Wireless carriers will have another shot at obtaining licenses in the AWS-3 band now that two Dish Network affiliates have opted not to purchase some of the AWS-3 licenses awarded to them earlier this year. The Dish affiliates, SNR Wireless and Northstar Wireless, participated in the auction as small businesses – a status that enables companies to bid more than they are obligated to pay. But the FCC subsequently determined that SNR and Northstar were not eligible small businesses and therefore were obligated to pay $3.3 billion more than they would have paid as small businesses.
In filings made with the FCC yesterday, SNR and Northstar said they would accept most of the licenses awarded to them but that they wanted the FCC to retain a portion of the licenses to minimize the amount that would have to be paid to the FCC.
A senior FCC official told Telecompetitor today that the licenses to be retained by the FCC would be re-auctioned but declined to provide a timeline, noting only that it would be after the 600 MHz auction that is on tap for next year. SNR’s and Northstar’s winning bids for the spectrum totaled $3.4 billion – approximately the same value as the bidding credits for which the companies were deemed ineligible.
Dish AWS-3 Licenses
The filings made by SNR and Northstar with the FCC detail the licenses that the FCC will retain, which include major metro markets such as New York and Chicago as well as many smaller markets. In a press release Dish offers a summary:
- Northstar Wireless is expected to be granted licenses with aggregate gross winning bids of $5.62 billion covering approximately 3.7 billion MHz-POPs. The licenses retained by the FCC have aggregate gross winning bids of $.2.2 billion and cover approximately 690 million MHz-POPs. Northstar Wireless is expected to maintain 84% of the original MHZ-POPs.
- SNR Wireless is expected to be granted licenses with aggregate gross winning bids of $4.27 billion, covering approximately 2.9 billion MHz-POPs. The licenses retained by the FCC have aggregate gross winning bids of $1.2 billion and cover approximately 629 million MHz-POPs. SNR Wireless is expected to maintain 82% of the original MHz-POPs.
Northstar and SNR are considered to have partially defaulted on their license payments and accordingly have paid a penalty. Additionally, as the FCC explains in letters to the companies, the companies will “remain responsible for their default obligations to the Commission.” The letters go on to note that “Until a license for the relevant spectrum is won in a subsequent auction, the Commission cannot determine the full amount of the default payment that is owed. Therefore, pursuant to Commission practice, we will assess an interim default payment toward the default payment ultimately owed. . . Once a subsequent winning bid for the relevant spectrum is established, the remaining amount owed . . . if any, will be assessed.”
