FCC Announces SNR and Northstar Wireless Selective Default
The Commission released a notice of interim default payment obligation for Northstar and SNR Wireless (both DISH designated entities). Both were winning bidders in Auction 97. As described in their attached respective Selective Default Letters, Northstar and SNR have selectively defaulted on their final payment obligation for certain of their AWS-3 auction winning bids.
The two parties, which together won 702 licenses in the AWS-3 auction, decided to forgo ownership of 197 of these licenses, including in key markets like New York, Boston and Chicago. The licenses that they are giving up are listed in Attachment 2 of each of the letters filed with the FCC by Northstar and SNR (also attached). The default is the result of the FCC denying the parties $3 billion in small business credits in an August Order. Both companies will have to pay an interim payment equal to 15% of the amount of each winning bid for the licenses they are giving up.
In addition to the 15%, the parties may have to pay additional funds based upon the final value of the returned licenses. The parties interim default payment owed will be satisfied by the application of funds already on deposit at the Commission. However, the Commission cannot determine the full amount of the default payment that is owed until a license for the relevant spectrum is won in a subsequent auction.
Once subsequent winning bids are established for the relevant spectrum, the Commission will determine the parties final payment obligation. If an additional payment is required, a further order will assess such payment.
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