FCC Consent Decrees re: Auction 105 PAL Aggregation Limits

On July 15, 2022, the FCC released five separate Orders adopting Consent Decrees with five parties (SAL Spectrum, LLC, Cable One, Inc., NorthWestern Corporation, United States Cellular Corporation, and Shenandoah Cable Television, LLC, collectively the “Parties”) concerning the FCC’s Auction 105 (the 3.5 GHz Auction) Priority Access License (“PAL”) aggregation limit rules.  Section 96.31(a) of the FCC’s rules limits the aggregation of PAL channels in any license area to no more than four at any given time to encourage competition, innovation, and efficient use of the 3.5 GHz band.  This rule applies to attributable, partial ownership, including non-controlling parent entities.

During its review of Auction 105 applications, the FCC discovered that BlackRock, Inc. (“BlackRock”), a private equity firm, held a 10% or greater interest in each of the five Auction 105 applicants.  These applicants were winning bidders in overlapping licenses areas, and because common, non-controlling interests of 10% or more are attributable, the applied-for PALs of each of these five applicants would be attributable to each other, and thereby violate the four-PAL limit rule in certain areas if granted.  In total, the five applicants implicate a total of 462 PALs in 80 license areas where the four-PAL aggregation limit would be violated if their applications were granted.

Upon review, the FCC granted each of the long-form applications with respect to the licenses listed in Appendix A of the Consent Decrees, which the FCC found would further the public interest by, to the extent possible, placing the licenses in the hands of entities that most highly value them while preserving the aggregation limit by requiring that the applicant return the licenses listed in Appendix B.  Upon return, the licenses listed in Appendix B will be immediately available for General Authorized Access (“GAA”) use.  The FCC agreed to relieve each of the applicants of any default penalties that would have been associated with the turning back of the licenses that implicated violation of the 4-PAL rule.

Each of the Parties also agreed to implement a compliance plan and comply with mandatory reporting obligations.

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