Dish's Ergen continues to pursue spectrum from 800MHz to 12GHz

Charlie Ergen's appetite for spectrum is showing no signs of slowing.

In recent days he appears to have committed $100 million to T-Mobile in pursuit of that company's 800MHz holdings. He also appears to have traveled to Washington, DC, in part to urge regulators to free up the 12GHz band for fixed wireless services.

And that's not all. Ergen also may be interested in the $9 billion the FCC is setting aside for its 5G Fund. During meetings this week with FCC officials, Ergen "encouraged the Commission to give greater weight to prospective 5G Fund for Rural America (5G Fund) participants that utilize open RAN in 5G Fund deployments."

Dish did not provide details on its proposal in its recent filing to the FCC summarizing Ergen's meetings with regulators. But it's possible that Dish might be looking to encourage smaller wireless network operators in the US to embrace the open RAN technologies it's using in its own 5G network. Or, potentially, Dish might be looking to score a part of the $9 billion in the fund to expand its own 5G network into rural areas.

Regardless, taken together, the developments appear to indicate that Dish is looking to expand its 5G ambitions beyond the roughly 240 million people it covers today.

The ongoing 800MHz drama

In new court filings, it appears that Dish and T-Mobile have agreed to a seven-month extension for Dish to purchase T-Mobile's 800MHz holdings. As noted by Bloomberg, Dish now has until April 1 to raise the $3.6 billion necessary to purchase T-Mobile's spectrum licenses. However, Dish must pay T-Mobile $100 million for that extension.

Now all that's left is court approval of that new deal.

"We are highly confident the court will take the deal, as courts tend to do when all the parties agree," wrote the financial analysts at New Street Research.

According to the financial analysts at Raymond James, the new deal reflects the sincerity of Dish's interest in T-Mobile's spectrum. "We believe the $100 million extension fee suggests that the company is seriously looking at ways to fund and buy the spectrum," they wrote in a recent note to investors.

Indeed, the analysts wrote that the 13.5MHz chunk of 800MHz spectrum at the heart of the debate might be worth close to $10 billion, based on the $2.21 per MHz-POP that T-Mobile recently agreed to pay Comcast for similar lowband spectrum. The per MHz-POP calculation is applied to most spectrum transactions and reflects the number of people covered compared with the amount of spectrum available, though it can be affected by a wide variety of factors.

"If we valued the 800MHz spectrum from T-Mobile at that same ~$2.21 per MHz-POP, it would suggest a value of ~$9.8 billion, compared to the $3.6 billion plus $100 million extension fee Dish would have to pay," they explained. "As such, we would like for Dish to find a way to capitalize on what amounts to arbitrage for an important block of lowband spectrum."

Dish, for its part, is hoping to find a better financing environment next year, after the close of its proposed merger with EchoStar.

The 12GHz band

Earlier this year, the FCC ruled against a proposal to allow mobile operations in the 12GHz band. But the agency left open the door for fixed wireless offerings in the band.

That could align with Ergen's plans for Dish's 12GHz holdings. Last year, Ergen suggested that the 12GHz band is an "ideal frequency" for fixed wireless access (FWA) services that could support "millions of customers," particularly in rural areas.

"The 12GHz band represents 500 megahertz of spectrum that can be authorized for higher-power fixed service without causing harmful interference to existing services," the company wrote of its latest meetings with FCC officials. "Dish reiterated that the Commission can, and should, act expeditiously to unlock the power of 5G-ready spectrum in this band."

The FWA industry has been growing by leaps and bounds, with FWA providers T-Mobile and Verizon chewing up most of the growth in the US broadband industry in recent months. Further, AT&T recently jumped into the space, gaining 25,000 FWA customers in its most recent quarter.

However, FWA services in general are limited by the amount of spectrum providers can apply to their networks. Thus, Dish's sizable holdings in 12GHz could power a noteworthy FWA play by the company.