FCC Denies Dish-Related Bidding Credits

FCC Chairman Tom Wheeler announced in a statement that the FCC had voted to deny bidding credits to SNR Wireless and Northstar Wireless, the Designated Entities (DE) that acted on Dish’s behalf in the auction.

The FCC has officially rescinded $3.3 billion in bidding credits allowed Dish Network in the AWS-3 auction.

Following a wave of protest and a government investigation, the FCC concluded that Dish’s bidding practices violated the spirit of the AWS-3 auction, and a draft order denying the discounts was circulated among the commissioners.

“Small businesses require an on-ramp into the mobile marketplace to provide more choices for consumers”.

The Federal Communications Commission said Monday that Dish Network Corp. can’t apply $3.3 billion in small-business credits toward the purchase of airwaves it gained in a government auction.

Dish has also been named as a potential buyer of T-Mobile US; however, Ergen said that missing out on the spectrum discount “would complicate M&A perhaps in a way [that meant] you couldn’t do it”.

The decision comes after a months-long review of Dish’s financial and operational ties to the two companies, Northstar Wireless LLC and SNR Wireless LicenseCo LLC, which had bid $13.3 billion in the record-setting auction that ended in January. Dish said it followed the FCC’s rules and precedents, and that its investments in Northstar and SNR “helped make the AWS-3 auction the most successful spectrum auction in FCC history, and resulted in more than $20 billion of direct benefit to the American taxpayer”. However, we respectfully disagree with the proposed denial of the bidding credits.

This implies that DISH will have to pay just around $10 billion to acquire all licenses it has won. Dish is a satellite TV company that has stocked up on airwaves although it has no cellphone business. Dish owns 85 percent of each company, which it has called a non-controlling interest.

The Wall Street Journal reported that Dish Chairman Charlie Ergen is thinking of either suing the FCC, paying the $3.3 billion, or refusing to buy the spectrum and paying a penalty fee. “This does not advance the public interest goals of promoting economic opportunity and competition and disseminating licenses among a wide variety of applicants”, she said.