YOU ARE AT:PolicyDish Network picks up all H-Block spectrum licenses; what’s next?

Dish Network picks up all H-Block spectrum licenses; what’s next?

To the surprise of few, Dish Network walked away with all 176 licenses up for grabs during the Federal Communications Commissions’ recently completed H-Block spectrum auction. The auction ended last Thursday after more than a month of bidding that raised just over $1.5 billion for the national treasury.

Dish Network participated in the auction under its American H Block Wireless bidding entity, and in the end out-bid the 22 other qualified participants for the 10-megahertz of spectrum in the upper 1.9 GHz band. Qualified bidders include a number of entities labeled under the names of individuals as well as a handful of established telecom operators like Ntelos, NE Colorado Cellular and Puerto Rico Telephone Co.

Most of the wireless industry’s larger players passed on the H-Block, instead focusing their efforts on the upcoming AWS-3 and 600 MHz incentive auction.

The H-Block licenses up for bid were adjacent to Dish Network’s 2 GHz spectrum licenses, with Dish Network now having control of a wider swath of spectrum in the upper 1.9 GHz/lower 2 GHz band to go along with its smaller holdings in the 700 MHz band. Dish Network had pledged to bid at least $1.5 billion for the 1.9 GHz H-Block spectrum set to come to auction next year if the FCC allows Dish to convert its current 2 GHz spectrum holdings to a single block for downlink use. Dish Network also made a proposal to reduce the power of its E-Block 700 MHz licenses in an attempt to reduce potential interference with the lower A-Block in exchange for an extension on the build out timeline for the E-Block.

Now the question becomes just what will Dish Network do with its bolstered spectrum portfolio. The satellite-television company does not compete in the wireless telecommunications space and thus does not have any network assets or infrastructure needed to house its spectrum. The company last year made an aggressive – but eventually failed – attempt to acquire both Clearwire and Sprint. Analysts noted those deals if successful would have provided Dish with an even greater depth of spectrum, but more importantly an installed network base in which to put its spectrum to use.

Dish Network Chairman Charlie Ergen has made numerous comments about a possible tie-up with T-Mobile US, with comments reciprocated by T-Mobile US’ management. Despite its failed acquisition attempt, there are also suggestions that Dish Network could work out a network hosting deal with Sprint.

Charlie Ergen

“I think that opportunity – certainly, T-Mobile from a – this is a company, you could put that together with Dish in any number of ways, including an acquisition or a merger, and that’s probably not possible with the other wireless providers,” Ergen noted during a financial conference call late last year. “But having said that, I think the other wireless providers do provide us some pretty good options. And I think in an ironic sort of way, Sprint becomes a really kind of an interesting potential partner for us as well, and I think people just assume maybe that, that’s not the case. But the fact is, we actually understand Sprint and Clearwire probably better than we do any of the other wireless providers. Certainly, I think Sprint and Clearwire understand us pretty well and certainly understand that – certainly understood the synergy and the strategic reason why we are an attractive option. I think we were just too late to the party.”

Ergen is also in the middle of a messy bankruptcy proceeding for spectrum license holder LightSquared, with accusations by LightSquared that Ergen attempted acquire LightSquared’s substantial debt and in turn gain control of the company.

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