The U.S. telecom regulator Federal Communications Commission (FCC) has decided to thoroughly review DISH Network Corp.’s DISH claim of a $3.3 billion discount on its total bid to acquire airwaves in the recently concluded AWS-3 spectrum auction. The U.S. Congress also promises a close scrutiny of the claim. On Apr 30, the FCC opened a window to accept petitions from opponents to DISH's claim for discount. The window will remaim open till May 11.
In Jan 2015, FCC had concluded its AWS-3 spectrum auction which registered a record-breaking bid value of $44.89 billion. Notably, AT&T Inc. T has emerged as the top bidder, spending $18.2 billion followed by DISH ($13.3 billion), Verizon Communications Inc. VZ ($10.4 billion) and T-Mobile US Inc. TMUS ($1.8 billion).
Interestingly, DISH participated in the auction via three designated entities (DE) – American AWS-3 Wireless, Northstar Wireless, and SNR Wireless. Immediately after the FCC declared the name of the auction winners on Feb 2, 2015, DISH claimed that it is eligible for a 25% discount on the total value of winning bids under FCC's “DE” program.
This implies that DISH will have to pay just around $10 billion to acquire all licenses it has won. However, FCC Commissioner Mr. Ajit Pai has strongly expressed his reservation about DISH’s practice. He has argued that the DE program is aimed at encouraging the participation of small wireless operators in the airwave auction which DISH has unduly taken advantage of.
Notably, DISH is the second largest satellite TV operator in the U.S. with annual revenues of almost $15 billion. The company already holds a strong portfolio of wireless spectrums. DISH holds 85% stake of both Northstar Wireless and SNR Wireless. Despite this the two companies have appealed for the small-business discount which largely violates the morale of the DE program.
The U.S. Senate Commerce Committee is investigating DISH’s claim to determine whether the $3.3 billion discount claimed by the satellite TV operator is fair or is a result of wrongful conduct, flawed agency rules or inadequacy of existing laws. Owing to this, the FCC is yet to approve the licenses won by DISH’s subsidiaries Northstar Wireless, and SNR Wireless in the New York, Chicago and Boston regions.
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