Regulatory - EBS Leasing

In order to encourage fuller use of ITFS spectrum, in 1983 the FCC adopted rules permitting (but not requiring) excess capacity of ITFS stations to be leased for commercial purposes.  Since 2005, EBS leasing has been authorized under the FCC’s “Secondary Markets” leasing rules in Part 1, Subpart X of Title 47 of the Code of Federal Regulations.   EBS leases typically follow the “de facto transfer leasing” approach, under which day to day control of, and regulatory responsibility for, the leased EBS spectrum is transferred to the commercial operator during the term of the lease.  This approach requires approval of the leasing arrangement (in the form of approval of the transfer of de facto control) by the FCC.

Over the years, certain additional requirements also came to apply to EBS leases under 47 CFR §27.1214 (c) and (e):

• The maximum EBS lease term could be no more than 30 years;
• Any lease arrangement in excess of 15 years had to include terms which provide the EBS licensee on the 15^th year and every 5 years thereafter with an opportunity to review its educational use requirements in light of changes in educational needs and technology, and to obtain access to such additional services, capacity, support and/or equipment as the parties agree;
• The lease had to afford the licensee an opportunity to purchase or lease the dedicated or common EBS equipment in the event that the leasing arrangement is terminated; and
• The licensee of any leased EBS license had to meet certain minimum educational use requirements (20 hours per channel per week of service to an accredited school).

Leases that were entered into prior to January 10, 2005 under the old ITFS leasing rules, which do not comply with the Secondary Markets leasing rules, were “grandfathered” by the FCC for a period not to exceed 15 years from the lease start date.

As of April 27, 2020, EBS leases are no longer required to comply with the four above-noted requirements, although the FCC rule changes did not by themselves result in any changes to the terms of existing leases.