Dish Proposal Would Pair L-Band Spectrum with LightSquared Holdings
Dish Network Chairman Charlie Ergen appears to be putting together a plan to pair some of the S-band spectrum that Dish already owns with LightSquared L-band spectrum, for a 40 MHz national network that would make Dish a big player in the wireless industry, industry sources said Wednesday. Industry officials who attended the Technology Policy Institute’s Aspen Forum this week said they had heard from others there that the plan had been hatched and was moving forward. Dish representatives have already been at the FCC to discuss using the S-band for downlink, agency officials said Wednesday.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Under the reported Dish plan, the satellite operator would use all of its S-band spectrum for downlink, rather than using it for a 10 MHz up/10 MHz down network. Dish would then use the LightSquared spectrum for uplink. That could partially solve a big problem faced by LightSquared because using the spectrum just for uplink likely wouldn’t raise the same GPS interference issues as a two-way network, industry officials said. It would also solve a problem for the FCC with the highly controversial LightSquared issue.
Dish Executive Vice President Stanton Dodge spoke at the forum Sunday, saying Dish is “dead serious” about entering the wireless market (CD Aug 20 p9). “We acquired a bunch of S-band spectrum several years ago, successfully worked with the FCC to grant us terrestrial rights to that, and we're currently out there trying to find more spectrum,” he said. On an Aug. 6 investor call, Ergen said he bought LightSquared debt and is interested in the company’s spectrum. LightSquared “is a unique property with a lot of problems,” he said (CD Aug 7 p6). The spectrum “could fit with spectrum we have long-term,” he added. “There are lots of hoops to jump through from a regulatory point of view."
One industry executive said Ergen would have three choices if he can pull off a deal -- merging with another network operator, building a standalone network or selling the spectrum on the secondary market. Speculation was that the Dish spectrum paired with LightSquared could be worth as much as $5 billion, the executive said.
Public Knowledge Senor Vice President Harold Feld said he had heard similar discussion in Aspen, where he was on a panel. “The [Dish] scenario is the most plausible scenario to make this work and I think it’s a reasonable one,” Feld said in an interview. “The LightSquared stuff is good spectrum for this kind of use.”
"It seems like pie in the sky given all of the hurdles they would need to go through to use that L-band spectrum whether it’s uplink or downlink, the number one hurdle being the GPS industry and the number two being the Department of Defense,” said a former FCC legal adviser. A former FCC spectrum official said LightSquared remains a “toxic” topic for the administration and it appears unlikely the agency would want to reengage on LightSquared anytime soon.
The GPS industry opposed LightSquared’s plans for a terrestrial network due to interference concerns in the satellite company’s downlink spectrum. LightSquared’s proposal to permanently relinquish the 1545-1555 MHz band and deploy terrestrial downlink operations at 1670-1680 MHz is expected to fix the GPS issue (CD Nov 6 p14). The FCC is seeking comment on the potential use of LightSquared’s wireless uplink with GPS devices and comments are due Sept. 6, the commission said in a public notice (http://bit.ly/1asBsqq).
Combining S-band spectrum with LightSquared’s L-band spectrum is a very long-term play, a satellite industry official said. That plan “doesn’t help competition and doesn’t solve the GPS issues,” the official said.
The Ergen spectrum play being bantered about holds some attraction on a number of levels, but is contingent on a mix of factors, said Jeff Silva, analyst with Medley Global Advisors. He would have to acquire LightSquared’s L-band spectrum in bankruptcy, which could be complicated by the Harbinger lawsuit (CD Aug 21 p22) and by an emergence of a higher bidder or bidders for LightSquared wireless assets later this year, he said in an email. The latter scenario “could indeed materialize if LightSquared receives favorable regulatory treatment from the FCC on band modification, to avoid GPS interference, and uplink proposals pending before the agency,” he said.
Even if Ergen is successful in securing LightSquared’s spectrum, “his options for maximum monetization of S- and L-band spectrum are limited as a practical matter,” Silva said. “Of those options, building a new nationwide wireless network in a mature, saturated market would seem the most irrational.” At the same time, “given this environment of increased spectrum scarcity and strong wireless data demand in the wireless space, Charlie Ergen has to be taken seriously and should be never be counted out.”