DISH DISH Network Corporation

The Federal Communications Commission voted unanimously Monday to deny $3.3 billion in discounts sought by two small partners of Dish Network Corp. in an airwaves auction earlier this year.

The order was circulated by FCC Chairman Tom Wheeler in July and the agency had briefed the company on its recommendation. The decision led Dish Chairman Charlie Ergen to shift his tone earlier this month on possibly entering the wireless industry, saying that selling or leasing its airwave holdings might make more sense.

With the denial, Mr. Ergen had said the company had three options: refuse to buy the spectrum and pay a penalty; pay the additional $3.3 billion; or sue the FCC to overturn the decision. A Dish spokesman on Monday had no immediate comment.

An FCC official said Monday that the commission examined the complex arrangements and financial connections that created an extensive relationship between Dish and the entities—called SNR Wireless and Northstar Wireless. The analysis concluded that Dish had the power to control the smaller companies and they therefore didn't qualify for the discounts. The management services agreements between Dish and the entities also showed Dish had control, the official said.

Dish provided 85% of the capital in both Northstar and SNR. But in filings with the FCC, both entities had reported revenue of less than $15 million and said Dish didn't control them. The two entities won $13.3 billion in wireless licenses in the auction earlier this year.

Dish's entities already have paid about $10 billion, the FCC official said, and must pay the remaining $3.3 billion within 30 days or provide a letter of credit to make the payments within 120 days. The entities can file a request for reconsideration or make a judicial appeal within 30 days of the FCC's decision.

Shalini Ramachandran contributed to this article.

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(END) Dow Jones Newswires

August 17, 2015 19:25 ET (23:25 GMT)

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