FACT SHEET![](media/image1.png){width="0.7388888888888889in"
height="0.7458333333333333in"}

FEDERAL COMMUNICATIONS COMMISSION News Media Information: (202) 418-0500

**445 12th STREET, S.W.** Fax-On-Demand: (202) 418-2830

# WASHINGTON, D.C. 20554 Internet: [http://www.fcc.gov](http://www.fcc.gov/)

# ftp.fcc.gov

**September 19, 2000**

## QUESTIONS & ANSWERS REGARDING

**PRIVATE WIRELESS LICENSEES' OBLIGATIONS**

UNDER SECTION 310(d) OF THE COMMUNICATIONS ACT OF 1934

This Fact Sheet discusses the obligations of private wireless licensees
under Section 310(d) of the Communications Act of 1934, as amended, 47
U.S.C. § 310(d). The Commission and its staff recently have concluded a
number of investigations of private wireless licensees that have
transferred control of or assigned their licenses without obtaining
prior Commission consent, in violation of Section 310(d) of the Act. The
evidence that the Commission has received in these proceedings, as well
as discussions with licensees and their attorneys, suggest that many
private wireless licensees may not be aware of their obligations under
Section 310(d) of the Act to obtain Commission consent ***prior*** to
consummating a transfer of control or assignment of license.[^1]

**1. Who should read this Fact Sheet?**

Any entity that holds or is eligible to hold licenses in the Private
Wireless Services. These include: manufacturers, railroads, public
utilities, motor carriers, security companies, or any other entity that
uses licensed radio facilities or devices for internal, rather than
commercial, purposes. Attorneys and other consultants who represent such
entities in acquisition and merger transactions also should read this
Fact Sheet.

**2. What does Section 310(d) of the Communications Act require?**

Section 310(d) of the Communications Act reads:

> No construction permit or station license, or any rights thereunder,
> shall be
>
> transferred, assigned, or disposed of in any manner, voluntarily or
>
> involuntarily, directly or indirectly, or by transfer of control of
> any corporation
>
> holding such permit or license, to any person except upon application
> to the
>
> Commission and upon finding by the Commission that the public
> interest,
>
> convenience, and necessity will be served thereby.

47 U.S.C. § 310(d).

Under Section 310(d) of the Act, all licensees, including private
wireless service licensees, must seek ***and*** obtain FCC consent
***before*** assigning or transferring control of FCC-issued licenses or
permits. This means that prior to consummation of an assignment of
license (such as in connection with a sale of assets) or a transfer of
control of a license (*i.e.*, as in a corporate merger or
reorganization), the parties must file the appropriate application(s)
with the Commission. ***The FCC must grant the application(s) before
consummation of the transaction may take place***.

**3. I have heard that all I have to do is file the application; then
I'm free to consummate the transaction. Is this correct?**

No. The FCC must authorize the assignment or transfer of control of the
FCC-issued licenses. Thus, for Private Radio Service licensees, simply
filing the application is insufficient. The parties must wait for the
FCC ***to grant*** the application ***prior*** to closing or
consummating the transaction. In addition, simply notifying the
Commission of the change in name and/or address of the licensee-entity
after the transaction has been consummated is not sufficient.

**4. What types of transactions are subject to this requirement?**

Section 310(d) applies to all transactions involving the assignment of a
license or the transfer of control of a licensee.

5.  **What constitutes an "assignment" and a "transfer of control."**

An assignment of authorization is a transaction in which the license is
assigned by one entity to another. For example, a transaction in which a
private land mobile radio license switches from Company A to Company B
would constitute an assignment of license.

A transfer of control is a transaction in which the licensee remains the
same, but control of the licensee-entity is transferred from one person
or entity or group of persons or entities to another. For example, if
Company B holds private wireless licenses, a transaction in which
Company A purchases the stock of Company B would constitute a transfer
of control. In such a transaction, although Company B remains the
license-holding entity, ownership of Company B has changed.

6.  **What is the difference between a "substantial" and a "*pro forma"*
    assignment or transfer of control?**

For licenses in the Private Wireless Services, both "substantial" and
"*pro forma*" assignments and transfers of control require prior FCC
approval. A substantial assignment or transfer of control is (1) a
transaction involving the assignment of an FCC license to an entity that
is not controlled by the same parties as the assignor or a change in
controlling ownership interest of the licensee-entity (known as "de
jure" assignment or transfer of control), or (2) a change in actual
operating control of the licensee (known as a "de facto" transfer of
control). For example, a transaction where Company X acquires the assets
and FCC licenses of Company Y would be deemed a substantial assignment
of license because the license would be assigned by one entity to
another. A transaction where Company A purchases 90 percent of the
outstanding voting stock of Company B would be deemed a substantial
transfer of control because there would be a change in a controlling
ownership interest of the corporate-licensee even though the same
licensee would continue to hold the license. In another example, A, a
general partner in Licensee Partnership X, holds a controlling interest
under the terms of the partnership agreement, even though he holds less
than 50 percent of the total partnership interests. A sells his
partnership interest to newcomer B or existing partner C. This
constitutes a substantial assignment.

