This January, Dish Network purchased airwaves licenses using $3.3 billion dollars in small business credits and today, the Federal Communications Commission said the satellite TV company does not qualify to use those credits.
Dish won $13.3 billion worth of spectrum but only paid $10 billion for them because is used two small companies that it had invested in to bid in the auction and get the discounted price.
Because Dish owns 85 percent of each company, the FCC determined that amount equaled a controlling interest in the companies, thus making the companies ineligible for credits set aside for small businesses.
This development will make it tough for Dish to acquire wireless carrier T-Mobile as it has planned. During an earnings call earlier this month, Dish Chairman and CEO Charlie Ergen said that the prospect of losing the discount had caused difficulties in the negotiations.
With it being denied the credit, Dish will have to pay that balance $3.3 billion in savings, appeal or not pay the balance and pay a penalty instead.