FCC Offers Designated Entities Some of the Clarity They Sought Prior to AWS-3 Auction
The FCC was poised to release an order Wednesday giving Grain Management and other designated entities (DEs) relief they had sought to clarify that they can more readily participate as DEs in the upcoming AWS-3 auction and in other auctions as well. The order has been approved by a 3-2 vote over the objections of Commissioners Ajit Pai and Mike O'Rielly, FCC officials said.
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In March, Grain asked the FCC for clarity on whether the attributable material relationship rule (AMR) applies to spectrum deals in the secondary market (CD March 6 p14). Grain was part of a multiparty spectrum deal involving AT&T and Verizon Wireless last year. “The attributable material relationship rule, as it is currently drafted, is overly broad and has the potential to deny entities whom Congress would have intended to receive DE benefits from receiving such benefits,” Grain said then (http://bit.ly/1oqUWhy).
The approval was controversial in part because Grain is owned by David Grain, who donated tens of thousands of dollars to the Democratic National Committee and to President Barack Obama’s two election campaigns, according to FEC records. The records also indicate Grain has been an active contributor to Republican candidates as well, particularly in his home state of Florida. Former FCC Chairman William Kennard is a senior adviser at Grain Management.
An FCC official noted Wednesday that the order does not guarantee any particular company will win a license in an upcoming auction but helps would-be bidders understand the rules before the upcoming AWS-3 auction.
"Treating entrepreneurs and small businesses like multibillion dollar corporations when competing for spectrum licenses could deter them from participating in auctions,” an FCC spokesman said. “Granting regulatory relief to entrepreneurs and small businesses in the same situation as Grain, Inc. helps them qualify to compete for spectrum license opportunities.” The actions taken by the FCC are also “consistent with Congress’s directive to make sure that we design auctions that avoid concentration of licenses and disseminate licensees among a wide variety of applicants, including small businesses and others,” the spokesman said. It helps “would-be bidders” know the rules of the road for the upcoming AWS-3 auction.
The Minority Media and Telecommunications Council has been pushing the FCC to revise its DE rules, arguing that rules restricting DEs from reselling spectrum they buy in an auction on the secondary market meant few DEs took part in the last big FCC auctions -- AWS-1 in 2006 and 700 MHz two years later (CD Feb 26 p1).
"This order is about allowing a waiver of the AMR to allow some level of participation in the AWS-3 auction,” said Nicol Turner-Lee, MMTC chief research and policy officer. MMTC hopes the order is the beginning of a promised proceeding that looks at how to encourage greater DE participation in auctions, she said. (hbuskirk@warren-news.com)