Is the FCC Being Distracted by Net Neutrality and Not Focusing on...

Is the FCC Being Distracted by Net Neutrality and Not Focusing on DE Rules?


It’s hard to miss what’s going on with the FCC and the debate over what constitutes an open Internet – or what exactly does net neutrality mean.  Unless you’re living an unplugged life then you’ve probably seen or heard about John Oliver’s impassioned – although misleading – plea to people encouraging them to essentially break the FCC’s website by entering comments on how the commission should treat Internet traffic. They did, of course, and now 3.7 million comments later the commission is still undecided although they have stated they hope to reach a decision by the end of 2014.

Amid the very heated net neutrality debate the FCC is also gearing up for the equally important incentive auction of television broadcast spectrum. The auction is slated for mid-2015, but before we can get there the FCC must review and hopefully rework the Designated Entity Rules.  For those unfamiliar with these rules they involve eligibility for “designated entity” or “DE” status.  Being a DE gives smaller companies that might otherwise be unable to compete with larger, well-established telecom companies an opportunity to participate in the spectrum auctions.

In a paper released earlier this year by the Minority Media and Telecommunications Council, Digital Déjà vu: A Road Map for Promoting Minority Ownership in the Wireless Industry,” it’s noted that the FCC’s DE program of the past twenty years has been largely ineffective at promoting minority and women owned business enterprise (“MWBE”) engagement, and the primary beneficiaries of the rules have been incumbent rural telephone companies.

Since we are talking about billions of dollars in goods up for sale, it is imperative that women and minority owned businesses are given a seat at the table, even if one has to be carved out for them.  Owning spectrum is the gateway to participating in the fastest growing industry in the nation.

Several commissioners have weighed in publicly on how they think the issue should be addressed.

Commissioner Ajit Pai has said that the key to incentive auction participation is allowing people to bid on smaller economic areas, which he said would allow more smaller DE’s to bid in the upcoming AWS-3 and broadcast incentive auctions.

Commissioner Mignon Clyburn vowed that the commission would do all it can, in a legally sustained way, to promote meaningful participation for small and diverse businesses.

Rushed decisions on the 2006 rules resulted in women and minority business enterprises being left out of the auction process. Given the growth outlook for the wireless industry over the next five to ten years, the FCC will need to make sure they carve out the time amid the hub-bub over net neutrality to thoroughly review and rework the designated entity rules.