Dish Network has been criticized for using two designated entities, which are essentially investment vehicles, to secure $3.33 billion in discounts in the FCC's just-completed AWS-3 spectrum auction. According to an investigation by the Wall Street Journal, while the investment structure for the entities is legal, it involves a complex web of investment partners, including a former FCC official.
Thanks to its $18.2 billion in new AWS-3 spectrum, AT&T Mobility has caught up to Verizon Wireless in spectrum ownership in major markets, according to analysts. "We estimate that AT&T and Verizon are in general parity in terms of paired low- and mid-band spectrum assets in the top 20 markets (~120 MHz), with AT&T spending $18 billion to Verizon's $10 billion," Jefferies analysts Mike McCormack, Scott Goldman and Tudor Mustata wrote in a research note.
As the dust settles on the now-completed AWS-3 spectrum auction, one FCC commissioner is blasting the discount that Dish Network's two designated bidding entities are to receive. FCC Commissioner Ajit Pai said the discount "makes a mockery" of discounts that are intended for small businesses.
Dish Network is spending around $10 billion to acquire a wide range of spectrum licenses in the FCC's now-completed AWS-3 spectrum auction. That spectrum, combined with the wide-ranging spectrum licenses that Dish already owns, will turn Charlie Ergen's company into a spectrum powerhouse. But it's still not clear what Ergen's Dish is going to do with all of its airwaves.
The FCC has revealed the identities of the winning bidders in the AWS-3 spectrum, and AT&T was the biggest bidder, with close to $18.2 billion in provisionally winning bids, roughly in line with analysts' expectations. Verizon Wireless wound up bidding $10.43 billion, less than many analysts had expected (most had expected Verizon to bid $15 billion to $20 billion).
Now that the AWS-3 spectrum auction is officially concluded, with nearly $44.9 billion in provisional winning bids, speculation is beginning in earnest over how much wireless carriers bid for the airwaves--and what will come next.
The FCC said bidding in the AWS-3 spectrum auction, known as auction 97, is now closed after 341 rounds of bidding. Total provisional winning bids came in at a record $44.899 billion. That's far more money than the FCC raised in its previous spectrum auctions.
The FCC said it has closed bidding on paired spectrum in the AWS-3 spectrum auction, the clearest sign yet that bidding is drawing to a close.
AT&T's disclosure that it entered into credit agreements worth more than $11 billion has prompted some financial analysts to think that the company may wind up buying more airwaves at the AWS-3 spectrum auction than Verizon Wireless, spending anywhere from $20 billion to $22 billion at the auction.
The FCC's AWS-3 spectrum auction is nearing the bitter end, with total provisional winning bids topping $44.68 billion and unlikely to go much higher. Now, attention is turning to what will happen once the auction officially closes--and how carriers will come up with the money to cover their bids.