T-Mobile US claims Dish’s abuse of bidding process deserves punishment
You can officially count T-Mobile US as a fan of Dish Network not being allowed to participate in the planned re-auction of 1.7/2.1 GHz spectrum assets it returned to the Federal Communications Commission tied to bidding maleficence during the record-setting AWS-3 auction earlier this year.
In a letter filed with the FCC, T-Mobile US said that Dish and any of its entities should be forbidden from participating in the planned re-auctioning of spectrum licenses after the FCC found Dish had “abused the competitive bidding process.” In addition, T-Mobile US said Dish and its designated entity partners should be considered “former defaulters,” which would require them to provide a 50% greater upfront payment should they look to enter the 600 MHz incentive auction.
“Commission action is necessary to preserve the integrity of the auction process, 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,” T-Mobile US noted in its filing.
Dish drew significant scrutiny for its bidding practices in the AWS-3 auction, which saw the company’s DE bidding partners Northstar Wireless and SNR Wireless pick up $3 billion in bidding credits on their $13 billion in gross bids despite being fully backed by Dish. DE rules allow for a 15% credit for small businesses, which are those with annual gross revenue of less than $40 million for the preceding three years, and 25% for “very small business,” or those with less than $15 million in annual gross revenue. Dish Network has annual revenue nearing $14 billion.
Following an outcry from auction participants, the FCC eventually revoked the bidding credits as well as rewrote rules regarding DE participation in spectrum auctions. Dish last month agreed to return some of the spectrum licenses, valued at $3.5 billion, won by the DEs with the stipulation that if it ends up selling for less when re-auctioned, the Dish affiliates will be expected to pay the difference.
Dish had previously stated the financial uncertainty tied to the AWS-3 spectrum licenses could impact its participation plans for the 600 MHz spectrum auction.
“Obviously, to the extent that the FCC requires us to pay the discount in the last auction, then it would be a complicating factor for us in that auction,” explained Dish CEO Charlie Ergen.
The FCC is set to begin the complex 600 MHz incentive auction proceedings on March 29, and is expected to re-auction the AWS-3 licenses returned by Dish in the second half of next year.
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