Dish Used “Small Business” Discount To Save $3B At Taxpayer Expense

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Something tells me that, if anything is done about this, it sure as hell won't be a $3 billion fine. :(

"[T]wo companies in which Dish Network has an 85 percent ownership stake claimed over $3 billion in taxpayer-funded discounts when purchasing spectrum in the AWS-3 auction," Pai said in his call for an investigation today. "Those discounts came through the FCC’s designed entity (DE) program, which is intended to make it easier for small businesses to purchase spectrum and compete with large corporations. Dish, however, has annual revenues of almost $14 billion, a market capitalization of over $32 billion, and over 14 million customers. Its participation makes a mockery of the DE program."
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The cute part is top brass at Dish are probably genuinely confused, looking around at each other twirling their mustache's wondering who these plebs are interfering with their billions (although it may be mere tens of millions by the time it reaches their kids trust funds). I'm sure they'll chalk it up to more of that 99% scum bitching and whining to get their way.

On a side note, so did Tom Wheeler get ejected from the various broadcast lobbies that had control of him years ago? He seems to be raging pretty hard and actually getting shit done. I'm still not convinced it's not all part of an elaborate conspiracy to earn the public's trust and then go back to shilling for Comcast in a few more years, but for now the man is on point.
 
Wheeler has been talking out of a different side of his mouth sometimes. As far as "getting things done", nothing yet.
 
Man, just when think Tuesday is safe day to avoid losing your faith in humanity, an affirmation of the power of lobbying comes in to blindside you in the testicles.
 
i dont see the issue here.

they used an existing loophole to buy spectrum cheaper.

dont like what they did.. then close the loophole, but dont be mad at them for doing things that are legal and increase their profits
 
kattana said:
i dont see the issue here.

they used an existing loophole to buy spectrum cheaper.

dont like what they did.. then close the loophole, but dont be mad at them for doing things that are legal and increase their profits
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^^ Future business leader of America right here. I...don't even know how to respond to this other than just because you can do something doesn't mean you should. If you find a loophole that makes murder legal, you don't go out and start shooting people, because it is wrong to murder people. Similarly it is wrong to rip off taxpayers (who also happen to be your customers). If you don't see this, please go step in front of a bus.
 
People made a mockery of a system of coercion to prevent theft from that system.



Insert statement of moral outrage at defiling our system of coercion that enslaves us all.
 
Steve said:
Something tells me that, if anything is done about this, it sure as hell won't be a $3 billion fine. :(
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That's the problem.

With violations netting companies in the billions, and fines being in the hundreds of thousands, violating the law has just become a cost of doing business.

We need to change the regulatory structure such that MINIMUM fines are the value the company gained by the violation PLUS a punitive damages multiplier...

If a wall street bank violates the law, and this results in an $8 billion gain, they should be paying a $16B fine, not $23M.
 
Kardonxt said:
.....or do you....?
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The Purge? :D


So if Dish makes any sort of decisions on how to use these airwaves "the smaller company" bought immediately classify it as a gift from smaller company to bigger company, charge them at the value of said spectrum of 13.3B hit them with a 35% corporate tax rate, they end up owing the government 4.7B in taxes.
 
I thinks someone's tax code needs a huge simplification.

I won't mention any names.
 
This is very common for SBIR (small business innovation research) contracts. Huge companies that don't qualify will create a new small one and apply using technology from the parent.
 
DarkAngel_ZERO said:
Wow, this and the reveal of a 97% profit margin on services from Comcast in the same 24-hour period? That's interesting.
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Time Warner cable, and it's link bait because it ignores things like having to pay off equipment, pay for employees, and power. I really don't want to defend them, but Bullshit stories like this is why more and more people don't pay attention to what's going on around them.
 
