Court upholds FCC response to DISH spectrum auction scam

A US appeals court upheld a 2015 FCC ruling that two companies in which DISH has a controlling financial interest were ineligible for “small entity” discounts in that year’s wireless spectrum auction. But the court sent the case back to the FCC with a strange admonition: give the two companies the opportunity to demonstrate they are independent of DISH.

It’s not clear how the FCC can do this, given the auction took place two years ago. Perhaps that’s why the court also said, “Nothing in our decision requires the FCC to permit a cure.” A “cure” could nullify about $500 million in fines and make the two companies eligible for $3.3 billion in wireless spectrum discounts – if the companies can demonstrate they are independent of DISH.

Two years ago, DISH coordinated with two smaller companies, SNR Wireless and Northstar Wireless – companies in which DISH has an 85 percent financial interest – to win wireless licenses valued at $13 billion. The companies then tried to claim $3.3 billion in discounts available through the Designated Entity (DE) program. The program was designed to give credits to small, minority- and women-owned business so they can participate in the spectrum marketplace – not as a loophole to be exploited by a major service provider.

The FCC made the correct decision, denying the DE discounts and putting a stop to DISH’s scam. DISH challenged the decision in court, which ruled that DISH’s subsidiaries can have the discounts if they prove they are independent of DISH. We aren’t holding our breath.

Links:

U.S. Court Grants Dish Affiliates New Chance to Win $3 Billion in Auction Credits (New York Times, Aug. 29, 2017)

How Dish Network scammed the spectrum auction for $3 billion (Speed Matters, Mar. 1, 2015)

FCC denies DISH’s auction scam (Speed Matters, Aug. 18, 2015)