February 4th, 2015
It has been reported this week that DISH Network has been making massive overtures to large chunk of wireless spectrumÂ recently set to auction by the US government. Wireless spectrum, the signals mass media companies use to get their products to consumers (there’s only so much), is one of the gateways to businesses like ISPs and Dish use to get to web markets.
The Wall Street Journal reported this week, “The road to satellite TV giantÂ Dish NetworkÂ Corp. â€™s coup to win a large chunk of wireless licensesâ€”with the aid of a $3.3 billion discount aimed at small businessesâ€”started in Texas and wound through Alaska.Texas investor, lawyer, fantasy-fiction author and former jailhouse teacher Stephen Hillard was a key member of an eclectic investment team that backed Dishâ€™s successful bids for many of the licenses sold at government auction last week, putting to use decades of ties he had built to Alaskan Native American groups. The arrangements Mr. Hillardâ€™s firm, Council Tree, helped put together allowed Dish to qualify for a 25% discount that is meant to bring small players into the wireless industry. Critics say Dishâ€™s use of the incentive plan has only given a big company another avenue to control a scarce public resourceâ€”radio waves.
Ajit Pai, a Republican commissioner of the Federal Communications Commission, said this week that Dishâ€™s bid â€œmakes a mockeryâ€ of the small-business discount and asked the agencyâ€™s chairman to launch an investigation. An FCC spokesman said the agency â€œtakes seriously its obligation to provide bidding credits only to those entities that are eligible to receive them,â€ and that it was normal procedure to thoroughly review the arrangements to ensure compliance with rules.Dish Chairman Charlie Ergen is venturing into the wireless business in search of growth as the companyâ€™s core pay-TV business stagnates. He had already acquired a large stash of frequencies before the recent auction.
The question of course is how the move to get spectrum affects the market as a whole, since other conglomerates and mergers will no doubt be keeping an eye on the DISH moves, as it affects the web spectrum available to everyone.
As one of the more innovative and disruptive mass media corporations in the US, and the globe, Dish certainly sets trends and has in the past.
Dish, which generated $13.9 billion in revenue in its most recent fiscal year, owns an 85% financial interest in each bidding vehicle. The entities registered for the 25% small-business discount because Dish technically doesnâ€™t control them and because they reported less than $15 million in revenue annually. Doyon has a controlling interest in Northstar.
According to a former FCC official, the bidding entities have to show regulators that a small business is actually exercising control, by providing management and making hiring and firing decisions.
FCC rules bar companies involved in the auction from speaking about it until Feb. 13.
Categories: DISH & TV news