The NAACP and free-market evangelist Steve Forbes joined a growing chorus this week in criticizing DISH Network’s scheme to bilk taxpayers out of more than $3 billion.
In a letter to FCC Chairman Tom Wheeler Thursday, the Communications Workers of America (CWA) and the NAACP claimed that in the FCC’s most recent spectrum auction, “the largest beneficiary of the ‘small business’ bidding credit was DISH Network, a company with a $34.6 billion market cap.”
“DISH is certainly not a small business,” the letter helpfully clarifies, and yet, “it appears that DISH … created partnerships and loopholes in the FCC’s small business designated entity rules to claim $3.25 billion in bidding credits on 702 licenses.”
The CWA and NAACP allege that DISH “incorporated two designated entities … then entered into a joint bidding arrangement with these companies,” with DISH using its vast financial resources to keep competitors at bay, then dropping out to allow one of the spinoffs to win the license.
The groups warn Wheeler that DISH’s “unusual bidding tactics coupled with its abuse of the designated entity rules are creating a cloud over the auction.” (RELATED: FCC Chairman Tom Wheeler Finally Reveals His Net Neutrality Plan)
In a recent column for National Review, Steve Forbes explains that, “[w]hen authorized by Congress, the FCC conducts spectrum auctions, which can generate huge revenues as wireless players compete to buy the spectrum they need to provide better services for their customers.”
Through the designated entity (DE) program, the FCC offers qualifying small companies a taxpayer-funded credit for 25 percent of the purchase price to help them compete against their larger rivals when bidding for spectrum, but the program was clearly never intended for a company as large as DISH.
“DISH Network effectively shut out smaller competitors and small businesses by using the very tools created to help them,” Forbes argues, pointing out that, “[a]fter moves like these, it’s no wonder Americans are losing faith in big business.” (RELATED: Sprint’s Crony Socialist Hypocrisy)
Taxpayer advocacy groups have also been critical of DISH’s tactics. In February, the Taxpayers’ Protection Alliance, Americans for Tax Reform, the Center for Individual Freedom, and the National Taxpayers Union submitted joint comments to the FCC in order to denounce the scheme for the record.
“If the FCC is serious about enhancing diversity in the wireless marketplace and creating truly competitive auctions,” they wrote, “then it must undertake a holistic review of its DE rules and make wholesale changes.” (RELATED: DISH Network Dealt Setback by the FCC)
“Many stakeholders have questioned whether the Commission has positioned the best interests of the public and taxpayers at the forefront,” the taxpayer groups noted, concluding that, “the FCC must act swiftly and decisively in order to bolster public confidence that the nation’s airwaves—and the revenues they generate—are not being squandered.”
The CWA/NAACP letter expressed optimism in that regard, pointing out that the auction results have yet to be formally approved, and predicting, “The FCC will reject DISH’s attempt to qualify as a small business eligible for $3.25 billion in taxpayer subsidies.”
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