Dish Comes Under More Pressure Over Spectrum Auction -- Update

By Ryan Knutson 

Sen. John Thune (R., S.D.) is piling more pressure on Dish Network Corp. for its tactics in a recent record-setting auction of wireless airwaves.

Sen. Thune, who is chairman of the Senate Committee on Commerce, Science and Transportation, sent letters Wednesday to Dish, its small-entity partners in the auction and the Federal Communications Commission requesting internal documents and emails. Sen. Thune said the committee is examining whether Dish's tactics were lawful and whether the FCC exercised proper oversight.

At issue is Dish's coordination with a pair of small entities that together won $13.3 billion worth of bids--second only to AT&T's $18.2 billion--while qualifying for $3.3 billion in discounts aimed at small businesses.

Dish has said it complied with the law and followed industry precedent in the auction, which drew $45 billion in bids. On Wednesday, it said it looks forward to working with Sen. Thune on his review. The FCC declined to comment.

Rivals Verizon Communications Inc. and AT&T have complained that Dish's tactics distorted the auction's outcome. Dish didn't win any licenses itself. Instead, the satellite-TV provider bankrolled entities called SNR Wireless and Northstar Wireless that worked together with Dish to place the winning bids.

Other participants were unable to see the identities of those placing the bids, and Verizon and AT&T have said that Dish, SNR and Northstar created the false impression there was more demand than their actually was.

The Wall Street Journal reported Monday that FCC officials were giving SNR's and Northstar's applications extra scrutiny and that the bidding credits might be denied. On Wednesday, the FCC opened Northstar's and SNR's applications for public review.

Parties have 10 days to petition the FCC to deny the companies' applications. If that happens, the companies may be forced to pay the extra $3.3 billion or risk losing the licenses. Dish has also said in filings with the FCC that it could take over the spectrum in that case.

The companies and the FCC must respond to the request by May 15.

Write to Ryan Knutson at [e-mail]

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