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AT&T to FCC: Cap DE Bidding Credits

AT&T has told the FCC it should cap bidding credits for designated entities (DEs) to only $10 million, and should impose strict build-out requirements on whoever wins the spectrum.

AT&T said it was joining with some smaller carriers to propose the changes to avoid "incentives for abuse" and "windfalls" meant to go to small businesses.

The FCC has sought further comment on how to adjust its auction bidding rules—in advance of the broadcast incentive auction—driven mostly by criticism of the $3 billion or so in bidding credits applied for by two DEs funded largely by Dish and which, together, was the second-highest bidder in the AWS-3 spectrum auction.

"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," AT&T VP of federal regulatory Joan Marsh blogged Monday.

AT&T was the top bidder in the auction bidding $18,189,285,000, but the Dish-funded DEs, Northstar Wireless and SNR Wireless, came in second with a total $13,327,423,700. Verizon was third at $10,430,017,000. Verizon has argued that by total of licenses won, Dish (through the DEs) actually topped both AT&T and Verizon.

The FCC has not yet decided whether to grant the bidding credits to Northstar and SNR, but it has accepted the license applications and is vetting them.

Dish has said it complied with the auction rules, but FCC chairman Tom Wheeler has spoken out against slick lawyers gaming the auction system and signaled the FCC would scrutinize the AWS-3 auction bids, as well as adjust its rule to prevent gaming of the system going forward.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.