No Discounts. No Deal?

After the FCC’s meeting last week, reports have surfaced that Chairman Tom Wheeler has circulated an order recommending rejecting Dish Network’s use of the Designated Entity bidding discounts in the AWS-3 spectrum auction. By using two smaller companies that Dish had an 85% stake in, they were able to secure $3 billion in discounts. Dish claims they followed the rules, but Commissioners and other companies claim it was unfair. “In light of the strong Congressional criticism of Dish’s use of DEs, the FCC has a political motive to deny the discount,” Jonathan Chaplin at New Street Research explained. “As such, investors should not assume that the FCC’s action is solely driven by an assessment of the strength of its legal position against Dish. We doubt that Dish’s legal position and DE structuring was premised on the hope that the FCC would interpret an ambiguity in the law in its favor, as there have been a number of cases in which the FCC has offered its views on the indicia of control. We are certain the Dish lawyers relied heavily on those precedents in crafting the legal structure and doubt they were trying to create new law.”  Continue reading here.