The Federal Communications Commission plans to change rules that allowed Dish to take over $3 billion in discounts during the previous spectrum auction that were meant to help small businesses. Dish was able to qualify for the discounts by bidding through smaller companies that it had invested in, even though it was ultimately clear where the spectrum would end up. The FCC's new rules should put a stop to such activities in the future in a few ways, including evaluating on a license-by-license basis who's really "running the show" and by significantly capping the discounts a single company can receive per auction. The cap will vary with each auction, but for the upcoming 600MHz auction, it'll be limited to $150 million for small businesses.
The broad goal of these reforms is to prevent large companies from taking advantage of the system without limiting small businesses. In fact, these rules actually hope to give small businesses more flexibility. More businesses will now be eligible for discounts, and they'll actually be able to lease more spectrum to larger businesses than they could before. Previously, small businesses were limited to licensing out 25 percent of their spectrum, but the FCC now intends to allow the practice so long as the larger company isn't really pulling the strings. Small business will also be allowed to continue bidding in conjunction with other small businesses as though they were a single entity, while nationwide providers will be constrained in how they can form joint bidding agreements. The rules will be voted on in July.