WASHINGTON (CN) – The Federal Communications Commission is removing two provisions of its competitive bidding rules to comply with a 3rd Circuit decision finding that it violated the Administrative Procedures Act.
In Council Tree Communications, Inc. v FCC, the U.S. Court of Appeals for the Third Circuit found that the FCC’s impermissible material relationships rule and its extension of an unjust enrichment period from 5 years to 10 years had been adopted without adequate opportunity for public comment.
The impermissible material relationships rule limited the amount of broadcast spectrum a licensee could lease or resell to 50 percent of the spectrum held under any one license.
The 10-year unjust enrichment rule required so-called designated entities — small businesses and community groups — to pay to the Federal Government a declining percentage of any profit from the sale of part of their holdings to non-designated entities, to make up for the reduced price they had paid as designated entities.
The rules revert to their old form, which allowed licensees to lease out as much of their spectrum as they wished, and allowed designated entities to sell off spectrum without any repayment penalty, after five years.
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