The Outlook Live infrastructure is already federated with Microsoft Federation Gateway. All you need to do to enable federated sharing is create a new organizational relationship with another Outlook Live domain.

Before you begin

Federated sharing uses the autodiscover information in your domain to configure the federated relationship. You must make sure that both your organization and the partner organization have the CNAME autodiscover record configured in DNS. See Use a CNAME Record to Enable Outlook 2007 to Connect to Outlook Live.

Use Windows PowerShell to configure federated sharing in Outlook Live.

1. Connect Windows PowerShell to Outlook Live.

2. Run the following command to enable free/busy sharing between two Outlook Live organizations:

Get-FederationInformation –DomainName <the other tenant domain> | New-OrganizationRelationship -Name <the other tenant domain> -FreeBusyAccessEnabled $true -FreeBusyAccessLevel LimitedDetails

Here’s an example of what the command would look like in the Contoso scenario, where the administrator for the Contoso organization configures a federated sharing partnership with Fabrikam College:

Get-FederationInformation –DomainName | New-OrganizationRelationship -Name Fabrikam -Domainnames -FreeBusyAccessEnabled $true -FreeBusyAccessLevel LimitedDetails

More information

Managing Federated Sharing

Here’s the full article: It’s on Outlook Live Answers, so you’d need to log in with your Admin account: