US DTH provider Dish Network has refuted arguments that it should pay higher fees to take part in the upcoming 600 MHz spectrum auction. It has told the FCC that AT&T and T-Mobile US are seeking to limit access to broadband spectrum “critical for wireless market entry”.
US DTH provider Dish Network (NASDAQ:DISH) has refuted arguments that it should pay higher fees to take part in the upcoming 600 MHz spectrum auction. It has told the FCC that AT&T (NYSE:T) and T-Mobile US (NYSE:TMUS) are seeking to limit participation.
Last week, AT&T and T-Mobile submitted their own filings with the FCC, asking it to issue a declaratory ruling stating that Dish, of which Charlie Ergen (pictured) is chairman and CEO, and two of its designated entities (DEs) have defaulted on past payments, so should pay more to to participate in the upcoming auction. Dish controversially won spectrum in last year’s AWS-3 auction via two DEs, Northstar Wireless and SNR Wireless.
After the commission found they did not qualify for small business discounts because of their ties to the satellite broadcaster, the DEs surrendered US$3.5bn of the US$13.3bn worth of spectrum licences. Dish, for its part, was directed to pay a US$515m penalty fee and the FCC plans to re-auction the relinquished licences.
In its filing, Dish contended that the wireless operators have provided no basis to treat it and the DEs as former defaulters, saying “AT&T’s filing, like that of T-Mobile, is nothing more than a transparent effort by an established wireless operator to create obstacles to limit participation in the upcoming auction for broadband spectrum that is critical for new wireless market entry”.
Dish argued that the commission and Wireless Telecommunications Bureau have already addressed and rejected such allegations in previous decisions.
The company said that under commission rules, it may issue declaratory rulings to eliminate “controversy” or “uncertainty”, adding that neither is present in this case.
Dish continued that the parties cannot be considered former defaulters under either the commission’s Auction 97 or recently revised auction rules because the affiliates made all default payments to the FCC within the required timeframe.
Last November, T-Mobile called upon the FCC to bar Dish and its DEs from bidding in any re-auction of the surrendered spectrum. The wireless operator also argued that the pay-TV provider should have to make a 50% greater upfront payment to take part in the 600 MHz auction since the FCC had found it and its affiliates had “abused” the competitive bidding process.
The Dish scenario prompted the FCC to review bidding procedures ahead of the 600 MHz spectrum auction, set to begin in March. In mid-July 2015, the commission voted to introduce the first ever cap on small business credits at spectrum auctions and prohibit joint bidding and multiple applications by parties with common controlling interests.
Wells Fargo analyst Marci Ryvicker said in a recent note that she expects widespread participation from broadcasters in the reverse part of the auction, which will see them sell spectrum to the FCC. However, she is less certain about the forward part, which will see wireless operators bid for the airwaves, as they have “waivered in their commitment to this massive event”.
Her team predicts that some 60 MHz of spectrum will be sold in the auction at about US$1.75 megahertz per population (MHz Pop), raising about US$30bn in total proceeds.
