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The chairman of the Federal Communications Commission on Tuesday proposed to greenlight Dish Network’s plan to create a nationwide LTE network, competing with those of AT&T and Verizon Wireless. The FCC is expected to vote on the proposal before the end of the year.

But the agency’s proposal will apparently force Dish to bump up their spectrum band by 5 MHz, reports Fierce Wireless.

Dish blasted the agency’s proposal today as “significantly flawed.” Dish said the FCC’s rules ultimately “could add years to a process that has already lasted 20 months.”

The FCC’s proposal calls for Dish to use lower power levels on its network to minimize the chance of interfering with neighboring airwaves, reports the Washington Post.

That requirement, supported by rival Sprint Nextel, could limit the capabilities of the network, Dish said. When users upload photos or videos, the process would be much slower, the company said.

“Telling us to lower our power levels cripples our ability to enter the business,” Dish Chairman Charlie Ergen said in a phone interview. “We want to enter the wireless business. We have $6 billion more we want to spend on building out this business. But the FCC could make it extremely risky for us.”

Separately, the FCC also said it will propose auctioning the H Block of PCS spectrum in 2013, which Sprint Nextel has said it wants for its LTE network.

Sprint has repeatedly petitioned the FCC to move Dish up 5 MHz, from 2000-2020 MHz to 2005-2025 MHz so adjacent H block PCS spectrum can be used for their expanded (2 x 10 MHz) LTE service.

The developments may further muddy the outlook for Ergen—one of the wireless industry’s most closely watched wild cards, notes the Wall Street Journal.

Dish first asked for FCC approval in August 2011 after paying about $3 billion for airwaves from bankrupt satellite companies DBSD North America and TerreStar Networks in deals announced last year.

The H block auction was part of legislation creating the incentive spectrum auctions. The auctions are necessary to pay for FirstNet, a nationwide LTE network built from scratch and available only to first responders.

AWS-3 spectrum, desired by T-Mobile, may also be auctioned in the 1755-1780MHz and 2155-2180 MHz band.

But, if T-Mobile and Sprint have soured on a partnership with Dish, then conceivably Dish may be more likely to sell their spectrum outright to AT&T or partner with a foreign carrier, perhaps along with a content provider like Google or Microsoft.

Collateral damage from FirstNet and a broken Congress.

Related Dailywireless articles include; Dish: On the Move , FirstNet: The Asymetrical Threat, Dish and Sprint Battle over PCS band Extension, Dish CEO: T-Mobile Partnership?, FCC Approves 2.3 GHz for AT&T, 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, 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?, The National Broadband Plan, FCC Gets Unlicensed White Spaces in Payroll Tax Bill

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