FCC Clarifies Spectrum Auction Rules

FCC CLARIFIES "DESIGNATED ENTITY" ELIGIBILITY RULES
[SOURCE: Federal Communications Commission]
On Friday, the Federal Communications Commission (FCC) adopted an Order on Reconsideration of the Second Report and Order (Recon Order) that provides guidance on certain aspects of the FCC's April 2006 Second Report and Order (April 2006 Order) which modified certain rules governing the benefits reserved for applicants or licensees that qualify as "designated entities." Several parties have recently submitted filings seeking reconsideration and clarification of various aspects of the April 2006 Order and Friday's Recon Order addresses issues raised in those filings. The Order: 1) dismissed arguments claiming that the adoption of rules in the April 2006 Order was without sufficient notice, 2) clarified how the FCC will evaluate impermissible and attributable material relationships, including those that are grandfathered, for the purpose of determining eligibility for designated entity benefits and the imposition of unjust enrichment, 3) responded to arguments that rule changes related to unjust enrichment payments were arbitrary and capricious, and made clear that the ten-year schedule applies only to licenses granted after release of the April 2006 Order, and 4) clarified that the new rule relating to reportable eligibility events includes events that might affect a designated entity's eligibility under either the new material relationship or existing controlling interest standards. Chairman Kevin Martin said, "These changes to our designated entity rules arose out of a last-minute proposal in the proceeding to adopt rules for the Advanced Wireless Services spectrum. While I supported examining potential changes to our designated entity rules for future auctions, I did not believe the rules needed to be changed, especially in advance of the auction this summer. Nevertheless, I agreed to the changes in order to obtain the support needed to establish the rules for wireless services that were essential to making the spectrum available for wireless broadband services this summer." In a separate statement, Commissioner Adelstein said, "I support the specific clarifications in this Order on Reconsideration because they in part respond to legitimate concerns from designated entities regarding the possibly retroactive application of new rules. I have this lingering concern, though, that the Commission's course of action in this troubled proceeding, notwithstanding the legal maneuvering in this decision, may still leave other issues unresolved. As I have noted before, much of this uncertainty could have been avoided had we started this proceeding earlier and kept it more narrowly focused. I hope that the Commission's decisions over the past several months do not prove to be the undoing of our most significant auction in 10 years."
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265754A1.doc

See the Order: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-78A1.doc

* Chairman Martin's statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-78A2.doc

* Commissioner Adelstein's statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-78A4.doc

* Commissioner Copps: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-78A3.doc

* Commissioner Tate: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-78A5.doc