FCC to Fix Auction Bidding Rules for Designated Entities
Apr 21, 2015, 12:05 PM by Eric M. Zeman
The FCC is moving forward with plans to alter how companies use designated entities in spectrum auctions and qualify for discounts. The existing rules have been under fire since the close of the AWS-3 spectrum auction wherein Dish Networks won $13 billion in spectrum by bidding through smaller entities. The smaller entities were eligible for discounts, which wiped about $3 billion from the total price Dish has to pay. Dish's competitors complained that Dish is a large company and the discounts are meant for small companies. In response, the FCC issued a formal public notice seeking comment on potential rule changes. Specifically, the FCC wants to know if it should restrict "larger nationwide and regional carriers, entities with a certain number of end-user customers, and/or other large companies from providing a material portion of the total capitalization of DE applicants or otherwise exercising control over such applicants as part of the definition of material relationship." The FCC also wants to know if it would be best to "limit the total dollar amount of DE benefits that any DE (or group of affiliated DEs) may claim during any given auction, based on some multiple of its annual revenues, or a set cap to ensure that DEs cannot acquire spectrum in a manner that is wildly disproportionate to the concept of a small business." The FCC wants to move on this change quickly to be sure the new rules are in place well ahead of next year's planned 600MHz spectrum auction.
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