Verizon calls out DISH in recent AWS-3 spectrum auction, claims distortion tactics, files grievance with FCC

Verizon calls out DISH in recent AWS-3 spectrum auction, claims distortion tactics, files grievance with FCC
When the AWS-3 spectrum auction concluded last month, everyone was astonished at the final tally, nearly $45 billion in all, with AT&T dominating the affair at a little over $18 billion committed. Traditional logic would dictate that Verizon was the second highest bidder for spectrum, but technically, that was not the case.

DISH Network put up the second largest total of bids, $13.3 billion, but that total rolled back to just under $10 billion after certain discounts were applied.

Those discounts were granted because the companies that won those licenses were designated entities of DISH, and those two companies, Northstar Wireless and SNR Wireless, qualified as “small businesses.” That definition was bestowed to them because as entities, their revenues were below $15 million per year.

However, DISH owns 85% of each company, and it is no secret that it was the sugar-daddy for monies those companies used to make bids on spectrum, knowing they were going to get a hefty 25% discount on the back end. One FCC Commissioner, Ajit Pai, has already asked Tom Wheeler to investigate the award.

Now, Verizon has chimed in, one week after AT&T filed a similar grievance, claiming that DISH’s coordination with the two subsidiaries created an artificial impression of more demand than actually existed. Big Red shared the data from its analysis of the auction with the FCC.

Looking at the progression of bidding for the New York City market, AT&T ultimately won the big block of spectrum for $2.8 billion, but not before duking it out with all of DISH’s designees, who won the remaining licenses in that market, leaving Verizon and T-Mobile eating dust.

DISH naturally disputes the allegations, and the company’s CEO, Charles Ergen, says flatly, “We wanted to win the licenses. We were disappointed we didn’t win all the licenses.” Indeed, no one likes to lose, but considering DISH arguably got the nation’s biggest market at a discount by proxy, we do not think this issue is going away anytime soon.

source: The Wall Street Journal (1, 2 graphic)

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7 Comments

1. ePoch270

Posts: 193; Member since: Sep 26, 2013

I couldn't have any less sympathy for these privileged tool-bags.

2. o0Exia0o

Posts: 903; Member since: Feb 01, 2013

+1 hundred-thousand-trillion...... It is funny that with both AT&T and Verizon's dominate market position that they would cry foul....

3. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

There is a problem for the Dish subsidiaries, though. If they are majority-owned by Dish, they won't qualify as small businesses. Especially if they are co-ordinating their bids with Dish. Expect the Dish subsidiaries to lose their discount and have to pay full freight for their spectrum.

4. o0Exia0o

Posts: 903; Member since: Feb 01, 2013

Well Doug, while I understand and see the point you have made there would also be an argument to say that because they have a substantially smaller revenue stream that they should be allowed to receive the discount. Now if it comes to light that these dish subsidiaries used none of the money from their own coffers and dish financed this whole ordeal in order to keep other service providers from having the spectrum then I agree, go ahead make them pay the full price or not issue the licenses for the spectrum to them. Im sure that dish did use some of their money in order to secure this spectrum, that would just be smart business, but what would have to be proven here is that dish and only dish did this for the sake of keeping AT&T and VZW from the spectrum...Just my 2 cents

7. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Fran Scammo's just mad he won't be counting any extra money over the next few years. Eat it, Hook...

5. fauxsure

Posts: 2; Member since: Mar 25, 2013

This is the equivalent of someone using food stamps to pay for food when they really dont qualify for food stamps.

6. corporateJP

Posts: 2458; Member since: Nov 28, 2009

You mad, Verizon?

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