The US Federal Communications Commission wants to change government rules for frequency auctions so that big companies cannot use a discount programme actually meant for small businesses, Reuters reported.
The commission’s chairman, Tom Wheeler, told the US Senate that he intends to “fix” the problem and has asked other commissioners to advise on specific proposals to resolve the matter.
The rules are intended to help smaller, rural and minority-owned businesses compete against big companies in auctions.
The most recent example of alleged misuse was when satellite broadcaster Dish Network this year participated in a blockbuster spectrum auction through two “designated entities” — Northstar and SNR — which bid $13 billion but qualified for a $3 billion discount.
Dish defended its bid tactics, saying it had “fully complied” with rules.
“Our approach — publicly disclosed ahead of the auction — was based on DE [designated entity] investment structures that have been approved by the FCC in past wireless spectrum auctions, including structures used by AT&T and Verizon,” it said in a statement.
The broadcaster was the second highest bidder in the record-breaking auction with $13.3 billion, behind AT&T, and is now in a position to claim back $3.3 billion.
All eyes will be on seeing how FCC proceeds as it gears up for a big auction in 2016. It is currently reviewing the legal and financial independence of these entities from Dish.
A Dish spokesperson has said the company looks forward to working with the FCC as it evaluates auction rules.