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DISH Wireless and the FCC are at Odds Over DEs, $3.3 Billion Worth of Bidding Credits

The FCC main entrance

As DISH continues to expand its reach in the wireless world, the company and the FCC are seeing things differently in terms of the DE (designated entities) program. Designed to allow better access for smaller and minority-owned businesses to compete at spectrum auctions, DE programs have long been scrutinized for the ability of larger companies to take advantage and gain more credits for bidding. Here is where DISH Wireless and the FCC clash. While DISH Wireless is remaining adamant that it is not holding a “de facto control” over the two DEs in question, Northstar Wireless and SNR Wireless, the FCC maintains the position that they are. This means that the $3.3 billion of bidding credits these two DEs would receive are now being denied and to understand why we’ll need to look back a few years.

Back in 2015, the FCC would go on to deny the bidding credits for the AWS-3 auction for DISH which would lead to a lengthy process two years later seeing the FCC forced by the U.S. Court of Appeals to provide an opportunity for the DEs to make the situation right. From here, we see DISH claiming that the FCC has not held up their part of the ruling while the FCC claims the opposite. Speaking on the matter, the Chairman of DISH Wireless, Charlie Ergen stated, “For DISH, the decision is a setback for an emerging competitor and we are disappointed. The ruling hurts, in part, because we have enormous respect for the FCC commissioners and their public service…We are discouraged that the agency declined multiple meeting requests over the past two-and-half years so that Northstar and SNR’s applications could be further amended if for any reason they were found to imply de facto control. The refusal to be transparent about these requirements departed from decades of precedent governing how the FCC has treated other designated entity arrangements.” Continuing he added, “Despite today’s decision, we are fully aligned with the FCC on the importance of 5G to grow the economy, promote competition, spur innovation, provide essential network security, and create jobs. This ruling will no doubt complicate our efforts, but it will not affect our resolve. We remain committed to building out the nation’s first open RAN cloud-native broadband network and restoring American leadership in telecommunications.” Doyon, the parent company of Northstar Wireless, is also concerned about what the decision means for the future of DEs. Sarah Obed, Northstar’s Vice President of External Affairs stated that “Denying bid credits is a blow to both present and future minority-owned business participation in the wireless sector – an express goal of the current Commission and Chairman Pai himself…This is no way to provide certainty to any business, much less one in possession of a vital and in-demand resource such as wireless spectrum.”

Ajit Pai, the commissioner of the FCC kept his stance with a strongly pointed statement against the situation with DISH Wireless and its use of the DE program saying that all parties were given “ample opportunity to resolve these deficiencies, (but) today we find that they have failed to do so. Indeed, the exercise has only reconfirmed that Northstar and SNR are not kings of their own destiny, but pawns. For example, even though the two entities are in significantly different positions in terms of their finances and spectrum portfolios, they curiously submitted to the Commission nearly identical revisions to their agreements with DISH Network. These agreements maintain DISH Network’s stranglehold over the two companies’ businesses and restrict the entities’ ability to raise capital, lease their spectrum, or enter into mergers or other corporate transactions.” VTel Wireless has expressed support of the FCC claiming the commission is helping the program. “In one bold stroke, the FCC has upheld the integrity of both its spectrum auction processes and its designated entity program…Today’s decision makes clear their work is about more than just raising auction revenue; it’s also about ensuring that auctions are transparent and fulfill the public interest in the broadest possible sense,” said VTel Wireless CEO Michel Guité.

DISH Wireless is having an incredible year creating its nationwide cloud-native network. The company is rapidly expanding its reach through innovative network solutions and configuration but losing the opportunity to $3.3 billion in spectrum bidding credits isn’t one of the highlights. With that said, as industry analyst Blair Levin points out, this saga is set to continue with both DISH Wireless and the FCC not conceding and the opportunity arising for DISH Wireless to take things back into court. “The market should understand that DISH and the DEs have a good chance of prevailing in court,” said Levin.

Source: Fierce Wireless

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