The U.S. Court of Appeals for the D.C. Circuit has backed the FCC's decision that Northstar Wireless and SNR Wireless were under Dish's control when they successfully bid $13 billion in wireless licenses in the AWS-3 auction, and thus did not qualify for the over $3 billion in bidding discounts that brought the price down to $10 billion.

The two companies teamed with Dish to acquire $10 billion worth of spectrum licenses in the auction. But the FCC subsequently concluded that Dish's majority financial interest in the companies were controlling interests that should be attributable to Dish, which meant the companies were ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.

Dish had put up most of the $10 billion.

The companies appealed the FCC decision to the D.C. Circuit, which in August 2017 upheld the finding that Dish exercised de facto control, but also held that the FCC, under then chair Tom Wheeler, failed to notify the companies that if the FCC found they did not qualify for the credits, worth billions of dollars, the FCC would not give them a chance to cure that problem and instructed the FCC to correct.

The FCC provided that chance to cure the problem, but still ruled the subsequent new filings did not change its conclusion that Dish was both he biggest investor and in de facto control of Northstar and SNR and so did not deserve the designated entity bidding credit.

Also: Dish Makes Case for AWS-3 Bids

The companies then challenged that 2020 decision (under Republican Chairman Ajit Pai) in the D.C. circuit, saying the FCC "flouted this court’s orders in SNR Wireless by not working closely enough with them to reduce Dish’s control, wrongfully found them to be controlled by Dish, and penalized them without fair notice."

Wrong, wrong and wrong, the court said Tuesday in upholding the FCC. It said the FCC had provided the requisite opportunity to cure and "reasonably applied its precedent to the companies and gave them fair notice of the legal standards that it would apply in analyzing their claims to be very small companies," claims the FCC rejected. ■

The FCC has told a D.C. Federal Appeals Court that Dish retains de facto control of two wireless companies, Northstar Wireless, LLC (Northstar) and SNR Wireless LicenseCo (SNR), that claimed $3.3 billion in bidding credits in the FCC's AWS-3 spectrum auction.

That came in its response to a challenge by the wireless companies to its decision, actually "decisions" plural, that those companies did not merit the credits because they were controlled by Dish, which put up the $13.3 billion in winning spectrum bids.

The FCC said the court should uphold its decision and deny the petitions to review those decisions.

As to the process, the FCC told the court that it had given those companies a chance to cure their problems, which they didn't, and via procedures consistent with FCC precedent.

As to the challenge to its conclusion that Dish still controlled them, the FCC said that Dish's authority to veto the leasing of the spectrum licenses demonstrated it still had de facto control.

It also told the court it had given the companies fair warning their revisions did not cure Dish's de facto control.

Also Read: Dish Makes Case for AWS-3 Bids

The two companies teamed with Dish to acquire $10 billion worth of spectrum licenses in the AWS-3 auction. But the FCC subsequently concluded that Dish's majority financial interest in the companies were controlling interests that should be attributable to Dish, which meant the companies were ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.

That federal court in August 2017 upheld the finding that Dish exercised de facto control, but also held that the FCC, under then chair Tom Wheeler, failed to notify the companies that if the FCC found they did not qualify for the credits, worth billions of dollars, the FCC would not give them a chance to cure that problem and instructed the FCC to correct.

The FCC under new management--Chairman Ajit Pai--and in response to the court remand, in January told the companies to renegotiate with Dish and other parties and file the necessary documents to show they now qualify for the credit. They did, but the FCC again concluded they were still controlled by Dish.

As expected, the FCC has concluded that SNR Wireless LicenseCo and Northstar Wireless still don't get the bidding credits they sought in the 2015 AWS-3 auction.

The two companies teamed with Dish Network to acquire $10 billion worth of spectrum licenses in the AWS-3 auction. But the FCC subsequently concluded that Dish's majority financial interest in the companies were controlling interests that should be attributable to Dish, which meant the companies were ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.

Dish had put up most of the $10 billion.

Related: MMTC, NABOB Say FCC Should Help Northstar, SNR Cure DE Applications

The companies appealed the decision in court.

That federal court in August 2017 upheld the finding that Dish exercised de facto control, but also held that the FCC, under then chair Tom Wheeler, failed to notify the companies that if the FCC found they did not qualify for the credits, worth billions of dollars, the FCC would not give them a chance to cure that problem and instructed the FCC to correct.

Related: Dish Makes Case for AWS-3 Bids

The FCC under new management--Chairman Ajit Pai--and in response to the court remand, in January told the companies to renegotiate with Dish and other parties and file the necessary documents to show they now qualify for the credit.

The companies revised the agreements, but the FCC has now concluded that upon reviewing those, Dish continues to exercise de facto control, and that neither company--nor Dish as the de facto controller-- qualifies for the $3.3 billion.

They have already defaulted on the licenses they sought bidding credits for--they paid full price for others--so they won't owe the $3.3 billion, though they may be subject to default payments when the licenses are re-auctioned.