Dish Network (
) recently won the bidding for wireless broadband
frequencies in all 176 U.S. markets auctioned by the Federal
Communications Commission (FCC). Dish bid exactly the $1.56 billion
it promised the FCC that it would spend in exchange for more
flexibility in how it uses other wireless broadband frequencies.
While the FCC will be deploying the raised money for the
licenses to fund a nationwide wireless communications network for
emergency responders, Dish gets another 10 megahertz of spectrum,
taking its total spectrum holding to 56 megahertz. Having amassed
the spectrum, Dish can move forward with a number of options, such
as leasing or selling the spectrum, launching its own nationwide
wireless network, or partnering with an existing wireless
See our complete analysis for Dish
Why Was Dish Interested In H-Block Auction?
The H Block is a 10 MHz block of paired airwaves that runs from
1,915-1,920 MHz (for the uplink) and from 1,995-2,000 MHz (for the
downlink). Dish controls 40 MHz spectrum adjacent to a portion of
the H Block, called AWS-4, which specifically runs from 2,000-2,020
MHz (for the uplink) and 2,180-2,200 MHz (for the downlink).
However, Dish has asked the FCC to let it use the 2,000-2,020 MHz
band for downlink operations instead of uplink as a condition for
agreeing to bid the reserve price.
Late last year, the FCC had given the nod over extending the
deadline for Dish to complete a national wireless broadband
network. The FCC also gave the company flexibility in how it can
use wireless frequencies. In return, Dish pledged to bid at least
$1.56 billion in the FCC's H-block auction of frequencies and to
lower the power of transmissions on some former TV-station analog
frequencies Dish bought in 2008.
The bid for H-Block airwaves was part of the company's
initiative to build a wireless service offering voice, video and
high-speed Internet, both at home and for mobile devices. The
satellite provider has been aggressively acquiring wireless
spectrum for a while in order to enter the wireless space. In 2011,
Dish acquired bankrupt DBSD and Terrestar for their spectrum.
Overall, Dish has spent more than $5 billion on such acquisitions
Dish sees the bundling potential as a growth opportunity due to
the saturation of the U.S. pay-TV industry. Pay-TV penetration is
currently very high, with more than 90% of the U.S. TV households
subscribing. Given the saturation level and slowdown in the housing
market, it is difficult to see a significant increase in the number
of the U.S. pay-TV subscribers. Moreover, fierce competition
between satellite, telcos and cable operators, and the rise of
alternative video platforms is adding to the woes of pay-TV
operators. In such a scenario, wireless could fuel the future
growth for Dish.
However, the question is how will Dish put the spectrum to use?
Last year, the company made an unsuccessful attempt to acquire
) and failed to outbid Japanese telco Softbank. There were talks
between Dish and T-Mobile U.S. but even those appear to be fading
away since Softbank has approached T-Mobile. Charles Ergen,
co-founder and chairman of Dish Network, recently stated that Dish
is not going to outbid SoftBank in any transaction and to the
extent that the Japanese telco is going after T-Mobile, Dish won't
engage into that. Given the circumstances, it appears that building
its own network or partnerships with existing players is the road
forward for Dish's foray into the wireless arena.
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