CWA, NAACP Challenge DISH Network Abuse of FCC Small and Minority Owned Business Rules

CWA and the NAACP are challenging DISH Network's manipulation of the Federal Communications Commission's "small and minority-owned business rules" that enabled DISH to make $3.25 billion – at taxpayer expense – from the FCC's recent wireless spectrum auction.

In a letter to FCC Chairman Tom Wheeler, CWA President Larry Cohen and the NAACP's Hilary O. Shelton, Washington Bureau director and senior vice president for advocacy and policy, said the auction was clouded by DISH's tactics taking advantage of the small and minority-owned business rules and its bidding tactics. "We expect that the FCC will reject DISH's attempt to qualify as a small business eligible for $3.25 billion in taxpayer subsidies," they wrote.

Ironically, DISH has no wireless network or subscribers but came up the big winner in this auction. This outcome "raises fundamental questions about reserve set-asides and preferential programs" in the wireless spectrum auction. "We cannot afford another gamed auction, where the winning bidders use taxpayer subsidies and unfair advantages" to drive out companies with a proven track record of infrastructure investment that benefits U.S. consumers, they wrote.

DISH manipulated the FCC's small business rules by incorporating two companies – Northstar Wireless and SNR Wireless – while maintaining an 85 percent financial interest in both. This was clearly done to take advantage of the FCC's "small and minority-owned business" bidding credit. DISH then made a joint bidding deal with these companies and the three began triple bidding for the nearly 4,000 available licenses. When DISH dropped out of the bidding, one of the two entities won the bid but it was DISH that won overall, paying just $10 billion for licenses worth $13.3 billion.