Challenger to C-Band Clearinghouse Recommendation Says It or Third Party Is Preferable
Vertix Consulting isn't likely to challenge the FCC legally if the agency opts not to override a search committee, even though the firm opposes the team chosen as C-band clearinghouse to manage and distribute the relocation payments (see 2008190045), Vertix Partner Greg Weiner told us. "We will have spoken our piece," he said, adding if the agency agrees with its challenge about the CohnReznick team, the agency's choice apparently will be between the Vertix team and a third one. The FCC didn't comment.
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"The challenge is without merit," emailed CohnReznick. It "centers on the faulty factual predicate that there is no bank associated with the CohnReznick team. In fact, CohnReznick is relying on Truist, the 6th largest commercial bank in the U.S. Truist is well-equipped by any measure -- be it liquidity, privacy, or fraud prevention -- to assist the Relocation Payment Clearinghouse in discharging its duties. We look forward to FCC affirmation of the Selection Committee’s unanimous award."
A search team member told us pushback was somewhat unexpected. We were told the committee got multiple submissions, reviewed them and asked for additional materials before making its recommendation. The process was fair and in accordance with the C-band order laying out the clearinghouse duties, the member said. If none of the submissions met all the requirements, none of them would have been recommended and the search team either would have solicited for more or gone back to the FCC for guidance, we were told.
The Vertix team is taking its arguments to the eighth floor. In a docket 18-122 ex parte posting Tuesday, Vertix recapped calls including with Commissioner Mike O'Rielly, an aide to Chairman Ajit Pai and Wireless Bureau Chief Don Stockdale about its assertions the CohnReznick proposal falls short of the terms and conditions of the request for proposal and the order. Invoice fraud could become "a significant issue" if there's only monthly account reconciliation, the filing said. The Vertix team said it includes a major custodial bank and a major services firm and it can "meet surges in demand [and also] the accelerated timelines of the C-Band program.
The C-band report and order said the clearinghouse is to be "a neutral, independent entity" with no financial interests in incumbent satellite operators, earth station operators, content companies using the C-band to distribute, wireless operators or anyone who might seek flexible-use licenses or make or market equipment in the band. Clearinghouse jobs are to include collecting and distributing relocation and accelerated relocation payments, auditing incoming and outgoing invoices, mitigating cost disputes "and generally acting as clearinghouse," according to the order.
The Wireless Bureau is to issue a public notice seeking comment on whether the entity satisfies the clearinghouse criteria. If the bureau finds the criteria aren't satisfied, the selection process "will start over and the search committee will submit a new proposed entry," the order said. The order doesn't leave open the door for remedying the CohnReznick proposal and addressing issues with it, Vertix's Weiner said.
Weiner said the CohnReznick recommendation is likely due to the search committee members being versed in regulatory matters but not solicitations or the importance of such things as having banking representation on the team. He said judging by questions asked of the search committee, which were shared among those applying for the job, at least one other applicant had raised the issue of a bank being part of the team. The RFP doesn't require a bank on the team, but the description of duties indicates teams must handle about $13 billion of cash flow.
There were potentially five teams vying for the clearinghouse job, with two -- neither of which were the Vertix team -- dismissed for not meeting the criteria, Weiner said. "Had we lost to somebody we thought was credible, I wouldn't have made any filing," he said.
Vertix hopes others will file backing its challenge to the search committee recommendation, but Weiner said individual parties may not do so because they were represented on the search committee through CTIA, NAB, ACA Connects, the Wireless ISP Association, NCTA or the Competitive Carriers Association.