US says Dish can’t use US$3.3 bil. in cred­its in air­waves auc­tion


The U.S.’ Fed­eral Com­mu­ni­ca­tions Com­mis­sion ( FCC) said Mon­day that Dish Net­work Corp. can’t ap­ply US$3.3 bil­lion in small-busi­ness cred­its to­ward the pur­chase of air­waves it gained in a gov­ern­ment auc­tion.

The gov­ern­ment sells spec­trum to car­ri­ers like AT&T and Ver­i­zon so they can add more ca­pac­ity for wire­less In­ter­net. Dish is a satel­lite TV com­pany that has stocked up on air­waves although it has no cell­phone busi­ness.

Dish has re­port­edly been in talks to ac­quire wire­less car­rier T-Mo­bile. But on an earn­ings call ear­lier this month, Dish Chair­man and CEO Char­lie Er­gen said that the prospect of los­ing the dis­count had caused dif­fi­cul­ties in the ne­go­ti­a­tions.

In the latest auc­tion that ended in Jan­uary, Dish won US$13.3 bil­lion worth of spec­trum through two small com­pa­nies it in­vested in. It paid US$10 bil­lion, with the small­busi­ness credit sav­ing it US$3.3 bil­lion.

The FCC said Mon­day the two com­pa­nies aren’t el­i­gi­ble for credit. Dish owns 85 per­cent of each com- pany, which it has called a non­con­trol­ling in­ter­est.

The FCC found that Dish, which is based in En­gle­wood, Colorado, does have a con­trol­ling in­ter­est in the com­pa­nies and de­nied them the credit.

That means they are on the hook for the rest of the money. They can also ap­peal, or not pay the US$3.3 bil­lion and in­stead pay a penalty.

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