McFry said:
On a side note, so did Tom Wheeler get ejected from the various broadcast lobbies that had control of him years ago? He seems to be raging pretty hard and actually getting shit done. I'm still not convinced it's not all part of an elaborate conspiracy to earn the public's trust and then go back to shilling for Comcast in a few more years, but for now the man is on point.
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Wheeler has been talking the talk but I still don't trust him. But unfortunately it won't matter since our Republican Congress, paid off by the telecomms, are trying to circumvent any victories Wheeler brings for the consumer.

To the idiot that said this is OK because it's a loophole - it ISN'T a loophole. They were allowed to do something that was not legally allowed. It is lack of oversight. That said, I agree that it's the fault of poorly written, overly-complex tax code. There should be no need for ANY sort of discount in taxes if taxes would be more fair and less complex to begin with.
 
if a tax system is something you believe in, you should want it tested to make it more robust.
 
You can fix the tax system, you can't fix corporations trying to make as much money as possible.

Why are we always angry at the wrong person(s) in America? lol
 
Corporations have reduced liability to the people thanks to government force.

Everyone can stop giving money to HP. Try doing that with the government.
 
Right, I agree with you aardvark.

I just wish citizens would point at the broken tax code and the corrupt politicians that get paid to not fix it. Rather than the companies who are just doing what companies do.
 
dandragonrage said:
To the idiot that said this is OK because it's a loophole - it ISN'T a loophole. They were allowed to do something that was not legally allowed. It is lack of oversight. That said, I agree that it's the fault of poorly written, overly-complex tax code. There should be no need for ANY sort of discount in taxes if taxes would be more fair and less complex to begin with.
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To expand on this, these loopholes are nearing "unknown unknowns" territory. That is, the tax code is so complicated, the loopholes so small, that it is impossible to plug them all. Think of a computer program: the larger and more complicated it gets, the higher the chance of bugs, and the lower the chance that those bugs will be found and squashed before it gets released to the public. As far as I know, the federal government is not employing scumbag ex-CFO's to scour government documents looking for ways to subvert them.
 
Kardonxt said:
I just wish citizens would point at the broken tax code and the corrupt politicians that get paid to not fix it. Rather than the companies who are just doing what companies do.
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People definitely need to start holding politicians responsible for a lot of things, including the broken tax code. No argument there. However, it is still correct to hold a business responsible for using deductions they don't actually qualify for. If I walk into Target and steal something and I later get identified and caught due to security footage, it wouldn't be a valid argument to defend me simply because they didn't catch me as I committed the act.
 
McFry said:
The cute part is top brass at Dish are probably genuinely confused, looking around at each other twirling their mustache's wondering who these plebs are interfering with their billions (although it may be mere tens of millions by the time it reaches their kids trust funds). I'm sure they'll chalk it up to more of that 99% scum bitching and whining to get their way.

On a side note, so did Tom Wheeler get ejected from the various broadcast lobbies that had control of him years ago? He seems to be raging pretty hard and actually getting shit done. I'm still not convinced it's not all part of an elaborate conspiracy to earn the public's trust and then go back to shilling for Comcast in a few more years, but for now the man is on point.
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How dare thee talk bad about the 1%, they're job creators!

I always found that funny. Truthfully, the only jobs they physically create are for their personal staff (drivers, maids, etc.). Customers create jobs (the 99%). Very very few businesses think .. "Hey, it has been a slow year, I think I'll hire 10 more people!"
 
Ryokurin said:
Time Warner cable, and it's link bait because it ignores things like having to pay off equipment, pay for employees, and power. I really don't want to defend them, but Bullshit stories like this is why more and more people don't pay attention to what's going on around them.
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The paranoid side of me says this article was made just for the "actually their profit margins are tiny we swear" response article.
 
Kardonxt said:
Right, I agree with you aardvark.

