The FCC said Thurs. it had adopted an exemption for rural telepho...

of rural cooperatives’ not being carved out from the auction attribution rules. Those rules were designed to bar large companies from manipulations so they could qualify as small entities for certain benefits, such as bidding credits. The agency said the step was designed to “increase the ability of rural telephone cooperatives to participate in spectrum auctions and provide service in rural areas.” The exemption involves the requirement that the gross revenue of entities controlled by an applicant’s officers and directors be attributed to the applicant when determining eligibility for small business preferences, such as bidding credits. The exemption is available to prospective auction participants under certain conditions: (1) The applicant is “validly organized” as a cooperative under state law. (2) The gross revenue and other financial and management resources of the affiliates of the applicant’s officers and directors aren’t available to the applicant. (3) The applicant is a rural telephone company as defined by the Communications Act. (4) The applicant is eligible for tax-exempt status under the tax code. Powell and Adelstein said: “Unfortunately, our rules have not always appreciated their unique structures and roles.” They said the FCC’s attribution rules, which require that gross revenue of entities controlled by an applicant’s officers and directors be attributed to the applicant, are important. Those rules bar applicants from obtaining bidding credits that are more favorable than justified, they said. “The rule as crafted, however, had the unintended consequence of attributing to rural telephone cooperatives the gross revenues of the outside business interests of its officers and directors even though these officers and directors do not control the cooperatives,” they wrote. Such cooperatives usually are controlled by member-subscribers and are nonprofit entities, Powell and Abernathy said. Comr. Martin in a separate statement said: “I am hopeful that this will enable greater participation in spectrum auctions by rural cooperatives and will provide greater rural deployment of wireless services.”