FCC Denies Dish and Partners $3 Billion in Auction Discounts

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Dish Network Corp. and two partners were denied $3.3 billion in small-business discounts for airwaves by the Federal Communications Commission.

The commission unanimously voted Monday that the two small companies, SNR Wireless LicenseCo LLC and Northstar Wireless LLC, aren’t eligible for the program. The FCC earlier said it had concluded the companies are controlled by Dish, which funded them.

The FCC action could leave Dish in control of the disputed airwaves once it pays the full price, Commissioner Mignon Clyburn, a Democrat, said in an e-mailed statement.

“This does not advance the public interest goals of promoting economic opportunity and competition,” Clyburn said.

Bob Toevs, a Dish spokesman, didn’t immediately respond when reached for comment.

Dish and the two companies were among the winners of January’s record-setting $44.9 billion airwaves auction with combined bids of $13.3 billion -- a sum that would have dropped to $10 billion with the discounts.

“They in fact are not eligible for bidding credits,” FCC Chairman Tom Wheeler said Monday in an e-mailed statement.

Competitive Disadvantage

Without the discount, Dish can’t compete with phone giants AT&T Inc. and Verizon Communications Inc. in spectrum auctions, Dish Chief Executive Officer Charlie Ergen told investors Aug. 5. If Dish can’t compete, it’s in shareholders’ interest to sell or lease spectrum, Ergen said.

Dish said it complied with all legal requirements after a July 22 FCC briefing outlining the agency’s preliminary decision to disqualify the partners.

The FCC on July 16 voted to change program rules, capping bidding credits at $150 million for small businesses.

Bidding tactics like Dish’s have been used at least 36 times before by participants including wireless leaders AT&T and Verizon, Dish said in a letter to a lawmaker who questioned the company’s participation.

AT&T and Verizon rejected the comparison and FCC Commissioner Ajit Pai has called Dish’s use of a law intended to aid small companies “an abuse.”

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