I just wish citizens would point at the broken tax code and the corrupt politicians that get paid to not fix it. Rather than the companies who are just doing what companies do.
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It all gets pointed out, but what becomes of it? Nothing. Tax code is broken. Politicians are corrupt. Every knows it. Nothing is done or can be done about it.
 
the-one1 said:
It all gets pointed out, but what becomes of it? Nothing. Tax code is broken. Politicians are corrupt. Every knows it. Nothing is done or can be done about it.
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Stuff CAN be done about it, but it requires a large portion of the population to care/act at the same time. It certainly does no good to give up as you have. Make the right political decisions and encourage others to do the same and we have the chance of improvement. Give up and we have not even a chance, and things will get even worse.
 
dandragonrage said:
Stuff CAN be done about it, but it requires a large portion of the population to care/act at the same time. It certainly does no good to give up as you have. Make the right political decisions and encourage others to do the same and we have the chance of improvement. Give up and we have not even a chance, and things will get even worse.
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Oh no, I've not given up. But its near impossible to make a change when all the choices are a corrupt politician and another corrupt politician
 
the-one1 said:
Oh no, I've not given up. But its near impossible to make a change when all the choices are a corrupt politician and another corrupt politician
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Yes, the choices are often only corrupt people, but if we stop reelecting the same corrupt people then we might get some new blood in there.

Also, even when your choices are corrupt people, it's generally still better to vote against the incumbent. This sends the message that corrupt politicians won't be able to sit back and retain their job forever.

And when it comes to the president, it's never a choice of "the lesser of two evils" - voting for the wrong person is always the wrong choice. Even if you don't think Gary Johnson or whoever else has a chance, it's still better than voting for someone you already know is terrible, even if you think that the Republican is very slightly better than the Democrat (or vice-versa)... He isn't.
 
Gweenz said:
^^ Future business leader of America right here. I...don't even know how to respond to this other than just because you can do something doesn't mean you should. If you find a loophole that makes murder legal, you don't go out and start shooting people, because it is wrong to murder people. Similarly it is wrong to rip off taxpayers (who also happen to be your customers). If you don't see this, please go step in front of a bus.
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Public business is about making money, not about doing the "right" thing. There are some private companies that might make some considerations for what is "right", but they are few and far between and many of them are doing it for market share (not the "right" reasons - for $$$$). No publicly traded company is about anything but $$$$. Very few people (including our 401K's, IRA;s and mutual finds) are going to hold stock in company that does not try to maximize it's profits and increase them a significant amount year over year; they get penalized for not making enough.

It is really logically unrealistic to expect companies to be so utopian - especially when few humans (if any) truly are. If they are truly bad the public should not spend their money there. If they are monopolistic, RICOH them. If they break laws charge them. Many of the loopholes are there intentionally for exploiting. Lobby (personally or as a group) to close the loopholes. Fix the tax code? Organize, vote.

It is not about customer service (unless that is a function of making money - ie not for the "right" reasons. It is not about employees (it never has been). Companies make money that's it.

As far as ripping off taxpayers... Dish is small change compared to politicians and bureaucrats and other businesses. Perhaps we should take the big ones down first?
 
Gweenz said:
^^ Future business leader of America right here. I...don't even know how to respond to this other than just because you can do something doesn't mean you should. If you find a loophole that makes murder legal, you don't go out and start shooting people, because it is wrong to murder people. Similarly it is wrong to rip off taxpayers (who also happen to be your customers). If you don't see this, please go step in front of a bus.
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While I am as disgusted as you, unfortunately we have to be realistic.

If you are in a competitive market, and your competitor does something legal to lower their expenses, you simply HAVE to follow suit or risk dire consequences.

If your competitor has lower costs and you don't, they can - for example spend more on R&D for their next generation products than you can, crushing you in their next generation.

OR, they could lower prices, pricing you out of the market, or, etc. etc.

Based on this, a company - unless they are filling a loyal niche market faces the dilemma of either following others on a tactic that while it may sound shady and wrong, can be justified as legal, or face potential extermination.

This extermination may not come overnight, but it comes slowly and bit by bit.

The blame lies solidly with politicians who put the laws in place. Many of them are bought and paid for by special interests, and many other are simply ideological fanatics and idiots, but unfortunately, once their drivel is in place, it's kill or be killed on the business end. you simply can not afford to not take the same cost cutting measures as your competition.
 
