Dish Partners Relinquish Billions In Spectrum Licenses

Satellite service provider Dish Network has been involved in a struggle with the Federal Communications Commission over the network's handling of airway licenses. Today, two of Dish's affiliates surrendered licenses to the wireless spectrum valued at $3.5 billion. These affiliates were hoping for the approval of discounts that would significantly decrease the amount Dish would have to pay to hold those licenses.

Dish won several billions more worth of licenses by participating in an auction held by the FCC. Of that, only $9.8 billion in licenses will remain in their possession. Though Dish was the largest presence at the auction, claiming half of all licenses on sale, AT&T and Verizon were both in attendance. Dish was expecting a 25% discount on their purchase of $13.3 billion. The bid was not bought directly from Dish but was instead a joint effort by Northstar Wireless and SNR Wireless. The FCC did not approve the 25% small-business discount, however, because they determined that Dish was directly managing both corporations. The two affiliates disagree with the FCC on their ineligibility and intend to sue in a U.S. Court of Appeals. It is possible they will receive the licenses for which the small-business discount was denied. Even with control over the seemingly substantial amount of spectrum, Dish may be in need of more. As previously reported, Dish, as well as other major networks, may be interested in pursuing a presence in the wireless network market as a carrier.

Dish's past actions are strongly suggestive of these plans. In 2013, the nation's fourth-largest wireless carrier Sprint was up for auction and Dish placed a bid. Sprint ended up going to someone else and Dish failed to acquire a carrier, eliminating hopes of a speedy ticket into the world of wireless. Dish instead acquired sections of the wireless spectrum needed for a carrier to operate, though even before today's surrender Dish had already defaulted on approximately 200 of those licenses. The FCC imposed a fine of $500 million as a result. These events have made it likelier that Dish will lease or sell the wireless access they have instead of directly selling service to customers. The licenses Dish gave up will be re-auctioned in March. Dish will pay if the final bid is less than their original $3.5 billion.

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