MMTC: RECENT H BLOCK SPECTRUM AUCTION GENERATED REVENUE FOR PUBLIC SAFETY, BUT NO MINORITY-OWNED BIDDERS OR DE WINNERS

by mmtcbbsj on March 5, 2014

WASHINGTON, D.C. (March 5, 2014):  Last week, the Federal Communications Commission announced that the DISH Network won all 176 of the H Block spectrum licenses put up for bid during last month’s auction, paying $1.564 billion and outbidding all other qualified bidders, including Designated Entities (DEs).  David Honig, President of the Minority Media and Telecommunications Council (MMTC), stated, “The H Block auction was successful in garnering revenue from DISH’s successful bid to help fund FirstNet.  That is a laudable achievement, but the lack of MWBE participation in the auction reconfirms that improving the Designated Entity Program must be an FCC priority for future spectrum auctions.”

On February 25, MMTC issued a White Paper emphasizing the need to reform the FCC’s Designated Entity Program to facilitate increased entry by minority- and women-owned businesses (MWBEs) in the current and upcoming spectrum auctions.  The failure of the FCC to generate qualified MWBEs for the H Block Auction points to the need for the FCC to craft auction rules that fulfill the mandate of Section 309(j) of the Communications Act to avoid excessive concentration of licenses, and to disseminate the licenses among a wide variety of applicants, including small businesses, rural telcos, and MWBEs, collectively called Designated Entities.

The MMTC White Paper, “Digital Déjà Vu: A Roadmap for Promoting Minority Ownership in the Wireless Industry,” reported that over the course of 56 wireless auctions during the past 20 years, the majority of DEs that currently hold wireless licenses are incumbent rural telephone companies, very few DEs are new entrants, and even fewer DEs are MWBEs.

Of 23 qualified bidders in the H Block auction, preliminary reports indicated that there were 10 Designated Entities, including a few small and very small businesses, and one small rural telecommunications company.  However, none of these businesses were able to compete with DISH to win any of the 176 licenses.  There were no qualified minority-owned business bidders.

The White Paper included nine public policy recommendations that could help chart more positive outcomes in the wireless market for minority entrepreneurs and businesses.  Three key priority recommendations highlighted in the paper were: 1) the elimination of the Attributable Material Relationship Rule, 2) an increase in bidding credits to at least 40 percent, and 3) the incorporation of diversity and inclusion into the Commission’s public interest analysis of secondary market transactions.

“MMTC hopes that the results of this H Block auction will help urge the Commission to move forward on the policy recommendations in the paper to ensure DEs and MWBEs do not come up short in any future spectrum auctions,” said Honig.

About MMTC:

The Minority Media and Telecommunications Council (MMTC) is a national nonprofit organization dedicated to promoting and preserving equal opportunity and civil rights in the mass media, telecommunications and broadband industries, and closing the digital divide. MMTC is generally recognized as the nation’s leading advocate for minority advancement in communications.

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