AT&T wants FCC to tightly control next spectrum auction

Carrier wants feds to limit spectrum auction bidding credit for designated entities

WASHINGTON – Carrier AT&T has asked the Federal Communications Commission to impose strict guidelines on the 2016 spectrum auction, limiting the bidding credit for designated entities to $10 million and imposing strict build-out requirements.

The comments from AT&T come in response to the FCC asking for input from stakeholders following some controversial issues with the previous spectrum auction, which reached more than $44 billion in winning bids.

Most notable among those controversial issues was Dish Network using its designated entity Northstar, in which Dish owns a majority stake, to buy $7.8 billion worth of spectrum at a cut-rate price because of Northstar’s status as a “very small business” and a tribal corporation.

Joan Marsh, AT&T VP of federal regulatory wrote in a blog post: “When the veil of the auction was lifted, we all learned that some bidders attempted to use the rules to obtain a windfall and, in the process, prevented the intended beneficiaries of the program – small business and rural telcos – from obtaining valuable spectrum licenses.”

Dish Network, through its strategy of using designated entities, was able to secure the majority of licenses in the last spectrum auction gaining 702 licenses to AT&T’s 251 and Verizon’s 181.

Using the designated entity strategy, Dish would only pay $13.3 billion and, with a 25% discount, very small companies are entitled to get more than $3 billion refunded. AT&T meanwhile paid full freight of $18.2 billion for its licenses.

The legal trickery provoked outrage in Washington, D.C., with FCC Chairman Tom Wheeler saying, “We are going to fix this. These are rules that have been in place since the Bush administration.”

“We are going to issue a new public notice on this to make sure that this specific issue is teed up,” he said. “And we are going to make sure that this, that designated entities, have the opportunity to participate and not to have designated entities as beards for people who shouldn’t.”