CWA, NAACP Criticize Dish AWS-3 Bidding Credits

Say that calls for careful review of rules in advance of incentive auction

The Communications Workers of America and the NAACP have added their voices to those who want the FCC to reject the AWS-3 auction bidding credits given to two companies majority owned by Dish.

In a letter to FCC chairman Tom Wheeler, the groups said Dish had manipulated the auction's small business and minority-owned business rules to get a $3.25 billion discount on the spectrum it won though "Northstar Wireless and SNR Wireless," in which it owns an 85% interest.

They said the company exploited loopholes to game the auction, and don't want the same thing to happen in the broadcast incentive auction. They said the AWS-3 results call for a careful review of the designated entity and joint bidding rules.

Dish paid the second-highest price for spectrum after AT&T's $18 billion.

“The Commission takes seriously its obligation to provide bidding credits only to those entities that are eligible to receive them," said an FCC spokesperson when questions were first raised about the bidding credit. "Existing FCC rules mandate that before awarding any license or bidding credit, the Commission conduct a thorough review of every provisional winner to ensure compliance with eligibility rules. For 20 years, the Commission’s competitive bidding rules have provided flexibility to enable a wide variety of applicants – including small businesses – to participate in the auction process, while including safeguards to protect the integrity of its auction program. As part of the auction closing process, the FCC is carefully reviewing winning bidders’ applications before awarding any bidding credits."

FCC commissioner Ajit Pai is among those who have questioned the use of the bidding credit. Dish's use of designated-entity (DE) rules makes a "mockery" of the just-completed AWS-3 spectrum auctions, he said in asking the chairman to investigate and branding the credits billion-dollar subsidies to Dish.

"DISH’s investments in two DEs in the AWS-3 auction ensured that more parties, not fewer, could participate in the long-term spectrum economy," Dish told the FCC following the auction. "Investments in DEs have been a longstanding practice of incumbent wireless carriers, and DISH’s participation followed a path that has been available for 15 years and used in many previous auctions."