CWA, NAACP file FCC Petition to Deny DISH?s auction abuse

The Communications Workers of America (CWA) and the National Association for the Advancement of Colored People (NAACP) urged the Federal Communications Commission (FCC) to deny DISH Network’s manipulation of FCC rules. The company claims a $3.3 billion small business bidding credit through two affiliated entities in the recent AWS-3 spectrum auction.

Fromthe petition: “DISH, a company with no wireless subscribers or network, won more spectrum than any other entity in the auction, distorted auction prices for other participants, and if the Commission were to approve the DE [“Designated Entity” small business] credits, won this valuable spectrum at a cost of $3.3 billion to U.S. taxpayers.”

This challenge comes afterthe FCC sought public comment on DISH Network’s actions at the recent spectrum auction. DISH coordinated with two smaller companies, SNR Wireless and Northstar Wireless – companies in whichDISH has an 85 percent financial interest – to win wireless licenses valued at $13 billion. The company is now trying to claim $3.3 billion in discounts intended for small businesses.

These discounts are available through the Designated Entity (DE) program, a program designed to give credits to small, minority- and women-owned business so they can participate in the spectrum marketplace. As the CWA/NAACP petition notes: “Through their affiliation with DISH, Northstar and SNR do not qualify under the Commission’s rules as small businesses eligible for DE bidding credits.”

CWA and the NAACP emphasized their strong support for the goals of the DE program, and urged the FCC to deny the DISH/Northstar/SNR claim to the credits in order to protect the integrity of the program.

The FCC is currently looking at proposals to reform the DE program to combat this type of abuse. Large and small carriers have called for an “equitable and sustainable Designated Entity program.” Last week, a coalition of 26 small rural carriers and AT&T proposed a $10 million cap on the bidding credit available to any individual eligible applicants. FromJoan Marsh, AT&T’sVice President of Federal Regulatory Affairs:

Together, we envision a DE program that redefines ‘small business’ in a way that is more aligned with the structure of the modern wireless industry and that seeks to benefit true small entities – many of which operate in rural America. To avoid incentives for abuse, we propose a strict cap of $10M on the bidding credit available to any individual eligible applicant – an amount that will provide a meaningful benefit to the very types of business the program is designed to benefit while ensuring policymakers that those who seek to abuse the program will not be rewarded.

CWA/NAACP Petition to Deny (FCC, May 11, 2015)

FCC seeks public comment on DISH Network’s $3.3B auction scam (Speed Matters, May 1, 2015)

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

How Loopholes Turned Dish Network Into a ‘Very Small Business’ (NY Times, Feb. 24, 2015)