FCC to allow wholesaling of D block spectrum: Decision seen as victory for Frontline

The Federal Communications Commission relaxed the small-business bidding rule for the national commercial/public-safety license up for grabs in the upcoming 700 MHz spectrum auction. The ruling is major victory for startup Frontline Wireless L.L.C., which has expressed strong interest in pursuing the D block license using a wholesale business model.
A small business, or designated entity, is eligible for bidding discounts up to 25% as long as it does not wholesale more than 50% of its spectrum capacity. The FCC waived that provision, finding that unique circumstances and obligations of the D block license and other factors made strict application of the rule unnecessary. Other DE guidelines will remain intact for the eventual 700 MHz D block winner.
“To encourage the widest range of potentially qualified applicants to participate in bidding for the D Block license, we enabled eligible bidders for this license to seek designated-entity bidding credits for small businesses, as a means to create incentives for investors to provide innovative small businesses with the capital necessary to compete for the D block license at auction,” the commission stated.
The filing window for short-form 700 MHz applications opens Nov. 19 and closes Dec. 3.
“This was a vital step needed to pave the way for small business participation in this auction by innovative new competitors such as Frontline who want to provide facilities-based wholesale services on a fully built-out network,” the Silicon Valley-backed firm said. “Because the D block carries unique obligations to meet public safety’s needs, including a 99.3% buildout requirement, no small business could vie for this spectrum-and build out a new-build, 4G network-except as a wholesaler.”