A *pro forma* transaction is one involving a non-substantial change in
ownership of

the license or the licensee entity. The following are examples of *pro
forma* transactions:

a.  ***An assignment or transfer of control from a wholly-owned
    subsidiary to a parent corporation or vice versa, or an assignment
    or transfer of control from one wholly-owned subsidiary to another,
    both of which are owned by the same parent corporation**.*

> A, Inc., a wholly-owned subsidiary of B Corporation, is in direct
> control of Private Land Mobile Radio Station licenses. A, Inc. is
> merged into B Corporation such that the Private Land Mobile Radio
> Station facilities controlled by A, Inc., are now directly controlled
> by and in the name of B Corporation.
>
> A, Inc., is merged into C, Inc., another wholly-owned subsidiary of B
> Corporation such that the Private Land Mobile Radio Station licenses
> controlled by A, Inc., would now be controlled by and in the name of
> C, Inc.
>
> K Corporation, which directly controls several private wireless
> licenses, creates a new holding company subsidiary, L Holding, Inc.
> and transfers operational control of those FCC facilities to the new
> subsidiary.

b.  ***An individual or individuals (including partnerships) assigns the
    license(s) to a corporation owned or controlled by the same
    individuals or partnerships without any substantial change in the
    relative interests.***

> John Doe holds several Private Operational Fixed (Microwave) Radio
> Service licenses in his own right as an individual. He incorporates
> resulting in an assignment of the FCC-licensed facilities to John Doe,
> Inc., in which he holds 100 percent ownership interest.
>
> XY Partnership holds Private Land Mobile Radio Station licenses. X and
> Y each own 50 percent interest in the partnership. XY Partnership
> incorporates and as a result becomes "XY Corporation." X and Y each
> hold a 50 percent voting interest in the new corporation.

c.  ***A corporation reorganizes but has no substantial change in the
    beneficial ownership of the corporation.***

> For example, Manufacturer X, Inc., which holds several private
> wireless licenses, engages in a stock reorganization such that control
> of Manufacturer X is transferred from John Doe to John Doe 2000
> Revocable Trust, John Doe, Trustee.

d.  ***A partner assigns or transfers an interest (including a
    non-controlling interest) in a partnership which results in the
    dissolution of the partnership agreement under state law.***

> A is a partner of AC Licensee Partnership. A sells a part of his
> interest to newcomer D or existing partner C, and the transfer of that
> interest causes the partnership to dissolve automatically under state
> law, requiring the formation of a new entity.

This list is merely illustrative. It is not an exhaustive list of the
types of *pro forma* transactions that would require prior Commission
approval under Section 310(d) of the Communications Act. Licensees
considering non-substantial ownership changes should first consult the
applicable Commission rules and precedent. Where questions remain,
licensees contemplating such changes should consult with Commission
staff prior to entering into such transactions.

7.  **I have heard that Section 310(d) only applies to transactions
    where the name of the licensee has changed. Is this correct?**

No. Section 310(d) applies to both substantial and *pro forma*
assignments and transfers of control, regardless of whether the name of
the licensee has changed. (Where there is a change in ownership or
control of the licensee, rather than an assignment of the license, the
name of the licensee often remains the same).

8.  **Do we still have to obtain Commission approval before consummating
    the transaction if it is a *pro forma* transaction?**

Generally, you must obtain prior Commission approval whenever there is
an assignment or transfer of control (substantial or *pro forma*). A
limited exception exists under the Commission's forbearance policy.
Under this policy, prior approval is not required if the licensee offers
telecommunications for a fee to the public or to such classes of users
as to be effectively available to the public. Forbearance does not apply
to services such as public safety, private land mobile, and private
point-to-point microwave. For licenses subject to forbearance, a
licensee is permitted to inform the Commission after consummating a *pro
forma* transaction involving those licenses.

9.  **Can I get Special Temporary Authority to close on my transaction
    pending action on the underlying assignment or transfer of control
    application?**

The Commission's rules authorize grant of special temporary authority
("STA") in the following circumstances: (1) emergency situations; (2) to
permit restoration or relocation of existing facilities to continue
communications service; (3) to conduct tests to determine necessary data
for preparing an application for regular authorization; (4) for a
temporary, non-recurring service where a regular authorization is not
appropriate; or (5) in other situations involving circumstances which
are of such extraordinary nature that delay in the institution of
temporary operation would seriously prejudice the public interest. A
party requesting an STA must demonstrate that one of these circumstances
applies in order to qualify for the STA.

