DISH's Dirty Tricks Are Hurting U.S. In Race to 5G

At the recent Competitive Carriers Association (CCA) meeting in Denver, DISH Co-founder and Chairman, Charlie Ergen, was asked about the future of competition in the wireless industry. In his response, he said this of the proposed merger between T-Mobile and Sprint: “…Sprint and-T-Mobile will have a big effect on the people in this room and the industry for a long time to come. We are public that we have opposed it as it has been presented because we think it reduces competition and raises prices.”

Mr. Ergen should take a look at how his own company is operating, rather than pointing fingers. He purports to favor public policies that promote competition and help consumers, but his company’s failure to deploy its massive spectrum holdings over the last several years has thwarted pro-consumer policy. In fact, DISH’s continued warehousing of prime commercial spectrum has actually slowed 5G deployment in the U.S., and DISH has a history of trickery when it comes to acquiring spectrum.

An FCC investigation into SNR Wireless and NorthStar Wireless, who claimed independent small business discounts during the auction, found that the two companies were more like fronts for DISH to receive discounts to the tune of $3.3 billion.

The FCC’s investigation revealed that DISH had an 85% economic stake in the two companies. During the auction the two companies purchased a combined $13.3 billion in spectrum, but, leading up to the auction, the companies had combined revenue of $0. After the auction these companies owed DISH about $10 billion. The FCC also discovered that DISH contracted various agreements with the two companies that gave them significant leverage in policy, financial, business, employment, technology, and marketing decisions.

DISH’s deception would be bad enough if all it did was to bilk taxpayers out of more than $3.3 billion of revenue from wireless spectrum auctions and untold legal fees. However, it gets worse as they continue to hoard spectrum and not even meet the minimum buildout requirements for spectrum licenses.

The company sits on about 95 megahertz of nationwide spectrum and plans to use only about 2% of it by 2020. Afterwards it will start building its 5G network from scratch in some nebulous future.  As a result of these concerns, we recently sent a letter to the FCC in support of the Commission’s inquiry into DISH’s progress in this area.

Spectrum is the critical input for wireless service. Without access to a pipeline of spectrum to meet Americans’ growing demand for more mobile services, America cannot invest in the facilities and infrastructure to support 5G. Therefore, when spectrum is not being used, tremendous opportunity costs are imposed on the entire American economy.

This brings us back to the proposed merger between T-Mobile and Sprint. Both companies have laid out compelling cases for why a merger gives the U.S. the best chance to win the 5G race, including in the critical areas of innovation, job creation, improving coverage in rural America and pricing.

T-Mobile already has a track record of lowering prices and offering innovative services. With the merger, T-Mobile CEO John Legere has said that the New T-Mobile “will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint,” for the next three years.

And, with respect to creating more competition in the race to 5G, the merger would create a more robust competitor to Verizon and AT&T, undoubtedly putting pressure on them to invest more heavily in their own 5G networks. When Mr. Ergen said, “we don’t think the other guys get there as fast unless somebody’s pushing them a little bit,” he was right, but DISH isn’t doing any pushing; its squatting.

Leading the way in 5G would help America also lead in everything from cars to healthcare to education. That is why the FCC recently announced “the largest spectrum auction in our nation’s history” as well as a $20 billion “Rural Digital Opportunity Fund” to help underserved communities in America. But more steps are necessary to ensure that America’s first in 5G innovation.

We need to reward companies that invest and innovative, not those that play regulatory games in Washington. Getting spectrum into the hands of companies that intend to use it means taking action to bring DISH’s shady spectrum tactics to an end.