The Federal Communications Commission (FCC) told Dish that its two affiliates are ineligible for $3.3 billion in small-business discounts they claimed after a mega auction of spectrum in the US earlier this year.
The US broadcaster met FCC staff to discuss a draft order relating to Northstar Wireless’ and SNR Wireless’ pending applications for AWS-3 licences, the company said in a statement. The order was circulated by chairman Tom Wheeler.
Dish heard that, if approved, the order would find Dish has a controlling interest in both affiliates, meaning the broadcaster’s revenue should be attributed to them, making them ineligible to receive 25 per cent bidding credits (approximately $1.9 billion for Northstar Wireless and $1.4 billion for SNR Wireless).
The two firms bid a total of $13.3 billion in January’s auction. Combined, the two were the second largest bidder in the unexpectedly lucrative contest which netted a total of $44.9 billion.
The FCC’s draft order says both firm are qualified to hold the licences, meaning they (and Dish) can keep them if they pay the $3.3 billion outstanding.
In addition, the FCC will not designate the matter for a hearing, or refer it to the FCC enforcement bureau or the Department of Justice, indicating the commission had not found any collusion or other breach of auction rules.
The draft order remains subject to change, and must be approved by a majority of the Commissioners to become effective. If it is approved, Dish did not say what its next move would be. Its likeliest response is a legal challenge to the FCC’s order.
“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,” said DISH executive vice president and general counsel, R. Stanton Dodge.
“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,” he added.