10. **We have just signed an asset purchase agreement with another
    company. We have no idea whether they hold any FCC licenses. How do
    we obtain this information?**

First, ask the other party whether it holds any FCC licenses. Ask about
particular operations. For example, is the other party a manufacturer?
Does it own vehicles? Does it use dispatch radios in its vehicles? Does
it employ security guards who carry radios? Does it use radios as part
of its plant operations? If so, these radios could be licensed by the
FCC under its Private Land Mobile Service rules.

Is the other entity a railroad? If so, does it use radio communications
to operate switches and signals or communicate with crews?

Is the other party a public utility? Does it use radio communications to
communicate with crews in the field or control and monitor operations
along its pipeline or electric transmission network? If so, these radio
facilities could be licensed by the FCC under its Private Operational
Fixed (microwave) Service rules.

Does the other party own any ships or aircraft that make international
communications or travel to international ports? If so, these ships
could be equipped with FCC radios licensed under the Commission's Marine
(ships) or Aviation (aircraft) Service rules.

Another way to find out is to check the FCC's databases. The Wireless
Telecommunications Bureau's Universal Licensing System ("ULS"), which
contains licensing information for the Bureau's radio services, is
available at [www.fcc.gov/wtb/uls](http://www.fcc.gov/wtb/uls). Please
note that certain services have not yet been incorporated into ULS. For
such services, during this interim period, you must search the "legacy"
databases for these services by clicking on the "databases" heading on
the Bureau's homepage ([www.fcc.gov/wtb](http://www.fcc.gov/wtb)) and
selecting "Search the Wireless Databases Online." The ULS homepage
provides an up-to-date list of which radio services are currently
licensed in ULS.

Some private wireless licensees may hold other types of FCC-issued
licenses for which prior FCC approval will be required. For example, if
the company is a government contractor, such as a defense equipment
manufacturer, it may hold licenses for non-common carrier satellite
earth stations which are issued by the FCC's International Bureau or
experimental licenses which are issued by the FCC's Office of
Engineering & Technology. The FCC must approve assignments and transfers
of control of these licenses before consummation as well.

11. **What if we find that the other company does hold FCC licenses that
    are subject to the transaction? What questions should we ask about
    the status of those licenses?**

You should make sure that the FCC licenses in question are assignable or

transferable. For example, for some services, the FCC requires that the
radio facility be constructed and operational in order to be assigned.
*See, e.g.*, Section 101.55 of the Commission's Rules, 47 C.F.R. §
101.55 (prohibiting voluntary substantial assignments or transfers of
control of unauctioned microwave licenses prior to completion of
construction). Accordingly, you should ask the licensee about the status
of construction and operation of its FCC-licensed facilities.

The FCC will not assign or transfer a license that has been previously
cancelled or allowed to expire by the licensee. Accordingly, you should
verify that all of the licensee's FCC-issued facilities that are subject
to the transaction are, in fact, licensed. In this regard, please note
that the fact that a licensee has a cancelled check covering renewal
application filing fees ***does not mean*** that the FCC has actually
renewed the license. Check the FCC's database and ask the licensee for a
copy of the current license for verification of the current status of
the license.

Some private wireless licenses are not assignable or transferable. For
example, ship and aircraft radio licenses cannot be assigned or
transferred. Section 1.948 of the Commission's Rules, 47 C.F.R. § 1.948.
In this case, the acquiring entity must obtain a new license.

12. **What forms must we file to request FCC approval of an assignment
    or transfer of control?**

In general, requests for FCC approval of assignments and transfers of
control of private wireless licenses must be filed on FCC Form 603. As
of the release date of this Fact Sheet, most requests for Private Land
Mobile Radio Service licenses must be filed on FCC Form 600 (for
assignment of license applications) and FCC Form 703 (for transfers of
control). However, the Commission will begin using FCC Form 603 for all
of these licenses in the near future. The Commission is in the process
of converting Private Land Mobile Radio Services to ULS over a
three-phased period. *See* Wireless Telecommunications Bureau Implements
Phase I Of a Three-Phased Deployment of the Universal Licensing System
for Land Mobile Radio Services on September 19, 2000, *Public Notice*,
DA 00-1992 (WTB, Sept. 1, 2000) (ULS Public Notice). *See also* Wireless
Telecommunications Bureau Announces Three-Phased Deployment of the
Universal Licensing System for the Land Mobile Radio Services, *Public
Notice* DA 00-1647 (WTB, July 25, 2000). Information regarding the
specific effective dates for ULS conversion for specific land mobile
services can be obtained by reading these Public Notices (and subsequent
Commission announcements) as well as the Wireless Telecommunications
Bureau's ULS web page. You should also refer to these Public Notices
(and any additional Commission announcements) to determine when ULS
implementation will become effective for your licenses. Once a service
has been converted to ULS, the Commission will begin accepting
assignment and transfer of control applications on the FCC Form 603. In
addition, you should check the Commission's rules to determine whether
you need to submit any corresponding forms, such as FCC Form 602
(providing ownership information).

