LITIGATION SURROUNDING RULES for auction-bound 700 MHz wireless licenses took an unexpected turn last week.
Verizon Wireless filed to withdraw its appeal of the Federal Communications Commission’s 700 MHz open-access rule, only to have cellphone industry trade association CTIA immediately fill the void by challenging the same regulation in a lawsuit filed at U.S. District Court of Appeals for the District of Columbia Circuit.
“In challenging the 700 MHz order, petitioner does not seek to delay or overturn the results of any auction,” CTIA told the court. “Petitioner does, however, seek to overturn certain aspects of the order that are at odds with prior commission rulings and with the realities of the competitive marketplace for wireless services.”
In its filing, Verizon Wireless said the lawsuit withdrawal was prompted by the D.C. Circuit’s Oct. 3 denial of its emergency motion for expedited treatment of the No. 2 mobile phone carrier’s appeal of the 700 MHz open access rule.
The FCC imposed open access requirements on about a third of the 62 megahertz of spectrum headed for auction beginning Jan. 24, an action harshly criticized by many in the mobile phone industry (AT&T Inc., the big exception) and applauded by consumer advocates, public interest groups, Google Inc., Frontline Wireless L.L.C. and others. Bidding for the 1,099 licenses at 700 MHz could generate up to $15 billion for the U.S. Treasury.
DE challenges
Compounding matters for the FCC is another 700 MHz lawsuit, this one filed by Council Tree Communications at the 3rd U.S. Circuit Court of Appeals over guidelines for small-business, or designated entity, bidding discounts-up to 25%-on wireless licenses to be auctioned.
“With our mandamus petition, we are looking forward to court action to compel an FCC ruling on our long outstanding reconsideration petition, following which we’ll have a clean procedural pathway for the 3rd Circuit to review this case on the merits,” said Council Tree in a statement. “Our petition for review of the 700 MHz DE rules seeks to ensure that we don’t repeat the experience of Auction 66 where DE participation languished, totaling just 4% of auction proceeds, a small fraction of historical DE participation levels.”
Council Tree’s suit adds a new wrinkle to 700 MHz litigation, which until now centered on the FCC’s open access rule.
The 3rd Circuit recently dismissed as premature Council Tree and other parties’ appeal of DE rules for last year’s advanced wireless services auction. Council Tree, Bethel Native and the Minority Media and Telecommunications Council last week petitioned the 3rd Circuit to force the FCC to rule on the group’s 17-month-old petition for reconsideration of AWS DE rules. If the FCC rejects the petition for reconsideration, Council Tree and the others plan to re-file their appeal in the 3rd Circuit. The suit has the potential to overturn the results of the $13 billion AWS auction, which proved critical and pricey ($4.2 billion) for No. 4 operator T-Mobile USA Inc. in terms of acquiring additional spectrum needed to roll out 3G wireless services.
The FCC last year approved controversial rule revisions to extend DE license sale restrictions from five to 10 years and to deny incentives to DEs that resell or lease more than 50% of their spectrum capacity. Sources said the FCC plans to revise DE wholesale provisions for the 700 MHz auction. An FCC spokesman declined to comment. Frontline Wireless and a public interest coalition have aggressively lobbied the FCC to relax DE wholesale guidelines.
Major stakeholders, including Frontline Wireless, CTIA and AT&T, continue to battle at the FCC over how the agency’s 700 MHz ruling should be revised.
Microsoft out, Google a mystery
Meantime, while one high-tech giant-Microsoft Corp.-officially removed its name from the list of prospective bidders for 700 MHz licenses, another continues to keep the wireless industry guessing. While speculation has largely focused on whether Google will bid-alone or with a partner(s) for the 22 megahertz open access block of spectrum, there are signs the Internet search engine giant might have designs on the 10 megahertz commercial-public safety nationwide license as well. Last week, Sunil Daluvoy, Google’s senior manager for new business development, met with FCC officials to discuss rights and responsibilities of the eventual D-block winner, including that licensee’s ability to provide wholesale, retail or other types of access to its wireless network.
