DISH NETWORK CORPORATION (NASDAQ:DISH) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into Material Definitive Agreements
Amendment of AWS-3 Auction Agreements
On March 31, 2018, in light of the Order on Remand (as defined below), DISH Network Corporation (the “Corporation”) and its wholly-owned subsidiaries, American AWS-3 Wireless II L.L.C. (“American II”) and American AWS-3 Wireless III L.L.C. (“American III”), entered into certain amendments and restatements of certain Northstar operative agreements and certain SNR operative agreements, with Northstar Wireless, LLC (“Northstar Wireless”), SNR Wireless LicenseCo, LLC (“SNR Wireless”), respectively, and certain other entities directly or indirectly holding interests in Northstar Wireless and SNR Wireless. The respective parties are continuing to have negotiations regarding certain matters in light of the Order on Remand.While further modifications to the agreements are likely in light of the Order on Remand, there is no assurance such modifications will be made.The summary below does not purport to be complete and is qualified in its entirety by reference to the provisions of the various agreements.
AWS-3 Auction
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Non-Controlling Investments |
As previously disclosed in its public filings, the Corporation, through its wholly-owned subsidiaries American II and American III, made over $10 billion in certain non-controlling investments in Northstar Spectrum, LLC (“Northstar Spectrum”), the parent company of Northstar Wireless, and in SNR Wireless Holdco, LLC (“SNR Holdco”), the parent company of SNR Wireless, respectively.Northstar Wireless and SNR Wireless each filed applications with the Federal Communications Commission (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.
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, was 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, was approximately $4.112 billion.
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 the Corporation has a controlling interest in, and is an affiliate of, Northstar Wireless and SNR Wireless, and therefore the Corporation’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).
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October 2015 Arrangements |
On October 1, 2015, the Corporation, American II, American III, Northstar Wireless, SNR Wireless, and certain other entities holding certain interests in Northstar Wireless and SNR Wireless, in light of, and subject to, the litigation arising from the Order, entered into a series of arrangements with respect to the AWS-3 Licenses that included, among other things, a notification from Northstar Wireless and SNR Wireless to the FCC that they would not be paying the gross winning bid amounts on certain AWS-3 Licenses. As a result, the FCC retained those AWS-3 Licenses and Northstar Wireless and SNR Wireless paid the FCC an additional interim payment of approximately $334 million and $182 million, respectively, as further described in letters exchanged between Northstar Wireless, SNR Wireless and the FCC Wireless Bureau, as discussed in the Corporation’s public filings.
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D.C. Circuit Court Opinion |
On August 29, 2017, the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) in SNR Wireless LicenseCo, LLC, et al. v. Federal Communications Commission, 868 F.3d 1021 (D.C. Cir. 2017) (the “Appellate Decision”) affirmed the Order in part, and remanded the matter to the FCC to give Northstar Wireless and SNR Wireless an opportunity to seek to negotiate a cure of the issues identified by the FCC in the Order (a “Cure”). On January 26, 2018, SNR Wireless and Northstar Wireless filed a petition for a writ of certiorari, asking the United States Supreme Court to hear an appeal from the Appellate Decision. We cannot predict with any degree of certainty the timing or outcome of these proceedings.