Dish Network’s lawyers had a tough day last Friday, according to financial analysts at New Street Research.
“In this case, it appeared that the judges favored the FCC arguments,” they wrote in a note to investors issued shortly after Dish’s attorneys appeared before the U.S. District Court of Columbia Circuit.
That’s about $ 515 million in fines and 197 AWS-3 spectrum licenses worth about $ 3.3 billion. Dish argues that it should not pay the fine and that it should be able to get the frequency licenses. The FCC disagrees. And the debate between the two has flourished across different courtrooms over the past eight years.
In 2022, however, the issue may be settled once and for all. And according to New Street Research analysts, it looks like Dish may be the loser.
“Oral arguments are not always good predictors of outcome, as not all judges ask questions and sometimes judges ask questions to test their own views rather than reveal their views. Still, the oral argumentation is the best data we have for how the judges are thinking, “they wrote about the legal debate between FCC attorneys and Dish attorneys Friday in the appellate court.
“We believe the judges can judge both ways, but based on the arguments, we believe the judges are inclined and have an easier way of judging for the FCC,” the analysts concluded. They said the DC judges can reach a decision in the case over the next few months and that further appeals are unlikely to succeed.
From AWS-2 to 12GHz
The long-running legal battle between the FCC and Dish is centered around two bidding entities called Northstar Wireless and SNR Wireless, which bought $ 13.3 billion worth of AWS-3 spectrum at the FCC auction, which ended in 2015. SNR and Northstar qualified originally referred to as “designated entities,” or DEs, which entitled them to a 25% discount for small businesses.
After the auction ended, the FCC decided that the two DEs should not receive that discount because they were financially too close to Dish. As a result of the FCC’s decision, Dish paid a $ 515 million fine and issued AWS-3 spectrum licenses worth about $ 3.3 billion. But the company has been working to get that money and spectrum back across years of legal anchor.
Dish’s broader 5G ambitions will not be hampered if it eventually loses its legal battle against the FCC. The company’s current 5G network deployment plans span a wide range of other spectrum bands and licenses that do not hang under a legal cloud.
However, a win by the FCC against Dish over the AWS-3 spectrum could ultimately benefit AT&T and Verizon. This is because the two companies have essentially borrowed access to some of the 197 AWS-3 licenses covered in the legal battle between Dish and the FCC. Companies gained temporary access to these licenses due to the FCC’s efforts to provide additional network capacity to wireless network operators at the start of the COVID-19 pandemic. If the FCC emerges victorious from the AWS-3 issue, will it likely re-auction these licenses ?? paves the way for AT&T, Verizon and others to win them.
It is also worth noting that Dish has pursued a number of other spectrum options in addition to the controversial AWS-3 licenses. Primarily among these options is the 12GHz band, where Dish has a significant amount of spectrum for its satellite TV operations. The company has urged the FCC to write new rules that will allow 5G operation in the 12GHz band along with satellite operations.
In an filing for the FCC this week, Dish wrote that the 12GHz band should be “released from the outdated restrictions” so that it can be used for 5G. Doing so, the company said, would help “promote and cement the 5G revolution and US 5G leadership.”
Separately, Dish is expected to be a big winner in the FCC’s latest auction over the spectrum between 3.45 GHz and 3.55 GHz. The results of this auction are expected to be announced in days.
?? Mike Dano, Editor-in-Chief, 5G & Mobile Strategies, Light Reading | @mikeddano