(Via Ars Technica) Dish took advantage of discounts intended for small businesses to save $3.3 billion in an auction of public airwaves, making a “mockery” of the small business program, according to a member of the Federal Communications Commission.
Read full article at Ars Technica: Dish used ‘small business’ discount to save $3 billion at taxpayer expense
Quote from Ars Technica:
Dish used companies it owns in order to place $13.3 billion worth of winning bids in an auction of wireless airwaves that can be used for cellular networks. Results of the auction were announced last week. But Dish only has to pay $10 billion because it didn’t place the bids directly. FCC Commissioner Ajit Pai called upon FCC Chairman Tom Wheeler “to immediately launch an investigation into these multi-billion dollar subsidies.”
“Two companies in which Dish Network has an 85 percent ownership stake claimed over $3 billion in taxpayer-funded discounts when purchasing spectrum in the AWS-3 auction,” Pai said in his call for an investigation today. “Those discounts came through the FCC’s designed entity (DE) program, which is intended to make it easier for small businesses to purchase spectrum and compete with large corporations. Dish, however, has annual revenues of almost $14 billion, a market capitalization of over $32 billion, and over 14 million customers. Its participation makes a mockery of the DE program.”
Dish offered this response when contacted by Ars: “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. 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.”
(Illustration: SmallBusiness.com)