while the Commission amended Section
24.839 to codify the new rule, it did not revise Section 24.714, the
partitioning and disaggregation rule, to allow for a corresponding
provision for partial assignments. Accordingly, Section 24.714 does not
clearly permit partial assignments of C and F Block PCS spectrum to
non-entrepreneurs where the construction benchmark has been met within
the first five years. Carolina PCS asks the Commission to clarify that
the Commission's new policy on assignments of C and F block PCS spectrum
licenses won in closed bidding, as presented in the *C/F Block Sixth
Report and Order*, also extends to partial assignments.

Upon consideration of Carolina PCS' request, we clarify that the rule on
assignments of C and F block PCS licenses won in closed bidding, set
forth in Section 24.839(a), as amended, extends to partial assignments
of C and F block PCS spectrum as described in Section 24.714(a).[^15] We
consider partial assignments to be a subset of full assignments. Section
24.839 draws no distinction between full and partial assignments.
Moreover, while Section 24.714 does not expressly allow for partial
assignments upon satisfaction of the first construction benchmark prior
to the five-year mark, it directs entities seeking authorization for
partial assignments to "request an authorization for partial assignment
of a license pursuant to Section 24.839."[^16] Accordingly, we clarify
that C and F block PCS licensees that have met their five-year
construction benchmark prior to the end of the five-year holding period
and have notified the Commission of the satisfaction of these
benchmarks, are permitted to partition or disaggregate a license won in
closed bidding to a non-entrepreneur.

The Wireless Telecommunications Bureau will conduct a review of the
assignment applications for the underlying transactions. This action is
taken pursuant to the delegated authority under Section 0.331 of the
Commission's rules.[^17]

> Sincerely,

#  Margaret Wiener, Chief 

#  Auctions and Industry Analysis Division

#  Wireless Telecommunications Bureau

[^1]: 47 C.F.R. § 1.2 (2000).

[^2]: *See* Petition for Declaratory Ruling Pursuant to Section 1.2 of
    the Commission's Rules, filed by Christine M. Crowe, Counsel for
    Carolina PCS, on June 11, 2001.

[^3]: *See* "Entrepreneurs\' C Block Auction Closes," *Public Notice*,
    DA 96-716, Attachment A (rel. May 8, 1996). Carolina PCS qualified
    as an entrepreneur by meeting the financial requirements set forth
    in Section 24.709 of the Commission's rules. 47 C.F.R. § 24.709
    (1996).

[^4]: *See* FCC File Nos. 0000002008, 0000002011, 0000002012,
    0000002013, 0000002014, 0000002015, 0000002016, 0000002017, and
    0000002018.

[^5]: *See* FCC File Nos. 0000083370, 0000083372, 0000083375,
    0000334642, 0000370950, 0000370952, 0000370956, 0000370957, and
    0000370959.

[^6]: Each assignee will receive the same 10 MHz frequency block for all
    nine disaggregated licenses: Lafayette (1905-1910 MHz and 1985-1990
    MHz), VoiceStream (1895-1900 MHz and 1975-1980 MHz) and Verizon
    Wireless (1900-1905 MHz and 1980-1985 MHz). *See* 27 applications
    that Carolina PCS has filed with respect to the Lafayette (FCC File
    Nos. 0000365205, 0000365207, 0000365211, 0000365216, 0000365223,
    0000365224, 0000365225, 0000365229, and 0000365251), VoiceStream
    (FCC File Nos. 0000450185, 0000450264, 0000450266, 0000450267,
    0000450268, 0000450269, 0000450272, 0000450273, and 0000450274), and
    Verizon Wireless (FCC File Nos. 0000460489, 0000460520, 0000460522,
    0000460523, 0000460524, 0000460525, 0000460527, 0000460535, and
    0000460564) transactions. The applications for disaggregation to
    Lafayette were granted on June 18, 2001. *See* *Public Notice*, DA
    01-1444 (rel. June 18, 2001).

[^7]: ^?^ Carolina PCS states that Lafayette qualifies as an
    entrepreneur under the Commission's rules.

[^8]: *See* In the Matter of Amendment of the Commission's Rules
    Regarding Installment Payment Financing for Personal Communications
    Services (PCS) Licenses, WT Docket No. 97-82, *Sixth Report and
    Order and Order on Reconsideration*, 15 FCC Rcd 16,266 (2000) ("*C/F
    Block Sixth Report and Order*"). To permit the transfer of C and F
    block PCS licenses to non-entrepreneurs prior to the end of the
    five-year holding period, the *C/F Block Sixth Report and Order*
    modified both the five-year holding period and limited transfer
    rule, 47 C.F.R. § 24.839 (2000), and the construction requirements
    rule, 47 C.F.R. § 24.203 (2000).

[^9]: *See* Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding, PP Docket 93-253, *Fifth Report and Order*,
    9 FCC Rcd 5532, 5588-89, ¶¶ 128-29 (1994); *see also* Implementation
    of Section 309(j) of the Communications Act -- Competitive Bidding,
    PP Docket 93-253, *Fifth Memorandum Opinion and Order*, 10 FCC Rcd
    403, 465-469, ¶¶ 117-127 (1994) and 47 C.F.R. §§ 24.839 and 24.714
    (1999).

[^10]: *See* Amendment of Parts 20 and 24 of the Commission's Rules --
    Broadband PCS Competitive Bidding and the Commercial Mobile Radio
    Service Spectrum Cap, WT Docket No. 96-59, Amendment of the
    Commission's Cellular/PCS Cross-Ownership Rule, GN Docket No.
    90-314, *Report and Order*, 11 FCC Rcd 7824, 7863, ¶ 84 (1996).

[^11]: 47 C.F.R. § 24.203 (2000); *see also* 47 C.F.R. §1.2111 (2000).

[^12]: *See C/F Block Sixth Report and Order*, 15 FCC Rcd at 16,290, ¶
    49, and 16,308-15, Appendix D.

[^13]: 47 U.S.C. § 309(j).

[^14]: *See C/F Block Sixth Report and Order*, 15 FCC Rcd at 16,290, ¶
    50.

[^15]: *See* 47 C.F.R. §§ 24.714(a) and 24.839(a) (2000).

[^16]: 47 C.F.R. § 24.714(a)(1) (2000).

[^17]: 47 C.F.R. § 0.331 (2000).