DISH Network Corp (NASDAQ:DISH) spiked as much as 4.6 percent Tuesday after the U.S. Court of Appeals referred a “bidding credit” case involving Dish partners to the Federal Communications Commission.

"We are pleased this has been referred back to the FCC,” a Dish representative told Benzinga. “We look forward, along with NorthStar and SNR, to working with the FCC to address any concerns they may have.”

What Happened?

The story began with the FCC back in 2014, when Dish had lent Northstar Wireless and SNR Wireless LicenseCo billions of dollars to acquire wireless spectrum for national internet and phone services.

The companies expected also to qualify for the FCC’s “bidding credits,” or license discounts granted to small business recording less than $40 million in revenue.

Having won $13.3 billion in bids, the Dish partners requested $3.3 billion in credits. The FCC denied eligibility on the grounds that the companies were actually under the control of the $13 billion earning Dish. Citing inability to pay, Northstar and SNR opted to purchase only a portion of licenses at full price, thus violating auction terms and incurring fines worth hundreds of millions of dollars.

“The Commission did not give SNR and Northstar adequate notice that, if their relationships with DISH cost them their bidding credits, the FCC would also deny them an opportunity to cure,” the court opinion read. “As a result, we remand this matter to the FCC to give petitioners an opportunity to seek to negotiate a cure for the de facto control the FCC found that DISH exercises over them.”

Image credit: Dave L, Flickr