Dish’s Wireless Plans Could Cost More

Dish affiliates would pay $3.3 billion more for spectrum under FCC proposal
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Dish affiliates would pay $3.3 billion more for spectrum under FCC proposal
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Washington D.C. – Dish affiliates Northstar Wireless and SNR Wireless will have to cough up another $3.3 billion on top of their $13.3 billion winning bids for about 25MHz of wireless AWS-3 cellular spectrum, a Federal Communications Commission draft order contends.

Dish disagreed.

The draft order, which is still subject to change, must go to the full commission for a vote.

In a meeting with staff members of the FCC’s Wireless Telecommunications Bureau, Dish said it was told that the draft order, if approved, would find that Dish owns a controlling interest in successful bidders Northstar Wireless and SNR Wireless. As a result, Northstar and SNR are ineligible to receive a 25 percent bidding credit that they had applied to receive as designated entities under FCC rules. The additional cost would be another $1.9 billion for Northstar Wireless and $1.4 billion for SNR Wireless.

The draft order, however, finds both entities are qualified to hold AWS-3 licenses, and it says the FCC will not hold a hearing on the matter or refer it to the FCC enforcement bureau or the Department of Justice.

Dish EVP and general counsel R. Stanton Dodge contended that the two entities’ bids “followed 20 years of FCC precedent and complied with all legal requirements.” Dish’s investments in NorthStar and SNR “helped make the AWS-3 auction the most successful spectrum auction in FCC history and resulted in more than $20 billion of direct benefit to the American taxpayer,” he said.

The satellite-TV company has said it wants to diversify beyond its mature satellite-TV business and possibly use cellular spectrum to offer triple-play packages combining home phone and broadband service with satellite-TV service. Dish could also deliver subscription-TV content to smartphones if it secures such rights.

During the auction, Dish’s affiliates acquired around 25MHz of spectrum near the currently deployed AWS 1.7/2.1GHz spectrum to supplement Dish’s 700MHz spectrum and 2GHz AWS-4 spectrum, which consists of satellite spectrum repurposed for terrestrial service.

Dish hasn’t yet launched cellular service, but the company has said it wants to diversify beyond its mature satellite-TV business and possibly use cellular spectrum to offer triple-play packages combining home phone and broadband service with satellite-TV service. Dish could also deliver subscription-TV content to smartphones if it secures such rights.

Some analysts believe Dish might also try to lease capacity to other carriers or merge with T-Mobile to get into the cellphone business.

During the AWS 3 auction early this year, Verizon, AT&T, T-Mobile and Dish collectively spent $41.3 billion for spectrum near the currently deployed AWS 1.7/2.1GHz spectrum.

T-Mobile spent $1.8 billion compared to AT&T’s $18.2 billion, Verizon’s $10.4 billion, and Dish’s $13.3 billion.

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