Dish Network wants the FCC to allow it to combine the S-Band spectrum licensees it acquired from TerreStar Networks and DBSD North America and grant it a waiver to offer terrestrial-only devices to customers on a proposed hybrid satellite-terrestrial mobile broadband network using LTE-Advanced network technology.
Dish, citing the conditional waiver the FCC granted LightSquared, wants to build out a hybrid network using the 40 MHz of spectrum from TerreStar and DBSD under a subsidiary called Gamma, and argues that the network will help promote the FCC's goal of expanding broadband access. In its filing to request the transfer of the spectrum licenses, Dish said that the FCC should waive its Ancillary Terrestrial Component (ATC) "integrated service" rule, and permit Dish provide dual-mode devices to customers who want them, and single-mode terrestrial devices to customers who do not want the satellite function.
"Allowing TerreStar and Dish to provide single-mode terrestrial terminals to customers who have no need for satellite functions will achieve significant public benefits, and will do so by better serving the important, underlying policy," Dish wrote in its filing.
In the filing, Dish said that getting the waiver will allow it to acquire the "critical mass" of MSS/ATC subscribers needed to create a viable terrestrial mobile broadband offering, which will allow the company to support the MSS service. "In other words, by helping to ensure the viability of Dish's MSS/ATC service through the provision of flexibility, the commission will also help ensure a viable and substantial MSS service," Dish wrote.
An FCC spokesman declined to comment.
One of they issues that has come to the fore in the wake of the FCC's decision to grant a similar conditional waiver to LightSquared is that LightSquared's L-Band spectrum sits adjacent to GPS spectrum, and that terrestrial transmissions from LightSquared's proposed wholesale LTE network in the upper portion of its spectrum is causing GPS interference. Pointedly, in its filing, Dish said its 2 GHz S-Band spectrum "will not raise the technical issues that have hampered the use of the MSS L-Band, such as the interleaving of the operators' assignments and the severe interference claimed by systems operating in adjacent spectrum."
In return for the waiver, Dish said it will commit to a "substantial terrestrial network deployment" of a branded retail service intended to increase wireless broadband competition, including in rural areas, using LTE-Advanced network technology. Dish said it is prepared to work with the FCC "to develop a reasonable, attainable buildout schedule keyed to commercial availability of the LTE-Advanced standard," and that it is committed to developing a buildout schedule "consistent with FCC precedent and based on the buildout principles established" in Sprint Nextel's (NYSE:S) combination of its spectrum assets with Clearwire (NASDAQ:CLWR).
According to BTIG Research analyst Walter Piecyk, the Sprint buildout requirements were 15 million POPs in four years and 30 million POPs within six years. "That is materially short of LightSquared's commitment to build 100 million POPs by the end of next year and 160 million POPs by the end of 2015 in order to obtain its waiver to offer terrestrial-only services," Piecyk wrote.
Dish spokesman Marc Lumpkin did not have any comment on the buildout timetable or details.
"While we don't pretend to be regulatory experts, we would be surprised to see the FCC waiver granted to Dish which in effect would further delay any license transfer," Piecyk wrote. "If anything, Dish may have attracted unwanted attention to the lack of buildout requirements of the S-Band spectrum they are attempting to acquire with or without a waiver."
TMF Associates analyst Tim Farrar said wrote in a blog post that Dish "is now in a perfect position to replace LightSquared as the FCC's favored option for providing additional wireless competition." He wrote that the Dish application "now sets the scene for a negotiation with the commission over the terms of the promised buildout, including the specific coverage commitments and perhaps even some later promise (depending on the views of Dish's key partners) to enter into wholesale deals with smaller players. With the cable companies apparently aligning themselves with Sprint, it looks very much like Dish will now partner with MetroPCS (NASDAQ:PCS) and perhaps even DirecTV and/or Leap (NASDAQ:LEAP) as well."
- see Dish's filing (PDF)
- see this TMF Associates blog post
- see this BTIG blog post (reg. req.)
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