WASHINGTON, D.C. - Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.) today requested documents and other information from the Federal Communications Commission (FCC), DISH Network and two affiliated companies related to bidding in the FCC’s recent Auction 97 for Advanced Wireless Services.

“The Committee has significant questions about whether conduct surrounding the bidding strategies employed by DISH Network and two affiliates adhered to both the letter and intent of the law, since it may ultimately cost three billion dollars in public funds,” said Thune on sending the four letters. “While the FCC is reportedly already looking at whether DISH broke auction rules, an examination of how these affiliated companies approached the auction is the only way for Congress to determine whether this three billion dollar price tag was appropriate or a result of wrongful conduct, flawed agency rules, or laws Congress must update.”

The FCC conducts auctions, like Auction 97, as a means for selling the rights to licenses for public bandwidth frequencies for private sector use – typically for uses such as mobile phones, satellite broadcasts, terrestrial radio and television broadcasts. Auction 97 took place through rounds of bidding on divisions of geographically based spectrum frequency from November 2014 through January 2015. To preserve the integrity of the auctions and guard against the formation of bidding rings and other collusive practices, bidders on any particular license can see the number of competitors they face and their competitors’ bid amounts, but not the other bidding parties’ identities. While FCC auction rules allow affiliated companies to share and coordinate some information, they warn that companies are not exempted from anti-trust laws designed to prevent collusive bidding practices.

In Auction 97, DISH utilized a strategy involving two subsidiary entities, Northstar Wireless and SNR Wireless LicenseCo., that fit the legal definition of “very small businesses.” As very small businesses, Northstar and SNR were legally entitled to a 25% discount on the price of all winning bids. According to analysis of data from the auction, while DISH itself appeared to bid aggressively in the early rounds of the auction on hundreds of licenses, in every instance it dropped out when it was only competing against Northstar or SNR – ultimately winning zero licenses up for auction while discount-eligible Northstar and SNR collectively won 702 licenses. In an auction where the identity of bidders was supposed to be blind, complaints by other participants have raised concerns that the pattern of bids by DISH and its affiliates suppressed competition.

Below are four document request letters sent today by Commerce Committee Chairman John Thune:

Letter to FCC

Letter to DISH Network

Letter to Northstar Wireless

Letter to SNR Wireless LicenseCo.

The letters request responses as soon as possible, but by no later than May 15, 2015. An expeditious resolution of concerns is critical as the FCC is scheduled to conduct the Broadcast Incentive Auction, another multi-billion dollar spectrum auction, next year. The Commerce Committee has legislative and oversight jurisdiction of the FCC and its activities, including spectrum auctions.