FCC to probe changes to its designated entity rules ahead of incentive auction

The FCC will consider what changes it should make to its rules governing designated entities (DEs) that bid in spectrum auctions, ahead of next year's incentive auction of 600 MHz broadcast TV spectrum.

The agency's five commissioners were supposed to have voted on the item at today's open meeting, but the item was removed from the FCC's agenda. Instead, the commissioners approved the item ahead of the meeting, and the vote was unanimous. 

FCC Chairman Tom Wheeler had vowed to fix the rules so that they benefit truly small businesses and are not used as a front to let major corporations win discounts on spectrum. Dish Network (NASDAQ: DISH) has taken flak from  carriers, lawmakers and others for manipulating the FCC's designated entity system in its bidding strategy for the AWS-3 spectrum auction to get discounts for DEs worth more than $3 billion. Dish has pushed back against that, arguing that it followed the FCC's rules.

In the public notice, the FCC is seeking comment on how it can change the rules to balance competing interests. On one hand, it wants make sure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women have an opportunity to participate in spectrum auctions. At the same time, the FCC wants to ensure that there are adequate safeguards to protect against "unjust enrichment to ineligible entities." Republican Commissioner Ajit Pai has said the discount given to Dish's designated entity partners "makes a mockery" of the rules. FCC document

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