(a) An applicant must file an application for an initial PAL. Applications for PALs must:

(1) Demonstrate the applicant's qualifications to hold an authorization;

(2) State how a grant would serve the public interest, convenience, and necessity;

(3) Contain all information required by FCC rules and application forms;

(4) Propose operation of a facility or facilities in compliance with all rules governing the Citizens Broadband Radio Service; and

(5) Be amended as necessary to remain substantially accurate and complete in all significant respects, in accordance with the provisions of § 1.65 of this chapter.

(b) CBSDs used for Priority Access must register with an SAS and comply with its instructions consistent with § 96.39 and subpart F of this part.

(c) Records pertaining to PALs, including applications and licenses, shall be maintained by the Commission in a publicly accessible system.

(a) Priority Access Licensees must operate CBSDs consistent with the technical rules and interference protection requirements set forth in this part.

(b) PALs have the following parameters:

(1) Geography: Each PAL consists of a single License Area.

(i) Contiguous geographic areas: An SAS must assign geographically contiguous PALs held by the same Priority Access Licensee to the same channels in each geographic area, to the extent feasible. The SAS may temporarily reassign individual PALs held by the same Priority Access Licensee to different channels, so that geographical contiguity is temporarily not maintained, to the extent necessary to protect Incumbent Users or if necessary to perform its required functions under subpart F of this part.

(ii) [Reserved]

(2) Channels: Each PAL consists of a 10 megahertz channel within the frequency range set forth in § 96.11. Channels must be assigned by the SAS. Priority Access Licensees may request a particular channel or frequency range from the SAS but will not be guaranteed a particular assignment.

(i) Contiguous channels: An SAS must assign multiple channels held by the same Priority Access Licensee to contiguous channels in the same License Area, to the extent feasible. The SAS may temporarily reassign individual PALs to non-contiguous channels to the extent necessary to protect Incumbent Users or if necessary to perform its required functions under subpart F of this part.

(ii) [Reserved]

(3) License term. Each PAL has a ten-year license term. Licensees must file a renewal application in accordance with the provisions of § 1.949 of this chapter.

(4) Performance requirement. Priority Access Licensees must provide substantial service in their license area by the end of the initial license term. “Substantial” service is defined as service which is sound, favorable, and substantially above the level of mediocre service which might minimally warrant renewal. Failure by any licensee to meet this requirement will result in forfeiture of the license without further Commission action, and the licensee will be ineligible to regain it. Licensees shall demonstrate compliance with the performance requirement by filing a construction notification with the Commission in accordance with the provisions set forth in § 1.946(d) of this chapter. The licensee must certify whether it has met the performance requirement, and file supporting documentation, including description and demonstration of the bona fide service provided, electronic maps accurately depicting the boundaries of the license area and where in the license area the licensee provides service that meets the performance requirement, supporting technical documentation, any population-related assumptions or data used in determining the population covered by a service to the extent any were relied upon, and any other information the Wireless Telecommunications Bureau may prescribe by public notice. A licensee's showing of substantial service may not rely on service coverage outside of the PAL Protection Areas of registered CBSDs or on deployments that are not reflected in SAS records of CBSD registrations.

(i) Safe harbor for mobile or point-to-multipoint service. A Priority Access Licensee providing a mobile service or point-to-multipoint service may demonstrate substantial service by showing that it provides signal coverage and offers service, either to customers or for internal use, over at least 50 percent of the population in the license area.

(ii) Safe harbor for fixed point-to-point service. A Priority Access Licensee providing a fixed point-to-point service may demonstrate substantial service by showing that it has constructed and operates at least four links, either to customers or for internal use, in license areas with 134,000 population or less and in license areas with greater population, a minimum number of links equal to the population of the license area divided by 33,500 and rounded up to the nearest whole number. To satisfy this provision, such links must operate using registered Category B CBSDs.

(c) PAL Protection Areas. PAL channels shall be made available for assignment by the SAS for General Authorized Access use only in areas outside of PAL Protection Areas consistent with this section and § 96.41(d).

(1) A CBSD will be considered to be in use for purposes of calculating a PAL Protection Area once it is registered and authorized for use on a Priority Access basis by an SAS consistent with §§ 96.39, 96.53, and 96.57.

(i) Priority Access Licensees must inform the SAS if a previously activated CBSD is no longer in use.

(ii) Any CBSD that does not make contact with the SAS for seven days shall not be considered in use and will be excluded from the calculation of the PAL Protection Area until such time as contact with the SAS is re-established.

(2) The default protection contour will be determined by the SAS as a −96 dBm/10 MHz contour around each CBSD. The default protection contour will be calculated based on information included in the CBSD registration and shall be determined and enforced consistently across all SASs.

(i) The default protection contour is the outer limit of the PAL Protection Area for any CBSD but a Priority Access Licensee may choose to self-report protection contours smaller than the default protection contour to the SAS.

(ii) If the PAL Protection Areas for multiple CBSDs operated by the same Priority Access Licensees overlap, the SAS shall combine the PAL Protection Areas for such CBSDs into a single protection area.

(3) The PAL Protection Area may not extend beyond the boundaries of the Priority Access Licensee's Service Area.

Mutually exclusive initial applications for PALs are subject to competitive bidding. The general competitive bidding procedures set forth in part 1, subpart Q, of this chapter will apply unless otherwise provided in this subpart.

(a) Small business. (1) A small business is an entity that, together with its affiliates, its controlling interests, and the affiliates of its controlling interests, has average gross revenues not exceeding $55 million for the preceding three (3) years.

(2) A very small business is an entity that, together with its affiliates, its controlling interests, and the affiliates of its controlling interests, has average gross revenues not exceeding $20 million for the preceding three (3) years.

(b) Eligible rural service provider. For purposes of this section, an eligible rural service provider is an entity that meets the criteria specified in § 1.2110(f)(4) of this chapter.

(c) Bidding credits. (1) A winning bidder that qualifies as a small business as defined in this section or a consortium of small businesses may use a bidding credit of 15 percent, as specified in § 1.2110(f)(2)(i)(C) of this chapter. A winning bidder that qualifies as a very small business as defined in this section or a consortium of very small businesses may use a bidding credit of 25 percent, as specified in § 1.2110(f)(2)(i)(B) of this chapter.

(2) An entity that qualifies as eligible rural service provider or a consortium of rural service providers who has not claimed a small business bidding credit may use a bidding credit of 15 percent, as specified in § 1.2110(f)(4) of this chapter.

(a) Priority Access Licensees may aggregate up to four PAL channels in any License Area at any given time.

(b) The criteria in § 20.22(b) of this chapter will apply in order to attribute partial ownership and other interests for the purpose of applying the aggregation limit in paragraph (a) of this section.

(a) Priority Access Licensees may transfer or assign their licenses and enter into de facto leasing arrangements in accordance with part 1 of this chapter.

(b) Priority Access Licensees may partition or disaggregate their licenses and partially assign or transfer their licenses pursuant to § 1.950 of this chapter and may enter into de facto transfer leasing arrangements for a portion of their licensed spectrum pursuant to part 1 of this chapter.

(c) Priority Access Licensees may enter into spectrum manager leasing arrangements with approved entities as prescribed in § 1.9046 of this chapter. Priority Access Licensees may only enter into leasing arrangements for areas that are within their Service Area and outside of their PAL Protection Areas.