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'Well-Lit Path' Ignored

DC Circuit Again Upholds Denial of AWS-3 Bidding Credits

The FCC gave Dish Network and designated entities SNR Wireless and Northstar Wireless an opportunity to cure control issues in the AWS-3 auction and fair notice of the legal standards it would apply in looking at their claims to be very small companies, said a U.S. Court of Appeals for the D.C. Circuit panel Tuesday, again rejecting challenges by the petitioners of the auction outcome. Oral argument was in January (see 2201140032). The D.C. Circuit in 2017 upheld the FCC's withholding of auction bidding credits to the DEs based on too-close ties to Dish (see 1708290012).

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Judges Patricia Millett and Harry Edwards, in a 51-page opinion (docket 18-1209) penned by Millett, said the agency -- contrary to DE arguments -- was under no obligation to negotiate with them on details of securing their de facto independence from Dish. "The Companies enjoyed a well-lit path to a cure," the court said, citing an FCC opinion, guidance from the appellate court via the 2017 decision and interactions with agency staff before the FCC accepted their initial long-form applications. "Our remand order required only that the Companies be allowed the opportunity for a cure, not that Commission staff prescribe the cure," it said. The court said it also agreed with the FCC that Dish retained and even expanded its power over business decisions on development and use of the wireless spectrum they bought.

Dish and the DEs amended some terms of their 2018 agreement, but "DISH’s right hand took away what the left hand gave" with new veto powers over the DEs ability to lease the spectrum, the court said. It said the DEs argued it was natural for them to amend their agreements with Dish, such as on their ability to borrow from it to finance network construction, but that argument ignores their "acquiescence" in identical numerical amendments such as converting most debt into equity.

The court said Ketanji Brown Jackson was a member of the panel when the case was argued but didn't participate in the decision.

New Street Research's Blair Levin said the appeals process is "all but done" since an appeal of the latest D.C. Circuit decision seems unlikely to go anywhere and the agency can soon auction the licensees returned when it challenged the Dish/DEs relationship. He said Dish would have to pay for any shortfall from a re-auction, but spectrum values and the license locations seem to indicate there won't be a shortfall. Dish always has the option of bidding on the licenses in a new auction, he said.

Dish emailed it's looking at its legal options. "Throughout this seven-year process, we believe that DISH, SNR and Northstar have been treated differently than other strategic partners and DEs that participated in the same AWS-3 auction, as well as previous auctions, and that the FCC failed to provide fair notice of its decision-making," it said. "Ultimately, wireless competition has suffered as a result."