Council Tree Communications, Bethel Native Corporation, and the Minority Media and Telecommunications Council have lost their appeal against the US FCC’s decision to award US$33bn of wireless spectrum to Verizon, AT&T, Deutsche Telecom’s T-Mobile and…
Council Tree Communications, Bethel Native Corporation, and the Minority Media and Telecommunications Council have lost their appeal against the US FCC’s decision to award US$33bn of wireless spectrum to Verizon, AT&T, Deutsche Telecom’s T-Mobile and others in auctions that took place between 2006 and 2008.
The US Third Circuit Court of Appeals in Philadelphia upheld the FCC’s decision despite admitting that some of the rules governing the auction were unfair.
In a statement, Judge Thomas Hardiman spoke for the court: “It would involve unwinding transactions worth more than US$30bn, upsetting what are likely billions of dollars of additional investments made in reliance on the results, and seriously disrupting existing or planned wireless service for untold numbers of customers.”
The auction process had been challenged by Council Tree, Bethel Native and the MMTC as they maintained the auctions were unfair to smaller service providers.
The FCC had offered credits of as much as 35% to smaller providers to help them compete for licences. However, it also adopted rules to limit the ability of these providers to team up with larger rivals, or to sell their credits to those rivals for quick profits. According to the appeals court, companies that qualified for credits comprised 113 of the 205 winning bidders, but won only about 3.2% of the licences’ total value.
In contrast, in auctions that preceded adoption of the rules, qualifying bidders had won about 70% of the licenses by dollar value, the court said.
In its 53-page ruling, the Third Circuit struck down two rules designed to limit or dissuade small carriers from selling their spectrum capacity, and upheld a third.
But it declined to overturn the auctions altogether and punish licence winners it said were “innocent third parties” to the FCC’s “improper” rulemaking.
