The Minority Media & Telecommunications Council (MMTC) and two would-be designated entrants in the Federal Communication Commission's (FCC) planned August auction of wireless spectrum licenses have sued the FCC in federal court to stay recent changes to the auction rules and to delay the auction itself. In April the FCC tightened its rules to try and prevent what was becoming a common practice: Larger telecommunications companies using using smaller, rural, women- or minority-run companies as front companies to secure the bidding credits given to such designated entrants, or DE's.
The changes the FCC introduced in April included extending the length of time that a winning bidder has to own the company before selling it, and reducing the percentage of the spectrum that can be leased.
MMTC argues that changes were made without due consideration, and that these changes could do irreparable harm to smaller companies by denying them the "flexibility" to lease or sell out. The companies had asked the FCC to make some changes to discourage abuses of the credit by larger companies, but suggested the FCC's changes were too draconian and would "effectively deprive" DE's of their bidding credits if they lease or resell even so much as 25 percent of their spectrum capacity. They also took issue with the doubling of the "hold" period, that is, how long they have to hold the spectrum before selling out, from 5 to 10 years.
There are about 1,200-plus licenses, all reclaimed from government use, which are up for grabs -- enough here to build a national network.
For more on the legal skirmishes concerning spectrum bidding
-see this B&C report