FCC treatment of Obama donor draws GOP ire

Republicans in the House and at the Federal Communications Commission are angry over reports the agency is letting a company owned by an Obama donor skirt the rules of an upcoming airwave auction.

Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.) — chairmen of the House Energy and Commerce Committee and the subcommittee on communications, respectively — issued a joint statement Wednesday, condemning the FCC’s Democratic leadership.

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“The process is clearly broken, and something smells rotten on the eighth floor,” the pair said, referring to the commissioners’ and chairman’s offices at FCC headquarters.

Bloomberg reported earlier this week that the FCC granted Grain Management LLC — run by Obama and Democratic National Committee donor David Grain — a waiver, exempting it from certain rules in an upcoming airwave auction.

Grain was set to face certain disadvantages in the auction because it licenses its airwaves to bigger firms. The revenues of those bigger firms would be counted towards Grain, depriving it of benefits meant for small businesses.

But the agency voted 3-2 this week to grant them and other companies in a similar situation an exception, as long as they can prove they are a small business operating independently of the larger firms.

FCC Republican Commissioner Ajit Pai issued a dissenting statement criticizing the rationale for and likely outcomes of the decision.

“We need clear, predictable and legal rules that apply to all players and promote entry by small companies into the wireless business — not arbitrary waivers that yield no benefits other than a serendipitous profit to a preferred entity,” he said.

Upton and Walden — who have led the charge in the House to reform the FCC — criticized the vote.

This week’s vote “raises additional questions about the decisionmaking process at the FCC and underscores the need for additional transparency and process reform,” they said.

An FCC official defended the vote.

“Treating entrepreneurs and small businesses like multibillion dollar corporations when competing for spectrum licenses could deter them from participating in auctions," the official said.

"Granting regulatory relief to entrepreneurs and small businesses in the same situation as Grain, Inc. helps them qualify as designated entities so that they can compete for spectrum license opportunities with the benefit of small business bidding credits.” 

-- This story was updated at 10:30 a.m. to correct the nature of the waiver.