The Multicultural Media Telecom and Internet Council and National Association of Black Owned Broadcasters have told the FCC it needs to work with SNR Wireless and Northstar to help them qualify for designated entity (DE) bidding credits, a way to encourage minority participation in spectrum auctions.
The two companies teamed with Dish Network to acquire $10 billion worth of spectrum licenses in the AWS-3 auction. But the FCC subsequently concluded that Dish's majority financial interest in the companies were controlling interests that should be attributable to Dish, which meant the companies were ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.
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The credits would have lowered their bid to $10 billion, after which the companies said they could not pay for all of the licenses, paying full price for some and turning back others, which the FCC allowed them to do.
Dish had put up most of the money for the two to bid the $10 billion.
A federal court in August 2017 upheld the finding that Dish exercised de facto control, but also held that the FCC, under then chair Tom Wheeler, failed to notify the companies that if the FCC found they did not qualify for the credits, worth billions of dollars, the FCC would not give them a chance to cure that problem and instructed the FCC to correct.
The FCC under new management and in response to the court remand, in January told the companies to renegotiate with Dish and other parties and file the necessary documents to show they now qualify for the credit.
The companies told the FCC earlier this month that they will have something new ready by June 8, but that they were essentially flying blind, with the FCC allowing them to potentially run into a wall once again by "the commission’s refusal to engage in iterative and responsive discussions..."[W]ithout additional input and guidance from the Commission on how it would view concrete proposals from the Applicants for amending their respective agreements with subsidiaries of DISH," SNR and Northstar told the commission, "the remand proceeding established in the [court's] Remand Order will serve as nothing more than a 'gotcha' process designed to have the Applicants fail."
Enter MMTC and NABOB, who filed comments this week saying the FCC should confer with the companies on how to cure the problem.
"The Commission should at a minimum agree to meet with SNR and Northstar and provide its views as to whether proposed changes to their relationships with DISH would entitle SNR and Northstar to bidding credits," they said. "A decision not to provide such input would discourage the participation of the under-represented groups Congress required the agency to assist in the DE Program, and discourage passive investment in businesses controlled by members of such groups. It is not asking too much for the agency’s staff to respond to routine, business-related questions, the answers to which are vital to any entrepreneur that is attempting, in good faith, to comply with standards that are not bright-line and potentially subject to varying interpretations, depending on the circumstances."
Without that guidance, they argue, the FCC is saying: "Figure it out for yourself, and if you guess wrong, we will throw out your applications.”
