Dish's LTE Plan Could Be in Jeopardy

March 21 may be D-Day for Dish Network LLC (Nasdaq: DISH)'s plan to build out its own Long Term Evolution (LTE) network.

It depends on whether the Federal Communications Commission (FCC) decides to start developing rules for flexible terrestrial use of spectrum assigned to the Mobile Satellite Service (MSS) in the 2GHz band. Dish is in line to gain access to 40MHz of S-band spectrum in that band via its acquisitions of TerreStar Networks and DBSD North America Inc. for a combined $2.8 billion.

Dish was counting on the FCC waiving the requirement that Dish's spectrum be applied to phones that support both land and satellite connections. But if the FCC dives into the MSS rulemaking, it would mean no waiver right away and a lengthy wait -- and Dish doesn't want to wait. Chairman Charlie Ergen has already said he'd explore all other options, including the sale of that spectrum.

The FCC's self-imposed deadline on the waiver decision is March 12, but the looming FCC vote (they call it a notice of proposed rulemaking -- a vote on whether to develop rules) could mean FCC Chairman Julius Genachowski is "disinclined" to grant the waiver, Stifel, Nicolaus & Co. Inc. analysts David Kaut and Christopher King wrote in a research note.

Why this matters
If Dish sells the spectrum, AT&T Inc. (NYSE: T) and T-Mobile US Inc. are among the carriers speculated to be interested in buying that capacity and perhaps partnering with Dish. But they may have to dig deep to get it. BTIG Research analyst Walter Piecyk tells Light Reading Cable that if Ergen is forced to sit on that spectrum without any buildout requirements, "it will continue to rise in value as smartphone penetration and data usage continues to rise."

For more
Catch up on Dish's LTE ambitions.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:40:46 PM
re: Dish's LTE Plan Could Be in Jeopardy

The best case scenario for Dish is to get the waiver ahead of or in conjunction with the FCC vote. Worst case is it doesn't get the waiver and it has to twiddle its thumbs as the FCC ramps up what would likely be a lengthy rulemaking process (and then hope that the resulting rules will allow Dish  to use the spectrum as it intends to).

Chalk some of this up to posturing (it's about FCC regs , after all) , but Dish insists that it can't wait very long to start executing the plan it has in mind partly because it will have to get to work on R&D on equipment that can use the spectrum. And it's not about to get too far downstream on that until the FCC acts. Here's the statement from Dish that resets its position on the matter:

"DISH looks forward to working with the FCC on the 2 GHz Mobile Satellite Service (MSS) Notice of Proposed Rulemaking (NPRM) that was announced today to examine important spectrum policy issues.  Concurrent with the NPRM, we believe that the Commission should grant our waivers.  Immediate grant of the waivers is essential for DISH to expeditiously put the S-Band spectrum to competitive use.  Time to market is critical, and we need regulatory certainty to begin development of consumer devices and to design our state-of-the-art 100 percent 4G broadband network.  A rulemaking alone would delay that process indefinitely." 

Jeff Baumgartner 12/5/2012 | 5:40:46 PM
re: Dish's LTE Plan Could Be in Jeopardy

Troubling news for Dish late Friday , when the FCC denied the waiver as it moves on the proposed rulemaking. We'll have more ,but here's part of Dish's reaction to the news:


" As we review our options, we will continue working with the FCC on the forthcoming 2 GHz Notice of Proposed Rulemaking (NPRM) to achieve those goals as expeditiously as possible. DISH is committed to helping the Administration and the FCC solve the existing spectrum crunch, and DISH believes that new competition is particularly critical given the expanding world of bit caps and restrictive data plans. We expect to close the DBSD and TerreStar transactions as soon as practicable.”


joset01 12/5/2012 | 5:40:42 PM
re: Dish's LTE Plan Could Be in Jeopardy

Oof. Where now for wholesale customers? Clearwire is the ONLY option.

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