WASHINGTON—The 3rd U.S. Circuit Court of Appeals scheduled oral argument for next week on a challenge of controversial changes to small business bidding rules, a development that may signal that the court sees merit in the suit against the Federal Communications Commission. The issue could ultimately lead to further delays in the Aug. 9 advanced wireless services auction.
Council Tree Communications Inc., Bethel Native Corp. and the Minority Media and Telecommunications Council filed suit at the 3rd Circuit earlier this month. The suit was in response to an FCC decision extending small business—or designated entity—license sale restrictions from five to 10 years. The FCC decision also denied bidding incentives to DEs that resell or lease more than 50 percent of their spectrum capacity. DEs are entitled to wireless license discounts up to 25 percent.
The three groups want the 3rd Circuit to stay the Aug. 9 auction and take up their appeal of the FCC small-bidder ruling.
The court will give the Council Tree group and the FCC 30 minutes each on June 28 to make their cases before a three-judge panel. The Justice Department indicated it will not join the FCC as a co-defendant in the case.
Council Tree, Bethel and MMTC have said the new DE guidelines will hinder financing for startups, entrepreneurs and others interested in the 1,122 wireless licenses up for sale by the federal government. Some venture capital firms agree with their claims.
The AWS auction, expected to generate between $8 billion and $15 billion for the U.S. Treasury, was originally set to begin June 29.
