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.