Verizon: Dish Coordinated Bidding In Spectrum Auction Went Too Far -- Update
Today : Monday 27 April 2015
By Ryan Knutson
Verizon Communications Inc. says rival Dish Network Corp.'s coordinated bidding with two affiliated entities in an Federal Communications Commission spectrum auction went too far and may have violated the agency's rules.
The complaint, voiced in a filing with the commission late Friday, adds a new wrinkle to the debate over Dish's aggressive strategy in the record auction that drew $45 billion worth of bids and closed in January.
Rivals have already complained that Dish distorted the results and unfairly claimed $3.3 billion in discounts set aside for small businesses. Now, Verizon is alleging that the company's complex bidding strategy may have violated antitrust rules.
Dish has said it followed the FCC's rules and that the auction was fair. Some analysts have said in the end that Dish's entities submitted winning bids that rivals could have topped had they chosen to and that the auction's record $45 billion in bids accurately reflected demand for spectrum amid a surge in wireless Internet use.
"We are confident that we fully complied with all legal requirements," a Dish spokesman said, "including antitrust law."
Dish entities won $13.3 billion in bids at the auction, behind AT&T Inc.'s $18.2 billion but ahead of Verizon's $10 billion. Verizon, the country's largest wireless carrier, said the bidding got out hand and that it will rely on new technologies to reduce the need for additional spectrum in its network.
Dish's surprising performance has drawn the ire of wireless carriers and scrutiny from lawmakers and some FCC commissioners. Dish didn't technically win any of the spectrum licenses, but worked with two small companies that it backed financially and in which it owned 85%. Those entities were eligible for a 25% discount aimed at small businesses, allowing Dish and its partners to save the $3.3 billion.
Dish disclosed ahead of the auction that it would coordinate its activities with the two entities--called Northstar Wireless and SNR Wireless--which is allowed under FCC rules. But the rules also say that disclosure of bidding agreements "will not insulate a party from enforcement of antitrust laws."
In a meeting with the FCC Wednesday, Verizon told agency officials that Dish and its partners suppressed competition, divided markets and coordinated in ways that reduced their overall bill, based on a Verizon analysis of auction data.
During the auction, the identities of the participants were anonymous. Dish, SNR and Northstar placed coordinated bids that gave other participants a false impression there was more competition than there actually was, Verizon said in an FCC filing that described its meeting with the agency.
Dish, SNR and Northstar all participated in the auction, but only SNR and Northstar won licenses, and only SNR and Northstar were eligible for the small business discounts.
In 190 instances where both SNR and Northstar submitted identical winning bids, the company accepted the outcome of the FCC's random choice of a winner, Verizon said. That only happened five other times throughout the auction for all other bidders, suggesting the Dish entities had planned to coordinate and allocate licenses between them, Verizon said.
SNR and Northstar's combined spectrum winnings allowed them together to cover the entire U.S., even though there were broad areas where each didn't win any licenses. "This result is virtually impossible to explain in the absence of coordination and collusion," Verizon said.
The FCC is still reviewing SNR and Northstar's applications for the licenses they won. Earlier this month, the agency approved the applications for Verizon, AT&T and T-Mobile.
Both Verizon and AT&T complained to the FCC earlier this year that Dish's tactics in the auction distorted prices.
Today : Monday 27 April 2015
By Ryan Knutson
Verizon Communications Inc. says rival Dish Network Corp.'s coordinated bidding with two affiliated entities in an Federal Communications Commission spectrum auction went too far and may have violated the agency's rules.
The complaint, voiced in a filing with the commission late Friday, adds a new wrinkle to the debate over Dish's aggressive strategy in the record auction that drew $45 billion worth of bids and closed in January.
Rivals have already complained that Dish distorted the results and unfairly claimed $3.3 billion in discounts set aside for small businesses. Now, Verizon is alleging that the company's complex bidding strategy may have violated antitrust rules.
Dish has said it followed the FCC's rules and that the auction was fair. Some analysts have said in the end that Dish's entities submitted winning bids that rivals could have topped had they chosen to and that the auction's record $45 billion in bids accurately reflected demand for spectrum amid a surge in wireless Internet use.
"We are confident that we fully complied with all legal requirements," a Dish spokesman said, "including antitrust law."
Dish entities won $13.3 billion in bids at the auction, behind AT&T Inc.'s $18.2 billion but ahead of Verizon's $10 billion. Verizon, the country's largest wireless carrier, said the bidding got out hand and that it will rely on new technologies to reduce the need for additional spectrum in its network.
Dish's surprising performance has drawn the ire of wireless carriers and scrutiny from lawmakers and some FCC commissioners. Dish didn't technically win any of the spectrum licenses, but worked with two small companies that it backed financially and in which it owned 85%. Those entities were eligible for a 25% discount aimed at small businesses, allowing Dish and its partners to save the $3.3 billion.
Dish disclosed ahead of the auction that it would coordinate its activities with the two entities--called Northstar Wireless and SNR Wireless--which is allowed under FCC rules. But the rules also say that disclosure of bidding agreements "will not insulate a party from enforcement of antitrust laws."
In a meeting with the FCC Wednesday, Verizon told agency officials that Dish and its partners suppressed competition, divided markets and coordinated in ways that reduced their overall bill, based on a Verizon analysis of auction data.
During the auction, the identities of the participants were anonymous. Dish, SNR and Northstar placed coordinated bids that gave other participants a false impression there was more competition than there actually was, Verizon said in an FCC filing that described its meeting with the agency.
Dish, SNR and Northstar all participated in the auction, but only SNR and Northstar won licenses, and only SNR and Northstar were eligible for the small business discounts.
In 190 instances where both SNR and Northstar submitted identical winning bids, the company accepted the outcome of the FCC's random choice of a winner, Verizon said. That only happened five other times throughout the auction for all other bidders, suggesting the Dish entities had planned to coordinate and allocate licenses between them, Verizon said.
SNR and Northstar's combined spectrum winnings allowed them together to cover the entire U.S., even though there were broad areas where each didn't win any licenses. "This result is virtually impossible to explain in the absence of coordination and collusion," Verizon said.
The FCC is still reviewing SNR and Northstar's applications for the licenses they won. Earlier this month, the agency approved the applications for Verizon, AT&T and T-Mobile.
Both Verizon and AT&T complained to the FCC earlier this year that Dish's tactics in the auction distorted prices.
