It’s official: Dish Network has missed out on the US$3.3 billion worth of spectrum discounts it accumulated in the AWS-3 auction, after the Federal Communications Commission (FCC) voted in favour of denying them to the satellite TV provider.
"I’m proud that our thorough, fact-based analysis ensures that bidding credits only go to the small businesses our rules aim to serve," said FCC chairman Tom Wheeler, in a statement late on Monday.
Dish spent $13.3 billion acquiring spectrum in the AWS-3 auction – also known as Auction 97 – taking a big step toward launching wireless services.
It participated via three smaller subsidiaries, two of which – Northstar Wireless and SNR Wireless – won frequencies. Under the FCC’s designated entity (DE) rules, the pair both qualified for a 25% small business discount on the airwaves, reducing the overall bill by $3.3 billion.
Following a wave of protest and a government investigation, the FCC concluded that Dish’s bidding practices violated the spirit of the AWS-3 auction, and a draft order denying the discounts was circulated among the commissioners.
"Small businesses require an on-ramp into the mobile marketplace to provide more choices for consumers. Our competitive bidding rules were designed to do just that – give bona fide small businesses an opportunity to acquire valuable spectrum," said Wheeler on Monday.
The decision clears up any confusion over future auctions that implement the DE rules, and it also casts doubt over Dish Network’s wireless strategy.
"$3.3 billion is a lot of money," noted Dish CEO Charlie Ergen, during his company’s Q2 investor call recently, who said that it may consider leasing or sellin g its spectrum.
Dish has also been named as a potential buyer of T-Mobile US; however, Ergen said that missing out on the spectrum discount "would complicate M&A perhaps in a way [that meant] you couldn’t do it."
