FCC proposes cap on smaller business discounts in auctions

26 June 2015 |


The US Federal Communications Commission (FCC) has proposed to close loopholes that allowed Dish Network to claim $3.3 billion in discounts in the January 2015 spectrum auction.

Under the proposed rules, bidding discounts for smaller operators would be capped and the loophole that enabled Dish to fund the bids for smaller operators would be eliminated, said US federal regulators. 

A cap of $150 million will be set for small businesses and $10 million for rural operators. The rules will apply to the spectrum auction in 2016. 

The proposed changes follow complaints over the outcome of the auction in January 2015, when two small companies supported by Dish placed $13.3 billion in winning bids and claimed a 25% small-business discount. 

In addition FCC chairman Tom Wheeler is proposing to end another rule that allowed coordinated bidding between related-parties, which rivals claimed enabled Dish and its partners to change the results of the auction in their favour. 

“The modernised rules will increase transparency and efficiency to prevent potential gaming or abuse, as well as protect the integrity of the Commission’s auction process,” said Wheeler. 

“We must also make sure that small businesses receiving credits are exercising independent decision-making authority. We will not allow small businesses to serve as a stalking horse for another party,” he added.

The FCC’s five commissioners are expected to voting on the proposal in July 2015.