Diversity Panel Declares Victory in Fight Over DE Rules
A group appointed by the FCC to address minority issues declared victory Tues. in its fight to keep the agency from significantly broadening proposed restrictions on partnerships between designated entities and carriers. Having won, the Advisory Committee on Diversity for Communications in the Digital Age scuttled a resolution asking the FCC not to ban carriers with annual revenue of more than $125 from teaming up with DEs in the advanced wireless services auction.
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Members of the committee, citing reports that Chmn. Martin had dropped plans to expand the restrictions (CD April 21 p 11), agreed the resolution isn’t needed any more. The FCC had eyed a $5 billion threshold, but Martin pushed far tighter restrictions. His proposed $125 million threshold would have barred many smaller carriers, not just large national carriers, from joining with DEs to buy licenses in the auction.
Instead, the committee passed a resolution urging more general reform of the DE program and emphasizing the importance of enforcing existing rules. The FCC was expected late Tues. to issue a further notice of proposed rulemaking and report and order on DE issues, focusing in part on preventing “unjust enrichment” of DEs and fraud and tightening rules in both areas. The FCC couldn’t reach agreement on which firms could partner with a DE in the auction.
Steve Hillard, CEO of Council Tree, who led efforts to get the committee to pass a resolution, told the committee Martin has by most accounts changed course on DE restrictions, backing away from the lower threshold. “That appears to be an idea that is not currently under consideration by the Commission,” Hillard said. “It now appears that the current dialog within the Commission is centering on a more modest program… Under consideration is something that would simply, if you will, punt on the basic question of restrictions on even the largest carriers.” The only consensus appears to be on the need for a further inquiry, he said.
Hillard said that instead of restrictions on DE-carrier partnerships, the FCC is more likely to approve a rulemaking that would “more definitively refine reforms” for the DE program for future auctions and would reinforce existing rules on audits in the DE program as well as penalties for rule violations.
With short forms applications due May 10 and the auction set to start June 29, the FCC has run out of time to approve major reforms to the DE program before the AWS auction, Hillard said. “Time has become an important pragmatic aspect of the problem,” he said.