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Senator Thune opens probe into Dish over spectrum auction

John Thune Sen. John Thune (R-S.D.)

Sen. John Thune (R-S.D.), chairman of the commerce committee, has opened a probe into Dish’s tactics in the recent AWS-3 spectrum auction.

Dish has come under increasing fire for using two small companies in which it has a non-controlling majority interest, to win spectrum bids worth $13 billion, qualifying for a 25 percent discount.  AT&T was the second largest bidder in the auction at $18.2 billion.

Thune sent four letters—to Dish and to each of the two “designated entities” Northstar Wireless and SNR Wireless, as well as to the Federal Communications Commission which administered the program designed to benefit small businesses.

“The committee has significant questions about whether conduct surrounding the bidding strategies employed by DISH Network and two affiliates adhered to both the letter and intent of the law, since it may ultimately cost three billion dollars in public funds,” said Thune on sending the four letters.

AT&T and Verizon have objected to Dish’s tactics and Verizon has accused Dish of collusion. FCC GOP commissioner Ajit Pai has called for the commission to change its rules and FCC chairman Tom Wheeler has promised to look at them before the upcoming broadcast incentive auction in 2016.

“While the FCC is reportedly already looking at whether DISH broke auction rules, an examination of how these affiliated companies approached the auction is the only way for Congress to determine whether this three billion dollar price tag was appropriate or a result of wrongful conduct, flawed agency rules, or laws Congress must update,” Thune said.

Dish has said it has done nothing wrong and “looks forward to working with [Sen. Thune] on this matter.”

“We are confident that we fully complied with all legal requirements for the AWS-3 auction, including antitrust law and the DE rules, which were unanimously approved by the full Commission. Our approach – which was fully and publicly disclosed ahead of the auction – was based on DE investment structures that have been approved by the FCC in past wireless spectrum auctions, including structures used by many other auction participants in the past. Participation by small businesses through the DE program helped make the AWS-3 auction, on a gross and net basis, the most successful spectrum auction in FCC history,” the company said in a statement.