FCC Chairman Tom Wheeler Friday circulated rulemaking notice on designated entity rules for the TV incentive auction, updating DE rules for the first time since 2006. Among the draft provisions is a proposed conclusion that the national carriers should not be permitted to enter into joint bidding relationships. Sprint and T-Mobile reportedly plan to jointly raise some $10 billion to spend in the auction (CD July 16 p 19).
House Republicans launched an investigation into the FCC’s limited waiver of certain designated entity (DE) rules for Grain Management, a private equity and telecom infrastructure firm, prompting outcry from House Democrats. Politics of the waiver exploded in recent days, with Republican FCC commissioners questioning the merits of the waiver (CD July 25 p5), while speakers at a Minority Media and Telecom Council conference this week defended Grain as the one designated entity trying to participate in the AWS-3 spectrum auction (CD July 29 p1).
Sprint reported its best performance in seven years, with Q2 earnings of $23 million. The carrier also trimmed its customer losses, reporting a net loss of 220,000 customers in the quarter, down from 383,000 lost in the same period last year.
Lawmakers must look past the current spectrum auctions when considering spectrum policy, said Darren Achord, a senior legislative assistant leading telecom policy for Sen. Marco Rubio, R-Fla. Achord spoke Tuesday at a briefing hosted by the Congressional Hispanic Leadership Institute at the Capitol. This forward-looking need is a challenge, “because so much focus is on the here and now,” he said, calling on government to use spectrum as efficiently and effectively as possible. There’s need for more spectrum sharing and scrutiny of barriers to wireless infrastructure deployment, he said. Rubio has highlighted spectrum policy as a priority this year and introduced two pieces of legislation on the topic. “On the member level, it’s just the education about how important this is,” Achord added, lamenting people falling asleep at the sound of gigahertz. “It’s all about after those auctions,” Achord said. “We've got to continue to be looking forward. … Can we make more spectrum available? Where do we need to be doing that?”
The Minority Media and Telecommunications Council supports the FCC’s order giving Grain Management and similarly situated companies a waiver of parts of the commission’s designated entity (DE) rules (CD July 24 p3), the group said in a news release Thursday. Grain sought a waiver of the attributable material relationship (AMR) rule, which limits the ability of a DE to lease out spectrum licenses it buys to another carrier rather than build out its own network. MMTC hopes the FCC will eliminate the AMR rule in its entirety “because it impedes a DE’s ability to create flexible business plans and access the capital necessary to participate in FCC spectrum auctions,” the group said. “On Wednesday, the Commission took a step in the right direction by enabling greater, near-term participation by small businesses in the upcoming AWS-3 auction and in the secondary markets,” said David Honig, MMTC president. The FCC is looking at more sweeping changes to the DE rules, but agency officials said they're unlikely to be released prior to the AWS-3 auction. “In line with Congress’s mandate to advance small business participation in wireless auctions, the FCC’s decision to engage Designated Entities in November’s AWS-3 auction will increase their participation in wireless spectrum ownership,” MMTC said.
The FCC’s FY 2015 budget hangs in the balance on Capitol Hill, with multiple big-ticket items on the agency’s agenda for that year. The House passed an appropriations bill this month that would give the agency more than $50 million less than it requested (CD July 17 p3), in stark contrast to the initial appropriations bill proposed in the Senate, which would fully fund the agency. Reconciliation of the different budget numbers is not expected any time soon, and FCC Chairman Tom Wheeler should perhaps anticipate getting less than requested, one key lawmaker cautioned.
Dish Network spectrum is valuable for Verizon, wrote New Street Research analysts in an email to investors Sunday. With 38 percent of industry revenue and just 16 percent of industry capacity, Verizon has a tremendous amount of value at stake if capacity utilization were to approach 100 percent, they said. Verizon should increase its share of industry capacity slightly in the upcoming FCC spectrum auctions, and “Dish is the only asset that would meaningfully narrow the gap,” they said. Dish may have lost two near-term options with AT&T’s plan to buy DirecTV “and the path to value realization may be less clear as a result,” they said. “The intrinsic value of Dish’s assets is unchanged,” New Street said. The most compelling transaction for both affected parties would be for Verizon to acquire Dish, said the analysts.
Proposed changes to how FCC regulatory fees are assessed impose a “disproportionate” burden on wireless, CTIA said in comments filed at the FCC. The FCC’s overall budget for FY 2014 is $449.8 million and Congress directed the agency to recover about $339.8 million through regulatory fees, and $98.7 million through revenue retained from spectrum auctions. Comments in docket 12-201 were due Monday on a June 12 NPRM (http://bit.ly/U1K1m0).
The FCC is expected to take up proposed rules for designated entity (DE) participation in the TV incentive auction this summer, to encourage more minority bidders in what many expect to be the last major spectrum auction for years to come. FCC officials said Chairman Tom Wheeler has been consistent in indicating the agency would start a DE rulemaking this summer, possibly at the Aug. 8 open meeting.
The Obama administration is expanding public interest group representation on the Commerce Spectrum Management Advisory Committee, which was created under President George W. Bush to improve management of the airwaves. Public Knowledge Senior Vice President Harold Feld will join longtime member Michael Calabrese, director of the Wireless Future Project at the New America Foundation, as a public interest group member of CSMAC. Both have been strong advocates of unlicensed spectrum. Feld had sought to become a member in the past but had been turned down.