Dish's spectrum bill is a lot higher than it hoped. The Federal Communications Commission decided today that two small companies controlled by Dish are not eligible for the "very small business" discounts that they claimed during the last spectrum auction. Dish owns an 85 percent stake in the two small companies — SNR Wireless LicenseCo and Northstar Wireless — and used them to collectively claim $3.3 billion in discounts, reducing its check from $13.3 billion to around $10 billion. The commission, predictably, wasn't thrilled at this use of the small business discounts, and has been moving over the past few months to close the loopholes that allowed Dish to do this in the first place.
Dish says it will consider its options from here
With the discounts denied, Dish may now end up paying the $3.3 billion difference that the two companies owe. It could also try to challenge the order, but it isn't saying either way just yet. "We are respectfully disappointed that the commission voted today to deny the bidding credits," R. Stanton Dodge, general counsel for Dish, says in a statement. Dodge says that Dish will review the order and "consider our options going forward."
Small business discounts were originally established to give more opportunities to businesses owned by women and minorities. Rules have been in place to make sure that larger companies — like Dish — aren't using smaller companies to bid for them at a discount in auctions, but those rules evidently left some room open for abuse. In the wake of Dish claiming billions in discounts, the FCC moved to overhaul the rules and managed to push through new ones in June. The change basically allows the commission to decide on a case by case basis which company is really "running the show." Those rules won't apply to Dish because this auction occurred before the changed, so it's possible that the FCC still has a fight on its hands.