An appeals court in Washington, D.C., has rejected an effort by Dish Network to claw back some of the spectrum licenses it has been trying to acquire for the better part of a decade.

"We are disappointed in the court's decision and are evaluating our legal options," Dish wrote in response to the development. "Throughout this seven-year process, we believe that Dish, SNR and Northstar have been treated differently than other strategic partners and DEs [designated entities] that participated in the same AWS-3 auction, as well as previous auctions, and that the FCC failed to provide fair notice of its decision-making. Ultimately, wireless competition has suffered as a result."

At issue are $515 million in fines and 197 AWS-3 spectrum licenses worth around $3.3 billion. Two bidding entities called Northstar Wireless and SNR Wireless bought $13.3 billion worth of AWS-3 spectrum in the FCC's auction that ended in 2015. SNR and Northstar initially qualified as "designated entities," or DEs, which made them eligible for a 25% discount intended for small businesses.

After the auction ended, the FCC ruled that the two DEs should not receive that discount because they were financially too close to Dish. As a result of the FCC's decision, Dish paid a $515 million fine and relinquished AWS-3 spectrum licenses worth around $3.3 billion. But the company has been working on getting the money and spectrum back during years of legal appeals.

Figure 1: (Source: Jonathan Weiss/Alamy Stock Photo)

The financial analysts at New Street Research argued that today's ruling represents a final setback for Dish.

"While the appeal process can continue, it is all but done, meaning that the FCC will soon be free to reauction the licenses that were turned back in when the FCC challenged the Dish/DE relationship as contrary to its rules," the analysts wrote in a note to investors Tuesday.

Dish's broader 5G ambitions won't be impeded if it ultimately loses its legal battle against the FCC. The company's current 5G network buildout plans stretch across a wide range of other spectrum bands and licenses that are not hanging under a legal cloud.

The New Street analysts wrote that Dish's latest legal loss doesn't carry any specific downside, other than rankling investors who had hoped for a different outcome. "As a legal matter, Dish remains on the hook for any shortfall in a re-auction of the licenses in question," they said. "Based on spectrum values and the location of the licenses, there is unlikely to be any shortfall. Moreover, Dish itself could bid on the licenses, pay what New Street Research believes would be a fair market value and guarantee that there is no shortfall."

Dish's stock lost around 3% in trading Tuesday.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano