The Minority Media Telecommunications Council is urging the Federal
Communications Commission to eliminate what it sees as a loophole in auction
rules for broadcast channels that allows buyers to temporarily pose as bidders
qualified for small business credits, even though they may be backed by
established media companies.
The loophole can skew bidding by leading small businesses truly entitled to the
credits to bid for channels they have no hope of winning and neglect frequencies
that offer a better chance of success.
"This major flaw in the broadcast auction rules has fatally weakened the
commission's only significant policy aimed at promoting minority broadcast
ownership," MMTC executive director David Honig wrote in a petition to the FCC.
Honing said buyers can pose as bidding-credit-eligible during early stages of
an auction and then, when bidding has begun, announce that they will not use the
credit.
By then, it's too late for small businesses needing the credit to vie for other
channels.
The MMTC is seeking an immediate stay on bidding, but it is particularly concerned
about an as-yet-unscheduled auction for 350 FM-construction permits.
Bidders that own no broadcast properties are permitted to pay 35% less than
their actual bid.
Those with ownership of three broadcast properties are entitled to a 25%
credit.
