Charlie Ergen’s Dish Network won a large slice of new bandwidth in the FCC’s AWS-3 spectrum auction earlier this year. Dish paid a total of $13.3 billion for the rights. Now he is handing some of it back.

Some of the allocated bandwidth was paid for through two Dish subsidiaries, Northstar Wireless and SNR Wireless and Dish had expected to gain a significant $3.3 billion discount because the subsidiaries would qualify as smaller businesses.

The FCC would not accept that the two “Designated Entities” were truly independent and refused to grant the discounts. Indeed, the two have been ‘fined’ about $413 million for being late and defaulting on around 200 of the regional licences.

Dish Network is now surrendering some of the spectrum back to the FCC which will re-auction the frequencies.  This still leaves Dish with some $9.8 billions-worth of new spectrum. The FCC says that Dish, Northstar and SNR can bid for new spectrum in upcoming auctions and will not be blacklisted because of the above events.

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