Appeals Court: FCC right in denying Dish-Doyon bidding discounts

The U.S. Court of Appeals for the District of Columbia Circuit ruled Tuesday the Federal Communications Commission was right to deny bidding discounts worth billions of dollars to a subsidiary of Doyon Limited, the Alaska Native Regional Corporation for Interior Alaska.

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The subsidiary is called Northstar Wireless. The Appeals Court ruling says Doyon’s partner, a massive telecom giant, cannot hide behind an affiliate to claim benefits intended to help small and minority-owned businesses.

Dish Network, a massive player in the telecom world, owns 85 percent of Northstar. Doyon owns a portion of the remaining 15 percent.

In 2015, Dish cleaned up at an auction for the right to use public airwaves for cell service and wireless Internet. Dish coordinated with two smaller companies and together their bids totaled $13.3 billion. Then Dish and its affiliates said they only had to pay $10 billion, because the smaller companies get discounts available to small businesses. The late Sen. Ted Stevens helped create the spectrum auction, and thanks to him there’s an exception that allows Alaska Native Corporations to qualify as small businesses.

Federal Communications Commission Chairman Ajit Pai told senators at a 2015 hearing the Dish-Doyon deal is outrageous.

“To be frank, I’m appalled that a corporate giant has attempted to use small business discounts to rip-off American taxpayers,” Pai said.

Doyon vice president Sarah Obed said outside the courthouse last fall that Doyon runs the show.

“Dish Network does not manage Northstar Wireless. We do. And so that’s something we’re really proud of,” Obed said.

The FCC, though, looked into the contract and decided Dish really holds the strings. Dish has financial say, and the FCC said the contract terms pressure Dish’s partners to sell their stakes to Dish after five years.

The Appeals Court judges agreed that Dish plays an out-sized role in Northstar. But the judges also said the FCC should’ve given Dish and its partners a chance to change the terms of their contract, so Dish doesn’t have control of the subsidiary.

Doyon, in a written statement, said Tuesday it’s studying the decision and welcomes the opportunity to work with the FCC to address its concerns.