FCC Republicans Question Designated Entity Moves

Federal Communications Commission members Michael O’Rielly and Ajit Pai were not happy with portions of the FCC's Notice of Proposed Rulemaking on competitive bidding in spectrum auctions, particularly the upcoming broadcast incentive auction.

The item passed, but not without the Republicans dissenting in part and making their unhappiness known. The FCC voted to allow small businesses and minorities more opportunities to bid by, among other things, loosening restrictions on third-party leasing or requirements for higher upfront payments from bidders with past debt issues. "The NPRM proposes to permit small businesses (known as 'designated entities' or 'DEs') to obtain taxpayer-funded discounts and then turn around and lease 100% of their spectrum to the world’s largest corporations. It does absolutely nothing good for competition in the wireless marketplace to award bidding credits to entities that flip their spectrum to large incumbent providers," Commissioner Pai wrote in his partial dissent. "To the contrary, it only makes it harder for small and regional facilities-based providers to win spectrum and compete on a level playing field. The Commission did not need to take this approach" He said there were some parts worth exploring, but on balance called it a "lost opportunity" by DEs to get into the wireless business. Commissioner O'Rielly also took issue with the NPRMs proposal that DEs not have to be a facilities-based provider -- allowing them to lease the spectrum to others.