FCC Sued Over Wireless Auction

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The Minority Media & Telecommunications Council and two would-be designated entrants in the FCC's planned August auction of wireless spectrum licenses have sued the FCC in federal court to stay recent changes to the auction rules and to delay the auction itself yet again.

The FCC in April tightened its rules to try and prevent larger telecommunications companies from using smaller, often rural ones one by women and minorities, as front companies to secure the bidding credits given to such desginated entrants, or DE's.

Those changes included extending the length of time that a winning bidder has to own the company before selling it, and reducing the percentage of the spectrum that can be leased.

MMTC says the changes were last-minute--the FCC did move the auction from June to August--and could do irrreparable harm to smaller companies by denying them the "flexibility" to lease or sell out.

The companies had asked the FCC to make some changes to discourage abuses of the credit by larger companies, but suggested the FCC's changes were too draconian and would "effectively deprive DE's of their bidding credis if they lease or resell even so much as 25% of their spectrum capacity. They also took issue with double the "hold" period--how long they have to hold the specrum before selling out, from 5 to 10 years.

Some 1,200-plus licenses, recalimed from government use, are up for grabs, enough to build a national network. The cable industry, which is already delivering video, Voice over IP phone service, and Internet access, is looking to add wireless service to its bundle as it prepares for increased competition from the phone companies in its video space.

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