FCC May Drop Break for Women, Minorities : Telecom: The agency is expected to instead favor small businesses in its upcoming auction for wireless services.
The Federal Communications Commission today is expected to drop rules aimed at bolstering the participation of minorities and women in this summer’s multibillion-dollar auction for new wireless communications services.
The agency will instead substitute a general preference for small businesses.
The decision, which was expected by many industry analysts in the aftermath of the U.S. Supreme Court’s June 12 ruling placing stricter limits on government affirmative action efforts, will probably delay the auction, which had been set for Aug. 2.
It is unclear whether the FCC move will trigger similar action by other agencies. But legal experts said the 2,200-person commission has historically been among the most influential of federal agencies because so many of its rulings, upon judicial review, have set legal precedents.
An FCC official said Thursday that the agency’s five commissioners are discussing holding the auction in the last week of August or in early September. The official said commissioners are still ironing out details of the plan but added that he expects the agency to issue proposed new rules today.
“They are feverishly working on trying to complete a document,” the official said. “There is a great desire for not falling behind with these auctions or running the risk of legal challenge and having them overturned.”
Participants in the auction are expected to wager between $2 billion and $4 billion for nearly 500 licenses giving them the right to offer a wireless technology called personal communications services. PCS is a less expensive and more portable communications rival to current cellular telephone service.
The upcoming sale is being held to allocate the last portion of the powerful broad-band PCS spectrum, which the government began auctioning earlier this year. Within the next five years, small businesses and female and minority bidders who win broad-band PCS licenses will be competing head-to-head with telecommunications giants such as AT&T;, Cox Communications and other big firms that collectively bid $7 billion in PCS license auctions last winter.
The FCC’s original bidding rules for the August auction would have given a 10% discount to any auction participant that had less than $40 million in annual gross revenue. What’s more, firms controlled by women or minorities would have qualified for an additional 15% discount and gotten extra time to make payments.
The commission now plans an across-the-board 25% discount to any bidder with less than $40 million in gross revenue. That means a winning bid of $40 million would require a bidder to come up with only $30 million for the license.
As female and minority groups mulled their options in the wake of the expected rule change, one association representing female and minority bidders filed papers Thursday challenging the FCC’s expected move. The group suggested that the agency retain a special preference category for women and minorities who can prove they have suffered discrimination in the communications industry or can show some other compelling interest in requiring special incentives.
“We are disappointed and discouraged by these reports,” said Thomas A. Hart Jr., a Washington communications lawyer who is counsel to the National Paging and Personal Communications Assn., which filed a request for retaining special rules with the FCC late Thursday.
“We are concerned any rule change will delay the auction as well as send a very bad signal to women and minorities who have relied in good faith on these FCC rules for over two years,” Hart said.
The August auction would be the fifth sale of the public airwaves since the FCC began putting certain classes of communications licenses up for bid last summer.
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