National Civil Rights and Public Interest Groups Ask FCC to Immediately Fix Wireless Auction Rules

Leaders from ten prominent civil rights, women and minority interest organizations have been making the rounds meeting with FCC Commissioners asking them to reverse 2006 rule changes that, since adopted, have virtually eliminated the ability of small and minority businesses to compete against large wireless companies for valuable spectrum at FCC auctions. The groups are concerned about two aspects of the FCC auction rules designed to give small businesses with limited assets and revenue, (called designated entities or DEs) a reasonable chance to bid for and win spectrum at auctions where they have to compete with large wireless companies. Before the changes, DEs were able to raise capital, secure spectrum at a discount and operate successful wireless companies. However, in 2006, without warning or opportunity for public comment, the FCC changed the rules shortly before it auctioned off prime and valuable spectrum in the Advanced Wireless Service auction (Auction 66). Between 1996 and 2005, DEs' average successful participation rate in comparable wireless auctions was over 70% compared to only 4% in Auction 66 and 2.6% in Auction 73 (a subsequent auction). After these changes, of the $19 billion of licenses sold in Auction 73 last year, minorities acquired just $5 million, or less than 1 % of the total value of those licenses.