Dish Network may be forced to sell the spectrum it hopes to use for a nationwide LTE Advanced network if the FCC does not approve a crucial waiver Dish needs, according to Dish Chairman Charlie Ergen.
In addition to seeking approval for its purchase of 40 MHz of S-band spectrum, Dish is also asking the FCC to waive its Ancillary Terrestrial Component (ATC) "integrated service" rule. Waiving the rule would permit Dish to provide both dual-mode devices and single-mode terrestrial devices to customers who do not want the satellite function. Dish CEO Joseph Clayton said he expects a decision from the FCC in the "coming weeks." One possible outcome of Dish's request is that the FCC could initiate a rulemaking proceeding on the topic for all MSS spectrum, which would delay Dish's network launch, Ergen said.
"I think if they went to rulemaking, that we'd look at the risk profile, which if we look at it today, would say that our risk profile would increase substantially," Ergen said during the company's fourth-quarter earnings conference call, according to a Seeking Alpha transcript. "And I think it would--it may be too risky for us to enter the business place. In which case, all options would be on the table for how we would move forward with the company and the spectrum."
Ergen said Dish has an "80 percent chance or better" of being successful in the wireless industry as long as the FCC lets Dish use the spectrum and grants the waiver. Otherwise, he said: "We'd have to look at other alternatives with what to do with the business and the spectrum, which would be unfortunate."
The waiver that Dish is seeking is similar to the one the FCC granted to LightSquared, though the FCC granted the LightSquared waiver on the condition that all GPS interference concerns with LightSquared's proposed wholesale LTE network be resolved before the company launched service. Earlier this month the FCC said it would revoke the LightSquared waiver since those issues could not be resolved.
Ergen, who met earlier this week with FCC Chairman Julius Genachowski to press the company's case, said that given the LightSquared situation and the fact that broadcast TV spectrum won't be auctioned off for several more years, "we're kind of the country's best hope" for getting more spectrum into use in the wireless market.
Dish has pressed for the waiver to be addressed simultaneously with its spectrum license transfers so that it can get its network built quickly. "And the reason that a delay is so important is that our chipsets and our infrastructure is at a different frequency that's not used in the United States today," Ergen said. "And so our lead time to build those products and invest in those products, we had to start from scratch. So that's a major hurdle to overcome."
Ergen also reiterated a point he and Clayton have made in the past: that Dish could partner with another wireless carrier. He also mentioned network sharing as a possibility. "And it could be in any variety of--those could take any variety of shape, and that would potentially be a way to enter the marketplace sooner and reduce risk," he said. "And obviously, as rational businesspeople, we look at all those things. But you have to be in the game to be able to do that. And as I said, we're not in the game right now."
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