FCC denies $3.3B subsidy claim of Dish Network

By MoneyTimes

Aug 19, 2015 08:28 AM EDT

The Federal Communications Commission announced Monday that Dish Network Corp. can't avail the $3.3 billion credit to acquire the airwaves it gained through a government auction.

The government sells spectrum to giant communications companies like AT&T and Verizon to add more wireless internet capacity. Although it is not in the cellphone business, Dish is a satellite TV company that has massive airwaves capabilities.

Dish Network Corp. is in the process of acquiring wireless carrier T-Mobile, but the possibility of losing the discount has made negotiations more difficult, said Dish CEO Charlie Ergen.

Dish recently won a $13.3 billion worth of spectrum in the recent auction in January. This satellite big TV Company invested in two small companies called Northstar and SNR, which helped it get the spectrum. Dish only paid $10 billion through the small-business credit, along the company to save $3.3 billion.

However, FCC announced Monday that the companies where Dish invested in are not eligible for the credit. Dish owns about 85 percent of each of the two companies. The FCC found that Dish doesn't have controlling interest over the companies it invested in, which is why it is denied the credit. This means they have to pay the whole amount. They have the option to appeal for the $3.3 billion or not pay for it and just pay the penalty instead.

Dish general Counsel R. Stanton Dodge said in a statement Monday that their company is disappointed; especially that it had abide by the requirements set by the FCC. The satellite TV Company will now consider its options. Dish Network Corp. is even considering sale or leasing of the said assets.

The FCC makes sure it prevents abuse of the DE program by creating concrete requirements for licenses in line with the spectrum. However, there are many license holders that have met these rules, even without being a commercial wireless service.

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