Quickfire Q&A

1

MAY 2021

Selling EBS: Commonly Asked Questions

1: What is the impact of the Federal rule change?

FCC Rule 19-62 came into effect in April 2020, and eliminated restrictions on selling EBS licenses by educational institutions to commercial entities.

2: Why should we consider selling our EBS spectrum license?

Selling your EBS licenses is an efficient means of raising capital, without raising fees or depleting your endowment.  You can monetize a non-core asset and reinvest the proceeds to best support your organization.

3: Can I sell my EBS license despite having a lease in place?

Yes, the new Federal rule allows for a license with an existing lease to be sold.

4: If we sell our EBS license, how quickly will we get the lump sum payment?

Generally, within 4-6 months.

5: We want to sell our EBS license, but our lessee is making it difficult?

Your lessee has an incentive to block a sale to a third-party buyer, since they may want to purchase your EBS license at a discounted rate. You have a legal right to sell your EBS license at fair value. You should consult legal counsel to help you execute a sale at market rate.

6: Can we disclose the terms of my EBS lease to an interested buyer?

If you have a lease in place, any buyer will require the financial details of the lease. If you have restrictions in your lease, there are ways to navigate the sale of your EBS license. You should consult an FCC/EBS attorney. If you don’t have a specialist attorney, we can provide a list of attorneys experienced with EBS license sales.

7: We’ve received a Freedom of Information Act (FOIA) request for my lease. How do we respond?

If you are a public institution, in general you are obligated to deliver the documents contained in the FOIA request or its state level equivalent. If this is challenged by your lessee you should consult counsel.

8: How do we ensure fair market value for our lease?

Prior to April 2020 there was no market for EBS spectrum licenses, since license holders were not allowed to sell. With just a single lessee involved in 90% of EBS spectrum leases, there was zero competition and no incentive to pay a fair price to buy or lease. This changed in April 2020, and now there’s an open market for EBS licenses. Fair market value is only possible in a competitive market. Remember, your lessee has an incentive to try to avoid competitive bidding for your license, since they would prefer to buy below fair market value.

9: Can I sell if I’m using some of my EBS spectrum for educational purposes?

If WCO Spectrum buys your EBS license, we will preserve all educational provisions to the extent possible with your current lease.