13. **The FCC recently issued a Public Notice announcing grant of our
    assignment applications. Are there any other requirements with which
    we must comply before the FCC will view the transaction as
    complete?**

In general, under Section 1.948 of the Commission's Rules, 47 C.F.R. §
1.948, you must notify the Commission in writing of consummation of the
transfer or assignment. Such notice must be provided to the Commission
within 180 days of public notice of the Commission's grant of the
assignment or transfer application, unless a request for an extension of
time to consummate the transaction is filed prior to the expiration of
the 180-day period. Notifications of consummation and requests for
extension of time to consummate transactions must be filed on FCC Form
603. You may not submit notifications or requests for extension of time
by letter only. This requirement applies to all assignments and
transfers of licenses for private wireless services that have been
converted to the ULS (*i.e.*, Private Operational Fixed Services).

As noted above, the Commission is in the process of converting the
Private Land Mobile Service to the ULS over a three-phase process. *ULS
Public Notice, supra*. Prior to ULS, the Commission has not required the
submission of consummation notifications or requests for extension of
time to consummate for assignments and transfers of Private Land Mobile
Radio Services. However, this notification requirement will become
applicable to PLMRS licenses as the Commission converts this radio
service to ULS. *See ULS Public Notice*, *supra.*

14. **Reading this Fact Sheet has made us realize that we have, in fact,
    consummated at least one transaction without seeking and obtaining
    prior FCC approval. What should we do?**

You should file the appropriate applications for assignment or transfer
of control with the Commission as soon as possible. In addition, you
should file a request for Special Temporary Authority ("STA") pending
action on the application.

Your submissions should include an attachment providing full explanation
of why you did not seek and obtain Commission approval prior to
consummating the transfer or assignment. The fact that the transaction
has already occurred does not make it a *pro forma* transaction. If you
fail to obtain Commission approval prior to consummation of the
transaction, the FCC may take enforcement action. To alleviate delays in
processing, you may want to contact the Licensing and Technical Analysis
Branch of the Public Safety & Private Wireless Division, Wireless
Telecommunications Bureau, prior to or at the time of filing.

15. **Will the FCC's Enforcement Bureau impose a forfeiture for our
    failure to seek prior FCC consent for assignment and transfer of
    control of FCC licenses?**

Failure to seek FCC approval prior to an assignment or transfer of
control is a violation of the Communications Act and the FCC's rules
and, thus, subjects the parties to possible enforcement action,
including monetary forfeitures. Under Section 1.80 of the Commission's
Rules, 47 C.F.R. § 1.80, unauthorized substantial transfers of control
carry a base forfeiture amount of \$8,000 per violation, while
unauthorized *pro forma* transfers of control carry a base forfeiture
amount of \$1,000 per violation. These amounts can be adjusted upward or
downward based on the applicability of certain criteria.

The Commission strongly encourages parties that may have violated these
provisions to disclose voluntarily their transgressions to the
Commission as early as possible. Such voluntary disclosure is a factor
that may be considered in determining appropriate enforcement action, if
any. *See* Section 1.80 of the Commission's rules, 47 C.F.R. § 1.80. In
addition, the Commission invites parties to discuss with the Enforcement
Bureau the possibility of negotiated settlement of enforcement actions
through consent decrees.

By the Chief, Investigations & Hearings Division, Enforcement Bureau,
and the

Chief, Public Safety & Private Wireless, Wireless Telecommunications
Bureau.

For further information contact:

Enforcement Bureau contacts: Lisa M. Fowlkes, Office of the Bureau Chief
at (202) 418-7450 or Gary Schonman, Investigations & Hearings Division
at (202) 418-1420.

Wireless Telecommunications Bureau, Public Safety & Private Wireless
Division contacts: Jamison Prime, Monica Desai or Paul Moon at (202)
418-0680.

[^1]: This Fact Sheet is intended for information purposes only. Nothing
    herein provides licensees with any additional rights. Parties
    contemplating assignment or transfer of control transactions should
    consult Section 310(d) of the Communications Act and the
    Commission's Rules well in advance of filing applications and/or
    consummating transactions involving changes in ownership.