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Verizon accuses Dish of collusion in recent spectrum auction

Verizon is accusing Dish of collusion in the recent AWS-3 spectrum auction, an auction that surpassed all expectations by bringing in $41 billion.

Dish gained access to a large swath of spectrum in the auction through two companies in which it had a non-controlling, but majority financial interest. Collectively the two smaller companies spent $13.3 billion in the auction, but got a 10 percent discount per the Federal Communications Commission’s auction rules.

In an April 24 ex parte published Monday by the FCC, Verizon presented an analysis by economist Dr. Leslie Marx, who concluded that Dish, Northstar Wireless, and SNR Wireless colluded during the auction, a violation of antitrust laws.

Marx, a professor of economics at the Fuqua School of Business at Duke University, analyzed round-by-round auction results to find “extensive evidence of collusion” between Dish, Northstar Wireless and SNR Wireless.

Dish said it did nothing wrong.

“We are confident that we fully complied with all legal requirements for the AWS-3 auction, including antitrust law and the DE [designated entity] 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 Verizon. 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,” Dish said in a statement.

Dish has come under fire by AT&T, Verizon, GOP FCC commissioner Ajit Pai, and others for its strategy during the auction.

FCC chairman Tom Wheeler said last month at a Senate commerce hearing that the commission would look at and revise the designated entity rules before the upcoming broadcast incentive auction in early 2016.