Pai Hammers Dish Some More Over AWS-3 Bids

Republican FCC commissioner Ajit Pai Monday continued his attacks on Dish for its 85% investment in two bidders who got designated entity status in the AWS-3 auction and applied for the DE discount, which would save them -- and Dish -- some $3 billion.

The FCC has not yet decided whether or not to grant that discount.

In a press release posted on the "Headlines" section of the FCC Web site, Pai said the newest "evidence" of Dish's abuse of the auction process continued to mount with disclosures that it had lent over $8 billion and taken over $1 billion in equity in the two companies, which would just about cover the $10 billion (with credits) they bid on spectrum in the auction.

He also provided examples of what he suggested were five legitimate small business DE's outbid by the Dish-backed entities.

"In every one of these cases, the Dish entities outbid small businesses that claimed either no discounts or a lower discount than those sought by Dish," said Pai.

Pai has slammed the Dish/De relationship as anticompetitive arbitrage and corporate welfare.

"We respectfully disagree with the criticism of the Designated Entity program," said Dish in a statement, "and we are confident that we fully complied with the DE rules in the AWS-3 auction, which were unanimously approved by the full Commission.

"The DE program has been successful in providing much smaller entities the ability to access stronger capital structures, which has facilitated their meaningful participation in an auction process from which they would otherwise be precluded.  Our approach — 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 AT&T and Verizon."

FCC chairman Tom Wheeler has said that the FCC is carefully vetting the discount petitions with an eye toward concerns about gaming the system.

Some critics of the Dish bid, not all of whom argue it violated the letter of the rules, want the FCC to review and tighten the DE portion in advance of the incentive auction.

John Eggerton

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.