DISHing the dirt: FCC commissioner criticises pay-TV giant’s Auction 97 tactics

4 Feb 2015

DISH Network, the US pay-TV giant and long-time wireless market aspirant, has defended its bidding tactics in the Federal Communications Commission’s (FCC’s) recently concluded Auction 97 for AWS-3 spectrum. DISH emerged from the proceedings as the second highest bidder – behind AT&T – only to claim more than USD3 billion in discounts due to a technicality. Rather than bid directly, DISH invested in a pair of ‘bidding partners’, SNR Wireless and NorthStar Wireless, and under the Designated Entity (DE) programme the duo saw their collective bill slashed from USD13.327 billion to USD9.995 billion.

Following the publication of the auction results, FCC commissioner Ajit Pai released a statement criticising DISH’s strategy, saying: ‘Two companies in which DISH Network Corp has an 85% ownership stake claimed over USD3 billion in taxpayer-funded discounts when purchasing spectrum in the AWS-3 auction. Those discounts came through the FCC’s DE programme, which is intended to make it easier for small businesses to purchase spectrum and compete with large corporations. DISH, however, has annual revenues of almost USD14 billion, a market capitalisation of over USD32 billion, and over 14 million customers. Its participation makes a mockery of the DE programme.’

In its response, DISH hit back by saying: ‘We respectfully disagree with the criticism of the DE 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 [FCC] commission.’ Further, DISH officials likened the approach to similar bidding structures used by AT&T and Verizon in the past.

As previously reported by TeleGeography’s CommsUpdate, after more than two months and 341 rounds of bidding, Auction 97 concluded on 29 January, earning the watchdog USD41.329 billion in total potential winning bids.