Dish Network LLC (Nasdaq: DISH)'s plan to deploy its own Long Term Evolution (LTE) network is stuck on the launch pad.

The Federal Communications Commission (FCC) on Friday denied a waiver that would have given Dish permission to use 40MHz of S-band spectrum solely for cell phone use -- essentially the same kind of waiver LightSquared required for its spectrum.

But, as Dish Chairman Charlie Ergen had feared, the FCC will pursue new rules that look to permanently approve the use of Mobile Satellite Service (MSS) spectrum for terrestrial use.

The good news for Dish is that the FCC did clear the way for the satellite TV giant to buy TerreStar and DBSD North American Inc. -- the sources of Dish's new spectrum. Dish said it expects to close those deals, valued at a combined $2.8 billion, "as soon as practical."

Why this matters
The decision is a big blow to Dish's near-term wireless plans. Dish must now cool its heels as the FCC starts the rulemaking process, which could take a year or more to complete. Dish has argued that it's critical to gain approval for that spectrum right away so it can start to develop new devices that can use it.

Dish has also warned that a denial of the waiver or a rulemaking would force it to seek other options for its spectrum, including a possible sale. But Dish may have to sit on the spectrum until there's regulatory assurances that it can be used for terrestrial wireless services. In the meantime, Dish pledged to work with the FCC on the new rules and to "achieve those goals as expeditiously as possible."

For more

• Dish's LTE Plan Could Be in Jeopardy
• Dish: This Year's LightSquared?
• FCC Could Blow Up Dish's LTE Plan
• Charlie Ergen's Spectrum Grab
• Dish Sizing Up Mobile Broadband Service
• Dish's LTE Dreams Inch Toward Reality

— Jeff Baumgartner, Site Editor, Light Reading Cable