Dish Bid for Waivers Needed for Mobile Service Denied by FCC

U.S. regulators let Dish Network Corp. (DISH) buy airwaves for a high-speed wireless network while denying waivers the company says are needed to quickly offer the new service.

Today’s order from the Federal Communications Commission means Dish must wait as the agency writes new rules so the airwaves now used by satellites are permanently approved for high-traffic ground-based networks.

The FCC under Chairman Julius Genachowski is seeking ways to accommodate rising demand for mobile Internet service as consumers turn to smartphones and data-hungry tablets.

“The rulemaking process will best serve the public interest and maximize the long-term value of the spectrum for the American economy,” Neil Grace, an FCC spokesman, said in an e-mailed statement.

Dish said it would work with the FCC on the rulemaking “to achieve those goals as expeditiously as possible.”

“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,” Aaron Johnson, a Dish spokesman, said in an e-mailed statement.

The FCC order clears Dish, the second-largest U.S. satellite TV provider, to buy airwaves of satellite companies DBSD North America Inc. and TerreStar Networks Inc.

Dish expects to close on the acquisition “as soon as practicable,” Johnson said.

‘Other Alternatives’

The company had asked for the waivers to let it offer service with handsets that use ground-based signals only and don’t communicate directly with satellites.

Dish Chief Executive Officer Charlie Ergen said last week he would “look at other alternatives” if the waivers were denied or “kicked down the road without a decision through rulemaking.”

Incumbent mobile providers said the new, competing service may cause interference, and they asked that it be considered as part of a broader rulemaking. The FCC on Feb. 29 said it plans to commence the rulemaking process on March 21.

Dish dropped as much as 3.3 percent yesterday before paring losses after a report that the FCC wouldn’t grant the waiver. The stock rose 48 cents today to $29.27 at 4 p.m. in Nasdaq Stock Market trading.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net;

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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