Dish Network affiliates Northstar Wireless and SNR Wireless surrendered a number of spectrum licences worth $3.5 billion, after a dispute with the Federal Communications Commission (FCC) about discounts.
The FCC previously said that Northstar and SNR were not eligible for $3.3 billion in discounts following the AWS-3 auction earlier this year, due to their relationship with Dish.
The discounts were meant for small businesses.
The affiliates are paying penalties for defaulting on the licences (The Wall Street Journal gave a figure of more than $500 million), and Dish noted that the ability for the affected parties (including Dish) to bid in future is not affected.
Dish’s CEO, Charlie Ergen, said in an earnings call in August that paying the full amount would hurt the company’s financial flexibility and that the FCC’s decision meant Dish would probably sell or lease its airwaves rather than enter the wireless business.
SNR and Northstar won wireless licences worth approximately $13.3 billion in the auction and received 25 per cent bidding credits, giving them $1.4 billion and $1.9 billion in discounts respectively.
After surrendering the permits, SNR and Northstar are acquiring 505 licenses for around $10 billion.
The 197 licenses will be re-auctioned separately after the FCC’s auctions of broadcast airwaves in early 2016, Reuters quoted an FCC official as stating, and if the total bids in the re-auction are less than $3.3 billion, Dish will be liable to pay the difference.