STATEMENT OF
COMMISSIONER MIGNON L. CLYBURN
Re: Updating Part 1 Competitive Bidding Rules, WT Docket No. 14-170, Expanding the Economic 
and Innovation Opportunities of Spectrum Through Incentive Auctions, GN Docket No. 12-268,
Petition of DIRECTV Group, Inc. and EchoStar LLC for Expedited Rulemaking to Amend Section 
1.2105(a)(2)(xi) and 1.2106(a) of the Commission’s Rules and/or for Interim Conditional Waiver, 
RM-11395, Implementation of the Commercial Spectrum Enhancement Act and Modernization of 
the Commission’s Competitive Bidding Rules and Procedures, WT Docket No. 05-211.
Congress recognized more than 20 years ago that advanced telecommunications services and 
wireless technologies had the potential to create tremendous opportunities in our Nation.  Though 
smartphones, tablets, millions of mobile broadband apps and the Internet of everything may not have been 
part of their predictions back then, lawmakers knew that in order for all communities to benefit from 
technological innovation, the FCC’s obligation to allocate spectrum in the public interest should be 
guided by key enduring principles.  Most relevant are the ones which affirm that all consumers should
have access to affordable service, entrepreneurs and small businesses should have a reasonable 
opportunity to own and provide communications services, and that vigorous competition can promote 
both of those policy goals.  
So when Congress amended the Communications Act in the 1990s giving the Commission the 
authority to conduct spectrum auctions, it specifically mandated that we design them to “promot[e] 
economic opportunity and competition,” “ensur[e] that new and innovative technologies are readily 
accessible to the American people,” “avoid[] excessive concentration of licenses[,]…disseminat[e]
licenses among a wide variety of applicants, including small businesses,” and deter unjust enrichment.  
In implementing these mandates, the Commission has attempted to promote small business 
participation in the wireless industry, primarily by awarding auction bidding credits through its 
Designated Entity (DE) program.  
And these efforts have led to some inspiring successes.  Take Leap Wireless. It defined an 
entirely new strategy in the wireless industry through a simple, affordable and worry-free service.  Priced 
competitively with traditional home phone service, Cricket let customers make and receive virtually 
unlimited phone calls in their local service area.  It achieved strong penetration and brand awareness in its 
first two markets of Chattanooga and Nashville, and the company quickly set in motion plans to launch 
service in eight more markets by the end of 2000. By the close of 2001 they offered service in 35 
markets.
     In late 2000, Leap actively sought to acquire additional wireless operating licenses across the 
country.  They participated in the FCC's re-auction of “Entrepreneur's Block” PCS operating licenses – a 
program that was also designed to help small business compete for spectrum, just like the DE program. 
Leap’s then-CEO and Chairman credited this “Entrepreneur’s Block” with allowing them to expand 
aggressively.  Leap went on to sell their Cricket service to AT&T in 2014, but not before becoming a 
staple in the prepaid wireless market, serving more than four and a half million customers nationally.
The Leap story is one of a small, innovative company identifying an underserved market, 
developing an inventive business model, growing into a significant market player, and – in the process –
providing competition and innovation in a dynamic marketplace.  This is exactly the kind of story the 
Designated Entity Program is designed to make possible.  The challenge for this Commission, however,
has been to find the proper balance between allowing small businesses to acquire spectrum through DE 
credits on the one hand, and preventing parties from circumventing the purpose of those rules and being 
unjustly enriched on the other.  However, between 2004 and 2006, our policy changes actually shifted this 
balance and it impacted small business participation tremendously… and not for the better.  
A number of parties told us that the current rules are actually having an adverse effect on small 
businesses, right at a time when these entities are facing increased challenges to compete effectively in 
the commercial wireless industry and serve their target markets. That is why, since 2010, I have been 
calling on the Commission to consider creative and legally sustainable approaches to promote greater 
participation by small businesses in the communications industry.
1
  
I applaud Chairman Wheeler today for presenting us with an Order which contains 
comprehensive reforms to the Commission’s competitive bidding rules that will enable small businesses 
to compete more effectively.  At the top of the list are the elimination of the Attributable Material 
Relationship rule and the policy that DEs must use the licenses they win with DE credits to provide 
facilities-based retail service.  As I mentioned at the start of this proceeding, there is absolutely nothing in 
the statute or the legislative history that requires us to adopt those policies.  
But what we do have is the authority to change policies when it is evident that consolidation in 
the wireless industry, and other circumstances, warrant giving small businesses greater ability to raise 
capital and effectively compete.
I am also pleased that we are adopting a rural bidding credit for non-DEs with 250,000 or fewer 
subscribers.  In last year’s Notice I was particularly pleased that we sought comment on bidding credits to 
winning bidders that deploy facilities to persistent poverty counties.  According to the United States 
Department of Agriculture, a county is persistently poor if 20 percent or more of its population has been 
living in poverty over the last 30 years or more.  Currently, there are approximately 353 such counties in 
this country.  Although the record did not provide sufficient comment on how we should design a credit
to promote deployment in these counties, as the Order explains, the rural bidding credit covers 90 percent 
of these counties.  The wireless industry often talks about how deployment of their networks creates jobs 
and spurs economic growth.  So I hope this credit will create incentives to deploy more networks in these 
communities.  
While I fully support most of the rule changes in the Order, our decision, for the first time, to 
impose a cap on the amount of bidding credits that a DE may claim at auction does still concern me.  I 
recognize that the intent of this cap is to deter some of the alleged activity that people have criticized in 
the AWS-3 auction.  But I am confident that the other rule changes we adopt today are sufficient to 
remedy those concerns.  
Most notably, we are prohibiting DEs from entering into bidding arrangements with other 
entities.  We are also informing parties that some agreements that restrict the ability of DEs to make 
certain operational decisions could lead us to find that the DE does not control its license.  The timing for 
the first cap in the history of the DE program also causes me concern because AWS-3 resulted in a record 
setting $41.3 billion, and since spectrum below 1 GHz is more valuable, it is reasonable to surmise that 
                                                          
1
Statement of FCC Commissioner Mignon L. Clyburn, Statement on Public Notice Seeking Comment on Proposal 
to create an “Overcoming Disadvantage” category for its current Designated Entity rules (December 3, 2010); 
Section 257 Triennial Report to Congress Identifying and Eliminating Market Entry Barriers for Entrepreneurs and 
other Small Businesses, Report, 26 FCC Rcd 2909, 2969-70 (2011) (Separate Statement of FCC Commissioner 
Mignon L. Clyburn); Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive 
Auctions, GN Docket No. 12-268, Notice of Proposed Rulemaking, 27 FCC Rcd 12357, 12368 (2012) (Separate 
Statement of FCC Commissioner Mignon L. Clyburn).
the total provisionally winning bids for the incentive auction could be higher.  That means DEs will need 
access to more capital to win licenses.
That said, the rules we adopt today will give more flexibility to small businesses to enter into 
business models that should allow them to acquire licenses and thrive in the commercial wireless 
industry.  
Therefore, I am voting to approve.
I wish to thank Roger Sherman, Jean Kiddoo, Sue McNeil and the team in the Wireless 
Telecommunications Bureau, and my lead advisor Louis Peraertz, along with David Strickland, for their 
terrific work throughout this proceeding.