FCC chairman Tom Wheeler said Wednesday that the FCC would adjust its auction bidding rules to insure that designated entities (DE's), who get bidding credits and other advantages, can't be "beards" for big companies with slick lawyers.
That came at a Senate Commerce Committee FCC oversight hearing.
Commissioner Ajit Pai and others have complained that companies in which Dish has an 85% interest applied for $3.3 billion in DE discounts for the $13 billion-plus they bid in the AWS-3 auction.
Senator Claire McCaskill (D-Mo.) associated herself with Pai's complaints about the DE process. She said it was a very big company using small businesses to their advantage. She pointed out that one of the companies was an Alaska Native corporation, which can get the DE breaks with no limit on their size, meaning they can be a legal front and still be a multibillion dollar company. "This is really outrageous."
Dish has said it has complied with the rules, and the FCC has not yet ruled on whether the companies will get the credit. But at the hearing, Wheeler said he agreed with Pai — and at least a couple of Senators — that change was needed for the next auction — the broadcast incentive auction — to insure that "slick lawyers" wouldn't game the process.
We are going to fix this, he said, including the specific issue teed up by the complaint about Dish.
He promised that the FCC, which has an open proceeding on those incentive auction rules, would adjust the DE rules to make sure that slick lawyers would be reined in.
The chairman took the opportunity to dig broadcasters, saying he and Pai had disagreed over not allowing slick lawyers to game joint sales agreements, a reference to the FCC's vote, which Pai dissented from, to count JSA's as ownership interest.
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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.
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