AH FCC LOGO-9

FCC Looking to Reform Airwave Auction Discounts to Prevent Big Business Abusing Them

March 24, 2015 - Written By Tom Dawson

 

Every so often, the FCC (the Federal Communications Commission) holds auctions for rights to broadcast over new spectrum. This new spectrum is sort after by the big carriers like Verizon and T-Mobile as it’s necessary for them to build out new and improved networks, offering their customers better speeds, but more importantly better coverage. Recently, we’ve seen an impressive AWS-3 auction and now, there’s a lot of buzz surrounding the sale of 600 Mhz rights, which would give carriers more penetration through buildings and the ability to cover more distance with a similar amount of masts. Recently, this has come under fire from broadcasters who have been encouraged to sell spectrum they no longer use. Head of the FCC, Tim Wheeler, is now coming under fire for the FCC’s stance on discounts.

The FCC currently offer discounts to smaller businesses, allowing upcoming networks or businesses to compete with massive networks with deep pockets such as Verizon and AT&T. However, in a previous auction held recently, Dish Network managed to secure a massive $3 Billion in discounts. In order to secure the discounts, Dish Network and partners invested in companies with practically no revenue and declared them as “designated entities” which allows them a discount of 25%. According to the Reuters report, the FCC is currently looking into these companies’ legal independence from Dish Network and whether or not the discount is valid.

The fact that the discount was even considered for these satellite firms of Dish Network’s is what has the FCC in troubled waters once again, and Mr Wheeler has been asking heads of other commissions for advice on how to reform these discounts to prevent something similar from happening in the future. It’s already been a busy year for the FCC, with the announcement of Title 2 pleasing net neutrality activists everywhere and a big spectrum auction coming up, we can imagine that the FCC can do without another controversy. It’s interesting that such discounts even exist in the first place, considering only larger networks would be able to utilize the spectrum effectively. Still, it’s important that this system doesn’t get abused again, especially by a company like Dish Network that is clearly looking to get into the wireless business by any means necessary.