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FCC's Pai Takes Aim at Dish's AWS-3 Bidding

Federal Commuications Commission commissioner Ajit Pai said Dish's use of designated-entity (DE) rules makes a "mockery" of the just-completed AWS-3 spectrum auctions. He called on FCC chairman Tom Wheeler to investigate what he calls the DE rule-driven multi-billion dollar subsidies to Dish.

Dish was the second largest bidder with over $10 billion in licenses, including over $3 billion through co-investments with smaller businesses. Dish actually bid about $13.3 billion, but it drops to $10.4 billion with the 25% designated entity discount.

"Those discounts came through the FCC's designed entity program, which is intended to make it easier for small businesses to purchase spectrum and compete with large corporations," said Pai. "Dish, however, has annual revenues of almost $14 billion, a market capitalization of over $32 billion, and over 14 million customers. Its participation makes a mockery of the DE program."

Pai says that Dish's 85% ownership stake in those bidding ventures makes a mockery of the designated entry rules.

The FCC loosened those rules last year to make it easier for small businesses to bid by allowing them to lease the licenses to larger carriers and still get the bidding credits, but Pai dissented saying that it would invite auction end-runs by big business.

The chairman's office had no comment at press time about Pai's complaint. Dish spokespeople were not available for comment at press time.