Group pushes FCC for renewed opportunities for small businesses, minorities

An ambitious campaign has begun to press the new Obama administration and Congress to embrace policies promoting diversity in telecom and media sectors. The effort is geared in part to foster improved opportunities for minorities and women in the wireless space by overturning the Federal Communications Commission’s small business bidder rules, which are being litigated in a Philadelphia federal appeals court.
“We wasted eight years,” said David Honig, executive director of the Minority Media and Telecommunications Council, at a legislative briefing on Capitol Hill. “We are behind where we were in 2000 in so many ways.”
MMTC, Council Tree Communications Inc. and Bethel Native Corp. are challenging FCC small business, or designated entity, bidder guidelines that the commission – under former chairman Kevin Martin – approved before the advanced wireless services-1 auction in 2006. The rules were also in effect during last year’s 700 MHz auction.
T-Mobile USA Inc., the No. 4 wireless provider, was the big winner in the AWS-1 auction, while No. 1 Verizon Wireless and No. 2 AT&T Mobility dominated 700 MHz bidding.
The 3rd U.S. Circuit Court of Appeals is set hear oral argument in March on the lawsuit on the issue filed by MMTC, Council Tree and Bethel.
In addition to repealing the FCC’s DE program, MMTC wants policymakers to resurrect the FCC’s tax certification program, promote wireless technician training for minorities, abolish foreign ownership restrictions and increase auction-related funding for the Telecommunications Development Fund. The TDF, created in the 1996 telecom act to help small telecom businesses (including those owned by women and minorities), is currently underwritten by interest on upfront auction payments.
After gaining control of the House and Senate in the 1994 midterm elections, Republicans killed the FCC tax certificate program – which had been in effect for nearly two decades – as one of its first pieces of business in 1995.
Former FCC chairman William Kennard crafted a new tax certificate program in 1999, but the then-GOP-controlled Congress was unresponsive to the proposal. MMTC’s Honig said the $825 billion economic recovery bill would be a timely legislative vehicle to restore the tax certificate program. Bills were introduced in the last Congress to revive the program, which enables telecom and media companies to defer capital gains tax liability on sales to minority buyers.
The FCC in the mid-1990s offered bidding credits for women and minorities in spectrum auctions, but eliminated them after the Supreme Court in 1995 curbed federal affirmation-action programs. At the same time, in 1993 legislation authorizing spectrum auctions, Congress directed the FCC to promote wireless opportunities for women, minorities, small businesses and rural telephone companies.
As such, any new policies pursued by the Obama administration and the Democratic-led Congress likely would rely on the 1993 mandate but have to avoid running afoul of the high court’s 1995 ruling in Adarand Constructors Inc. v. Pena.