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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 FOR  IMMEDIATE  RELEASE:  NEWS  MEDIA  CONTACT:  June  2,  2006  Chelsea  Fallon:  (202)  418-  7991 
 FCC  CLARIFIES  CERTAIN  ASPECTS  OF  ITS  “DESIGNATED  ENTITY”  ELIGIBILITY  RULES  ADOPTED  IN  APRIL  2006 
 Washington,  D.  C.  –  Today,  the  Federal  Communications  Commission  (FCC)  adopted  an  Order  on  Reconsideration  of  the  Second  Report  and  Order  (Recon  Order)  that  provides  guidance 
 on  certain  aspects  of  the  FCC’s  April  2006  Second  Report  and  Order  (April  2006  Order)  which  modified  certain  rules  governing  the  benefits  reserved  for  applicants  or  licensees  that  qualify  as 
 “designated  entities.”  Several  parties  have  recently  submitted  filings  seeking  reconsideration  and  clarification  of  various  aspects  of  the  April  2006  Order.  Today’s  Recon  Order  addresses  issues 
 raised  in  those  filings. 
 In  the  April  2006  Order,  the  FCC  revised  its  designated  entity  rules  to  include  certain  “material  relationships”  as  factors  in  determining  designated  entity  eligibility.  Specifically,  the 
 FCC  adopted  rules  to  limit  the  award  of  designated  entity  benefits  to  any  applicant  or  licensee  that  has  “impermissible  material  relationships”  or  an  “attributable  material  relationship”  created 
 by  certain  agreements  with  one  or  more  other  entities  for  the  lease  or  resale  (including  under  a  wholesale  arrangement)  of  its  spectrum  capacity.  The  FCC  also  adopted  changes  to  its  rules 
 related  to  unjust  enrichment  payments,  explained  how  it  will  implement  its  rules  concerning  audits,  and  refined  its  rules  regarding  the  reporting  obligations  of  designated  entities.  The  FCC 
 found  that  these  rule  modifications  were  necessary  to  ensure  that  every  recipient  of  the  FCC’s  designated  entity  benefits  is  an  entity  that  uses  its  licenses  to  directly  provide  facilities-  based 
 telecommunications  services  for  the  benefit  of  the  public. 
 Today’s  Recon  Order: 


 o  dismissed  arguments  claiming  that  the  adoption  of  rules  in  the  April  2006  Order  was  without  sufficient  notice, 


 o  with  respect  to  the  material  relationship  rules,  clarified  how  the  FCC  will  evaluate  impermissible  and  attributable  material  relationships,  including 
 those  that  are  grandfathered,  for  the  purpose  of  determining  eligibility  for  designated  entity  benefits  and  the  imposition  of  unjust  enrichment, 


 o  responded  to  arguments  that  its  rule  changes  related  to  unjust  enrichment  payments  were  arbitrary  and  capricious,  and  made  clear  that  the  ten-  year 
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 schedule  applies  only  to  licenses  granted  after  release  of  the  April  2006  Order,  and 
 o  clarified  that  the  new  rule  relating  to  reportable  eligibility  events  includes  events  that  might  affect  a  designated  entity’s  eligibility  under  either  the 
 new  material  relationship  or  existing  controlling  interest  standards. 


 Action  by  the  Commission  on  June  2,  2006,  by  Order  on  Reconsideration  of  the  Second  Report  and  Order  (FCC  06-  78).  Chairman  Martin  and  Commissioner  Copps,  with  Commissioners 
 Adelstein  and  Tate  approving  in  part  and  concurring  in  part.  Separate  statements  issued  by  Chairman  Martin  and  Commissioners  Copps,  Adelstein,  and  Tate. 


 For  additional  information,  contact  Brian  Carter,  Wireless  Telecommunications  Bureau,  at  (202)  418-  0660,  or  Brian.  Carter@  fcc.  gov. 
 WT  Docket  No.  05-  211. 
 –  FCC  – 
 News  and  other  information  about  the  Federal  Communications  Commission  is  available  at  www.  fcc.  gov. 
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