Council Tree Signs on Allies in Bid to Overturn 700 MHz, AWS-1 Auctions
Support is growing for Council Tree’s effort to persuade the Supreme Court to review its challenge of the results from the AWS-1 and 700 MHz auctions, the designated entity (DE) said Thursday. Council Tree argues that the 3rd U.S. Circuit of Appeals in Philadelphia should have overturned the results of the auctions when it found problems with the FCC’s revised DE rules last August (CD Aug 25 p1). Council Tree said three amicus briefs have been filed in support of its petition.
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"For more than four years we sought to undo the commission’s flawed auction rules that undermined two of the largest and most important spectrum auctions in the FCC’s history,” said George Laub, Council Tree managing director. “While we were gratified with last summer’s decision by the Third Circuit which found unlawful and vacated key rules at issue, the Court’s failure to vacate the auction results creates a meaningless victory for petitioners and is a disservice to the public."
Bethel Native Corp., a small wireless carrier in Alaska, and the Minority Media and Telecommunications Council were also appellants. The three went to the 3rd Circuit twice. While overturning one provision of the FCC’s designated entity rules and remanding another to the commission, the court stopped short of overturning the results of 2006’s AWS-1 auction and the following year’s 700 MHz auction. “We are … loath to rescind the results of the auctions, since it would involve unwinding transactions worth more than $30 billion,” the court said.
Council Tree argues there is “ample Supreme Court precedent” for vacating auction results. The company cites the high court’s 2003 FCC v. NextWave decision overturning auction 35, in which the FCC sold $17.6 billion worth of spectrum licenses.
In one amicus filing, public interest, civil rights and consumer groups, as well as DEs, said the appeals court should have overturned the auction results. The 3rd Circuit acknowledged problems with the FCC’s DE rules, “yet failed to appropriate an adequate remedy to make whole DEs that relied on the DE rules to effectively compete and participate in those auctions,” they said. The brief cites last year’s FCC wireless competition report as evidence of post-auction problems: Many DEs were in effect shut out of the auction. “The FCC itself decided for the first time in 2010 against ruling that there is effective competition in the wireless industry, instead taking a neutral stance,” they said.
Among those signing on to the brief was Business Intelligence Solutions, a management and consulting firm owned by minorities and military veterans that applied to participate in the 700 MHz auction “but ultimately did not bid because of the negative impact of the FCC’s new DE restrictions on its business plan.” Another of the DEs was Rocking “R” International, a subcontractor for the installation of satellite broadcasting and data systems, which applied to bid in the AWS auction, but sat it out “due to difficulty raising capital because of the FCC’s new DE restrictions.”
Daniel Rodriguez, who teaches administrative law at the University of Texas Law School, and former Wireless Bureau Chief John Muleta also filed briefs with the court. Rodriguez said the case raises a larger issue the court should resolve: Whether “and in what circumstances a reviewing court should grant remand without vacatur when the court finds unlawful an administrative agency action.” “If universally applied, the Third Circuit’s refusal to call for a remedy would effectively nullify the rights of aggrieved parties that seek judicial protection from unlawful agency actions,” Muleta said in his brief. “Such a result is untenable because it denies petitioners the very thing they seek in coming to the courts.”