FCC Commissioner objects to DISH’s discount from AWS-3 auction

[ChadT41]

That should legitimize them a little more, Atleast for the argument he can make.

 

[Laddyboy]

There's a simple solution for this problem going forth: change the rules so that any company more than 50% owned by another is considered part of the larger owner for FCC purposes. Can't ex post facto this auction which seems A-OK based on the existing rules.

 

[Cold Irons]

Fat chance of that; its a greate idea, but the big businesses run Congress thru $$$.

This same situation is present in DOD contracting (and pretty much all federal & state govt. contracting); big companies access the contracts via small business "fronts". The Lockheed Martins/Boeings/IBMs of the world spend a lot of money on lobbyists to insure that doesn't change.

 

[ChadT41]

There's a simple solution for this problem going forth: change the rules so that any company more than 50% owned by another is considered part of the larger owner for FCC purposes. Can't ex post facto this auction which seems A-OK based on the existing rules.

So then if Northstar was 40% Dish, 40% Echostar, 20% other companies it would be ok? There will always be loopholes.

 

[Laddyboy]

So then if Northstar was 40% Dish, 40% Echostar, 20% other companies it would be ok? There will always be loopholes.

I don't know the ownership relationship between Dish and Echostar, but both may have Charlie as the majority owner which would make them a related single entity. As an example, if Co A owns 80% of Co B and Co B owns 70% of Co C, Co A owns 56% of Co C even though it may not own any shares of Co C directly. If Dish owned 50% plus of Northstar, Northstar would be considered part of Dish since Dish likely has a controlling interest. If the principal owner of both Dish and Echostar had more than a 50% stake of both, the 50% plus owner would be considered the actual bidder, not Dish and Echostar. This is sort of how it works in accounting for invested entities depending on the amount of control. Though one can have less than a 50% interest and still have control through other means. Nothing is perfect. I don't really care. I put it out there for the ones that have their knickers twisted over the auction.

 

[ChadT41]

I don't know the ownership relationship between Dish and Echostar, but both may have Charlie as the majority owner which would make them a related single entity. As an example, if Co A owns 80% of Co B and Co B owns 70% of Co C, Co A owns 56% of Co C even though it may not own any shares of Co C directly. If Dish owned 50% plus of Northstar, Northstar would be considered part of Dish since Dish likely has a controlling interest. If the principal owner of both Dish and Echostar had more than a 50% stake of both, the 50% plus owner would be considered the actual bidder, not Dish and Echostar. This is sort of how it works in accounting for invested entities depending on the amount of control. Though one can have less than a 50% interest and still have control through other means. Nothing is perfect. I don't really care. I put it out there for the ones that have their knickers twisted over the auction.

And I understood where you were comig from, but no matter the proposal that comes out, there are always going to be loopholes, and if those loopholes get filled, there will be more loopholes. Now just to play Devils advocate, what if they use someone like Bernie Han as the majority owner of Northstar with a promissory note to Charlie Ergen or Dish or Echostar for their financial backing. Now, there is still a finanacial backing/Loan program with the promise of the spectrum anyways, and even in the rebuttal it is ok

This isn't an attack, just pointing out that no matter what happens, it is a companies fiduciary duty to do what they can to get the best deal possible, and business is cut throat.