The Federal Communications Commission late last week rolled out a notice of proposed rulemaking connected to bidding plans for the planned spectrum auction of 600 MHz licenses.
The NPRM includes the potential to change rules tied to the FCC’s controversial designated entity program, which offers bidding credits to select entities based on their size and ownership structure. Part of the proposal looks to remove barriers preventing DEs from leasing spectrum to other non-DE operators.
The FCC is also looking to re-classify the financial threshold on potential DEs to provide a 35% bidding credit for business with average annual gross revenues not exceeding $4 million for the preceding three years; a 25% bidding credit for average annual gross revenues not exceeding $20 million for the preceding three years; and a 15% bidding credit for businesses with less than $55 million in average annual gross revenues for the preceding three years.
In addition, the FCC will look to re-visit the “defaulter rule” that requires higher up-front down payments from companies with a history of defaulting on payments to the government agency tied to previous spectrum auctions. The FCC recently announced plans to relax the defaulter rules for the upcoming AWS-3 auction scheduled to begin Nov. 13.
The FCC is also moving forward with plans to look into the current allowance of joint bidding in spectrum auctions, something that was recently brought up as part of the FCC’s seeming attempts to dissuade an attempt by Sprint to acquire smaller rival T-Mobile US.
–President Barak Obama last week re-nominated current FCC Commissioner Michael O’Rielly to a new term at the government agency. O’Rielly is a Republican member at the FCC along with Ajit Pai, having been initially named to the agency last year to replace outgoing commissioner Robert McDowell.
“I am extremely humbled and appreciative of the action by President Obama to consider and approve my nomination to a new term as a commissioner at the [FCC],” O’Rielly said in a statement. “In my tenure at the commission, I have appreciated the opportunity to work with my colleagues and the great people at this institution on the dynamic communications policy issues before us. The announcement by the President is an important step in the process, and I respect and honor the role that the U.S. Senate will undertake to consider my nomination as it determines appropriate.”
–A handful of industry groups and wireless operators recently sent a letter to the FCC asking the agency to “conduct a thorough and robust review” of pending acquisitions by AT&T that they claim could undermine the FCC’s attempts to diversify spectrum holdings below 1 GHz.
The letter notes that pending deals – if approved – would provide AT&T with control of more than 45 megahertz of sub-1 GHz spectrum in a number of markets, which would surpass the one-third concentration the FCC said would trigger an “enhanced review.”
“AT&T has steadily increased its spectrum holdings through secondary market transactions, and the transactions currently pending before the commission triggering the enhanced review called for in the Mobile Spectrum Holdings Report and Order deserve careful scrutiny,” the letter stated. “Permitting AT&T, already the largest competitor in most of these markets, to purchase this low-band spectrum would deny competitors the opportunity to enter or expand services in the market and result in further concentration of market share in the affected geographic areas.”
The letter references pending deals between AT&T and rural operator Plateau Wireless and Club 42CM Limited Partnership.
Signees on the letter include T-Mobile US, Sprint, Public Knowledge, Computer & Communications Industry Association, Writers Guild of America West, New America Foundation, Free Press and Comptel. T-Mobile US and Sprint have both had battles with AT&T over its spectrum holdings, with T-Mobile US targeting rules related to the upcoming 600 MHz incentive auction and Sprint related to AT&T’s attempt to acquire T-Mobile US.
AT&T recently closed on its acquisition of Leap Wireless that did not include that carrier’s 700 MHz spectrum license. The carrier last year acquired regional operator Atlantic Tele-Network that did include spectrum licenses in the 700 MHz and 850 MHz band, and closed on a $1.9 billion deal with Verizon Wireless to acquire a substantial number of 700 MHz licenses in the lower B-Block.
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