Analysts, Attorneys Weigh Dish Waiver Deadline Up Against Government Shutdown
Dish Network’s waiver request for flexible use of its AWS-4 spectrum can still be granted in time for the company to participate in the H-block auction if the partial government shutdown ends within a few weeks, said analysts and attorneys in recent interviews. Other industry analysts, though, said a prolonged stalemate could prove disruptive to the proceeding. They said that with reply comments in the proceeding due Thursday and commenters unlikely to access the FCC’s website to submit replies since the site is down, the commission still has time to approve Dish’s waiver by Dish’s desired deadline of Dec. 14. If the petition is approved by then, Dish agreed to bid the reserve price, nearly $1.6 billion, adopted by the agency in the H-block auction starting Jan. 14 (CD Sept 16 p1).
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"It’s still in the realm of possibility that everything could work out as Dish wants,” said a telecom attorney who has concerns about Dish’s petition. “There’s still time to grant Dish’s request by Dec. 14, if the government gets back in business in the next week or 10 days,” he said. “The FCC definitely has that on a fast track,” he said, referring to the FCC public notice on the proceeding, issued less than a week after Dish’s request. “Everything’s going to be pushed back a bit because even when the FCC gets back to running, there’s going to be a big backlog of stuff.”
A prolonged shutdown could be worrisome, some analysts said. “If the shutdown goes far longer than people expect, there could be some nervousness about the auction,” said Guggenheim Partners’ Paul Gallant. “I suppose, if they needed to, the FCC could consider delaying the H-block auction if it meant Dish would bid and help maximize auction revenues for First Net."
The stalemate in Congress over funding the government is affecting the FCC’s agenda, said Jeff Silva, Medley Global Advisors analyst. “At this point, whether the government shutdown is extended or lasts only a bit longer, most everything before the FCC that’s time sensitive could be affected on some level.” Every day the government remains closed “is one fewer day the agency has to review the Dish petition and prepare for the Jan. 14 scheduled H-block auction,” he said. The chances that the commission will act on the petition by Dec. 14 “could be diminished even though there’s no guarantee the FCC would have ruled by then had the shutdown not occurred,” he said. If the government doesn’t reopen before the end of October, the timing of the auction may be affected, said Spencer Kurn, a New Street Research analyst.
AT&T supported Dish’s proposal, which was opposed by NTCH, in initial comments (CD Oct 3 p10). Sprint called the requests “far-reaching” and “interdependent” and urged the commission to ensure that Dish would follow through on its assurance to bid nearly $1.6 billion for the H block if its petition is granted. Sprint’s input likely would have an impact in the way it did when Dish was trying to obtain a waiver to use the AWS-4 spectrum terrestrially only, some industry professionals said. “If Sprint weighed in in opposition to what Dish was requesting, that would have presented a big problem,” said the telecom attorney. Sprint and Dish “were the main ones fighting it out on the way the H block rules were set up in the first place,” he said. Dish and Sprint had no comment for this story.
When Dish went through the process at the FCC of obtaining authority to use the 20 MHz block for terrestrial purposes, Sprint really wanted to protect the H block, Kurn said. “In part, due to Sprint’s opposition, Dish had to effectively render 5 MHz of spectrum closest to the H block useless.” It’s “interesting” that Sprint wants Dish to be legally obligated to bid the reserve price for the H block, said Kurn. “Before the recent filing from Sprint, it had its eye on the H block and was perceived to be the lead bidder.” Dish’s recent filing expressed much greater interest in the H block than from the company previously, he said. “Some industry analysts have taken Sprint’s response that Dish be legally obliged to bid the reserve price as a signal that they [Sprint] may be less interested in the H block now.” Sprint has continued to express its interest in ensuring a successful auction and bidding on the H block (CD Aug 20 p3).
Sprint’s moderate position makes it easier for the FCC to move forward with Dish’s proposal, Gallant said. “Sprint is a highly interested party in this proceeding, so their relatively neutral position would seem to be a good thing from both Dish’s and the FCC’s perspective."
Silva said he doubts Dish will get all that it’s seeking from the FCC, including a year-long extension of its terrestrial buildout requirement. “I can see where the FCC might be willing to consider AWS-4 band-plan flexibility if doing so furthers certain policy and auction objectives,” he said. “Accommodating Dish on construction benchmark extensions to the extent requested could be a heavier lift.” (klane@warren-news.com)