wireless lanThe FCC is set to reject $3.3 billion in auction credits granted to small companies owned, in part, by Dish Network in the recent AWS-3 auction, the Wall Street Journal reports. The two companies – SNR Wireless and Northstar Wireless – would not be able to simply walk away from their commitment to purchase the spectrum licenses, valued at $13.3 billion in total, but Dish previously said it could take over the spectrum entirely if necessary, WSJ says.

Dish Partner Spectrum Bidding Credits
The FCC reportedly is arguing that SNR and Northstar violated the spirit of the system that lets small businesses bid more than they are actually committed to spending. The goal is to enable small companies to secure spectrum in a market increasingly dominated by just a few companies. Perhaps it is not a coincidence that news about Dish came to light the same day that the FCC voted to change the rules for small business bidding credits for the upcoming 600 MHz auction.

According to the WSJ, Dish and its affiliates coordinated their bidding strategies – an allegation others also have made. It is widely believed that as a result of Dish’s actions, AWS-3 spectrum prices were driven unusually high. Dish was one of the biggest winners in the auction, which generated spectrum sales of $45 billion – at least twice as much as expected. The WSJ speculates that Dish may have wanted to drive prices higher to increase the value of spectrum for which it previously had won licenses.

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Dish hasn’t commented on the FCC’s alleged rejection plans. But assuming the FCC moves ahead as expected, the company could opt to sue the commission.

Dish doesn’t currently operate a wireless network and some have argued that the company is unlikely to build its own network but instead will either sell its spectrum or work with another carrier on a build-out. In the past the company has talked about plans for a fixed wireless network that would provide broadband to areas that lack a high-speed landline broadband option.

The company also has partnered with several wireless carriers on fixed wireless trials.

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