FCC Likely Referring Dish DE AWS-3 Spectrums Buys to Enforcement Bureau, Wells Fargo Says
The FCC likely hasn't rejected outright long-form applications of Northstar Wireless and SNR Wireless, the designated entities that Dish Network used to indirectly buy, using bidding credits, the second-most AWS-3 spectrum of any player in the auction (see 1507160054), Wells…
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Fargo emailed investors Friday. Various news outlets reported Thursday the licenses are rejected under the order circulated by FCC Chairman Tom Wheeler. Industry officials told us that the order appears instead to refer questions about possible collusion to the Enforcement Bureau for further investigation. “We checked with our contacts” and “this order could just be a referral to the FCC's Enforcement Bureau to investigate unlawful collusive bidding,” Wells Fargo said. “Clearly this wouldn't be a positive either, but our point is no one knows what this document actually says.” Lawyers with ties to the DEs told us they have not been briefed on the FCC order. In comments on the competitive bidding rules approved by the agency Thursday, Commissioner Mignon Clyburn referred only to the “alleged activity that people have criticized in the AWS-3 auction.” The last thing either Dish or the FCC likely wants is another auction, said one lawyer who has represented a number of DEs. The most likely scenario would be the FCC coming up with a circumstance for granting the licenses, and Dish making up the financial difference and then trying to figure a path out of its DE arrangement. Another option before the FCC is to designate the matter for a hearing -- the same step that led to the implosion of Comcast's planned buy of Time Warner Cable -- the attorney said. In that scenario, Dish might then try to go through the hearing and make its case, arguing that its DE arrangement was similar to others the FCC has approved. “There’s some truth to that,” the attorney said. “If the FCC determined there was collusive bidding Verizon might have a strong case to sue the FCC to invalidate the entire AWS-3 auction and re-auction all the licenses,” BTIG analyst Walter Piecyk told us Friday.