Court ruling knocks FCC’s ‘designated entity’ efforts

The 3rd U.S. Circuit Court of Appeals ruled the small-business bidding suit against the Federal Communications Commission remains intact, an action with potential implications for two major spectrum auctions.
The 3rd Circuit, while declining to force the FCC to rule on a regulatory challenge to “designated entity” rule changes adopted prior to the 2006 advanced wireless services auction, ordered the FCC to respond within 30 days whether it plans to grant or deny a petition for reconsideration filed by Council Tree Communications Inc., Bethel Native Corp., and the Minority Media and Telecommunications Council.
In doing so, the court rejected the FCC’s assertion that it had already thrown out the DE petition for reconsideration. Moreover, the Philadelphia-based circuit court affirmed it has jurisdiction over the case.
“With this ruling, this case is very much alive. Remaining in play are the results of two auctions, AWS Auction 66 and the current 700 MHz Auction 73, in which DE participation has been drastically curtailed by the unlawfully adopted and unduly restrictive new DE rules,” said Council Tree in a statement. “The judicial ruling will ultimately clear the jurisdictional hurdles. It puts this fully briefed and argued case on an inexorable path toward a decision on the merits.”
The 3rd Circuit last year rejected on procedural grounds the three groups’ challenge to DE rule modifications approved by the FCC.
The FCC in April 2006 agreed to rule revisions that extended DE license sale restrictions from 5 to 10 years and denied incentives to DEs that resell or lease more than 50% of their spectrum capacity. The agency FCC relaxed the rule for commercial-public safety D-Block bidding in the ongoing 700 MHz auction.
Council Tree is one of two parties that appealed the FCC’s 700 MHz decision. DEs are eligible for license discounts up to 25% in spectrum auctions.