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FCC Closes Wireless Auction Loopholes

The FCC has modified its rules for the auction of advanced wireless spectrum licenses in an effort to cut down on abuses of the process.

To try and prevent larger companies from striking deals with smaller ones that get bidding credits in the auction, the commission now says that those smaller companies will not get the credit if they have deals to sublease more than 50% of the spectrum they win to another company that doesn't apply for the credit.

In addition, if within the first five years a winning bidder with an auction credit transfers that license to another entity that does not qualify for a bidding credit, 100% of the credit, plus interest, must be paid to the FCC, with a sliding scale of lesser, similar, payments for the ensuing years of the length of the license--75% in years six and seven, for example.

The next auction is scheduled for June 29. FCC Chairman Kevin Martin had said the commission would try to close the loopholes in advance of that next advanced wireless services auction.