FCC’s small-business bidding rule comes under fire: MetroPCS plans to bid in 700 MHz auction

The Federal Communications Commission’s relaxation of the small-business bidding rule for the commercial-public safety D-Block license in the upcoming 700 MHz auction has come under another attack, this time by the same parties that have entangled the agency in auction-related litigation since last year.
Council Tree Communications Inc., Bethel Native Corp. and the Minority Media and Telecommunications Council asked the FCC to repeal a recent waiver that’s expected to help startup Frontline Wireless L.L.C. in its campaign to capture the D-Block license in the 700 MHz auction.
Bidding, which could ring up as much as $15 billion for the U.S. Treasury, is set to begin Jan. 24.
Council Tree joins Verizon Wireless, the No. 2 mobile-phone operator, in urging the FCC to overturn the waiver. Under the rule at issue, a small business, or designated entity (DE), applicant is eligible for a bidding discount up to 25% so long as it does not wholesale more than 50% of its spectrum capacity. The FCC waived that provision, concluding unique circumstances, obligations of the D-Block licensee and other factors made strict adherence to the rule unnecessary.
“Once again the commission has improperly adopted a fundamental change to the DE rules on the eve of a major auction,” stated Council Tree. “DEs in general-whom the FCC is bound by law to ensure have sufficient time to prepare business plans-could not possibly respond to this change announced just 11 business days prior to the closing of the short form window. If the commission recognizes the 50% retail rule as defective, then it should provide relief for all DEs in Auction 73, not the extremely narrow pool who could conceivably participate on such short notice in bidding on a spectrum block that carries a $1.4 billion minimum bid.”
The short form application filing window closed Dec. 3.
Council Tree, Bethel and MMTC continue to challenge in federal appeals court DE rule changes approved by the FCC prior to last year’s advanced wireless services auction.
“Again we are troubled by the consistent lack of transparency in the commission’s decision-making process,” stated Council Tree, touching on a more general complaint about FCC processes that Democratic lawmakers have begun to investigate. “A DE rule change of this magnitude should have been a matter of public record. Here, the action was taken outside of all docketed proceedings; no party of record asked the FCC to waive the rule; and the public was given no opportunity to comment on either the prudence or the scope of this selective approach.”
Council Tree is party to one of the two court appeals of the FCC’s 700 MHz decision. Cellular association CTIA filed the other appeal, following Verizon Wireless’ withdrawl of its legal challenge.
As FCC and court challenges play out, the identities of likely 700 MHz bidders continue to surface.
MetroPCS Communications Inc., a leading regional carrier, is the latest to throw its hat into the ring. MetroPCS revealed it submitted a 700 MHz short-form application in a filing with the Securities and Exchange Commission.
The FCC intends to release an official list of 700 MHz applicants before the Dec. 28 deadline for upfront payments.