The FCC approved the assignment of AWS-3 spectrum licenses to Verizon Wireless (NYSE: VZ), AT&T (NYSE: T) and T-Mobile US (NYSE:TMUS), along with several smaller bidders. However, the commission has yet to approve licenses won in the AWS-3 auction by two designated entities in which Dish Network (NASDAQ: DISH) has an 85 percent economic stake, Northstar Wireless and SNR Wireless. The FCC has also not yet approved licenses for several other bidders.
Overall, the FCC granted licenses to 11 of the 31 winning bidders. An FCC official said that the fact that only some of the winning bidders' licenses have been granted doesn't mean that the FCC staff has any substantive concerns about any of the 20 other bidders. The staff are simply still reviewing those bidders' applications.
It's unclear whether or when the remaining licenses will be assigned.
Northstar Wireless and SNR Wireless made $13.3 billion in gross provisional winning bids, but are seeking to pay only around $10 billion because they filed their applications as designated entities to get the FCC's 25 percent discount for designated entities and small businesses. That move has drawn strong opposition from Verizon, AT&T and T-Mobile, as well as lawmakers and Republican FCC Commissioner Ajit Pai. They claim Dish and its designated entity partners manipulated the rules of the auction and coordinated their bidding strategy.
Dish has repeatedly argued against that, and has said that it followed the FCC's rules. The FCC has said that no spectrum will be granted to entities that violated the auction rules.
In addition to AT&T, Verizon and T-Mobile, the FCC approved licenses to Central Texas Telephone Investments (owned by the board of Central Texas Telephone Cooperative), FTC Management Group (owned by the board of Farmers Telephone Cooperative), Gila River Telecommunications, Ligtel Communications (owned by Ligonier Telephone), Michigan Wireless (owned by Hilbert Communications), Nsight Spectrum (owned by Northeast Communications of Wisconsin and affiliated with the Rioardan family of Cellcom), Pioneer Telephone Cooperative and the Triangle Communication System.
The AWS-3 band comprises unpaired uplink spectrum in the 1695-1710 MHz band, blocks of paired uplink spectrum from 1755-1780 MHz, and blocks of paired downlink spectrum from 2155-2180 MHz bands. The auction raised a record total of $41.329 billion in net winning bids, with 31 winning bidders winning a total of 1,611 licenses.
The FCC has received full payment for the licenses it granted. The money will be used to fund federal spectrum relocation costs, the creation of the FirstNet nationwide broadband public safety network, and other uses.
"The designated entities owned by Dish and others were not included in last night's license issuance but that should not be a surprise as those more complex applications have not yet been sent out on public notice for the required 10-day comment period," wrote BTIG analyst Walter Piecyk. "We continue to expect the designated entity licenses to be issued without further complication, although admittedly this delay could be considered a complication while we await the FCC's next move."
Dish's designated entities bid $13.3 billion for 702 licenses, winning 25 MHz of total spectrum including 13 MHz of paired spectrum.
Following criticism of Dish's use of DEs in the AWS-3 auction, wireless carriers and others are urging the FCC to update and tighten its DE rules ahead of the 600 MHz incentive auction of TV broadcasters' spectrum, currently scheduled for next year.
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