Deborah D. McAdams /
01.14.2013 02:35 PM
Cascade LLC Fined $75,000 for Collusion in 700 MHz Auction
Company told Verizon it had dropped out of bidding
WASHINGTON – Cascade Access has incurred a $75,000 fine from the feds for “collusive conduct.” The Federal Communications Commission issued a Forfeiture Order to Cascade, an Escatada, Ore., Internet service provider that participated in the 2008 auction of 700 MHz spectrum—bands vacated by TV stations in the digital transition.

The Order said both Verizon Wireless and Cascade applied for a license covering the same geographic area in Nevada, and that, “during the course of that auction, a representative of Cascade apparently engaged in a collusive communication with a representative of Verizon Wireless.”

FCC investigators found that Bob Milliken, and associate of Cascade, sent an email to William Hickey, executive director of strategic alliances for Verizon Wireless stating that Cascade had “dropped out of the 700 MHz auction” and was “ready to talk/meet” with Verizon. The FCC concluded that Cascade engaged in prohibited communication about its bidding strategy and issued a Notice of Liability in February of 2009.

Cascade responded that the fine should be cancelled because the communiqué in question did not relate the “‘substance’ of bids or bidding strategies,” as the FCC rules indicate. Cascade also said it did not intend to violate FCC bidding collusion rules.

The FCC concluded that Cascade’s communication did violate commission rules because it revealed to Verizon it was out of the bidding.

“Affirmatively revealing to another auction participant that you intend to refrain from bidding is no less significant than disclosing an intention to make a bid of a particular dollar amount or a bid for a license in a particular market,” the Forfeiture Order said.

It also rejected Cascade’s contention that the violation was unintended.

“While Cascade may not have set out with the specific intention of violating the anti-collusion rule, there is no doubt that Cascade’s representative intended to and did contact Verizon Wireless to initiate a conversation about Cascade’s participation in Auction No. 73 during the period of time when such communications were strictly proscribed.”

Cascade has 10 days from the Jan. 11 release of the Order to pay the fine.
~ Deborah D. McAdams

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