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FCC Says Dish Plan Would Hurt Public Asset Worth Billions

Nov. 26 (Bloomberg) -- Dish Network Corp.’s proposal for a mobile telephone network would destroy the value of airwaves the government plans to auction for commercial use, the Federal Communications Commission said today.

Dish has said its ability to add mobile-phone service to satellite television offerings could be crippled by FCC Chairman Julius Genachowski’s Nov. 20 proposal to limit power for the planned network. Dish wants to loosen the limits, which are intended to prevent interference with nearby frequencies, known as the H block, that are to be auctioned.

“In arguing that the commission should destroy the value of the H block, Dish is seeking to take a public asset potentially worth billions of dollars and turn it into a private windfall,” Justin Cole, an FCC spokesman, said in an e-mailed statement.

Genachowski’s proposal awaits a vote by the five-member FCC, and Dish Executive Vice President R. Stanton Dodge said in a Nov. 20 statement that the Englewood, Colorado-based company was ready to “work with the full commission” to produce final rules.

Today’s FCC statement shows Dish may not succeed in changing the order, Paul Gallant, Washington-based managing director at Guggenheim Securities, said in an interview.

“This certainly suggests the chairman is dug in and not likely to alter his proposal for how Dish can use its spectrum,” Gallant said.

Emergency Network

Congress directed the FCC to auction the H block, and by limiting Dish the FCC can generate more revenue to help pay for a planned nationwide radio network for emergency workers, Gallant said.

Bob Toevs, a Dish spokesman, said in an e-mailed statement that the company has invested more than $4 billion in “risk-based capital.”

“This is not windfall; it’s a venture where success is by no means assured,” Toevs said. “While we remain ready to work with the commission, we urge it to consider the sacrifices its current approach to the H block means for spectrum, jobs and investment.”

“Our approach does not destroy the H block,” Toevs said.

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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