If I stole $3000 of federally insured money from a bank (lets assume I do it in a non violent fashion hacking embezzlement etc) I would get at least 5 years in prison probably more and have a felony record that would haunt me for life.

But if dish network essentially steals 3 billion dollars from American tax payers they get... told that hey you you're going to need to give some of that back please.... yeah that seems like a fair and just system where everyone is held equally accountable under the law.
 
What they ought to do is give the entire dish board of directors 10-25 in federal prison and disband the company and redistribute it's assests to the share holders. Break the law cheat the people we put you out of business.
 
kinjo said:
What they ought to do is give the entire dish board of directors 10-25 in federal prison and disband the company and redistribute it's assests to the share holders. Break the law cheat the people we put you out of business.
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I agree, but from what I understand, this was technically a legal loophole, no?
 
Gweenz said:
If you find a loophole that makes murder legal, you don't go out and start shooting people, because it is wrong to murder people.
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No, you don't.... unless you wanted to kill them in the first place, but were scared of the punishment. Much like, you ... hmm... lets say avoid taxes... or pirate.
 
Zarathustra[H];1041406014 said:
1: you simply HAVE to follow suit or risk dire consequences...

2: faces the dilemma of either following others on a tactic that while it may sound shady and wrong, can be justified as legal, or face potential extermination...

3: The blame lies solidly with politicians who put the laws in place.

4: Many of them are bought and paid for by special interests...
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1. No, you don't.
2. Ties into number one. There are more than the presented 2 choices of 'do it, knowing it's wrong and survive' and 'refrain because it's wrong and get crushed'. The third and overlooked option is 'get the law changed' so that what's right and what's legal are aligned.
3. No, it doesn't. Some of it. Most of it. They are the ones with the votes and the gavels and the ability to make laws, yes. But the person whispering in their ear to MAKE the loopholes in the first place is NOT blameless. And with this we have little to no visibility and accountability. Politicians are not going to wake up and out of the blue create some special interest loophole out of the goodness of their heart. It's quid pro quo, and both sides share the blame.
4: See point 3. You agree they're bought, but place no blame on the person making the purchase. Bribery is not a crime for only the person accepting it, but also the person making it.

Unfortunately, it seems like the only time a company uses it's influence to buy a politician is to create a loophole and not to shut it down.

Now, to actually get political, this is THE problem with unbridled capitalism. Government regulation is the temper, the damper, the containment. It keeps the furnace from burning down the house when people are only concerned with short term heat (profit), consequences be damned.

I'm not advocating socialism and the government coming in to take over and make everything state owned. But a strong regulatory system is needed. And clearly willful violations of a law's intent need to be punished, and punished based on the size of the infraction- at a minimum the base dollar figure and THEN some penalty on top of it.

Like someone else mentioned, if I rob a bank of 3k, they're not going to let me give it back when caught and go on my way. Dish robbed us of 3b. They owe all of it back and then some.
 
Kardonxt said:
You can fix the tax system, you can't fix corporations trying to make as much money as possible.

Why are we always angry at the wrong person(s) in America? lol
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dandragonrage said:
People definitely need to start holding politicians responsible for a lot of things, including the broken tax code. No argument there. However, it is still correct to hold a business responsible for using deductions they don't actually qualify for. If I walk into Target and steal something and I later get identified and caught due to security footage, it wouldn't be a valid argument to defend me simply because they didn't catch me as I committed the act.
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Exactly. Capitalism doesn't work in a void of morals, but somehow we've idolized the word "capitalism" and the moral vacuum it works in. It's a particularly interesting juxtaposition against the supposed ideals of Christianity and those claiming to practice both.

Throwing an old widow out of her home? Perfectly Christian/Capitalist, per present day thinking.
 
Tax exemptions: noble for the middle class, evil underhanded tactic for the rich.
 
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