Under the Federal Communications Commission’s rules, an entity is deemed to have an attributable relationship with another party if it leases or resells more than 25% of its spectrum capacity to that party. This attributable material relationship rule can prevent designated entities (small businesses, rural telephone companies, and businesses owned by members of minority groups and women, also known as “DEs”) from leasing, wholesaling or reselling more than 25% of their spectrum capacity to any one entity without potentially losing their designated entity eligibility. Grain Management, LLC has submitted a petition requesting that the FCC clarify that that the attributable material relationship rule is not applicable to leasing transactions between DEs and non-DEs where: (1) the licenses involved in the transaction were not acquired through the use of DE benefits and, instead, such licenses were acquired on the secondary market; and (2) the transaction does not involve a structure permitting a non-DE to exercise undue influence over a DE’s activities or decision making. In the alternative, Grain Management requests that the Commission waive application of the attributable material relationship rule to a leasing transaction involving AT&T Inc., Cellco Partnership d/b/a Verizon Wireless, and Grain Capital II, LLC, approved by the Commission on September 13, 2013.
