DISH Wireless DEs Denied by FCC

Although not a complete surprise, two DEs (designated entities) with controlling ties to DISH Wireless have been determined to be ineligible for the $3.3 billion of bidding credits for the AWS-3 auction. The purpose of the DE program is to provide an avenue for smaller and minority-owned businesses to gain better access to spectrum auctions, however, many within the industry have long pointed out the flaws within the program that could be taken advantage of as a result. The decision to prevent bidding credits to Northstar Wireless and SNR Wireless comes as the commission believes that DISH Wireless commands a “de facto control” over both of these entities and the incident has been playing out for years.

Back in 2015, the FCC denied the bidding credits but the ruling was appealed in the U.S. Court of Appeals only to be found two years later that the FCC must allow the DEs a path to rectify the situation. Unfortunately for DISH Wireless, it appears that the FCC has not held up its part of the bargain in this complex point of contention. As DISH’s Chairman Charlie Ergen stated, “For DISH, the decision is a setback for an emerging competitor and we are disappointed. The ruling hurts, in part, because we have enormous respect for the FCC commissioners and their public service…We are discouraged that the agency declined multiple meeting requests over the past two-and-half years so that Northstar and SNR’s applications could be further amended if for any reason they were found to imply de facto control. The refusal to be transparent about these requirements departed from decades of precedent governing how the FCC has treated other designated entity arrangements.” He continued, “Despite today’s decision, we are fully aligned with the FCC on the importance of 5G to grow the economy, promote competition, spur innovation, provide essential network security, and create jobs. This ruling will no doubt complicate our efforts, but it will not affect our resolve. We remain committed to building out the nation’s first open RAN cloud-native broadband network and restoring American leadership in telecommunications.” 

Concerns of this decision are felt beyond DISH Wireless with Doyon, the parent company which owns Northstar Wireless, is worried about the precedent this could set for future endeavors by DEs. “Denying bid credits is a blow to both present and future minority-owned business participation in the wireless sector – an express goal of the current Commission and Chairman Pai himself,” said Northstar’s VP of External Affairs Sarah Obed. “This is no way to provide certainty to any business, much less one in possession of a vital and in-demand resource such as wireless spectrum,” she added.

The FCC’s commissioner Ajit Pai had strong words to disagree with the way things were handled and stood by the idea that DISH Wireless and others were using the DE program in an abusive manner. Furthermore, according to Pai, DISH Wireless and Northstar were given “ample opportunity to resolve these deficiencies, (but) today we find that they have failed to do so. Indeed, the exercise has only reconfirmed that Northstar and SNR are not kings of their own destiny, but pawns. For example, even though the two entities are in significantly different positions in terms of their finances and spectrum portfolios, they curiously submitted to the Commission nearly identical revisions to their agreements with DISH Network. These agreements maintain DISH Network’s stranglehold over the two companies’ businesses and restrict the entities’ ability to raise capital, lease their spectrum, or enter into mergers or other corporate transactions.”

Other entities seem to agree with the FCC with many within the wireless industry holding strong opinions one way or the other in favor or opposing the way DEs are used under the current system. One of the notable opponents voicing support for the way the FCC handled the situation is VTel Wireless. Their CEO Michel Guité released a statement saying “In one bold stroke, the FCC has upheld the integrity of both its spectrum auction processes and its designated entity program…Today’s decision makes clear their work is about more than just raising auction revenue; it’s also about ensuring that auctions are transparent and fulfill the public interest in the broadest possible sense.”

While this decision may feel like a conclusion, many understand that the issue is far from being resolved between various parties that still aren’t seeing eye-to-eye. Analyst Blair Levin points out that this decision will allow DISH Wireless the opportunity for another day in court, a day that could yield America’s newest nationwide wireless company a more favorable ruling. “The market should understand that DISH and the DEs have a good chance of prevailing in court,” said Levin. Enjoying an incredible year filled with acquiring spectrum, adding to its list of vendors, and purchasing Boost Mobile all while laying the framework for an innovative nationwide 5G network, DISH Wireless will have to wait and see if it can increase its collection of spectrum even further.

Source: Fierce Wireless