DISH Manipulates Federal Rules, Gets Billions in Discounts for Wireless Licenses

Chairman and co-founder of DISH a billionaire Dem donor

Charlie Ergen, DISH's co-founder and current chairman, is a major Democratic donor. / AP
February 2, 2015

DISH Network, whose co-founder is a major Democratic donor, cashed in on a $3.3 billion taxpayer-funded discount to purchase wireless licenses from the Federal Communications Commission (FCC) on Friday.

Using subsidiaries to capitalize on an FCC designation designed to help small businesses, DISH was able to purchase nearly half of the wireless licenses sold at the government auction, known as AWS-3. The satellite cable television company currently does not offer cellular service.

DISH secured $13.3 billion in wireless spectrum at the auction by bidding through smaller companies that qualify for the FCC’s "designated entity" program (DE), which is intended to foster competition by allowing smaller and minority businesses to compete. DE companies, which have less than $15 million in revenue, receive discounts when bidding for wireless licenses.

DISH will only have to pay roughly $10 billion due to the discounts, which are subsidized by the government.

Republican FCC Commissioner Ajit Pai condemned the $3 billion subsidy as making a "mockery of the DE program," and asked FCC Chairman Tom Wheeler for an investigation.

"We must change course, and soon, by closing loopholes that allow big businesses to rip off the American people to the tune of billions of dollars," Pai said in a statement Monday. "The American people should be outraged about this. I certainly am. And I am determined to do everything in my power to stop it from happening again."

Charlie Ergen, DISH's co-founder and current chairman of the board, has donated heavily to Democrats in recent years.

Ergen and his wife Cantey Ergen donated $253,000 solely to Democrats in the 2014 election cycle, according to the Center for Responsive Politics. Both he and his wife gave $64,600 to the Democratic Senatorial Campaign Committee (DSCC) as well as numerous contributions to Democratic candidates, including former Sens. Mark Udall (Colo.) and Kay Hagan (N.C.).

While Ergen, who is worth $15 billion, was a bundler for Sen. John McCain’s (R., Ariz.) bid for the presidency in 2008, he has almost exclusively donated to Democrats since.

All of his $92,175 in joint fundraising contributions since 2001 has gone to Democrats, including $2,300 to Obama For America in 2008, according to the Federal Election Commission (FEC).

DISH recently outraged Fox News viewers after a contract dispute removed the channel from the company’s subscribers TV sets for nearly a month. The company has also temporarily dropped AMC and seven Turner Broadcasting channels, including CNN, after contract fights.

Other Democratic donors have benefited from the FCC’s rules for designated entities. Last July the FCC granted a waiver to a company owned by a major bundler to President Barack Obama, which allowed it to receive favorable status as a DE for a wireless auction in November.

DISH said the auction Friday was a "win" for the taxpayer.

"The auction’s success is a win for the FCC, the American Taxpayer, the Public Safety community, and small business," the company said in a statement. "Because of the FCC’s anti-collusion rules, however, we are not able to discuss further at this time."