Dish Network said it was confident it fully complied with the rules in the recent U.S. AWS-3 auction, in response to suggestions it had abused a scheme that allowed it to claim more than $3 billion in discounts on spectrum licence fees.
The TV operator emerged as the surprise number two bidder in the auction: although the company did not buy any licences itself, it had invested in bidding partners SNR Wireless LicenseCo LLC and Northstar Wireless LLC, which bid a total of $13.3 billion in gross provisional winning bids. However, the net bid amount was $10 billion as these two companies qualified for a 25 per cent discount under the “Designated Entity” (DE) programme.
Following the auction results, a member of the Federal Communications Commission (FCC) said the DE programme is intended to make it easier for small businesses to purchase spectrum and compete with large competitors.
“DISH, however, has annual revenues of almost $14 billion, a market capitalisation of over $32 billion and over 14 million customers,” said Commissioner Ajit Pai in a statement.
“Its participation makes a mockery of the DE programme,” Pai added.
In its response, Dish Network said: “We respectfully disagree with the criticism of the Designated Entity programme, and we are confident that we fully complied with the DE rules in the AWS-3 auction, which were unanimously approved by the full Commission.”
The company also noted that its approach was publicly disclosed ahead of the auction and based on DE investment structures that have been approved by the FCC in past wireless spectrum auctions, “including structures used by AT&T and Verizon."
Pai said he had dissented from the FCC’s decision to loosen the DE rules for the AWS-3 auction last July. He called upon FCC chairman Tom Wheeler to immediately launch an investigation into the billion dollar subsidies, and al so insisted that the FCC reform its rules to stop what he described as abuse of the DE programme.
