Dish to Serve Mobile Video?

Any strategy Charlie Ergen lines up for newly won spectrum following the Federal Communications Commission (FCC) 's 700 MHz auction will likely center on what the satellite provider does best: video.

And, with wireless spectrum soon to join the assets of Dish Network LLC (Nasdaq: DISH), the going bet is that its chairman, president, and CEO, already a solid poker player, will push a few stacks of chips toward a mobile video service and application strategy.

While cable operators such as Cox Communications Inc. made some noise following last week's auction results, Frontier Wireless, a wholly owned subsidiary of Dish, bid about $711.8 million to snap up 168 licenses in the E-block. According to an 8-K document filed Friday (March 21), the licenses cover about 76 percent of the U.S. population.

The company has not identified its plans for the spectrum, but it's believed that Dish could use it to deliver video applications to mobile devices, because the spectrum is best suited for broadcast connections.

"I don't think anyone out there would say [that strategy] wouldn't have great potential," says Jimmy Schaeffler, the chairman and chief service officer of The Carmel Group .

The concept of video mobility and portability isn't new to Dish or its recently spun-out EchoStar Holding Corp. subsidiary. (See EchoStar Ready to Split.) The company is already an investor in Archos, the maker of PocketDISH, a portable video player that can retrieve and playback recordings from Dish satellite receivers with on-board digital video recorders (DVRs). Last year, Ergen agreed to put up $380 million for place-shifting pioneer Sling Media Inc. , so it's clear that Dish doesn't believe content (and video, particular) should be tethered to a solitary device. (See EchoStar Slings at Consumers.)

Schaeffler, recalling when Ergen was just an anonymous C-band dealer in Colorado in the 1980s, says: "He took the risk of his life by getting into direct broadcast satellite by buying some spectrum and making that spectrum work. Here he is doing almost the same thing, almost 20 years later."

Ergen didn't have to pay that much relative to what Verizon Communications Inc. (NYSE: VZ) or AT&T Inc. (NYSE: T) are forking over for their spectrum. "It would be one helluva bargain," Schaeffler adds.

Or it might be a money pit. Reuters, citing Citigroup analyst Jason Bazinet, reported that Dish might have to spend up to $5 billion to build out a wireless video network.

And it might have to partner up if it wants to fill potential coverage gaps in some of the larger U.S. markets. Qualcomm Inc. (Nasdaq: QCOM) secured E Block licenses in hubs such as Los Angeles, New York, Philadelphia, Boston, and San Francisco.

— Jeff Baumgartner, Site Editor, Cable Digital News

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