The Middle Class Tax Relief and Job Creation Act of 2012 started as a nightmare for DISH Network.
In order to pay for the bill's tax cut and "FirstNet" national wireless network for first responders, Congress sought to raise revenue from FCC wireless spectrum auctions. Among other things, the Senate bill included a requirement that satellite licensees in certain frequency bands who wished to transition their wireless spectrum to terrestrial, cellular networks first would have to put up the licenses for public auction. DISH Network had bought billions of dollars worth of satellite licenses in hopes of transitioning those obsolete satellite frequencies into a modern, nationwide terrestrial wireless network. DISH's would-be competitors, like AT&T and Verizon, gladly would have paid a lot at auction to acquire the satellite licenses and prevent a new competitor from entering the wireless market. When DISH pleaded its case to lawmakers, they were told that the Congressional Budget Office (CBO) had "scored" the auction provision at billions of dollars in revenue to the government that would go towards taxpayer relief and construction of the FirstNet network. Senators were reluctant to remove a revenue-generating provision that would help pay for their bill. DISH was facing an uphill battle.
Working with the Congressional Budget Office
First, we worked with the then-Ranking Member of the House Budget Committee to secure a rare meeting between CBO accountants and DISH Network attorneys to establish that the CBO had made a mistake in its calculation. DISH explained that because it was the only licensee implicated by the satellite auction provision, if forced to choose between holding the licenses or risk losing them at auction, it would not put the licenses up for auction. The revenue to the government therefore would be zero. In a very rare action, CBO reversed its prior scoring and issued a new calculation: revenues from the satellite auction provision would be zero. This eliminated a major hurdle preventing Congress from reconsidering the Senate provision. The House companion measure passed without the satellite auction provision.
Working with the Conference Committee
Second, when Senate and House negotiators met in conference to hammer out differences between the House and Senate bills, we worked with the Maryland delegation, including Sen. Ben Cardin (D-MD) and then-Rep. Chris Van Hollen (D-MD), both of whom were named to the conference committee. Bringing senior executives from DISH's Maryland company, Hughes Communications, to meet with Cardin and Van Hollen, we explained that Maryland would benefit directly from the conference committee eliminating the harmful Senate provision and adopting the House version of the bill, which did not require satellite licenses to go to auction before being used terrestrially. Much of the technology and operations, we explained, would be developed and run from Hughes' Germantown, Maryland headquarters. Cardin and Van Hollen made our case to the other conferees. We prevailed. The conference committee adopted the House version and the bill was signed into law, without the anti-competitive auction requirement.
Shortly after the bill's enactment, the Federal Communications Commission commenced a rulemaking that resulted in new regulations allowing satellite licensees in the relevant spectrum band to repurpose their satellite licenses for terrestrial wireless use (Advanced Wireless Spectrum, or AWS, 4 in the 2000-2020 MHz). This instantly propelled DISH Network into position to become a new wireless broadband provider, with 20MHz of nationwide spectrum.