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Dish proposal hints at plans to deploy LTE across 700 MHz E Block and AWS-4 holdings

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Dish Network (NASDAQ: DISH) filed a new proposal with the FCC that the company said would allow it to deploy an LTE network across its 700 MHz E Block and AWS-4 spectrum holdings. Dish is asking the FCC to set a new buildout deadline on its 700 MHz spectrum that would require the company to cover 40 percent of the population covered by its licenses by 2017 and 70 percent by 2021.

Dish paid around $712 million for 168 licenses across the country in the E Block during the FCC's 700 MHz spectrum auction in 2008. Under the FCC's network buildout requirements for the E Block, licensees must "provide signal coverage and offer service over at least 35 percent of the geographic area of each of their license authorizations no later than June 13, 2013." Dish has tested a number of mobile TV services in the E Block, but so far has not deployed commercial service.

Now, Dish said it is willing to reduce the maximum power output of its planned E Block network in order to prevent interference with operations in adjacent spectrum bands. But the company said that "the contemplated reduction of the E Block maximum authorized power levels will fundamentally alter network design and deployment strategies, thus imposing substantial additional costs and stranding Dish's investment to date to commercialize its 700 MHz E Block licenses." As a result, Dish is asking the FCC to extend the E Block buildout requirements to give Dish a chance to rework its network deployment plans.

Further, Dish said that now it currently plans to "deploy an LTE network similar to what 700 MHz Lower A, B, C, and D block operators have deployed today." The company also said that there is a "strong likelihood that Dish's E Block licenses will be deployed in conjunction with Dish's AWS-4 holdings," which likely indicates that the company currently plans to deploy an LTE network across its E Block and AWS-4 spectrum. (Several years ago Dish paid around $2.775 billion for 40 MHz of S-band satellite spectrum in the 2 GHz band, which the FCC allowed Dish to repurpose for terrestrial use and dubbed the AWS-4 band.)

An FCC spokesman did not immediately respond to a request for comment.

To be clear, an LTE network stretching across Dish's AWS-4 and E Block spectrum would still be tiny in comparison to the wireless networks of Tier 1 U.S. operators like AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ). However, Dish reportedly continues to chase additional wireless partners and additional spectrum.

Although Dish has said it doesn't plan to participate in the FCC's upcoming H Block auction, the company is pursuing a purchase of LightSquared's spectrum through bankruptcy court. Further, Dish Network Chairman Charlie Ergen has mentioned T-Mobile US (NYSE:TMUS) as a possible merger or acquisition target. Dish's attempts to purchase Sprint (NYSE:S) failed earlier this summer when SoftBank managed to purchase a controlling stake in Sprint.

Dish's new proposal could be related to an announcement from AT&T Mobility that it will now support Band Class 12 devices. Previously, AT&T had argued that it could not support Band Class 12 devices due to a variety of factors, including potential interference from E Block licensees. Dish's proposal to lower the maximum authorized power levels in its planned E Block operations could have played a part in AT&T's newfound support of Band Class 12. Indeed, in Dish's filing, the company said that "if AT&T declares its commitments null and void pursuant to the terms of the industry consensus on interoperability between AT&T and A Block licensees, then Dish reserves the right to challenge by appeal the reduction of its E Block power levels."

TMF Associates analyst Tim Farrar said that Dish's new proposal could ultimately pave the way to a teaming between Dish and either AT&T or Sprint, whereby Dish would essentially become a tower company: "Dish's submission to the FCC earlier this week, offering concessions on 700 MHz E Block power limits (thereby securing support from AT&T), and the prospects of a bid of up to $0.50/MHzPOP ($1.5B) for the PCS H block, in exchange for the option to use the 2000-2020 MHz AWS-4 uplink band for downlink operation, confirms that Dish's plan is to use LightSquared's L-band spectrum for uplink operations," Farrar wrote. "That would presumably be paired with the 2180-2200 MHZ AWS-4 downlink, which would give Dish the opportunity to offer the 2000-2020 MHz band as supplementary downlink for PCS operators. It also confirms that Dish's two targets for a potential partnership are now AT&T and Sprint, since they will be the two main LTE operators in the PCS band, and strongly suggests that Dish no longer has any interest in buying T-Mobile."

For more:
- see this TMF Associates post
- see this FCC filing

Related Articles:
AT&T does an about-face, will support 700 MHz interoperability
Dish's Ergen singles out T-Mobile as potential wireless M&A partner
Dish: We likely won't 'meaningfully participate' in H Block auction
Dish considers expanding 700 MHz mobile TV service to 40 markets

Article updated Sept. 12 with comment from Tim Farrar.