Dish Defends Its Spectrum Auction Strategy

Dish Network responded to critics of its bidding strategy in a recent auction of wireless licenses, saying it followed all the rules and helped competition. The company came under fire from rivals and some lawmakers after it won big at the $45 billion auction that ended in January. Dish itself didn’t win any licenses, but the two firms it bankrolled placed $13.3 billion in winning bids -- second only to AT&T’s $18.2 billion -- then claimed $3.3 billion in discounts aimed at small business.

Dish’s reply came in a response to a letter sent in April by Sen John Thune (R-SD), who suggested Dish’s strategy may have violated auction rules. AT&T and Verizon Communications have also argued that Dish’s coordination with the firms suppressed competition in some instances and created the false impression of increased demand in others. Dish said auction rules allowed it and the two firms, called SNR Wireless and Northstar Wireless, to collaborate on bids and discuss strategy during the auction because it disclosed the arrangement in advance. Dish also pointed to past government auctions where other carriers have collaborated in similar fashion with smaller firms. The company said its participation in the auction was good for competition, and its collaboration with SNR and Northstar helped the firms beat out industry giants AT&T and Verizon for some licenses they may otherwise have lost.