Dish AWS-4 Proposal Could Benefit H Block Auction, FCC
Dish Network’s request for flexibility to use its AWS-4 spectrum for downlink or uplink operations could let it use its spectrum more efficiently, and it could be viewed favorably by the FCC, some satellite experts said in interviews this week. The DBS company expects the flexibility to better position it to enter the wireless market and to commit to a $1.6 billion bid at the H block auction. It also requested an additional year to meet its final buildout requirement, which would allow it to offer terrestrial service within eight years.
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Dish said having such flexibility will allow it to be more successful in its efforts “to find new uplink spectrum for pairing through, among other things, strategic partnerships or transactions” (http://bit.ly/1aogHd2). Dish also said in a filing Tuesday that the FCC established out-of-band-emissions and power limits for the AWS-4 uplink band “that rendered the lower 5 MHz of the band unusable for mobile broadband and left and additional 15 MHz impaired."
Dish expects to participate “more meaningfully” in the H block auction if it gets the relief, it said. It will have the certainty “to plan for potential acquisition and deployment of the H block in combination with AWS-4,” it said. Grant of the relief would be conditioned upon Dish “bidding at least a net clearing price equal to any aggregate nationwide reserve price established by the commission in the upcoming H block auction” not to exceed the equivalent of 50 cents per MHz of bandwidth per population, it said. This would amount to about $1.5 billion at the auction, said an industry executive and also according to calculations by Stifel Nicolaus.
Granting Dish’s request can be beneficial for the FCC, said a satellite attorney who generally is sympathetic to what the company seeks. It’s something that should make sense to the agency and something that it should be very interested in considering, he said. “It’s clearly motivated by Dish’s expectation that they will get LightSquared spectrum as well.” While uplink isn’t 100 percent perfect or clear at this point, the main problem that LightSquared had with the GPS community has all been on the 20 MHz for downlink, the attorney said. If Dish gets the LightSquared spectrum and the DBS company’s only plan is to use it for uplink, “it doesn’t solve every GPS concern, but the bulk of them were in the opposite direction,” he said. This would enable all the spectrum to be used efficiently “and GPS is relatively happy and nobody is unhappy -- that’s a win-win for everybody,” he added: “At the end of the day it’s good for the FCC and the Obama administration in putting spectrum to use."
The bid offer makes FCC approval of the waiver petition likely, “given the desire to see a successful H block auction,” said Stifel Nicolaus analysts in a research note. “This is negative news for Sprint, a potential H block auction competitor.” If Dish gets the changes it wants, wins the H block and another 5 MHz piece of the J block, “Dish could put 30 MHz of contiguous downlink spectrum together at 1995-2025 MHz,” said Stifel.
Sprint is “intrigued” by the proposal, said a spokesman. “We intend to take a very careful look at it."
Dish’s request is an affirmation “of the opportunity for Dish to meaningfully improve the value of its spectrum by potentially using all of the AWS-4 spectrum for downlink,” wrote Citigroup analysts in an email to investors. Dish could add $17 a share to the value of its spectrum if its bid for LightSquared’s L-band spectrum is successful and if it can convert its 40 MHz of AWS-4 spectrum entirely to downlink spectrum, they said.
The commission likely won’t analyze Dish’s petition in isolation, said Jeff Silva, a Medley Global Advisors analyst. It will probably consider it “in a broader context of other spectrum-related proceedings, especially in terms of technical viability, competitive implications and auction planning,” he said. “The FCC’s approach to the waiver request could be influenced to some degree by the level of the agency’s confidence in Dish’s plan to construct a new national mobile broadband network.”