FCC Adopts NPRM On Competitive Bidding

Would allow more DE's to get bidding credits to participate in auctions
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As expected, the FCC is tentatively concluding that the Big Four wireless carriers can't team up to bid in the incentive auction or other, future, auctions.

The vote was 5-0, but with Republicans Ajit Pai and Michael O'Rielly concurring in part and dissenting in part on some parts of the order.

That is according to a Notice of Proposed Rulemaking approved by the commissioners that makes changes to the FCC's competitive bidding rules in advance of the broadcast incentive auction, which is targeted for mid-2015, though broadcaster court challenges could push that timetable.

The NPRM retains the rule permitting non-nationwide carriers to bid jointly, but tentatively concludes that joint bidding among nationwide carriers (Verizon, AT&T, Sprint, T-Mobile) should be prohibited.

It asks whether national carriers can be allowed to team up with smaller ones, but draws no conclusions.

The changes generally allow more smaller entities to bid in the incentive auction--and other future auctions--part of the ongoing effort to spread the beachfront spectrum around beyond the Big Four.

It has been eight years since the FCC last reviewed its bidding rules.

FCC Chairman Tom Wheeler last month circulated the item updating the FCC's policies on designated entities (DE's), those small businesses (or perhaps soon not-so-small), often minority- and women-owned, that can get bidding credits in upcoming spectrum auctions. 

The NPRM also proposes not making leases with big carriers a de facto bar on DE bidding credits, which is the reasoning behind the FCC's granting of a waiver to Grain Management for DE status in the AWS-3 auction. 

The FCC is holding a wireless spectrum auction next month (AWS-3) spectrum, but an order won't be done in time to change the rules for that auction.

The NPRM also proposes:

1. Eliminating the rule that requires small businesses to provide facilities-based service, and the rule assuming that leases affect control of a small business. It would retain rules about control of a bidding company and unjust enrichment.

2. Increasing the gross revenue thresholds for designated entity bidding credits (essentially allowing larger small businesses to qualify), taking into account over 15 years of inflation.

3. Eliminating duplicative reporting requirements.

4. Limiting the timing and amounts of prior debts that trigger a larger (150%) upfront payment required to participate in an auction.

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