September 13, 2019
The FCC fined AT&T $75,000 and AMG Technology Investment Group $100,000 for holding prohibited communications during the agency's CAF II auction last year.
The FCC said that AMG CEO Bill Baker was "discussing AMG’s Auction 903 bids, its bidding strategies, and bidding results" in order to "secure discounts from AT&T." However, the FCC did not provide details. The agency listed the fines under the "auction collusion" section of its website.
AT&T was a registered bidder in the auction but did not win anything. AMG's NextLink, meanwhile, won the most money of any participant in the FCC's CAF II auction, walking away with $281.3 million in total funding to deploy Internet services to nearly 100,700 homes and businesses in rural parts of Illinois, Iowa, Kansas, Nebraska, Oklahoma and Texas. The company told Light Reading recently that it plans to use the funds to build an extensive fixed wireless network to deliver services in the areas.
The FCC's $1.5 billion Connect America Fund Phase II (CAF II), dubbed Auction 903, was a reverse auction where the agency promised to give money to the companies that submitted the lowest bid to provide telecommunications services in rural and underserved areas.
Participants in any FCC spectrum auction are prohibited from communicating with each other during a "quiet period" that often lasts for months before and during agency auctions. Telecom executives routinely cite those "quiet periods" in their public appearances at trade shows and investor events when they discuss their spectrum strategies.
According to the FCC's documents on the matter, AMG's Baker sent several emails to AT&T executives over the course of the auction. Baker also met with AT&T executives and held a video call with them. Several months after the communications, AT&T's lawyers told the FCC about the prohibited communications, and then AMG did also.
In its filings, the FCC said it was authorized to levy fines of up to several million dollars, but noted that it has previously imposed fines of $100,000 for such behavior. The agency said that it lowered AT&T's fine from $100,000 to $75,000 because there was no evidence that AT&T gave AMG any information about its own actions during the auction, and because AT&T "was the party that ultimately stopped the prohibited communications by advising AMG that it could no longer engage in discussions."
This isn't the first time the FCC has levied fines for prohibited communications during auctions. For example, in 2013 the agency said a representative of Cascade Access "apparently engaged in a collusive communication" when they sent an email to a Verizon executive stating "[w]e have dropped out of the 700 MHz auction" and are "ready to talk/meet" with Verizon. The FCC fined Cascade $75,000.
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