Dish’s 700 MHz Spectrum Emerges as New Issue in S-band Proceeding
Questions about Dish Network’s 700 MHz E-block licenses has emerged as a consideration in the FCC’s review of Dish’s takeover of S-band spectrum. AT&T and U.S. Cellular have asked the agency to impose restrictions to “harmonize” the 700 MHz spectrum. The efforts seem to have touched a nerve with Dish, which discussed the issue with FCC Commissioner Mignon Clyburn and an aide Friday (http://xrl.us/bmq5cy), following an FCC filing last week responding to AT&T. The filings may be more about negotiating leverage than about interference concerns, said industry observers. A Dish subsidiary owns licenses for 6 MHz of 700 MHz spectrum in 170 markets.
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The 700 MHz E-block license issue is especially important to AT&T in light of its purchase of Qualcomm’s five licenses in the same spectrum. U.S. Cellular and AT&T have said the FCC should impose similar conditions on Dish’s 700 MHz spectrum as were included in AT&T/Qualcomm, specifically that the E-block use the same power and antenna limits that apply to the A and B blocks and that it be used only for downlink transmissions. Dish has said the E-block issue isn’t germane to the S-band proceeding and it hasn’t even made clear its plans for the spectrum. Speculation has increased in recent months that AT&T would seek a deal with Dish after AT&T’s proposed buy of T-Mobile fell through. The 700 MHz issue didn’t come up until AT&T raised it in a filing, a review of ex parte filings show. AT&T and Dish didn’t comment. The FCC is reviewing Dish’s buy of mobile satellite service S-band licensees and related waivers allowing for terrestrial service.
The 700 MHz dispute seems largely based on negotiating position, said industry executives. While Dish probably has the “winning legal argument here,” there’s some logic from AT&T’s point of view, said an industry lawyer. “From the point of view of efficient use of spectrum it probably makes sense for all blocks in the band to be used with the same technical parameters,” he said by email. “So I could see the FCC forcing DISH to accept this condition in order to get the 2 GHz deals approved, even though the issue really isn’t related to the 2 GHz proceeding.” While the issue is “tangentially” related to an FCC proceeding on 700 MHz interoperability, that proceeding largely deals with paired spectrum, which the E-block is not, said the lawyer.
Such restrictions “could materially reduce the value of that spectrum for DISH or for anyone who doesn’t want to use the same architecture AT&T is using,” he said. “If AT&T is indeed considering buying DISH or its spectrum, this could lower the price AT&T would have to pay and/or reduce the number of potential buyers (certainly it would reduce DISH’s options for exploiting the spectrum)."
The fight over 700 MHz restrictions is ultimately about what options Dish would have upon FCC approval, said consultant Tim Farrar. “AT&T wants a situation where Dish can only sell to AT&T,” said Farrar. If the conditions aren’t adopted, Dish would “have more leverage over AT&T” in negotiating a deal for its spectrum because Dish wouldn’t be “constrained to just do AT&T” and could pursue other deals, with MetroPCS for example, he said. Gaining access to Dish’s S-band and a ready-to-use E-block, combined with the E-block spectrum gained through Qualcomm, would give AT&T a “very powerful network,” he said.