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FCC Could Blow Up Dish's LTE Plan

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Dish Network LLC (Nasdaq: DISH) Chairman Charlie Ergen likes his chances of turning the company's Long Term Evolution (LTE) plan into a successful business, but warns that the fate of it rests in the hands of the Federal Communications Commission (FCC) as the agency decides whether to grant Dish an all-important waiver for its wireless spectrum.

Ergen, speaking on Thursday's earnings call, said Dish is eager to build an LTE network on its own or with partners, but said it would have to look at all other options, including a sale of that spectrum, if the FCC doesn't award the waiver or delays it by putting the matter through a formal rulemaking process. The FCC's self-imposed 180-day window on the decision closes on March 12, he added.

Dish wants to build an LTE network based on spectrum it's in line to acquire via its acquisitions of TerreStar Networks and DBSD North America Inc., but needs a waiver that would relieve a requirement that the spectrum is used on phones that support both land and satellite connections. (See Charlie Ergen's Spectrum Grab Dish Sizing Up Mobile Broadband Service , Dish's LTE Dreams Inch Toward Reality and Dish: This Year's LightSquared?)

The next couple of weeks will determine "whether we are in or out," said Ergen, who's known for his prowess at the poker table. "You have to be in the game, and we're not in the game right now."

And the waiver could prove vital to Dish's long-term vision as its core video service struggles to grow. The company believes a mobile broadband play will let it create a package of voice, video and data products that customers can use at home or on the go. (See Dish Subs Back in Black, But for How Long? )

Wireless is a "key, even transformative, strategy for us," Ergen said, giving Dish's new broadband wireless plan an "80 percent chance of being successful." But the FCC's finger is on the "self-destruct button," he added, comparing the situation to when Dish's satellite TV dreams rested on the successful launch of a Chinese-made rocket in the mid-1990s. "The waiver is a lot like that Chinese rocket," he said.

Ergen added that Dish needs that waiver as soon as possible because it will need lead time to develop products that can use the spectrum. But it's in a holding pattern until the FCC acts.

And he's confident that Dish's plan meets the public interest for a waiver, painting his company as a "disruptive" force against the dominance of AT&T Inc. (NYSE: T) and Verizon Wireless , which recently struck service bundling and spectrum deals with four major U.S. cable operators.

Ergen remains hopeful that the FCC will grant the waiver, holding that the spectrum it intends to use has "very little interference issues," and avoid what has stymied LightSquared 's plans. (See FCC Moves to Block LightSquared .)

But he joked about his poor track record with the feds. "I'd go broke betting on Washington. I'm about 0 for 100 in Washington," he said. Ergen then reflected for a moment and said the situation reminded him of a line in Dumb and Dumber. "I think there's a chance."

Okay, it wasn't a spot-on recital of the line, but here's the scene Ergen was summoning:

— Jeff Baumgartner, Site Editor, Light Reading Cable

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User Rank: Light Beer
12/5/2012 | 5:41:36 PM
re: FCC Could Blow Up Dish's LTE Plan

Interesting that Dish wants waiver from the requirement that phones support both LTE and satellie network. Lightsquared's integrated network is intended to do just that. So what's interesting is that if after FCC put the brakes on the Lightsquared network (citing interference with some GPS devices), FCC grants Dish the waiver.

Jeff Baumgartner
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:41:34 PM
re: FCC Could Blow Up Dish's LTE Plan

yeah, Lightsquared will flip out if Dish gets it and they don't, though there's no indication that Dish has the GPS interference issues that has caused so much trouble for Lightsquared.   But looks like Charlie's more worried about the spectre of a notice of proposed rulemaking from the FCC that would slow things down. JB

User Rank: Light Beer
12/5/2012 | 5:41:32 PM
re: FCC Could Blow Up Dish's LTE Plan

My understanding is that the Dish spectrum was earmarked up front to support both terrestrial and satellite service. Dish is just trying to ditch the satellite requirement.

LightSquared's spectrum, on the other hand, was originally earmarked only for satellite use.

So I don't see it as a big issue if the FCC gives Dish a pass on the satellite component.

User Rank: Light Beer
12/5/2012 | 5:41:30 PM
re: FCC Could Blow Up Dish's LTE Plan

The Dish spectrum is right next to Sprint's. Both are terrestrial, so the strong terrestrial signal swamping out a very weak satellite signal issue that occurs with GPS doesn't apply. Nevertheless, Sprint sued to prevent Dish from getting this spectrum. They settled the lawsuit.

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