Dish Network’s Chairman Charlie Ergen said he would consider “all alternatives” if U.S. regulators deny or delay his company’s attempt at using wireless spectrum for a high-speed network, reports Bloomberg.
Ergen said in a conference call today that Dish had “an 80 percent chance or better” of being successful in the wireless industry as long as the FCC allows the spectrum to be used.
Ergen met yesterday with FCC Chairman Julius Genachowski and other officials, according to a filing by Dish posted today on the FCC’s website. Dish Network is the second- largest U.S. satellite-television provider behind DirecTV. They bought assets of DBSD North America (ICO) and TerreStar Networks and have asked the FCC for license waivers to let it offer terrestrial LTE service – much like Lightsquared.
Unlike Lightsquared, the 40MHz of spectrum that Dish intends to use is around 2.1 GHz – the Mobile Satellite Service band, and is not anticipated to be problematic for users of GPS, or even other cellular providers (although cellular competitors object anyway).
Satellite consultant Tim Farrar says DISH will give up 2x5MHz of its 2x20MHz of DBSD/TerreStar spectrum, and move its uplink frequencies up by a further 5MHz into the original J block uplink (2020-25MHz) in exchange for the waiver, reducing the windfall profit. This would leave DISH with 2x15MHz of spectrum at 2010-2025MHz (uplink) and 2185-2200MHz (downlink) and would implicitly create a new guardband in the 2000-2005MHz block.
Ergen said that using the spectrum purchased from DBSD and TerreStar to offer high-speed wireless Internet service is crucial to his company’s future. Ergen wouldn’t rule out selling the spectrum or the entire company if the FCC ruled against Dish.
Without a waiver from the FCC, Ergen said Dish would probably have to write down the spectrum assets obtained in the acquisitions because “they wouldn’t be worth the $3 billion dollars or so we paid for them.”
The $3.6 billion Verizon/Cable deal valued the spectrum at $0.69 per MHz-POP (the number of people covered by each megahertz). Dish has 40 Mhz of nationwide spectrum, right near the AWS band. That would seem to be worth at least twice as much.
UBS Research says the best-case scenario is for Dish getting a waiver without restrictions for ATC, then selling the S-band to AT&T for ~$0.69/MHz-POP (in-line with the Verizon/SpectrumCo deal), as well as the Dish 700 MHz licenses for ~$0.90/MHz-POP (similar to the AT&T deal with Qualcomm). This values the spectrum at $9.4B vs. the $3.6B Dish paid.
Dish expects an answer from the FCC by March 12, said Ergen. Incumbent mobile providers say Dish’s proposed network may cause interference to other services. They have asked the FCC to consider Ergen’s proposal as part of a broad rulemaking on new uses of airwaves.
Ergen said Dish was the “best hope” to be a new competitive threat to AT&T and Verizon. The FCC has said it would prohibit hedge- fund billionaire Philip Falcone’s LightSquared Inc. wireless venture from using its spectrum because of GPS interference issues.
See Dailywireless: FCC Judgement on Lightsquared: Fail, Sprint Gives Lightsquared 6 Weeks, Lightsquared Vs the FAA, Dish Clarifies LTE-Advanced Plan, AT&T Competitors: No 700MHz Roaming, Dish: Show Me the Money!, Dish LTE-Advanced Called “Ollo”, Dish Talks Up Terrestrial LTE, ViaSat-1 Launched, Charlie Ergen’s Spectacular Triple Play, Charlie’s Big Play, EchoStar Closes $2B Hughes Deal, Lightsquared: FCC Will Rule by Year End, Lightsquared: A Hardware Solution, Lightsquared Interference: No Immediate Fix?, AT&T: On the Couch, Verizon Buying Nationwide AWS Spectrum from Cable, Verizon-Cable Deal: Too Cozy?, Cross Marketing of Verizon & Cable Begins, iBooks: Cellular’s Big Bang?
