Dish, DEs Probably Can't Fix Control Issue but So What, Wells Fargo Analyst Says

Dish Network is unlikely to be able to fix its de facto control issue of designated entities SNR and Northstar (see 1708290027), but that's financially immaterial, Wells Fargo's Marci Ryvicker emailed investors Wednesday. Dish at most will pay an $860 million penalty and can participate in any re-auction of the AWS-3 spectrum. She said it's unlikely Dish will face a penalty, since the spectrum in question is in high-demand markets like New York, Chicago and Boston, meaning a re-auction would be highly competitive so there probably wouldn't be a shortfall to be made up between the winning re-auction bid and SNR/Northstar's $3.4 billion bid in the initial AWS-3 auction. Such re-auction, if it happens, likely would be next year, the analyst said. Meanwhile, if Dish and the DEs do somehow satisfy the FCC, they would be entitled to $3.4 billion worth of spectrum relinquished to the FCC for no additional cash outlay, she said. The U.S. Court of Appeals for the D.C. Circuit Tuesday said the FCC and DEs should try to negotiate a solution to Dish's de facto control of the DEs.