Acting on its own motion, the FCC decided last week to waive its “impermissible material relationship rule” for designated entities (DEs) that hope to bid for the 700 MHz upper D-block license. Adopted in connection with last year’s auction of advanced wireless service (AWS) licenses, the rule prohibits any small business that applies for DE auction benefits from reselling, leasing, or wholesaling more than 50% of its licensed spectrum capacity. The rule, which was also applied to the upcoming January 24 auction of 700 MHz wireless licenses that could earn bids in excess of $10 billion, is intended to deter certain partnerships between DEs and large carriers that might use such relationships to gain control over scarce spectrum at a discount. Under rules adopted earlier this year for the 700 MHz auction, the winner of the 10 MHz commercial D-block license must form a nationwide broadband network that will be shared with the adjacent public safety broadband licensee. The D-block winner must complete a network sharing agreement with the public safety licensee that will be subject to FCC review and approval. The winner must also adhere to strict construction mandates that require it to build out 99.3% of its network. Citing “the unique circumstances and obligations of the upper D-block license,” the FCC decided that the application of the impermissible material relationship rule to the D-block licensee would be “unnecessary and inequitable in this instance.” Other DE safeguards, such as those covering attributable material relationships and unjust enrichment, will remain in force for the 700 MHz D-block. Frontline Wireless, which had urged the FCC to adopt a wholesale model for the 700 MHz auction, applauded the agency’s move as “a vital step needed for small business participation in this auction by innovative new competitors . . . who want to provide facilities-based wholesale services on a fully built-out network.”