Dish: On the Move

Google has held talks with satellite-TV provider Dish Networks in recent weeks to partner on a new wireless service, reports the WS Journal.

With 40 MHz of LTE spectrum, it would rival the networks of wireless carriers such as AT&T and Verizon. Google is just one of several companies that Dish has held talks with recently, and the discussions with other potential partners are also at an exploratory stage, said the people familiar with matter.

UPDATE: Google9to5 says the Google-Dish wireless service is a go, with plans for 2013 launch being hatched.

If Dish’s 40 MHz of spectrum is worth the same $0.69 price per MHz-POP that Verizon paid for AWS spectrum (in the SpectrumCo deal), then the Dish spectrum might be valued at $8.6 billion, estimates Credit Suisse analyst Jonathan Chaplin.

Content and advertising networks, such as Google, Microsoft, Apple, Amazon and Facebook, all stand to benefit with low cost (or no cost) data networking. That means they would have to buy spectrum outright or operate as wholesale Mobile Virtual Network Operators.

There are only two companies with a significant amount of spectrum available – Dish and Clearwire. Neither is a phone company. That may be the tricky bit – finding an equitable agreement.

Everyone wants in the pool, but telcos are wary of creating too much competition.

Dish’s AWS-4 wireless spectrum standards was approved by 3GPP this week. The Third Generation Partnership Project (3GPP) governs the specs for the 40 megahertz of MSS spectrum that Dish controls, around 2.1 GHz.

With the 3GPP technical standards approved, Dish now has a common set of standards around which to build a network. It would use the entire 40 MHz of MSS (satellite) spectrum, from 2000-2020 and 2180-2200 MHz.

Verizon bought nationwide AWS spectrum from cable companies (SpectrumCo), and AT&T was forced to give up some of its AWS to T-Mobile after its failed merger. Then T-Mobile announced merger plans with MetroPCS which adds more AWS frequencies. Now Verizon and T-Mobile are well stocked with nearly 40 MHz of AWS spectrum, while Sprint/Softbank controls more than 100 MHz in the 2.6GHz band.

The T-Mobile/MetroPCS merger (NewCo) would have a total of 76 MHz of spectrum. Adding 40 Mhz to T-Mobile/MetroPCS brings it to 116 MHz, creating four carriers, each with around 100 MHz.

AT&T, with 100 million subs, is facing an immediate spectrum crisis. They announced plans for building out 2.3 GHz, but coverage is not nationwide. AT&T will most likely need to acquire spectrum from Dish or Clearwire.

But Charlie Ergen says Dish would prefer not to sell their wireless play. The satellite television business has peaked. The future is mobile. Data not voice.

Dish Network spent $2.9 billion acquiring bankrupt satellite companies and their 2-way frequencies in 2011, and expects to utilize them for terrestrial LTE. What Dish and Google don’t have is wireless infrastructure and experience in mobile voice.

Sprint’s filing with the FCC this week reiterated its call to shift Dish Network’s AWS-4 band up 5 MHz from 2000-2020 MHz to 2005-2025 MHz so their planned adjacent “H block” of PCS spectrum can be used for LTE. Sprint wants to use the entire 1990-2000 MHz block (two 5 MHz chunks). But that would adjoin Dish’s spectrum and cause mutual interference.

Sprint-Nextel claims that if the FCC were to limit their proposed “H Block” to only small cell use, it would not likely bid on the spectrum. Dish has argued that a “full power” H Block would cause at least 25 percent of its uplink to become unusable, a claim Sprint has said is erroneous. Sprint says it is open to hosting Dish with their Network Vision architecture – but only if Dish were bumped up 5 MHz.

Jeff Blum, senior vice president and deputy general counsel for Dish, called Sprint’s proposal a “zero-sum approach” that “does not result in net spectrum gain for the American consumer and creates no new jobs.”

“Worse yet, it takes 5 MHz of spectrum out of the hands of a new market entrant and puts it in the hands of an incumbent that already has more than 200 MHz of wireless spectrum,” Blum said. “This makes no sense at a time when the nation is enduring a spectrum crunch and would benefit from more wireless competition.

Dish applied 18 months ago to the FCC to change the 40 megahertz of spectrum from requiring dual-mode satphones to allowing cheaper LTE phones that only work terrestrially. The FCC, apparently fearing a conservative LightSquared-like backlash (somehow), will finally make a ruling on Dish’s LTE and spectrum plan by year end.

The FCC, according to the WSJ, is seriously considering ruling against Dish — a move that Ergen said “would be a game changer for us.” In contrast, the FCC approved AT&T’s plan for 2.3 GHz in literally days.

