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Dish slams FCC draft order to deny auction credits

R. Stanton Dodge, DISH Executive Vice President and General Counsel

Dish isn’t happy with the Federal Communications Commission draft order that would deny auction credits to the two designated entity companies in which Dish had a financial interest.

FCC chairman Tom Wheeler circulated an order last week that would reject $3.3 billion in discounts requested by the two small wireless companies, SNR Wireless and Northstar Wireless. The two companies successfully bid for about $13.3 billion in spectrum in the AWS-3 auction early this year, but the companies’ financial arrangement with Dish became controversial, calling the FCC’s auction credit rules into question.

After Dish, SNR Wireless and Northstar Wireless met with FCC officials Wednesday to discuss the draft order, the company issued a statement disagreeing with the FCC’s decision.

“DISH has a tremendous amount of respect for the FCC commissioners and staff, 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,” Stanton Dodge, Dish executive vice president and general counsel said in a statement.

If the draft order is approved by a majority of the other commissioners, the order would find that Dish had a controlling interest in the two companies, making the companies ineligible for the 25 percent bidding credit.

However, the order would also find the two companies qualified to hold the licenses. The FCC would not designate the matter for a hearing or refer it to the enforcement bureau. Any petitions filed to deny the licenses would be denied.

All along, Dish has said it was only following the rules and did nothing wrong, but critics in Congress and some of the FCC commissioners disagreed, leading the FCC to pass new rules for auction credits in the next spectrum auction.

Dish, through its two designated entity companies, was the second largest winning bidder in the auction at $13.3 billion, second to AT&T’s $18.2 billion. Verizon was the third largest bidder at $10.4 billion.