Reforming the FCC's "Designated Entity" rules will promote diversity in spectrum ownership

The Minority Media & Telecommunications Council recently released a white paper, “Digital Déjà Vu: A Road Map for Promoting Minority Ownership in the Wireless Industry,”[PDF] that calls on the FCC to reform its “designated entity” rules. “Designated entities” (DE) are the collective term used for women- and minority-owned businesses, and the paper calls for the FCC to increase opportunities for women and minority-owned enterprises to participate in spectrum auctions by reforming its “designated entity” rules. We agree that this issue deserves FCC review. As a company that is committed to diversity and inclusion, Verizon supports efforts to create opportunities for greater inclusion and participation.

While we do not agree with every recommendation in the MMTC white paper, we support MMTC’s overall goal to increase participation of diverse communities in the communications space. We also agree with MMTC that the FCC should examine appropriate ways to reform the current “designated entity” rules to maximize opportunities for small, women and minority-owned businesses to participate in spectrum auctions.

For example, Verizon agrees that the FCC should explore reforming the “attributable material relationship” rule, which attributes the revenues of other firms to a DE if the DE enters into leasing, wholesale, and/or resale arrangements with those firms for more than 25% of the DE’s network capacity. As MMTC makes clear, this rule negatively impacts the ability of designated entities to raise capital.

As Verizon has said repeatedly, including more bidders in the auction process is a good thing. We agree with MMTC and the 20 civil rights and public interest groups that support the MMTC filing that the FCC should take a close look at reasonable reform in this area.