FCC Denies Dish-Related Bidding Credits

DE's or Dish will have to pony up $3 billion more
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As expected, the FCC has voted to deny bidding credits to two Dish-related companies in the AWS-3 auction of wireless spectrum earlier this year, which raised over $40 billion for various programs and the U.S. treasury.

That is according to FCC chairman Tom Wheeler, who had proposed denying the over $3 billion in bidding credits.

Wheeler circulated an item to that effect last month and was expected to have the votes to pass it.

The order concludes that Dish's majority financial interest in the companies are controlling interests that should be attributable to Dish, which means the companies are ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.

“Small businesses require an on-ramp into the mobile marketplace to provide more choices for consumers," Wheeler said in a statement. "Our competitive bidding rules were designed to do just that – give bona fide small businesses an opportunity to acquire valuable spectrum. Today, our review of two winning bidders in the recent AWS-3 auction has concluded that they in fact are not eligible for bidding credits. I’m proud that our thorough, fact-based analysis ensures that bidding credits only go to the small businesses our rules aim to serve.”

"DISH has a tremendous amount of respect for the FCC commissioners and staff," said Dish executive VP and general counsel R. Stanton Dodge at the time the order was circulated, "and we appreciate their hard work on this matter. However, we respectfully disagree with the proposed denial of the bidding credits. Our approach to the AWS-3 auction, which followed 20 years of FCC precedent and complied with all legal requirements, was intended to enhance competition -- in the auction and in the marketplace long term. Our 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.”

Now, either the DE's will have to come up with the extra $3 billion-plus on their own, or Dish will have to do so, in which case the licenses transfer to Dish.

“I applaud the FCC for taking meaningful action to address the questions I raised about the conduct of DISH and its two affiliates in the most recent spectrum auction," said Sen. John Thune (R-S.D.), chairman of the Senate Commerce Committee. "However, I remain concerned that the FCC’s constantly changing approach to designated entity rules may still prove ineffective in preventing future bidders from gaming the system to the disadvantage of authentic small and minority-owned businesses. The FCC is responsible for putting our nation’s spectrum resources to the most productive and efficient use possible, and I will continue to press the FCC to ensure future spectrum auctions are fair and competitive.”

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