DE Interest Scant in AWS Spectrum, Council Tree Tells Court
Council Tree, Bethel Native Corp. and Minority Media & Telecom Council want the 3rd U.S. Appeals Court, Philadelphia, to toss out the AWS auction, they said in a pleading. Rules approved pre-auction effectively killed participation by them and other designated entities, they said. Among provisionally winning bids, only 4% have been by DEs’, they told the court.
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A recurring topic of judges questions during arguments on a stay was a last-minute FCC filing noting that 166 DEs filed to bid in the auction, mooting objections to the rule changes, according to the agency. “Two-thirds of the participants in this auction at this point are designated entities, and this goes to the impact on the availability of capital,” Bill Lake, an attorney for wireless carriers, told the court.
Auction results undercut that argument, the complaining DEs said. “Actual DE participation in Auction 66 has in fact been sharply curtailed, and any promise held by the FCC’s citation of the number 166 has proven to be hollow,” they said: “If Auction 66 ended as of Sept. 1, DEs would have submitted a mere 4% of the total provisionally winning bids.” That contrasts with an average of 74% in 6 comparable FCC auctions over the past decade, the DEs said.
The revised rules violate the Administrative Procedure Act, the Communications Act and the Regulatory Flexibility Act, the DEs said. “The results of Auction 66 provide immediate evidence of this impact, where the historic level of small business success has collapsed,” the pleading said: “The flawed new rules must be vacated, and the FCC must be given the task of conducting Auction 66 again without the rules in place.”
“No one outside the FCC saw these dramatic changes coming” to the DE rules and “the aftermath of their adoption has been confusing and chaotic characterized by cosmetic remedial zigzagging,” the DEs said. The resulting uncertainty “impacted the ability of DEs to raise and retain capital, and to participate in the auction,” they said.
In June, a 3rd Circuit panel refused to stay the auction, which began Aug. 9 (CD June 30 p1). But the court admitted to concerns about the revised DE rules -- especially whether DEs were “sufficiently apprised” of fundamental changes in auction rules. That question must be settled later, the judges said. The court hasn’t set a date for oral arguments.