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T-Mobile: FCC Should Bar Dish, DEs From Re-Auction

T-Mobile has asked the FCC to prevent Dish and the Dish-backed designated entities (DEs) SNR and Northstar from bidding on the wireless licenses the FCC will have to re-auction and to get more upfront money.

The FCC concluded that Dish's funding of those entities constituted control and denied them $3.3 billion in bidding credits they sought for the licenses they won in the AWS-3 auction.

They decided to selectively default on licenses equal to the amount of credits they didn't get, but the FCC said they could still re-bid on those licenses in a new auction necessitated by the default—the FCC has had to re-auction defaulted licenses before.

Disallowing them from the re-auction is necessary, says T-Mobile, "to prevent Dish and the Dish DEs from further gaming the system, and to send a clear message that the behavior of Dish and the Dish DEs will not be tolerated in others."

In a filing with the FCC Monday, the wireless company said the FCC "should prohibit Dish and the Dish DEs from bidding in the future on AWS-3 licenses on which the Dish DEs 'selectively' defaulted and consider Dish and the Dish DEs 'former defaulters,' requiring them to provide a fifty percent greater upfront payment if they wish to participate in the upcoming incentive auction."

T-Mobile says if the FCC does allow Dish and the DEs to re-bid, they should be held to the same build-out schedule as those who have already won spectrum in the first auction, suggesting that the FCC needs to impose stronger penalties on selective defaults.

Dish had put up most of the money for the two to bid $10 billion on wireless spectrum licenses in the AWS-3 spectrum auction. The licenses were actually worth $13.3 billion, but SNR and Northstar sought DE credits in that amount as diverse owners.

The FCC denied that credit due to Dish's investment and its plans to run the network.

The FCC order concluded that Dish's majority financial interest in the companies are controlling interests that should be attributable to Dish, which means the companies are ineligible for the $1.9 billion (Northstar) and $1.4 billion (SNR Wireless) bidding credits they had applied for.

The order explained that the credits were denied because Dish had provided the two minority-owned companies the majority of their capital and had contracted to build out and run their wireless network, which the FCC concluded was a controlling interest that invalidated the small business.

Dish declined comment.