In a letter made public Friday, the Communications Workers of America and the NAACP accused DISH Network of manipulating a federal program designed to help minority and small business owners.
The FCC’s small business designated entity program is designed to promote participation by small and minority-owned businesses in spectrum auctions, among other program. The designated entity program provides a 25 percent credit to very small businesses with revenues not exceeding $15 million for preceding three years.
The letter was addressed to Tom Wheeler, chairman of the Federal Communications Commission. CWA and NAACP allege that DISH was able to unfairly manipulate the credit program by incorporating two companies, Northstar Wireless and SNR Wireless. DISH used the credits on the FCC’s AWS-3 auction which was held back in February.
The letter continued:
It appears that DISH, a company with no wireless network or subscribers, created partnerships and loopholes in the FCC’s small business designated entity rules to claim $3.25 billion in bidding credits on 702 licenses. Dish won more licenses that any other bidder.
If approved by the FCC, DISH will pay a net of $10 billion for licenses worth $13.3 billion, a $3.25 billion loss to the U.S. treasury.
DISH however argues that its acted fairly within the rules of the program, arguing that the method it used were done in past auctions.
“We respectfully disagree with the criticism of the Designated Entity program, and we are confident that we fully complied with the DE rules in the AWS-3 auction, which were unanimously approved by the full Commission,” DISH detailed in a statement.
The DE program has been successful in providing much smaller entities the ability to access stronger capital structures, which has facilitated their meaningful participation in an auction process from which they would otherwise be precluded. Our approach — publicly disclosed ahead of the auction — was based on DE investment structures that have been approved by the FCC in past wireless spectrum auctions, including structures used by AT&T and Verizon.
This report, by Connor D. Wolf, was cross-posted by arrangement with the Daily Caller News Foundation.