Dish Network 2015 Annual Report Download - page 155

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-51
other wireless service providers. For example, on February 10, 2016, we filed an application with the FCC to
potentially participate as a bidder in the upcoming Auction 1000. Auction 1000 is scheduled to begin on March 29,
2016. The FCC determined that bidding in Auction 1000 will be “anonymous,” which means that prior to and
during the course of the auction, the FCC will not make public any information about a specific applicant’s upfront
deposits or its bids. In addition, FCC rules restrict information that bidders may disclose about their participation in
Auction 1000. We may need to raise significant additional capital in the future to fund the efforts described above,
which may not be available on acceptable terms or at all. There can be no assurance that we will be able to develop
and implement a business model that will realize a return on these wireless spectrum licenses or that we will be able
to profitably deploy the assets represented by these wireless spectrum licenses, which may affect the carrying
amount of these assets and our future financial condition or results of operations.
DISH Network Non-Controlling Investments in the Northstar Entities and the SNR Entities Related to AWS-3
Wireless Spectrum Licenses
Through our wholly-owned subsidiaries American II and American III, we have made over $10.0 billion in certain
non-controlling investments in Northstar Spectrum, the parent company of Northstar Wireless, and in SNR HoldCo,
the parent company of SNR Wireless, respectively. Northstar Wireless and SNR Wireless each filed applications
with the FCC to participate in Auction 97 (the “AWS-3 Auction”) for the purpose of acquiring certain AWS-3
Licenses. Each of Northstar Wireless and SNR Wireless applied to receive bidding credits of 25% as designated
entities under applicable FCC rules. In February 2015, one of our wholly-owned subsidiaries received a refund from
the FCC of its $400 million upfront payment made in 2014 related to the AWS-3 Auction.
Northstar Wireless was the winning bidder for AWS-3 Licenses with gross winning bid amounts totaling
approximately $7.845 billion, which after taking into account a 25% bidding credit, is approximately $5.884 billion.
SNR Wireless was the winning bidder for AWS-3 Licenses with gross winning bid amounts totaling approximately
$5.482 billion, which after taking into account a 25% bidding credit, is approximately $4.112 billion. In addition to
the net winning bids, SNR Wireless made a bid withdrawal payment of approximately $8 million.
On August 18, 2015, the FCC released a Memorandum Opinion and Order, FCC 15-104 (the “Order”) in which the
FCC determined, among other things, that DISH Network has a controlling interest in, and is an affiliate of,
Northstar Wireless and SNR Wireless, and therefore DISH Network’s revenues should be attributed to them, which
in turn makes Northstar Wireless and SNR Wireless ineligible to receive the 25% bidding credits (approximately
$1.961 billion for Northstar Wireless and $1.370 billion for SNR Wireless) (each a “Bidding Credit Amount” and
collectively the “Bidding Credit Amounts”). Each of Northstar Wireless and SNR Wireless has filed a notice of
appeal and petition for review of the Order with the United States Court of Appeals for the District of Columbia,
challenging, among other things, the FCC’s determination that they are ineligible to receive the Bidding Credit
Amounts. We cannot predict with any degree of certainty the timing or outcome of these proceedings. An adverse
ruling against Northstar Wireless or SNR Wireless in these proceedings could potentially result in fines and/or
revocation of the Northstar Licenses or SNR Licenses, respectively.
On October 1, 2015, DISH Network, American II, American III, Northstar Wireless, SNR Wireless, and certain
other entities holding certain interests in Northstar Wireless and SNR Wireless, entered into a series of arrangements
with respect to the AWS-3 Licenses, as further described below.
Letters Exchanged between Northstar Wireless and the FCC Wireless Bureau. As outlined in letters exchanged
between Northstar Wireless and the Wireless Telecommunications Bureau of the FCC (the “FCC Wireless Bureau”),
Northstar Wireless paid the gross winning bid amounts for 261 AWS-3 Licenses (the “Northstar Licenses”) totaling
approximately $5.619 billion through the application of funds already on deposit with the FCC. Northstar Wireless
also notified the FCC that it would not be paying the gross winning bid amounts for 84 AWS-3 Licenses totaling
approximately $2.226 billion.