Wheeler testifies before a House Energy and Commerce Communications and Technology Subcommittee hearing on oversight of the FCC on Capitol Hill in Washington

FCC Changing Small Business Discount Rules for Auctions

June 25, 2015 - Written By Alexander Maxham

After the recent spectrum auction, where Dish came around with a bit more spectrum, we started hearing from AT&T that it was unfair what Dish did. What exactly did they do? Well let’s back up a bit. The FCC has a few rules in place that give discounts to small businesses, which allow them to compete a bit better with the bigger companies like AT&T and Verizon. Dish should have received a $3 million discount in the recent auction, at least according to the current FCC rules. What Dish did was bid through smaller companies which they invest in. So instead of Dish actually bidding at the auction, there were a number of smaller companies in which they invested in, bidding. Even though we all knew exactly where that spectrum was going.

The FCC has changed those rules today, for the upcoming 600MHz Incentive auction that’s scheduled for early 2016. So that larger companies, because Dish isn’t small by any means, won’t be able to manipulate the auction. They will also be evaluating each license, as to who’s really running it. That way it’s a bit more fair to everyone. They will also be capping the amount of discounts a company can get as well. Currently, the cap for the 600MHz auction is still quite high at $150 million.

The point of these rules from the FCC is to help create more competition. There are plenty of companies that want to get into the wireless game. We’ve seen a lot of that from Dish lately. And the point of these rules is to allow small businesses to get into the game, without larger businesses taking all the spectrum. These rules should actually give more flexibility to these smaller businesses. Now, more businesses will be able to get these discounts, as well as lease the spectrum out to larger businesses like AT&T and Verizon. The FCC is planning to allow smaller businesses to lease out as much of their spectrum as they want, just so long as the larger company isn’t the one in charge. For example, a smaller company that Verizon owns could lease the spectrum to Verizon, but the FCC doesn’t want Verizon telling that smaller company what they can and can’t do.