The domestic market for wireless spectrum assets narrowed a bit in the short term late last week as the Federal Communications Commission said it would open up a formal debate in regards to Dish Networks’ attempt to use satellite spectrum for a terrestrial cellular network. Dish had wanted the FCC to grant it an immediate license to use 40 megahertz of spectrum assets to begin rolling out an LTE network.
“Although we are disappointed that the FCC did not grant the integrated service and spare satellite waivers that Dish requested, we appreciate the cooperative spirit and diligent efforts of the Commission and its staff in reviewing our applications,” Dish noted in a statement. “We worked hard to demonstrate that the grant of those waivers was in the public interest, and we wish that we had been successful. We believe that the denial of those waivers will delay the advancement of some of President Obama’s and the FCC’s highest priorities – namely freeing up new spectrum for commercial use and introducing new mobile broadband competition. As we review our options, we will continue working with the FCC on the forthcoming 2 GHz Notice of Proposed Rulemaking to achieve those goals as expeditiously as possible. … We expect to close the DBSD and TerreStar transactions as soon as practicable.”
Dish filed a waiver with the FCC late last year in an attempt to gain access to spectrum assets it had acquired through the purchase of TerreStar Network. The TerreStar assets are expected to be combined with spectrum Dish picked up in the 700 MHz spectrum auction in which Dish Networks bid nearly $712 million and won 168 licenses for 6 megahertz of unpaired spectrum in channel 56 throughout most of the country except for major cities in California, Arizona and the Northeast. Dish’s license holdings cover 76% of the U.S. population.
Analysts noted the decision was positive for current mobile broadband provider Clearwire (CLWR), which following the recent setback by LightSquared in its attempt to use satellite spectrum for a mobile broadband network, is now in the immediate position to most benefit from other carriers looking to augment their spectrum and network positions.
“We believe that AT&T and MetroPCS have been waiting on the FCC to understand the timing of and potential conditions placed upon Dish’s spectrum,” noted Macquarie Equities Research in a report. “[AT&T], which reiterated its immediate need for more spectrum at a conference last week, now has to decide whether it waits for Dish’s NPRM, or moves forward with a temporary spectrum solution by acquiring spectrum from [Clearwire].”
However, Clearwire might not see any advantage until early 2013 at the earliest as the carrier is only now beginning to work on rolling out LTE-based technology across its network. Despite the potential positive sign, Clearwire’s stock was trading down more than 1% early Monday.
As for MetroPCS, Macquarie Equities Research wrote: “We also feel that Friday’s ruling further diminishes the possibility that Dish will partner with or acquire [MetroPCS] and/or Leap to build out an LTE network and that [MetroPCS] now has limited options for LTE spectrum aside from [Clearwire], the most accessible spectrum play in the market.”
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