Dish Agrees to Looser DE Controls After Circuit Court Remand

Dish and designated entities Northstar Wireless and SNR Wireless amended their agreements, with Dish loosening its control of those companies. The renegotiated DE agreements came after the U.S. Court of Appeals for the D.C. Circuit's August ruling that upheld the FCC withholding the DEs' AWS-3 auction bidding credits due to their too-close connections to Dish (see 1708290012). In an SEC filing Wednesday, Dish said its amended Northstar agreement says Northstar no longer has to consult with it about budgets and business plans and removed the requirement that its systems be interoperable with Dish's. Dish also agreed to exchange $6.87 billion in Northstar debt for 6.87 billion nonvoting shares. It said Dish also agreed to lower the interest rate on $500 million in Northstar debt still outstanding from 12 percent annually to 6 percent, to eliminate the higher interest rate that would apply in a default and to modify or remove some obligations for Northstar to prepay the loan. The satellite service provider said the amended SNR agreement has the same terms, though with Dish exchanging $5.065 billion owed for 5.065 billion nonvoting shares. Dish also said it agreed on identical terms modifications for $500 million in SNR shares still outstanding. The company said that other issues related to the remand remain in negotiation. The satellite-TV provider said SNR and Northstar have put in multiple requests with the FCC for meetings to discuss a cure to the DE control issue but that the agency hasn't granted an audience. The agency didn't comment. The agreements put Dish and the DEs "one step closer" to regaining the $3.3 billion AWS-3 spectrum discount, ultimately giving Dish close to 200 more spectrum licenses atop its close to 100 MHz, which would point to an IoT partnership or M&A, Maquarie analyst Amy Yong wrote investors. She said with negotiations ongoing, the process could run through the second half of this year or into 2019.