Dish’s Ergen to Consider ‘All Alternatives’ If FCC Denies Spectrum Waiver
Ergen met yesterday with Federal Communications Commission Chairman Julius Genachowski and other officials, according to a filing by Dish posted today on the FCC’s website. The second- largest U.S. satellite-television provider behind DirecTV (DTV) asked the FCC in August for clearance to buy assets of DBSD North America Inc. and TerreStar Networks Inc. and for license waivers to let it offer high-speed data service.
Ergen said that using the spectrum purchased from DBSD and TerreStar to offer high-speed wireless Internet service is crucial to his company’s future. He said in a conference call today that Dish had “an 80 percent chance or better” of being successful in the wireless industry as long as the FCC allows the spectrum to be used. Ergen wouldn’t rule out selling the spectrum or the entire company if the FCC ruled against Dish.
“If by chance we were not granted a waiver or it was kicked down the road without a decision through rulemaking, then I think that we’d have to consider the risk, and at this point, I’d say we probably don’t have an 80 percent chance of success,” said Ergen. “We’d have to look at other alternatives with what to do with the business and the spectrum, which would be unfortunate.”
Without a waiver from the FCC, Ergen said Dish would probably have to write down the spectrum assets obtained in the acquisitions because “they wouldn’t be worth the $3 billion dollars or so we paid for them.”
The company expects an answer from the FCC by March 12, said Ergen. Incumbent mobile providers say Dish’s proposed network may cause interference to other services. They have asked the FCC to consider Ergen’s proposal as part of a broad rulemaking on new uses of airwaves.
Ergen said Dish was the “best hope” among U.S. companies to be a new competitive threat to AT&T Inc. (T) and Verizon Communications Inc. (VZ) The FCC has said it would prohibit hedge- fund billionaire Philip Falcone’s LightSquared Inc. wireless venture from using its spectrum because of GPS interference issues.
CTIA-The Wireless Association, with members including largest U.S. mobile providers Verizon Wireless and AT&T, asked for the rulemaking in an Oct. 17 filing. Dish is seeking waivers “that would appear to eviscerate” some restrictions on airwaves use, the Washington-based association said.
Dish in the filing said approval of its service now wouldn’t preclude a broad rulemaking later, and it would “look forward to participating.”
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