T-Mobile and Sprint are positioned to take market share from AT&T and Verizon. Dish spectrum will likely be a catalyst for cheaper data plans. Ad revenue pays the freight.

Sprint’s Network Vision might incorporate Dish on their PCS antennas or Clearwire might incorporate Dish on their 2.6 GHz infrastructure. Clear has delayed their rollout of TD-LTE. T-Mobile’s TD-LTE rollout also starts mid-2013, a good match for Dish.

Dish spectrum provides interesting possibilities:

  • AT&T buys Dish. AT&T needs spectrum more than anyone and has the money. AT&T would have to build the infrastructure and get it approved by the feds. Dish says it would prefer a partnership, not a sugar daddy like AT&T (propped up by the iPhone). Dishes frequencies are also not international, like 1.8 and 2.6 GHz. If AT&T bought 40 MHz of 2.6 from Sprint, they could offer international roaming and iPhone access. It’s a close call. AT&T is on the ropes. Charlie Ergen is the decider.
  • A T-Mobile MVNO. T-Mobile has MVNO deals with Simple Mobile, Solavei and Ultra Mobile. Operating on the Dish frequencies, it would have the advantage of T-Mobile’s nationwide AWS tower infrastructure. Google Wireless provides free, $10 and $20/mo wireless data plans. T-Mobile handles billing and voice.
  • A Sprint/Softbank MVNO. Dish’s frequencies would create internal competition with Sprint’s own wholesale business at 2.6 GHz. Sprint/Softbank might grow their wholesale business with Dish if they sold off 2.6GHz and utilized 2.1 GHz, which has better range. That solves the interference issue.
  • A foreign operator, like América Móvil or Telefónica. This could break the log jam and create a new channel — much like Free Mobile did for France.
  • A Public Utility Coop. Run by the Competitive Carrier Association, a non-profit could allow competition and buy in bulk, offering data packages at half the cost.

The deal most likely to be approved by regulators might be if Dish teams with T-Mobile on a stand-alone MVNO and Sprint sells 40 MHz to AT&T. That evens the playing field.

Then Dish and DirecTV could merge and América Móvil could buy out Vodafone’s share of Verizon. América Móvil provides mobile service to 246 million subs in 18 countries.

Telefónica has teamed with Microsoft to develop what it calls its Global Video Platform for the delivery of all IPTV video content to its 300 million-plus customers in Europe and Latin America. Other operator partners include AT&T, Deutsche Telekom and TELUS. Telefónica might handle AT&T’s microcell and video division with Microsoft.

How does it shake out? AT&T with Telefónica and Microsoft buy 2.6GHz for microcell streaming video. Verizon with América Móvil upgrades Tracfone on AWS. T-Mobile with Dish and Google Wireless. Sprint/Softbank with Apple and Clearwire with Amazon and Facebook. Telefónica attempts to buy Clearwire but is repelled by Softbank.

All this is just idle speculation, of course. Something’s got to give. Mobile World Congress in February 2013 would be a good place for an announcement. That means some kind of tentative agreement should be reached by the end of the year.

Related Dailywireless articles include; Dish and Sprint Battle over PCS band Extension, FCC Approves 2.3 GHz for AT&T, AT&T Likely to Get 2.3 GHz, Sprint’s Dish Compromise, Nexus 4 Deals for Voice/Data, MetroPCS Merges with T-Mobile USA, T-Mobile & MetroPCS: Spectrum Rich for LTE-A, T-Mobile USA Upgrades to LTE, T-Mobile Gets AWS Spectrum from Breakup, Virgin Mobile Wants Russian MVNO Deal, Dish LTE-Advanced Called “Ollo”, Clearwire Cuts TD-LTE Deployment, Dish Talks Up Terrestrial LTE, Charlie Ergen’s Spectacular Triple Play, Charlie’s Big Play, EchoStar Closes $2B Hughes Deal, Broadband Satellites: Black Hole?, Aero Prevails, FCC to Okay Verizon/Cable Spectrum Buy, T-Mobile Gets AWS Spectrum from Breakup, Verizon Buying Nationwide AWS Spectrum from Cable, Vodafone’s share of Verizon, Carlos Slim Plans Internet TV Network, Latin America Goes LTE with Huawei and Ericsson, Top 20 Mobile Operators, Dish Holding Spectrum Cards, Sprint Gets Majority Control over Clearwire, Dish Planning Internet-based TV Service?

Posted by Sam Churchill on .

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