Verizon Makes Case Against Dish on Dish's Bidding in AWS-3 Auction

Verizon updated FCC officials on its allegations that Dish Network manipulated bidding in the AWS-3 auction, said an ex parte filing posted Monday. Dish indirectly captured the second-most spectrum of any player in the auction, behind AT&T, but at a discounted price through designated entities (DEs) Northstar and SNR Wireless (see 1501300051). Verizon officials were accompanied at the meetings described in the filing by Leslie Marx, professor of economics at Duke University, said the filing in docket 14-78. “Dr. Marx concluded that the auction data reveal extensive evidence of collusion by DISH, Northstar and SNR, which violates antitrust law and the Commission’s rules and policies,” Verizon said. “DISH and the DEs frequently bid on the same licenses in the same rounds while other bidders were active, which created the false perception that multiple other parties were interested in those licenses (though did so generally without bidding each other up),” Verizon said. “After competing bidders dropped out, DISH and the DEs avoided bidding against one another. This conduct is indicative of a bidding ring, intended to drive out competitors and then suppress rivalry among the ring members.” The two Dish DEs appeared to divide markets between them, Verizon said. Dish also “colluded with the DEs to exit the auction early, without risk and without penalty,” Verizon said. “It did this by ensuring that, when DISH exited the auction following round 20 when it was the high bidder on several hundred licenses, the DEs topped its previous high bids on virtually all those licenses.” Verizon said its representatives met with Wireless Bureau Chief Roger Sherman and Commissioners Ajit Pai and Mike O’Rielly, among others. Dish is confident it complied with the law during the auction, a spokesman responded. “Our approach -- which was fully and publicly disclosed ahead of the auction -- was based on DE investment structures that have been approved by the FCC in past wireless spectrum auctions, including structures used by Verizon,” he said. “Participation by small businesses through the DE program helped make the AWS-3 auction, on a gross and net basis, the most successful spectrum auction in FCC history.”