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NAACP, CWA Challenge Dish/AWS-3 Bidders

Over a half dozen petitions, including a joint filing by the NAACP and Communications Workers of America, have been filed asking the FCC to reject the winning AWS-3 spectrum auction bids of Northstar and SNR Wireless, the two designated entities (DEs) that bid mostly with money supplied by Dish, which has a major ownership stake (85%) in both.

The petitions' allegations vary, but at its root is the argument that the smaller companies fronted for/colluded with Dish, which, if the FCC grants the 25% bidding credits DEs qualify for, would only have to pony up $10 billion for $13.3 billion in licenses.

NAACP and CWA, which represents about 700,000 communications workers, said that while they applaud the DE program and the overall success of the AWS-3 auction, the financial ties between Dish and the companies means they do not qualify as DEs and giving them a $3.3 billion discount would be unjust enrichment and violates FCC rules.

Also among the petitioners was the National Action Network.

AT&T, the top bidder in the AWS-3 auction, has been critical of the bids, but did not petition to deny the deal, having signaled it was looking for changes to the rules going forward.

For its part, Northstar said the petitions are meritless and the Alaska-based company said it was preparing to become "the largest minority-controlled and largest Native American-controlled provider of wireless services in the United States."

"Northstar Wireless believes that each of the petitions is without merit, and its response will thoroughly demonstrate that Northstar Wireless's application, structure, and conduct during the auction fully comply with the FCC's longstanding Designated Entity rules and precedent," the company said.

Dish has also said the bidding was within the FCC's rules.

The commission has not yet decided whether to grant the DE status and FCC chairman Tom Wheeler has signaled the commission will adjust its rules going forward to make sure that they cannot be gamed by "slick lawyers"—he did not aim that comment at any particular bids or lawyers, or at least not explicitly, though in context—a Hill hearing where the issue was raised—the target was clear.

Dish had no comment, but has weighed in on the issue.

“We support the FCC’s efforts to perform a thorough, substantive and fair review of all long-form license applications,” Dish said recently. 

“We are confident that we fully complied with all legal requirements for the AWS-3 auction, including antitrust law and the DE rules, which were unanimously approved by the full Commission.  Our approach — which was fully and publicly disclosed ahead of the auction — was based on DE investment structures that have been approved by the FCC in past wireless spectrum auctions, including structures used by many other auction participants in the past.  Participation by small businesses through the DE program helped make the AWS-3 auction, on a gross and net basis, the most successful spectrum auction in FCC history."

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.