FCC denies DISH's auction scam

The Federal Communications Commission (FCC) has voted unanimously to deny DISH Network $3.3 billion in small business credits that it won in a recent spectrum auction by manipulating FCC rules.

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.

“Small businesses require an on-ramp into the mobile marketplace to provide more choices for consumers,” said FCC Chairman Tom Wheeler in astatement on the decision. “Our competitive bidding rules were designed to do just that – give bona fide small businesses an opportunity to acquire valuable spectrum. Today, our review of two winning bidders in the recent AWS-3 auction has concluded that they in fact are not eligible for bidding credits. I’m proud that our thorough, fact-based analysis ensures that bidding credits only go to the small businesses our rules aim to serve.”

DISH now has three options: refuse to buy the spectrum it won and pay a penalty, pay for the $3.3 billion in spectrum it won, or challenge the FCC in court. Whatever DISH decides, the FCC’s decision to deny the credits and stop the scam was the right one. It’s a step toward ensuring fair, diverse, and competitive spectrum auctions in the future.

Statement of FCC Chairman Tom Wheeler on the Decision to Deny Auction 97 Bidding Credits to SNR Wireless and Northstar Wireless (FCC, Aug. 17, 2015)

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

CWA, NAACP file FCC Petition to Deny DISH’s auction abuse (Speed Matters, May 18, 2015)